Simpson v. James
United States Court of Appeals for the Fifth Circuit
903 F.2d 372 (1990)
Attorney Oliver represented both Simpson (plaintiff) and the buyers in selling her family company to newly formed Tide Creek, drafting the sale documents securing the balance through stock liens and personal guarantees; after Oliver left the firm, partner James (defendant) helped Tide Creek recover $200,000 in insurance proceeds after a fire, then advised Simpson to restructure Tide Creek's defaulted payments while assuring her the firm would represent her interests in any conflict, before eventually telling her he represented Tide Creek and she needed new counsel; after Tide Creek went bankrupt and Simpson recovered nothing, a jury awarded her $100,000 on each of two negligence claims against James and the firm.
Whether a law firm's representation of different clients can give rise to malpractice liability when a conflict between the clients' interests prevents the firm from acting in one client's best interests.