Legal Malpractice

October 5, 2019

Tennessee Supreme Court Overturns Application of Judicial Estoppel

Where a plaintiff had previously signed a marital dissolution agreement that stated that the divorce settlement was “fair and equitable,” but also sought to bring a legal malpractice claim against an attorney who had represented her during a portion of her divorce proceedings, the Supreme Court ruled that the signed statement did not invoke the doctrine of judicial estoppel and the plaintiff’s claim could move forward.

In Kershaw v. Levy, No. M2017-01129-SC-R11-CV (Tenn. Sept. 18, 2019), plaintiff had previously been involved in a contentious divorce proceeding. She had already faced several issues when she retained defendant attorney to begin representing her in the divorce. At the time attorney began his representation of her, the divorce court had imposed discovery sanctions against plaintiff, including granting the husband a default judgment, striking her pleadings, and “barring [plaintiff] from asserting any defenses to the husband’s claims.” The Court extended plaintiff’s discovery deadline when she hired defendant attorney, however, and “apparently agreed to lift the sanctions, provided [plaintiff] timely file her discovery responses.”

August 12, 2019

Legal Malpractice Case Dismissed – No Causation As A Matter of Law

by The Law Offices of John Day, P.C.

Where a legal malpractice plaintiff could not “prove that he would have obtained relief in the underlying lawsuit but for the attorney’s malpractice,” summary judgment was affirmed.

In Marble v. Underwood, No. M2017-02040-COA-R3-CV (Tenn. Ct. App. June 24, 2019), plaintiff filed a legal malpractice action against the attorney who had initially been appointed to represent him in a case with the Department of Children’s Services (“DCS”) regarding the custody of his minor child. While defendant attorney was representing him, the plaintiff/father agreed to two different parenting plans with many requirements, which were eventually ratified by the trial court. During the time father was represented by defendant, DCS filed a dependency and neglect petition as to the minor. Defendant attorney “advised Father to stipulate that the Child was dependent and neglected,” father did so, and the “child was adjudicated as dependent and neglected.”

After this, father retained different counsel. He appealed the dependent and neglected finding to circuit court, and after a somewhat convoluted procedural process, “the trial court ultimately ruled that the Child was dependent and neglected as a result of Father’s inability to care for her and based upon his severe abuse for his knowing failure to protect her.” The ruling was affirmed on appeal.

February 15, 2019

Motion to Set Aside Judgment Must Show a Meritorious Defense

by The Law Offices of John Day, P.C.

When a plaintiff files a motion to set aside a final order granting summary judgment, he must “demonstrate that [he] had a meritorious defense” in such motion.

In Berge v. Warlick, No. M2018-00767-COA-R3-CV (Tenn. Ct. App. Jan. 3, 2019), plaintiffs filed a legal malpractice claim against defendant. Defendant filed a motion for summary judgment, and he sent a copy of the motion to plaintiffs’ attorney on September 7, along with a notice that it was scheduled for hearing on October 20, 2017. Plaintiffs never responded to the motion, and on the day a response was due, defendant sent a second copy of the motion to plaintiffs’ attorney via U.S. mail and email. Neither plaintiffs nor their attorney showed up for the hearing, and they did not respond to a proposed order granting summary judgment sent by defendant.

Twenty-eight days after the order was entered, plaintiffs filed a “Motion to Set Aside” pursuant to Tennessee Rule of Civil Procedure 59.04. Plaintiffs asserted that they were entitled to relief due to the excusable neglect of plaintiffs’ counsel, who stated that “he misplaced the motion and forgot to mark the hearing on his calendar.” The trial court denied the motion to set aside, and the Court of Appeals affirmed.

August 15, 2018

Judicial Estoppel Doctrine Bars Legal Malpractice Claim

by The Law Offices of John Day, P.C.

Where a plaintiff has signed a settlement agreement swearing that such agreement is “fair and equitable,” she may be judicially estopped from later bringing a legal malpractice claim based on that same settlement.

In Kershaw v. Levy, No. M2017-01129-COA-R3-CV (No. M2017-01129-COA-R3-CV), plaintiff filed a legal malpractice claim against defendant attorney who had previously represented her during part of her divorce proceedings. When defendant took her case, plaintiff had already been convicted of criminal contempt once in the divorce case for incurring marital debt for gambling money, and she had a pending criminal contempt petition for forging checks to get gambling money. Further, her discovery responses were overdue. After defendant took the case, he drafted a response to the contempt motion wherein plaintiff admitted that she took the money, and she was sentenced to 30 days in jail, though she was released when defendant filed an appeal three days later.

