Articles Posted in Legal Malpractice

Negligence without causation is like a biscuit without country ham (or blackberry jam). 

Now, I’m not so sure that juries pay as much attention to the concept as lawyers and judges, but causation is an element of every cause of action in the tort world.

This decision out of Michigan reminds us that causation must be proved in a legal malpractice case.  The lawyer blew the deadline for filing a notice of appeal – clearly negligence – but was not found liable as a matter of law because the appeal was denied on the merits.  Read the decision in McCabe vs. Miller & Associates, LLP,  No. 275498 (MI. Ct. App. October 9, 2007) here.

Rudolf fired his lawyers after a jury trial that resulted in a 50% finding of comparative fault and a total verdict of $250,000.  He then hired a new lawyer, got a new trial, and then settled his case for $750,000. 

Next, he sued his original lawyers for malpractice, saying that he failed to submit an appropriate jury instruction in the first trial and failed to object to the charge as given.  "In his damages claim, plaintiff sought payment of the legal fees associated with the motion to set aside the verdict and the appeal, as well as the expert witness fees and expenses incurred for the second trial. Plaintiff also requested approximately $190,000 in interest that would have accrued at nine percent per annum on the $750,000 had that sum been awarded at the conclusion of the first trial in January 2002."

The Defendants admitted negligence, but denied that Plaintiffs were damaged by it.  The New York court disagreed, saying that "plaintiff incurred litigation expenses to correct defendants’ error and paid a second time for expert fees for the retrial. These expenditures were readily ascertainable and calculated at $28,703.27 by Supreme Court. Although plaintiff achieved a $750,000 settlement as a result of the second trial, that sum represented compensatory damages in the underlying personal injury action and was not designed to reimburse plaintiff for the fees and expenses caused by
defendants’ negligence. We therefore agree with Supreme Court that plaintiff is entitled to consequential damages of $28,703.27."

The Hawaii Supreme Court has ruled that two law firms who represented a party in a business dispute cannot be sued by the adversary party for intentional interference with contractual relations.

Plaintiff had a dispute with a business partner – the two were general partners of a partnership that ran a hotel.  The defendant law firms represented the non-plaintiff partner.  The dispute ended up in arbitration, and Plaintiff demanded to see certain books and records of the hotel partnership.  The law firms took possession of those documents, and Plaintiff sued them for interfering with its right to access to the books and records.  The law firms said, inter alia, that the suit was barred by the litigation privilege.

The Court did a nice review of the history of the litigation privilege and ruled that the lawyer’s conduct was protected by the privilege.  The Court explained that the fact that the arbitration process was temporarily stayed at the time the dispute arose  was immaterial.

Last Fall I wrote several posts ( here and here) on a one portion of the causation issue in legal malpractice cases.

A summary of my view:  I believe that a plaintiff in a legal malpractice case arising out of a claim that a personal injury case was mis-handled must prove that amount of damages that would have been collectible in the underlying tort case. First, the plaintiff would ordinarily prove the amount of liability insurance, if any, available to the original defendant. Second, if the plaintiff wants to collect a judgment more than the amount of the liability insurance originally available, he or she should have to prove that it was more likely than not that the plaintiff could have collected more than that amount from the tortfeasor. This will require proof of the income, assets and liabilities of the original defendant. In appropriate cases, the lawyer defendant will want to demonstrate that the income, etc. of the original defendant is such that the plaintiff cannot prove that the judgment would not have been collectible above the amount of liability coverage or that the evidence offered is insufficient to prove that any monies could have been obtained over and above the insurance monies.

I think the burden of proving collectibility should be on the plaintiff because it should be deemed part of the causation argument. More specifically, the plaintiff has to prove damages by reason of the alleged malpractice of the lawyer. (The lawyer failed to have process re-issued in a timely fashion, and the case was dismissed with prejudice). That means plaintiff must prove that what damages, if any, he would have been able to collect in the underlying tort action against the original defendant. The plaintiff should not be able to collect more damages from the lawyer defendant that he would have been able to collect against the original defendant. What the plaintiff lost was the right to proceed to trial against the original defendant, and therefore what he should be able to collect from the lawyer is what he could have collected from the original defendant.

