Legal Malpractice Law Review : Professional Responsibility Case Summaries & Commentary : Bennett J. Wasserman : LegalMalpractice.com : Lawyer Malpractice & Legal Ethics

Restatement of the Law Governing Lawyers (ALI, 2000)

§ 122. Client Consent to a Conflict of Interest

(1) A lawyer may represent a client notwithstanding a conflict of interest prohibited by §121 if each affected client or former client gives informed consent to the lawyer’s representation. Informed consent requires that the client or former client have reasonably adequate information about the material risks of such representation to that client or former client.
(2) Notwithstanding the informed consent of each affected client or former client, a lawyer may not represent a client if:
(a) the representation is prohibited by law;
(b) one client will assert a claim against the other in the same litigation; or
(c) in the circumstances, it is not reasonably likely that the lawyer will be able to provide adequate representation to one or more of the clients.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Restatement of the Law Governing Lawyers (ALI, 2000)

§ 123. Imputation of a Conflict of Interest to an Affiliated Lawyer

Unless all affected clients consent to the representation under the limitations and conditions provided in § 122 or unless imputation hereunder is removed as provided in § 124, the restrictions upon a lawyer imposed by §§ 125-135 also restrict other affiliated lawyers who:
(1) are associated with that lawyer in rendering legal services to others through a law partnership, professional corporation, sole proprietorship, or similar association;
(2) are employed with that lawyer by an organization to render legal services either to that organization or to others to advance the interests or objectives of the organization; or
(3) share office facilities without reasonably adequate measures to protect confidential client information so that it will not be available to other lawyers in the shard office. 

§ 124. Removing Imputation

(1) Imputation specified in § 123 does not restrict an affiliated lawyer when the affiliation between the affiliated lawyer and the personally prohibited lawyer that required the information has been terminated, and no material confidential information of the client, relevant to the matter, has been communicated by the personally prohibited lawyer to the affiliated lawyer or that lawyer’s firm.
(2) Imputation specified in § 123 does not restrict an affiliated lawyer with respect to a former-client confidential information of the former client will be used with material adverse effect on the former client because:
(a) any confidential client information communicated to the personally prohibited lawyer is unlikely to be significant in the subsequent matter;
(b) the personally prohibited lawyer is subject to screening measures adequate to eliminate participation by that lawyer in the representation; and
(c) timely and adequate notice of the screening has been provided to all affected clients.
(3) Imputation specified in § 123 does not restrict a lawyer affiliated with a former government lawyer with respect to a conflict under § 133 if:
(a) the personally prohibited lawyer is subject to screening measures adequate to eliminate involvement by that lawyer in the representation; and
(b) timely and adequate notice of the screening has been provided to the appropriate government agency to affected clients.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Restatement of the Law Governing Lawyers (ALI, 2000)

§ 44. Safeguarding and Segregating Property

(1) A lawyer holding funds or other property of a client in connection with a representation, or such funds or other property in which a client claims an interest, must take reasonable steps to safeguard the funds or property. A similar obligation may be imposed by law on funds or other property so held and owned or claimed by a third person. In particular, the lawyer must hold such property separate from the lawyer’s property, keep records of it, deposit funds in an account separate from the lawyer’s own funds, identify tangible objects, and comply with related requirements imposed by regulatory authorities.
(2) Upon receiving funds or other property in a professional capacity and in which a client or third person owns or claims an interest, a lawyer must promptly notify the client or third person. The lawyer must promptly render a full accounting regarding such property upon request by the client or third person.

§ 45. Surrendering Possession of Property

(1) Except as provided in Subsection (2), a lawyer must promptly deliver, to the client or nonclient so entitled, funds or other property in the lawyer’s possession belonging to a client or nonclient.
(2) A lawyer may retain possession of funds or other property of a client or nonclient if:
(a) the client or nonclient consents;
(b) the lawyer’s client is entitled to the property, the lawyer appropriately possesses the property for purposes of the representation, and the client has not asked for delivery of the property;
(c) the lawyer has a valid lien on the property (see § 43);
(d) there are substantial grounds for dispute as to the person entitled to the property; or
(e)delivering the property to the client or nonclient would violate a court order or other legal obligation of the lawyer.

