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

Pierce v. Colwell, 563 N.W.2d 166 (Wis. Ct. Apps. 1997)

WI: Underlying criminal matter

Student Contributor: Jeff Cain

Facts: Client was charged with ten counts of sexual assault. He was represented by another lawyer during the arraignment and the jury trial, which found him guilty. Lawyer Colwell represented him during the sentencing, in which he was sentenced to 20 years in prison. The client unsuccessfully appealed his conviction, arguing among other things, that his due process rights were violated because the criminal court did not personally read the information to him at the arraignment. The client then sued the lawyer for not raising this fact at the sentencing.

Issue: How can a client prove that his former lawyer committed malpractice?

Ruling: To show lawyer malpractice in a criminal action, you must show that you would have succeeded in court if it were not for the lawyer’s failure to exercise reasonable care. In this case, the client had to show that he would have won if the lawyer argued that the client was prejudiced by the failure of the court to personally read the information to the client. To show this, the client would have to provide expert testimony to prove this. Since the client did not name an expert within the time limits, the court dismissed his claim.

Lesson: In Wisconsin, to prove a breach of a duty of care, expert testimony is generally required, since duty of care is outside of the area of common knowledge.

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Keister v. Talbott, 182 W.Va. 745, 391 S.E.2d 895 (W.Va. 1990)

WV: Underlying real estate conveyance (mineral rights)

Student Contributor: Karen Dindayal

Facts: Keister retained Webster County attorney, William Talbott, to examine title to two tracts of land, specifically the ownership of the surface and coal and mining rights. Talbot drafted a general warranty deed on June 24, 2986, wherein Mrs. Brown conveyed the two tracts of land, including the coal, oil, gas and minerals, along with the mining rights.  Talbott later discovered that a third party claimed mining rights to the coal underlying the property, further discovered that the rights were in fact conveyed in 1946 by the prior owners and notified the Keisters of this fact. Thereafter, in November 1986, the Keisters filed suit against Talbott, as well as Charles Herold, Webster County Clerk for negligence resulting in the deprivation of ownership of the coal underlying the property. The Talbotts sought compensatory damages of $10,000,000.00. The trial court excluded evidence offered by the Keisters regarding the value of the coal under the land and the jury assessed damages in the amount of $0.

Issue: Was Talbott’s negligence a proximate cause of the damages incurred by the Keisters?

Ruling: No. Talbott’s negligence did not cause the loss of mineral rights.

Lesson: In an action for legal malpractice, against an attorney who has overlooked a conveyance of property which leads to the plaintiff receiving less than he contracted to purchase, damages are typically calculated by subtracting the value of the property actually received from the purchase price paid. 

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Harrison v. Casto, 165 W.Va. 787, 271 S.E.2d 774 (W.Va. 1980)

WV: Underlying  personal injury and legal malpractice actions

Student: Karen Dindayal

Facts: Plaintiff, Paul H. Harrison hired attorney Don Kingery (#1) to file a personal injury action against Piedmont Airlines for injuries allegedly suffered while a passenger on a Piedmont plane. King failed to file the action within the statutory period. As a result, Harrison hired Carroll W. Casto (#2) to file an action against Kingery (#1) for malpractice. Casto (#2) failed to do so, but instead brought a personal injury suit against Piedmont Airlines and was unsuccessful.

Plaintiff then retained another attorney (#3) to sue Casto (#2) for legal malpractice, claiming (a) that Casto (#2) failed to file the instant action within the applicable statute of limitations and (b) breach of contract between Harrison and Casto.

Casto filed an Answer in which she set forth that Harrison’s Complaint lacks a cause of action since the claims against Kingery (#1) can still be brought in contract, since the applicable statute of limitations for breach of contract was ten years if the contract was in writing.

Issue: Was the trial court’s dismissal of the complaint correct?

Ruling: Yes. A malpractice action “could have been brought in contract” if the plaintiff alleged that defendant breached her contractual employment obligations. Harrison’s action on a breach of contract then survived against Kingery, (#1) although the tort action was barred by the statute of limitations. Therefore, Harrison was not deprived of anything and the Complaint was correctly dismissed.

Lesson: When a malpractice action sounds in tort and contract, statute of limitations barring the filing of the action in tort does not necessarily preclude the filing the action on the contract.

