CHICAGO -- A Detroit law firm filed an appeal this week with the Michigan Court of Appeals in an attempt to overturn a lower court decision that found the firm liable in a legal malpractice case involving a bond issue.

Lawyers for Miller, Canfield, Paddock & Stone and for the Pontiac School District, which filed the lawsuit, also presented arguments yesterday before an Oakland County Circuit Court judge over how much of the $25.6 million plus interest award in the case would be posted as bond by the law firm pending the outcome of the appeal.

Judge John J. McDonald set the bond at $40 million, according to Dennis Pollard, an attorney representing the school district. He said the district had asked for a $45 million bond to cover the award and interest that would accrue during the appeal process. Attorneys for Miller Canfield had requested bond in the low $30 million range, according to Thomas Linn, a partner at Miller Canfield.

Last month, Judge McDonald rejected Miller Canfield's attempt to have the award reduced or to order a new trial. Miller Canfield had argued for the trial based on alleged misconduct on the part of the attorney representing the Pontiac School District.

Linn said the appeal, which was filed Tuesday, will be based on similar arguments and should take two to three years given the current court schedule.

In July, Judge McDonald entered an award of $25.6 million plus interest against Miller Canfield after a jury in May found the law firm liable on three counts of legal malpractice, including a conflict of interest charge.

The Pontiac School District had filed the lawsuit in connection with a 1991 $54.6 million bond issue, which included about $35 million of capital appreciation bonds. The district charged that Miller Canfield, its bond counsel, also represented Kemper Securities Inc., the senior manager on the deal, without the district's consent.

The district also charged that Miller Canfield had omitted language in the issue's ballot proposal that would have allowed the district to use bond proceeds to buy land for a bus service and storage facility, as the district had intended. In addition, the district claimed the law firm misinterpreted -- to the district's detriment -- the Michigan State School Act of 1979 when it helped structure the bond issue.

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