May 8, 2018

Expert Needed in Legal Malpractice Case

by The Law Offices of John Day, P.C.

In most legal malpractice cases, a plaintiff will need expert proof regarding the applicable standard of care.

In Elaster v. Massey, No. E2017-00020-COA-R3-CV (Tenn. Ct. App. Feb. 22, 2018), plaintiff filed a pro se legal malpractice case against two attorneys who had previously represented her in a workers’ compensation claim. Plaintiff claimed that defendants had settled her workers’ comp claim without informing her, and that they had generally “failed to adequately represent her in the workers’ compensation case.”

Defendants filed a motion for summary judgment, supported by their own affidavits stating that they had “complied with all relevant standards of care in their representation of [plaintiff].” In support of their motion, defendants filed a statement of undisputed material facts, which stated that plaintiff’s workers’ compensation claim was “disputed and doubtful,” and that even though they had negotiated a settlement in that case, plaintiff repudiated and the case was never actually settled. In response to the motion, plaintiff “admitted that no settlement agreement was ever finalized, that she never entered into any settlement agreement with her former employer, that no settlement funds were ever paid, and that both [defendants] were familiar with the standard of care required in the underlying workers’ compensation case.” Importantly, plaintiff “cited only to her complaint” in responding to the summary judgment motion, and presented no expert proof that defendants’ conduct fell below the standard of care.

November 16, 2017

Expert Causation Testimony Required in Legal Malpractice Case

by The Law Offices of John Day, P.C.

In a legal malpractice case, a plaintiff must usually present expert testimony regarding the standard of care and causation.

In Franklin-Murray Development Company, L.P. v. Shumacker Thompson, PC, No. M2015-01968-COA-R3-CV (Tenn. Ct. App. Aug. 18, 2017), plaintiff sued defendant attorneys who had represented plaintiff in litigation related to a commercial real estate deal. In the underlying matter, plaintiff had contracted with First American Trust Company (FATC) to purchase property in Williamson County, giving FATC $100,000 in earnest money. Another $100,000 in earnest money was due “on the first business day after the last day on which [plaintiff had] a right to terminate the contract.” Just before the scheduled closing date, plaintiff found out there was a federal estate tax lien on the property, and so the sale did not close. Plaintiff “did not terminate the agreement in accordance with the termination provision, nor did it seek a refund of the earnest money previously paid or pay FATC the additional $100,000 in earnest money. Rather, [plaintiff] contacted FATC regarding the possibility of setting a new closing date.” Negotiations eventually broke down between the parties, and FATC filed suit seeking a declaratory judgment that the lien did not prevent conveyance of good title and for $200,000 in liquidated damages.

December 3, 2016

Statute of Limitations Bars Legal Malpractice Claim

by The Law Offices of John Day, P.C.

In Athena of S.C., LLC v. Macri, No. E2016-00224-COA-R3-CV (Tenn. Ct. App. Oct. 14, 2016), the Court of Appeals affirmed the dismissal of a Tennessee legal malpractice claim on the basis that the claim was barred by the one-year statute of limitations.

In the underlying matter, plaintiffs had purchased promissory notes from an individual and a business, and defendant attorney represented the sellers of the notes during the transaction. Thereafter, plaintiffs hired the same attorney to help them collect on the notes they purchased. Defendant attorney drafted two complaints and two agreed judgments against the debtors on the notes, which were entered in circuit court in November 2011. During the same time period, the debtor on the notes was involved in litigation in federal court, where his former business partner had sued him.

In May 2012, plaintiffs published a notice of foreclosure for condominiums that secured the notes, but the former business partner filed a motion in federal court to enjoin the sale. Finding that the transfer of the notes was likely fraudulent, the district court entered an order in May 2012 enjoining the sale. In July 2012, plaintiffs published a notice of foreclosure for lots that secured the note, and the same scenario played out, with the federal court enjoining the sale in August 2012.

August 9, 2016

Tennessee Legal Malpractice Statute of Limitations

by The Law Offices of John Day, P.C.

In a recent legal malpractice case, the Tennessee Court of Appeals held that the one-year statute of limitations had run and that the case should accordingly be dismissed in total.