§ 46. Documents Relating to a Representation

(1) A lawyer must take reasonable steps to safeguard documents in the lawyer’s possession relating to the representation of a client or former client.
(2) On request, a lawyer must allow a client or former client to inspect and copy any document possessed by the lawyer relating to the representation, unless substantial grounds exist to refuse.
(3) Unless a client or former client consents to nondelivery or substantial grounds exist for refusing to make delivery, a lawyer must deliver to the client or former client, at an appropriate time and in any event promptly after the representation ends, such originals and copies of other documents possessed by the lawyer relating to the representation as the client or former client reasonably needs.
(4) Notwithstanding Subsections (2) and (3), a lawyer may decline to deliver to a client or former client an original or copy of any document under circumstances permitted by § 43(1).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Restatement of the Law Governing Lawyers (ALI, 2000)

§ 61. Using of Disclosing Information to Advance Client Interests

A lawyer may use or disclose confidential client information when the lawyer reasonably believes that doing so will advance the interests of the client in the representation.

§ 62. Using or Disclosing Information with Client Consent

A lawyer may use or disclose confidential client information when the client consents after being adequately informed concerning the use or disclosure.

§ 63. Using or Disclosing Information When Required by Law

A lawyer may use or disclose confidential client information when required by law, after the lawyer takes reasonably appropriate steps to assert that the information is privileged or otherwise protected against disclosure.

§ 64. Using or Disclosing Information in a Lawyer’s Self-Defense

A lawyer may use or disclose confidential client information when and to the extent that the lawyer reasonably believes necessary to defend the lawyer or the lawyer’s associate or agent against a charge or threatened charge by any person that the lawyer or such associate or agent acted wrongfully in the course of representing a client.

§ 65. Using or disclosing Information in a Compensation Dispute

A lawyer may use or disclose confidential client information when and to the extent that the lawyer reasonably believes necessary to permit the lawyer to resolve a dispute with the client concerning compensation or reimbursement that the lawyer reasonably claims the client owes the lawyer.

§ 66.  Using or Disclosing Information to Prevent Death or Serious Bodily Harm 

            (1)  A lawyer may use or disclose confidential client information when the lawyer reasonably believes that its use or disclosure is necessary to prevent reasonably certain death or serious bodily harm to a person.

            (2)  Before using or disclosing information under this Section, the lawyer must, if feasible, make a good-faith effort to persuade the client not to act.  If the client or another person has already acted, the lawyer must, if feasible, advise the client to warn the victim or to take other action to prevent the harm and advise the client of the lawyer’s ability to use or disclose information as provided in this Section and the consequences thereof.

            (3)  A lawyer who takes action or decides not to take action permitted under this Section is not, solely by reason of such action or inaction, subject to professional discipline, liable for damages to the lawyer’s client or any third person, or barred from recovery against a client or third person.

§ 67.  Using or Disclosing Information to Prevent, Rectify, or Mitigate Substantial Financial Loss      

            (1)  A lawyer may use or disclose confidential client information when the lawyer reasonably believes that its use or disclosure is necessary to prevent a crime or fraud, and:

                        (a)  the crime or fraud threatens substantial financial loss;

                        (b)  the loss has not  yet occurred.

                        (c)  the lawyer’s client intends to commit the crime or fraud either personally or through a third person; and

            (d)  the client has employed or is employing the lawyer’s services in the matter in which the crime or fraud is committed.

(2)  If a crime or fraud described in Subsection (1) has already occurred, a lawyer may use or disclose confidential client information when the lawyer reasonably believes its use or disclosure is necessary to prevent, rectify, or mitigate the loss.

(3)  Before using or disclosing information under this Section, the lawyer must, if feasible, make a good-faith effort to persuade the client not to act.  If the client or another person has already acted, the lawyer must, if feasible, advise the client to warn the victim or to take other action to prevent, rectify, or mitigate the loss.  The lawyer must, if feasible, also advise the client of the lawyer’s ability to use or disclose information as provided in this Section and the consequences thereof.

(4)  A lawyer who takes action or decides not to take action permitted under this Section is not, solely by reason of such action or inaction, subject to professional discipline, liable for damages to the lawyer’s client or any third person, or barred from recovery against a client or third person.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Restatement of the Law Governing Lawyers (ALI, 2000)

§ 15. A Lawyer’s Duties to a Prospective Client

(1) When a person discusses with a lawyer the possibility of their forming a client-lawyer relationship for a matter and no such relationship ensues, the lawyer must:

(a) Not subsequently use or disclose confidential information learned in the consultation, except to the extent permitted with respect to confidential information of a client or former client as stated in §§ 61-67;

(b) Protect the person’s property in the lawyer’s custody as stated in §§ 44-46; and

(c) Use reasonable care to the extent the lawyer provides the person legal services.