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Summit Lodging, LLC v. Jones, Spitz, Moorhead, Baird & Albergotti, P.A., 176 N.C. App. 697, 627 S.E.2d 259 (2006)

NC: Underlying Real Property Transaction

Student Contributor: Vanessa L. Wachira

Facts: Clients, non-residents of North Carolina, retained a South Carolina-based firm (“Attorneys”) to organize a North Carolina limited liability company for the purpose of purchasing, owning, and operating an inn in North Carolina. Attorneys represented Clients in connection with the transaction by communicating with the Seller and preparing the documentation. Because Attorneys were licensed to practice in SC, they contacted an NC attorney to serve as counsel for Clients in the actual purchase transaction. At the closing, Clients signed a promissory note for nearly the entire purchase amount, “which provided for a maturity date of one year.” When Clients defaulted, they negotiated extensions with Seller and prepared a proposal to restructure the debt. To restructure the debt, Attorneys negotiated an arrangement in which one of Seller’s affiliates (“Affiliate”) would loan to Clients part of the sum needed to satisfy their indebtedness. The loan was to be personally guaranteed by Clients. Attorneys presented the agreement to Clients, who then executed the new promissory note. When Clients defaulted on the loan, Affiliate sought to collect from Clients personally. Although North Carolina statute (N.C. Gen.Stat. § 45-21.38 (2001)) prohibits deficiency judgments where a mortgage on real property represents part of the purchase price, because Clients had executed the new note with Affiliate, that portion of the debt became unsecured, with personal guarantees not subject to the statute. Clients brought suit for legal malpractice in NC, alleging that Attorneys failed to inform them of this consequence of the debt restructuring. Attorneys filed a motion to dismiss for lack of personal jurisdiction.

Issue: Whether personal jurisdiction can be established in a legal malpractice claim brought against non-resident lawyers by non-resident clients.

Ruling: Yes. In NC, plaintiffs establish personal jurisdiction by claiming “(1) that they suffered an injury within North Carolina which arose out of a defendant’s acts or omissions outside the state; and (2) that at or about the time of the injury, “solicitation or services activities were carried on within [NC] by or on behalf of defendant.” N.C. Gen.Stat. § 1-75.4(4) (2004). Here, Clients’ company, a North Carolina corporation, was injured when Attorneys failed to advise them of the anti-deficiency statute. This failure occurred in South Carolina, satisfying the foreign act requirement. During this time, Attorneys provided legal services to Clients to secure loan restructuring with two NC companies. Thus, Clients had made out a prima facie case for personal jurisdiction pursuant to the long-arm statute. Furthermore, although Attorneys were not physically present in North Carolina, they represented Clients’ corporation, a North Carolina company, “from its inception,” satisfying due process’s ‘minimum contacts’ requirement.

Lesson: When providing services for clients in foreign jurisdictions, it is imperative that you thoroughly research the laws of that jurisdiction; if you don’t, you may be liable for malpractice.  

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Fox v. Willis, 390 Md. 620, 890 A.2d 726 (2006)

MD: Underlying Divorce Proceeding

Student Contributor: Vanessa L. Wachira

Facts: Katherine Fox (“Client”) is a minor child whose parents were divorced pursuant to a judgment entered by the Circuit Court for Montgomery County. In the subsequent proceedings to determine custody and visitation, the court appointed Vincent Wills (“Attorney”) as Client’s guardian (in accordance with Maryland Code § 9-109 of the Courts and Judicial Proceedings Article) and counsel (in accordance with § 1-202 of the Family Law Article). On behalf of Client, Client’s mother brought action for legal malpractice against Attorney in the Circuit Court alleging that Attorney negligently represented Client, abdicated his responsibilities as counsel for the child, was in fact an advocate for the child’s father who was suspected of sexually abusing Client, and breached his duties as counsel by improperly allowing his friendship with the child’s father to influence his judgment regarding the child’s best interest. At trial, Attorney argued that, because of his position as counsel for the child under § 1-202, he was entitled to “judicial immunity” and that he was functioning on behalf of and for the benefit of the court.

Issue: Whether a minor’s statutorily appointed attorney is entitled to immunity from tort liability while acting in his capacity under the statute?

Ruling: An attorney appointed under § 1-202 of the Family Law Article has no immunity from tort liability with respect to legal malpractice suit filed against him by a third party on behalf of a minor child. Although an attorney appointed under the statute is appointed by the court, “neither language nor history of [the] statute” suggests that he owes his principal duty of allegiance to court rather than the minor child. To rely, as the lower courts did in this case, “on the notion that an appointed guardian functions ‘as an agent or arm of the court, to which it owes its principal duty of allegiance, and not strictly as legal counsel to a child client’” is to ignore the fact that the sole function of counsel appointed under Section 1-202 is “to represent the minor child.”
Furthermore, under common law, “[a] guardian is “liable to his ward for such damages as may result from any culpable omission or neglect on his part.” Speck v. Speck, 42 Ga.App. 517, 156 S.E. 706, 707 (1931). Inhabitants of Maryland are entitled to the Common Law under Article 5 of the Maryland Declaration of Rights. Although common law can be altered by statute or decision of Maryland’s highest court, no statute or decision have granted tort-immunity to attorneys appointed pursuant to § 1-202 of the Family Law Article. Accordingly, attorneys appointed under the statute have no immunity from malpractice suits

Lesson: Like retained counsel, guardians appointed by the court have legal responsibilities to their clients. Violations of these duties amount to malpractice for which the Court will not grant immunity. 

