(CN) – A man who had to give his ex-wife a 50 percent stake in a lucrative firewall patent can sue his lawyers for malpractice, the 8th Circuit ruled.
James Joyce alleged that his attorneys at Armstrong Teasdale never disclosed that they also represented a company he had founded with his then-wife Suzanne to market one of his inventions, Heuristic Firewall.
Armstrong Teasdale told Joyce to sign confidentiality, invention rights and patent-license agreements, but it failed to mention that the company, TechGuard, would assume the exclusive right to market and sell the firewall technology.
Suzanne won an equal share in the patent – once valued at hundreds of millions of dollars – after the couple divorced in 2007.
Joyce, in turn, sued Armstrong Teasdale for conflict of interest, but the Eastern District of Missouri dismissed the claims as barred under a five-year statute of limitations.
The federal appeals court in St. Louis, Mo., disagreed Tuesday and revived the suit.
Armstrong Teasdale never gave Joyce notice of “a potentially actionable injury” when he signed the last of the agreements in early 2001, Judge Kermit Edward Bye wrote for the court’s three-judge panel.
“Armstrong Teasdale represented Joyce when the firm allegedly told him he would not be injured by signing the agreements, and thus he had a right to rely upon such representation,” Bye wrote.
“During the course of an attorney-client relationship, Missouri does not impose upon a layperson the duty to double-check the attorney’s work or to understand that an attorney’s conduct caused harm unless a source external to the attorney-client relationship reasonably puts the layperson on notice the attorney has caused harm,” the ruling continues.