(2) A lawyer subject to Subsection (1) may not represent a client whose interests are materially adverse to those of a former prospective client in the
same or a substantially related matter when the lawyer or another lawyer whose disqualification is imputed to the lawyer under §§ 123 and 124 has received from the prospective client confidential information that could be significantly harmful to the prospective client in the matter, except that such a representation is permissible if:

(a) (i) any personally prohibited lawyer takes reasonable steps to avoid exposure to confidential information other than information appropriate to determine whether to represent the prospective client, and (ii) such lawyer is screened as stated in § 124(2)(b) and (c); or

(b) both the affected client and the prospective client give informed consent to the representation under the limitations and conditions provided under § 122.

 

Editors Note: To see each of the RLGL sections mentioned here, just scroll up to the next days. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Cleveland v. Rotman, 297 F. 3d 569 (7th Cir. 2002)

IL: Underlying tax advice

Student Contributor: Clem Durham

Facts: In 1996 Cleveland retained Rotman for advice in resolving the tax dispute. At the time, Cleveland's therapist informed Rotman of Cleveland's poor financial status, his severe depression, and his suicidal tendencies. Rotman advised Cleveland that he needed to file tax returns for a 10-year period, but Cleveland claimed that he was unable to calculate his income and expenses for this period because his financial records had been lost during office moves and discarded by others during divorce proceedings. As a result, it is alleged that Rotman told Cleveland to estimate his income and expenses for the relevant years. Apparently, Cleveland's estimates did not agree with IRS figures and the IRS decided to audit him again. On January 26, 1998, shortly before the audit was scheduled to take place, Cleveland shot himself in the head. Cleveland's estate alleges that Rotman committed malpractice, which triggered the IRS's proposed 1998 audit, which in turn triggered Cleveland's suicide. The estate argues that the district court erred in ruling that, as a matter of law, a plaintiff's allegations were insufficient under Rule 12(b)(6).

Issue: Whether under Illinois law a plaintiff may recover for a decedent's suicide following a breach of contract?

Ruling: No. It is well-established under Illinois law that a plaintiff may not recover for a decedent's suicide following a tortious act because suicide is an independent intervening event that the tortfeasor cannot be expected to foresee. The 7th circuit agreed with the district court and found this rationale equally applicable in the contract context and therefore dismissed the estate's claims arising from Cleveland's suicide. Cleveland's suicide was an independent intervening event that broke the chain of causation from Rotman's alleged malpractice to Cleveland's death. Cleveland was an adult, and the estate has not alleged that he was mentally unstable. Essentially, Cleveland's estate seeks to impose on Rotman a duty to foresee and avoid a client's suicide. Although an Illinois court imposed such a duty on a psychiatrist who knew of his patient's history of suicidal depression and yet failed to protect the patient from self-harm, the estate here points to no case law extending such a duty to the attorney-client context. Because of the differences between the psychiatrist-patient relationship and the attorney-client relationship, we see no justification for extending such a duty to attorneys. Psychiatrists are health care professionals trained to care for their patients' mental and emotional health. By contrast, attorneys are medical laypeople who cannot be reasonably expected to anticipate the mental health consequences of their legal advice.

Lesson: Lawyer’s cannot be liable for a client’s suicide as a result of their giving of poor legal advice. A client’s suicide is unforeseeable because attorneys are not trained medical practitioners; and therefore, should not be responsible for foreseeing a client’s likelihood of committing suicide.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Greycas, Inc. v. Proud, 826 F. 2d 1560 (7th Cir. 1987)