In Story v. Bunstein, No. E2015-02211-COA-R3-CV (Tenn. Ct. App. June 9, 2016), plaintiffs had previously been represented by defendant lawyers in a lender liability suit against three defendants. The timeline of the underlying litigation included the following:

On May 7, 2013, the trial court granted summary judgment to two defendants.
Lawyer “allegedly advised [plaintiffs] that he would fie a motion to correct what he perceived was the erroneous grant of the motion for summary judgment.”
Layer filed a motion to alter or amend, but no hearing was ever set for that motion.
“Shortly before trial on the remaining claims, [lawyer] allegedly informed [plaintiffs] that their damages evidence was not ready for trial” and recommended voluntary dismissal.
Underlying suit was voluntarily dismissed on November 13, 2013, and was not re-filed.

This legal malpractice claim was filed on September 3, 2014.

Defendants filed a motion to dismiss based on the statute of limitations. In response, plaintiffs argued that “the statute of limitations did not begin to run until the order of dismissal as to [plaintiff’s] remaining claims was entered on November 13, 2013.” The trial court held that the statute of limitations barred some of plaintiffs’ malpractice claims, but that plaintiffs’ “allegations with respect to the November 2013 voluntary dismissal of their remaining claim in the underlying case is a discrete allegation of alleged legal malpractice which is not barred by the statute of limitations.” The Court of Appeals disagreed, holding that the entire case was in fact time-barred.

July 6, 2016

Legal Malpractice – Statute of Limitations – Discovery Rule

by The Law Offices of John Day, P.C.

In Credential Leasing Corp. of Tenn., Inc. v. White, No. E2015-01129-COA-R3-CV (Tenn. Ct. App. May 17, 2016), plaintiff lender brought various claims against defendant lawyer, including claims for professional negligence and fraudulent misrepresentation, related to the drafting of a deed of trust. Defendant attorney prepared a 2010 deed of trust in favor of plaintiff, conveying title to a parcel of land owned in part by defendant’s brother. Defendant stated that he would do the title work, prepare the deed of trust, and issue title insurance for the property at issue, though he never actually issued any title insurance.

The property was actually owned by the brother and another man as tenants in common. In 2007 a deed of trust had been executed on the same property to secure a loan from another bank, and defendant attorney had notarized the signatures of the grantors (and correct property owners) on that deed. Despite the fact that the brother only owned a half interest in the property, the 2010 deed of trust did not mention the other owner’s interest. Instead, it listed the brother and the brother’s wife as grantors, even though the wife had no interest in the property. Further, while the warranty deed and previous deed of trust used a “lot and block” description of the property, the 2010 deed of trust described the property by metes and bounds.

In 2011, the brother declared bankruptcy. Plaintiff received a notice of the bankruptcy filing, which showed the other creditor having a first lien, which plaintiff was already aware of. Almost two years later, however, plaintiff learned that the property had been sold at foreclosure, and plaintiff had not received notice. Only after learning of this sale did plaintiff find out that the brother had only owned a one-half interest in the property, and that their deed of trust thus had not covered the entire property.

May 11, 2016

Summary Judgment Reversed in Legal Malpractice Case

by The Law Offices of John Day, P.C.

In Roberts v. Ray, No. E2015-01522-COA-R3-CV (Tenn. Ct. App. April 13, 2016), the Court of Appeals reversed summary judgment on a legal malpractice claim, finding that there were genuine issues of material fact in the case.

Plaintiff’s attorney (now the defendant in a legal malpractice claim) drafted a prenuptial agreement for defendant husband and his estranged wife in 2006. Attorney used a standard form from 1993, and this was the first prenuptial agreement he had drafted. Husband, wife and plaintiff attorney were all in agreement that there had been no “full and fair disclosure” of husband’s assets before the agreement was signed. The agreement, however, did state that “[e]ach party acknowledges that he or she knows and understands the value of the property…”

During the divorce proceeding, wife sought to invalidate the prenuptial agreement. Evidence in the divorce case suggested that husband and wife had never really talked about the value of husband’s assets, that husband kept financial information in a cabinet to which wife had access, though she testified that she had not looked at it, and that both husband and wife thought that defendant attorney were representing them both during the drafting and signing of the prenuptial agreement. After a hearing, the trial court set aside the prenuptial agreement, and plaintiff husband eventually entered into a marital dissolution agreement with wife which included a financial settlement.