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Roberts v. Chimileski, 820 A.2d 995 (Vt. 2003)

VT: Underlying Real Estate Subdivision; Environmental Law

Student Contributor: Eric B. Kang

Facts: Client, a real estate developer, consulted lawyers about a statute’s permit requirements concerning the subdivision of land into ten or more lots. The language pertinent to client stated that developers subdividing land into lots of any size needed to acquire a permit if they “owned or controlled” the land being subdivided. Lawyers advised client that land sales could still occur legally without a permit if the original owner prepared the subdivision first and then conveyed the lots to client so that client would not “control” the lots during subdivision. This way, the client would cover the costs and handle the preparation of the subdivision plan. At this juncture, the definition of “control” was legally ambiguous. Lawyers did not advise client of the potential illegality of this method of operating (“method”) because they believed they had no duty to advise client of the potential risk because it was too remote and tenuous. Client proceeded to complete over 100 transactions employing the lawyers’ suggested method. Thereafter, the Vermont Environmental Board issued declaratory rulings in cases involving circumstances similar to the method suggested by the lawyers and held that a permit was required because a buyer who manipulated the property before a sale fell within the statute’s definition of “control.” Upon learning of this decision, lawyers advised client that there were serious doubts now raised about the legality of the method. Nevertheless, client proceeded to make another transaction using the method after receiving this information. Thereafter, the State prosecuted client for making illegal subdivisions. Client then sued lawyers for malpractice alleging that they breached the standard of care of a Vermont attorney by failing to research and advise client of the ambiguous meaning of “control” within the statute. After the trial court held for lawyers, client appealed.

Issue: Are lawyers liable for malpractice for speculating in regards to ambiguous language in a statute?

Ruling: No. The court agreed with the trial court, which held that lawyers “could not be held negligent for their participation in the [method] because the definition of ‘control’ was a professional opinion regarding the interpretation of an unsettled area of the law, and they were thus shielded by the ‘judgmental immunity’ doctrine, which protects attorneys from liability for their opinions in areas of unsettled area of law.” Further, once the lawyers found out about the Vermont Environmental Board’s ruling, they advised client about the possible illegality of the method. Although client tried to make the additional argument that lawyers should have advised client about the risky nature of the method due to the unsettled definition of “control,” their argument fails because even after lawyers notified client about the Vermont Environmental Board’s ruling, client proceeded to continue with the unlawful development method.

Lesson: Lawyers are shielded from liability for professional services and opinions unsettled areas of law. Nonetheless, it is prudent to advise the client of the uncertainty of the law and that if client proceeds they may be subject to legal risks. 

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Licata v. Spector, 26 Conn. Supp. 378, 225 A.2d 278 (1966).

CT: Underlying will matter

Student Contributor: Laura Binski

Facts: The client hired the lawyer to draft her last will and testament. The lawyer failed to ensure that the will provided the required number of witnesses. As a result, the Probate Court declared the will invalid and assets of the estate were given to persons other than the will’s intended beneficiaries. The intended beneficiaries filed a two count complaint: (1) the client’s estate has suffered damages of $7500, and (2) as a result of the lawyer’s negligence, assets of the client’s estate were diverted to other persons. The lawyer demurred on the basis that certain elements of the alleged damage were improper and that there was no duty owed to the beneficiaries because there was no privity of contract.

Issue: Can a legatee of a will that has been deemed invalid as a result of not meeting statutory requirements, by fault of the lawyer’s negligence, bring an action against the lawyer for the losses sustained by being deprived of his intended rights under the will?

Holding: Yes. The Court held that “liability for negligent performance of a contract, or nonperformance, should be imposed where the injury to a person is foreseeable. . .” The harm that would result from the lawyer’s negligence was well within the realm of reasonable foreseeability. Thus, a liability link is established even in the absence of privity, and the intended legatees had every right to establish their right to redress. Due to the technical nature of drafting a will and the privacy that is often involved in the drafting, it is the duty of the lawyer, not the person making the will or the intended beneficiaries, to ensure that the will is valid.