Underlying loan transaction--duty to adversary

Student Contributor: Clem Durham

Facts: Theodore S. Proud, Jr., a member of the Illinois bar who practices law in a suburb of Chicago, appeals from a judgment against him for $833,760, entered after a bench trial. The original plaintiff, Wayne Crawford, like Proud was a lawyer but devoted most of his attention to a large farm that he owned in downstate Illinois. The farm fell on hard times and by 1981,  Crawford was in dire financial straits. He had pledged most of his farm machinery to lenders, yet now desperately needed more money. He approached Greycas, Inc., the plaintiff in this case, a large financial company headquartered in Arizona, seeking a large loan that he offered to secure with the farm machinery. He did not tell Greycas about his financial difficulties or that he had pledged the machinery to other lenders, but he did make clear that he needed the loan in a hurry. Greycas obtained several appraisals of Crawford's farm machinery but did not investigate Crawford's financial position or discover that he had pledged the collateral to other lenders, who had perfected their liens in the collateral. Greycas agreed to lend Crawford $1,367,966.50, which was less than the appraised value of the machinery. Crawford was required to submit a letter to Greycas, from counsel whom he would retain, assuring Greycas that there were no prior liens on the machinery that was to secure the loan. Crawford asked Proud to prepare the letter, and he did so, and mailed it to Greycas, and within 20 days of the first contact between Crawford and Greycas the loan closed and the money was disbursed. A year later Crawford defaulted on the loan; shortly afterward he committed suicide. Greycas then learned that most of the farm machinery that Crawford had pledged to it had previously been pledged to other lenders.

Issues: Does a lawyer have a duty of care to an adversary’s client when the primary purpose and intent of the attorney-client relationship itself was to benefit or influence the third party?

Ruling: Yes. By addressing a letter to Greycas intended to induce reliance on the statements in it, Proud made himself prima facie liable for any material misrepresentations, careless or deliberate, in the letter, whether or not Proud was Crawford's lawyer or for that matter anyone's lawyer. Knowing that Greycas was relying on him to determine whether the collateral for the loan was encumbered and to advise Greycas of the results of his determination, Proud negligently misrepresented the situation, to Greycas's detriment. Crawford hired Proud not only for the primary purpose, but for the sole purpose, of influencing Greycas to make Crawford a loan; and therefore, is liable under Illinois law for legal malpractice.

Lesson: Privity, normally required as a pre-requisite to attorney liability, is not a bar where the adverse party relied on the lawyer's representations to its detriment. The duty of care and candor extends even to adverse parties where the lawyer knows that the adversary will rely on his/her representations to its determiment.  
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Aaron v. Mansell, 854 So.2d.96 (2003).

AL: Underlying criminal case

Student Contributor: Farah Shahidpour

Facts:  Client hired Attorney. Client, now acting pro se, sues Attorney for legal malpractice and slander. Attorney filed an answer and denied both of Client’s allegations. Attorney cross-filed for summary judgment. Client filed a request for oral argument for evidentiary hearing, a motion for declaratory judgment or in the alternative a trial by jury. Court denies  client's cross-motion for summary judgment.  Client did not file an appeal; instead he filed a “motion/request to file out-of-time appeal.” He asserted that the clerk’s office did not mail his copy of the entry of judgment. The court entered summary judgment in favor of Attorney. Client now appeals.

Issue: Whether the trial court correctly entered summary judgment against Client?

Ruling: Yes. The court dismissed Client’s appeal because Client did not provide an affidavit or other notarized statement that shows the date he sent his notice of appeal in the mail. The certificate of service for the notice of appeal is not dated. It is referenced to “this day.” Therefore the court cannot determine which date he deposited his notice of appeal.

Lesson: If a prison inmate is confined in an institution and is acting pro se and files either a civil or criminal appeal, the notice will be considered as filed timely if it is placed in the institution’s internal mail system on or before the, last day for filing. If an institution processes its legal mail through USPS, then the inmate must use that system to receive the rule’s benefit. A notarized statement setting forth the date of filing can prove a timely filing. Rule 4(c), Ala. R. App. P. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Hasty Hills Stables, Inc. v. Dorfman, Lynch, Knoebel & Conway, LLP, 52 A.D.3d 566, 860 N.Y.S.2d 182 (App. Div. 1st Dep’t 2008).

NY: Underlying real estate matter

Student contributor: Nicole Milone

Facts: Hasty Hills Stables, Inc. (Hasty Hills) obtained Dorfman, Lynch, Knoebel & Conway, LLP (law firm) to represent them in the purchase of real estate in 1996. Hasty Hills sought to obtain a 50-year lease on the land, and believed the law firm drafted the contract to their desires. However, in July 2001, the lessor sold the land to a new owner. The new owner then utilized a defeasance clause in the contract which allowed them to terminate the lease. Hasty Hills was evicted in May 2003. They brought this action for malpractice in January 2005.