The Court of Appeal of California has ruled that a lawyer may be sued for failure to warn a client that the failure to settle a claim against the client  would put the client at risk for paying the adversary’s attorneys fees.  The Court held that it was not appropriate to dismiss the client’s claim against the attorney on that issue, and remanded the case to the trial court for consideration of the merits.

There is no need to state all of the facts here, but suffice it to say that the plaintff was upset about having the pay their original adversary’s attorney’s fees of over $600,000 (and their own attorney over $350,000) in a dispute that originally involved less than $20,000.

The case is Charney v. Cobert, B188087 (Cal. Ct. App. Div. 7 11/28/06); read it here.

Here is an interesting article on a lawyer who sues lawyers.

The Tennessee Supreme Court has rejected the notion of a locality rule for lawyers in legal malpractice cases.

In Chapman v. Bearfield, No. E2004-02596-SC-R11-CV  (Tenn. S. C., November 6, 2006), the Court said that "a single, statewide professional standard of care exists for attorneys practicing in Tennessee and that expert witnesses testifying in legal malpractice cases must be familiar with the statewide professional standard of care." 

Stated differently, "[a]n attorney practicing in Tennessee, then, must exercise the ordinary care, skill, and diligence commonly possessed and practiced by attorneys throughout the state. Indeed, while there may be local rules of practice within the various judicial districts of our State, there are no local standards of care. There is only one standard of care for attorneys practicing in Tennessee: a  statewide standard."  (Emphasis supplied by the Court.)

Believe it or not yesterday’s post brought in more comments than any other post in a 24-hour period.  I have published some of the comments; other comments seemed to address personal situations so I thought it best to pass on those.

Let me respond to several  of the comments.  Bill said "a judgment that is seemingly noncollectible today may be collectible tomorrow. Have you given any thought to this argument? In other words, what kind of proof should a victim of malpractice be required to produce?" 

First, the plaintiff should have to prove the amount of liability insurance, if any, available to the original defendant.  Second, if the plaintiff wants to collect a judgment more than the amount of the liability insurance originally available, he or she should have to prove that it was more likely than not that the plaintiff could have collected more than that amount from the tortfeasor.  This will require proof of the income, assets and liabilities of the original defendant.  In appropriate cases, the lawyer defendant will want to demonstrate that the income, etc of the original defendant is such that the plaintiff cannot prove that the judgment would not have been collectible.

I am currently defending a legal malpractice case for a friend of mine and have insisted that the plaintiff prove that amount of damages that would have been collectible in the underlying tort case.  I have a hearing on this issue coming up shortly; the trial is this Winter.

I think the burden of proving collectibility should be on the plaintiff because it should be deemed part of the causation argument.  More specifically, the plaintiff has to prove damages by reason of the alleged malpractice of the lawyer.   (The lawyer failed to have process re-issued in a timely fashion, and the case was dismissed with prejudice).  That means plaintiff must prove that what damages, if any, he would have been able to collect in the underlying tort action against the original defendant.  The plaintiff should not be able to collect more damages from the lawyer defendant that he would have been able to collect against the original defendant.  What the plaintiff lost was the right to proceed to trial against the original defendant, and therefore what he should be able to collect from the lawyer is what he could have collected from the original defendant. 

Illinois Legal Malpractice Blog has a post that highlights a recent case taking the opposite view but goes on to cite cases that set forth the majority (and better reasoned) view.

In Pederson v. Barnes the Alaska Supreme Court was faced with the issue of the circumstances under which a guardian’s lawyer is liable to the ward for  the guardian’s wrongdoing.

Aiken became Barnes’ guardian after Barnes’ parents died.  (Barnes was a minor at that the time of their death.) Pederson represented Aiken in the proceedings to become Barnes guardian.   In about two years the $111,000 estate was almost entirely dissipated.

Barnes sued Aiken and Pederson and another lawyer working with Pederson.  The lawyers moved for summary judgment, arguing that they did not have any actual knowledge of wrongdoing by Aiken.  The motion was denied, and the jury returned a verdict against Pederson for compensatory and punitive damages.