Philly firm calls N.C. lawyer 'incompetent' in defamation lawsuit over loss of client

PHILADELPHIA – A Philadelphia corporate law firm called a North Carolina lawyer “incompetent” in a recently filed defamation lawsuit and is seeking more than $75,000 from her.

Kang Haggerty & Fetbroyt filed its lawsuit in Philadelphia federal court on March 31 against Margaret Behringer Maloney of Charlotte, N.C.

KHF says Maloney’s action caused clients of the firm to terminate their relationship. She did so to cover up her own legal malpractice, KHF says.

“Defendant, an incompetent lawyer who committed legal malpractice against one of the clients causing a significant damage to that client, wanted to cover up her legal malpractice by falsely blaming Plaintiff and publishing defamatory comments about Plaintiff to the clients and others,” the complaint says.

“Defendant ultimately succeeded in accomplishing her goals – her conduct made it impossible for Plaintiff’s representation of the clients to continue, thereby causing damage to Plaintiff.”

KHF says the issue began in April 2014, when it began representing an individual client and his company in two lawsuits against them. The client’s two sons are co-defendants.

In December, Maloney, of Maloney Law & Associates, told the client that KHF was intentionally overbilling him, the complaint says.

Maloney also told the client that KHF breached its duty of loyalty to him by working for the sons in the actions, the complaint says.

“Maloney told the clients that Plaintiff only cared about money…” the complaint says.

“Maloney instructed the clients to refrain from paying for Plaintiff’s legal services provided in the actions.”

She did this because, KHF says, to cover up malpractice she committed while representing the same client in 2013 during the sale of his and his sons’ control of the company that is the subject of the lawsuits.

The selling agreement contained release that included the attorneys involved. Maloney was worried about being sued by the sons and included that provision, KHF says.

When she instigated inclusion of the release, Maloney never sought approval from the client nor advised him of its existence, KHF says.

Her conduct caused the client to unknowingly release his claims against his sons over two $140,000 promissory notes, KHF says.

“After she found out about Plaintiff’s discovery of the malpractice, Maloney undertook a course of conduct to tortuously interfere with Plaintiff’s relations with the clients and to cause the clients not to pay their obligations to Plaintiff,” the complaint says.

“In her attempt to hide or downplay the malpractice, Maloney, who had a longstanding relationship with the client, made Plaintiff a common enemy of both herself and the client by falsely accusing Plaintiff for, among others, breaching its duty of loyalty in connection with its representing the clients in the actions.”

KHF is representing itself. Maloney did not respond to an email seeking comment.

U.S. District Court for the Eastern District of Pennsylvania case number2:15-cv-01645

From the Pennsylvania Record: Reach editor John O’Brien at jobrienwv@gmail.com.