Issue: Whether the three-year statute of limitations on a legal malpractice claim should be tolled for continuous representation of the client by the attorney?

Ruling: No. The continuous representation of Hasty Hills by the law firm was unrelated to the issue that gave rise to a malpractice claim. The statute of limitations for this legal malpractice claim expired in 1999, three years after the law firm represented Hasty Hills in connection with the sale of real estate. The subsequent representation was unrelated to this sale.

Lesson: The three-year statute of limitation on a legal malpractice claim can be tolled under the doctrine of “continuous representation” only if the attorney continues to represent the client in the same matter that the alleged malpractice occurred.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Hearst v. Hearst, 50 A.D.3d 959, 857 N.Y.S.2d 596 (App. Div. 2d Dep’t 2008).

NY: Underlying divorce case and undue influence claim

Student Contributor: Nicole Milone

Facts: John Randolph Hearst, Jr. (John) suffered a stroke in 1989. He was married to Barbara in 1990. When Barbara filed for divorce in 2004, John discovered that she and their attorney, Leonard Ackerman, allegedly defrauded him of over $20 million in investments. John claimed his wife and lawyer asserted undue influence on him, which he was susceptible to due to his stroke.

Issue: Is there a triable issue of fact as to whether Barbara asserted undue influence over John with respect to their investments? Did John state a prima facie case of legal malpractice against Ackerman such that summary judgment dismissing the claim was improper?

Ruling: Yes and yes. John raised a triable issue of fact as to Barbara’s undue influence with evidence that she transferred finances from joint accounts to accounts under her control only. The court found that there is an issue here as to whether Barbara was acting within John’s best interests. The court also found that there is sufficient to support a legal malpractice claim against Ackerman. John introduced evidence that Ackerman aided Barbara in the misuse of John’s assets.

Lesson: A client can survive a summary judgment claim if they raise a triable issue of fact with respect to the legal malpractice cause of action.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Lundberg v. Backman, 11 Utah 2d 330 (1961).

Student Contributor: Manju Sunny

Facts: Plaintiff alleges that her former attorney was negligent by failing to file a motion for a new trial within the time prescribed by law. She further alleges that she relied upon her attorney to do this and his failure to do so caused her to lose her opportunity to have the trial court reverse its prior decision. Defendant responds that the parties never entered into an agreement with regard to appeals. To the contrary, he states that he advised his former client that he would not represent her on any appeal. This, despite the fact that he did not formally withdraw as her attorney until after the time for appeal had run. 

Issue: What, if anything, did the attorney do wrong?

Ruling: Nothing. 

As a general rule, implied authority of an attorney ends with the entry of a final judgment in the trial court. While there are some exceptions to this rule, it has been held that an attorney will not be held liable for failure to take proceedings for the review of a case unless he has been directed to do so, and he has agreed to and accepted that duty.

In this case, there was no agreement by the attorney to represent the client on an appeal of her case. Consequently, the fact that the attorney did not formally withdraw until after the time to file an appeal had run was of no significance. In fact, the relationship between the attorney and the client terminated upon entry of the final judgment.

Lesson: In Utah, attorneys appear to be under no obligation to bring an appeal on behalf of a client unless there is an agreement that they have agreed to and accepted such a duty. Nevertheless, the safest option would be to spell out in the retainer agreement and/or a timely disengagement letter that the attorney client relationship will end upon entry of a final judgment to avoid the possibility of confusion. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Kathy Lynn Darrow v. Steven E. Zigan, Esq., et al., 2009 Ohio 2205 

Student Contributor: Shiv Vydyula

Facts: Plaintiff contends that she was a third party beneficiary in the underlying divorce action, and therefore, in privity with the defendant attorney. By way of explanation, she provided that the attorney for her ex-husband told her he would draft the necessary documents to quit-claim the husband’s interest in their marital residence and prevent her from exposure to the home equity loan the ex-husband took before their marriage.

Ultimately, a collector placed a lien on the property. Plaintiff then filed suit claiming she was a third party beneficiary because she relied on opposing counsel’s promise to draft documents that would release her from liability on the loan. 

