Neb. Supreme Court Restores Award in Malpractice Case Against Law Firm

August 20, 2007

The Nebraska Supreme Court restored a jury award on Friday, Aug. 17 granting a La Vista keno owner $1.6 million in a malpractice case against the state’s second-largest law firm.

The court decision gave Richard T. Bellino about five times what a Douglas County District Court judge reduced the award to.

A jury ruled in October 2005 that attorneys James D. Wegner, William F. Hargens and the firm did not properly advise Bellino about how to separate from his business partner before opening another business.

District Judge Patricia Lamberty reduced the award to $229,000.

Bellino wanted to sever his partnership with Robert Anderson in La Vista Lottery and open his own business. His attorneys advised him to maintain 50 percent of his share with La Vista Lottery and open the competing La Vista Keno at the same time.

Anderson successfully sued Bellino after Bellino’s new business won a contract over La Vista Lottery to provide keno to the city.

The suit was based on a 1913 Nebraska Supreme Court ruling that an officer-shareholder “owes a duty of absolute loyalty” to his company and “may not harm it.”

The Supreme Court said the jury’s reasoning that Bellino’s attorney costs were higher made sense because the lawyers encouraged him to appeal the case when they shouldn’t have.

“The law in Nebraska is clear that a person who is an officer, director and shareholder of a closely held corporation has a fiduciary duty not to act adversely to that corporation,” Supreme Court Judge John Wright wrote in the ruling. “Given the facts in this case, it was inevitable that a court would determine Bellino had breached his fiduciary duty to Lottery.”

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