Issue: Does opposing counsel’s promise to complete a quit-claim deed create a privity sufficient to pursue a claim for legal malpractice?

Ruling: No. 

In Ohio, attorneys have qualified immunity against the claims of third parties which arise from actions taken while representing their clients...Unless a third party can establish that it is in privity with the client, or that the attorney acted with malice, the attorney is not liable to the third party.

In line with precedent, the controlling factor here was that there was no attorney-client relationship between the attorney and the plaintiff. Nor was there any privity because their interests were clearly at odds. 

Lesson: A promise made by opposing counsel is not sufficient to satisfy the burden of privity in an Ohio legal malpractice action.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Berry et al. v. Javitch, Block & Rathbone, L.L.P., 182 Ohio App.3d 795 (2009).

Student Contributor: Shiv Vydyula

Facts: The Berrys commenced suit for negligent concealment and alleged that defendants committed fraud when they failed to disclose that they were insured for malpractice by Clarendon National Insurance Co. Defendant(s) only disclosed a policy from Legion Insurance, which did not cover the time period of the Berrys'  claim.

This failure to disclose prevented the plaintiffs from asserting a claim against the appropriate carrier-- Clarendon. Defendants agreed to settle the matter for $195,000, $65,000 of which was to be paid up front by Defendants. Defendants would then have 90 days to get Legion to satisfy the balance of the claim. If payment was not made in 90 days, the Berrys could proceed directly against Legion. This, despite the fact that the parties' agreement provided that Legion had disclaimed coverage. Legion never paid the remaining $135,000. 

Eventually, the Berrys filed suit for fraudulent inducement against defendants. The trial court granted summary judgment in favor of the defendants without opinion. The Berry appealed the trial court's decision and argued that they had valid claims for fraud against defendants. 

Issue: Does failure to disclose a malpractice policy amount to fraud?

Ruling:  Yes, if the following prerequisites are met: 

(a) a representation or, where there is a duty to disclose, the concealment of a fact (b) that is material to the transaction at hand, (c) was made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, and (e) justifiable reliance upon the representation or concealment, (f) with a resulting injury proximately caused by the reliance. 

The appellate court remanded on the issue of whether the failure to disclose was purposeful in light of the fact that Defendants had notified Clarendon of the suit, yet answered Plaintiffs' interrogatory requesting information regarding any policy which "may" provide coverage with only Legion. 

Lesson: Under Ohio law, Intentional concealment of an applicable malpractice insurance policy could amount to fraud.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Caffery v. Stillman, 79 Conn. App. 192, 829 A.2d 881 (Conn. App. 2003)

CT: Underlying workers’ compensation action

Student Contributor: Laura Binski

Facts: On April 16, 1992, the client sustained injuries while working in the course of his employment for the city of New Britain. The client hired the lawyer to represent him in his workers’ compensation case in 1994. The case settled for $95,000. In 1997, the client sued the lawyer for legal malpractice for failing to adequately represent his case because the client felt he was entitled to more money. The court dismissed the case because the client had not first sought to re-open the workers’ compensation claim. The client then re-opened the workers’ compensation case and the court affirmed the original settlement amount. In 1999, the client again sued the lawyer for legal malpractice for negligence and breach of contract.

Issues: (1) Can the client’s claim be saved by the accidental failure of suit statute? (2) Do the allegations set forth a claim in contract or in tort?

Ruling: (1) No. §52-592, the accidental failure statute, provides that “a plaintiff must file an action for the same cause at any time within one year after the determination of the original action . . .” In this case, more than one year had passed between the date the court dismissed the client’s original action in 1997 and the date when this action was brought in 1999.

(2) The second claim was no more than a tort disguised in contract language. A client may not bring an action in both negligence and contract simply by saying that a lawyer breached the standard of care in the language of his employment contract. In this case, the client alleged that the lawyer had promised to bring a liability action against the city, and that the promise to bring such an action was premised on an inaccurate understanding of the law. The client claims that this incorrect understanding of the law caused him to suffer damages. Thus, the client’s allegation that the lawyer breached his contract by failing to meet the standard of care is in reality a negligence claim.

Lesson: The tort statute of limitations is three years, while a breach of contract statute of limitations does not run for six years. In this case, the client sought to avoid the statute of limitations by sounding his claim in contract rather than tort. This does not often work because the courts are very careful to delineate between tort and contract claims. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Mariscotti v. Tinari, 335 Pa. Super. 599, 485 A.2d 56 (1984).

PA: Underlying divorce case

Student Contributor: Laura Binski

Facts: The client hired a lawyer to handle her divorce. The lawyer gave the client an incorrect evaluation of the stock owned by her husband. The lawyer told the client that the stock was worthless when in fact it was valuable. The client admits that she knew her husband’s stock holdings were in his name and she did not have title to them. She claims that she would have been in a better bargaining position if she had known the value of the stock. The client claims that the lawyer’s mistake damaged her ability to receive the best possible property settlement after the divorce. The lawyer made a motion for summary judgment. The court granted summary judgment to the lawyer on the ground that the client’s loss, if any, was too speculative to allow recovery.

Issue: Was summary judgment appropriate because the client’s complaint of loss was too speculative?

Ruling: Yes. Summary judgment is appropriate when there is no genuine issue of material fact. A genuine issue of material fact did not arise in this case because the client’s claim was based purely on speculation. No one knows whether she would have achieved a better result if she had known the value of the stock. Exactly how much better the result would have been is even more speculative. Thus, dismissal of her case through summary judgment was appropriate because a jury could not have appropriately decided the issue of whether the client would have obtained a better result.

Lesson: When a client claims that a lawyer has breached his professional obligations, an essential element of the client’s claim is a showing of actual loss. If the client cannot prove actual loss, the claim may be too speculative or remote to survive. “The test of whether damages are remote or speculative has nothing to do with the difficulty in calculating the amount, but deals with the more basic question of whether there are identifiable damages…thus damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.” Pashak v. Barish, 303 Pa. Super. 559, 561-562, 450 A.2d 67, 69 (1982). 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Pashak v. Barish, 303 Pa. Super. 559, 450 A.2d 67 (1982).

PA: Underlying negligence action

Student Contributor: Laura Binski

Facts: Mr. Pashak was injured working as a longshoreman. He sued the ship’s owner for negligence, claiming that the ship was unseaworthy. Mr. Pashak hired some lawyers who recommended that he settle the case out of court for $100,000. Mr. Pashak agreed to settle the case. He was later notified that contrary to his lawyers’ advice, his statutory compensation benefits would be ended because of the settlement. When Mr. Pashak’s wife found out that she also would not be able to collect statutory compensation benefits as a result of the settlement, she sued the lawyers for legal malpractice. The lawyers defended themselves on the basis that Mrs. Pashak’s loss was too speculative and remote to justify her winning her case against the lawyers. The trial court agreed with the lawyers and dismissed Mrs. Pashak’s complaint with prejudice.

Issue: Was Mrs. Pashak’s loss too speculative and remote to justify her winning a legal malpractice case against her husband’s lawyers?

Ruling: Yes. The court reasoned that a mere breach of professional duty, causing only speculative damage or the threat of future damage is not enough to create a feasible cause of action of legal malpractice. In this case, Mrs. Pashak’s right to compensation would not become available until Mr. Pashak died. Thus, Mrs. Pashak’s right to the benefit was dependent upon her surviving him, and the amount of money she would receive was also dependent on whether the couple had children. Since there were so many conditions placed upon her receipt of the benefits, the court held that Mrs. Pashak’s claim was did not rise to the level of harm necessary in a legal malpractice lawsuit.

Lesson: To give rise to a legal malpractice claim, identifiable harm must exist. “The mere possibility or even probability that the plaintiff will sustain an injury at some future time does not alter the speculative nature of the damage claim or support a cause of action for legal malpractice…damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.” R. Mallen & V. Levitt, Legal Malpractice § 302 (2d ed. 1981). 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Veneri v. Pappano, 424 Pa. Super. 394, 622 A.2d 977 (1993).

PA: Underlying felony conviction case

Student Contributor: Laura Binski

Facts: The client was convicted of two related robberies and sentenced to twenty-five to fifty years in prison. The lawyer was a public defender assigned to the client’s case. The client claims he informed the lawyer that wanted to file a petition for allowance of appeal to the Supreme Court of Pennsylvania. The lawyer did not file the petition, so the client filed it by himself. The client then filed a complaint against the lawyer for negligence in failing to file the petition. The trial court dismissed the complaint and the client appeals.

Issue: Does the client’s complaint state a cause of action in negligence against the lawyer?

Ruling: No. The three elements for a cause of action for negligence are (1) employment of the lawyer, (2) failure of lawyer to act with ordinary skill and knowledge, and (3) that the lawyer’s negligence was a proximate cause of harm to the client. A client must also show that he likely would have won the underlying dispute. Here, the client did not suffer any real harm. The only harm he might have suffered as a result of the lawyer’s failure to file the petition was his right to habeas corpus relief. Since the client did file the petition, he suffered no real damage as a result of the lawyer’s conduct. As a result, his claim against the lawyer is speculative and does not meet the requirements of an action for negligence. In addition, the client did not make any showing that his claims were likely to be successful. Thus, the client’s case was properly dismissed.

Lesson: Speculative claims of future harm are not enough to rise to a viable cause of action. A client will not succeed in legal malpractice claims when he only asserts a possibility that he might be harmed as a result of the lawyer’s conduct. Also, a client must not forget to assert the likelihood that he would have prevailed in his underlying dispute if not for the lawyer’s malpractice.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Kornicki v. Cherniack, 2006 WL 6049500 (2006).

PA: Underlying criminal defense 

Student Contributor: Laura Binski

Facts: In May of 2000, Kornicki (the client) was found to have violated his probation and sentenced to 7 to 14 years in prison. In 2003, Cherniack (the lawyer) was appointed to represent the client. On behalf of the client, the lawyer filed a Post Conviction Relief Act (PCRA) petition. The court denied the petition. The client sued the lawyer for legal malpractice, claiming that the lawyer was negligent because she failed to raise the issue of credit for time served in the client’s PCRA petition. The trial court sided with the lawyer and dismissed the client’s legal malpractice claim. The client now appeals the court’s decision.

Issue: Was the trial court correct to favor the lawyer’s argument that she did not commit malpractice because she was not allowed to bring up credit for time served in the PCRA petition?

Ruling: Yes. The trial court ruled correctly in favor of the lawyer because under Pennsylvania law, lawyers are not permitted to challenge credit for time served in a PCRA petition because it is not the proper forum to do so. Instead, this type of claim must be raised in the Commonwealth Court against the Bureau of Corrections or in a writ of habeas corpus. Thus, the lawyer was not negligent and acted properly by not bringing up this issue in the wrong forum.

Lesson: In order to establish a legal malpractice claim in a criminal case, a client must show (1) employment of the lawyer, (2) the lawyer’s negligent disregard of the client’s interests, (3) that if not for the lawyer’s conduct, the client would have received an acquittal or dismissal, (4) existence of damages, and (5) that the client has sought post-trial remedies for the lawyer’s mistakes. Since the lawyer in this case could not have appropriately raised the miscalculation of credit issue due to the improper forum, the client failed to meet all of the above requirements.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Don v. Soo Hoo, 75 Mass. App. Ct. 80 (2009)

MA: Underlying Botched Bankruptcy Proceedings

Student Contributor: Jason W. Hake

Facts: A client retained the defendant law firm to file a bankruptcy petition on her behalf while he earned $8,000.00 per year. The attorneys forgot to file his petition and discovered their error three (3) years later when the client was earning $30,000.00 per year. The attorneys filed the petition and the bankruptcy trustee concluded that she could pay her debts and dismissed the petition. The client sued his attorneys for negligence, breach of contract, breach of the covenant of good faith and fair dealing, and for violation of Mass. Gen. Laws Ann. Ch. 93A. The jury awarded the client $16, 913.00 in damages. The attorneys appealed for judgment notwithstanding the verdict.

Issue: Did the jury properly find in favor of the client?

Ruling: Yes. The evidence properly supported the jury’ finding that but for the attorney’s negligence, the client would have received a discharge of her debts at an earlier date when she was making only $8,000.00 per year. The jury’s finding was also supported by the evidence which demonstrated that the client’s creditor’s were still interested in commencing lawsuits against her, as she was receiving demand letters and was no longer ‘judgment proof”. The amount of damages awarded by the jury were also supported by the evidence documenting the debt owed by the client.

Lesson: Beware of skeletons in the closet. It is extremely important to manage your case-load and document important dates and client goals and anticipate changes in circumstances which could adversely affect your clients.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link