Lesson: Imposition of a duty to third parties under these circumstances is grounded in public policy. The Court justifies this decision by reasoning that public policy considerations tip in favor of the innocent third party seeking damages that are a result of an error over which they had no control or ability to correct. 

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DiTondo v. Meagher, 24 Misc. 3d 720, 883 N.Y.S.2d 690 (Sup 2009).

NY: Underlying negligence action, choice of law

Student Contributor: Nicole Milone

Facts: Joseph DiTondo (“DiTondo”) was injured while unloading a chain link fence he delivered to a National Rent-A-Fence facility in North Carolina. DiTondo hired Frederick J. Meagher, Jr of Meagher & Meagher Law Firm  to represent him in the underlying negligence action. The injury took place in North Carolina, where there is a contributory negligence bar to negligence actions. However, DiTondo lives in New York and Rent-A-Fence has its principal place of business in California, and both states practice comparative negligence law. Meagher brought the action in federal district court in New York. Rent-A-Fence submitted a motion for summary judgment, which went unopposed. Chief Judge Scullin struck Meagher’s opposition papers because they failed to comply with federal rules. The summary judgment motion argued that North Carolina’s law of contributory negligence should apply in this case, which would bar DiTondo’s recovery. The judge determined that North Carolina has the most contacts with this litigation, being the site of the injury and the location of a Rent-A-Fence facility, and applied North Carolina law. However, the judge denied Rent-A-Fence’s motion for summary judgment, finding they did not meet the high standards applied in North Carolina to contributory negligence cases on summary judgment. Before the case went to trial, Meagher filed a motion to withdraw as DiTondo’s counsel, which the judge granted provided he located another attorney willing to take the case.

Issue: Whether a lawyer’s failure to properly research and argue the choice of law in a federal diversity case constitutes legal malpractice?

Ruling: Yes. Meagher failed to meet the proper standard of care in representing his client. If not for his error, DiTondo would have prevailed in the underlying case. Meagher should have argued that applying the New York choice of law rule, or the Neumeier rule, North Carolina was not the proper choice of law. The judge found that North Carolina law applies because it was the site of the accident as well as the location of a Rent-A-Fence facility. However, Meagher should have pointed out that Rent-A-Fence has its principal place of business in California, which means it is domiciled in California. If Meagher had presented this version of the facts to the judge in the underlying case, he would not have applied North Carolina law. North Carolina has no interest in applying its law to these facts because both parties are not domiciled in the state.

Lesson: A lawyer is responsible for zealously advocating on behalf of their client. Failure to do the proper research and argue the relevant law will result in a malpractice action against the attorney. 

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Hays v. Sony Corp. of America, 847 F. 2d 412 (7th Cir. 1988)

Underlying copyright dispute

Student Contributor: Clem Durham

Facts: The plaintiffs, Stephanie Hays and Gail MacDonald, teach business courses at a public high school in Des Plaines, Illinois. In 1982 or 1983 they prepared a manual for their students on how to operate the school's DEC word processors, and distributed copies to students and to other faculty members. In 1984 the school district, having bought word processors from Sony Corporation of America, gave Sony the plaintiffs' manual and asked Sony to modify it so that it could be used with Sony's word processors. Sony proceeded to do so, resulting in a manual very similar to — in many places a verbatim copy of — the plaintiff's manual. In February 1985 the plaintiffs, presumably spurred by knowledge of Sony's manual, registered their own manual with the Copyright Office, and in July they filed this lawsuit in federal district court. Sony filed several motions for sanctions under Rule 11 of the Federal Rules of Civil Procedure, seeking reimbursement of some $47,000 in attorney's fees and related expenses, and the district judge had heard, but not decided, the motions several days before he dismissed the action. Several months later, on February 18, 1987, the judge awarded Sony $14,895.46 in sanctions against the plaintiffs' counsel, Emmanuel F. Guyon, but not against the plaintiffs. Guyon appealed.

Issue: Is an award of sanctions permissible, under FRCP Rule 11, against an attorney for filing a complaint that is not frivolous but was ineffectively pursued?

Ruling: Yes. In the Rule 11 setting the victims are the lawyer's adversary, other litigants in the court's queue, and the court itself. By asserting claims without first inquiring whether they have a plausible grounding in law and fact, a lawyer can impose on an adversary and on the judicial system substantial costs that would have been — and should have been — avoided by a reasonable prepleading inquiry.

Lesson: The Rule 11 standard, like the negligence standard in tort law, is an objective standard. Therefore, one must know the law before bringing claims, even if one is not an expert in the field. Otherwise, a lawyer may get sanctioned.  

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Goggins v. Grimes, 969 S.W.2d 135 (Tex. App. 1998).

TX: Underlying action for award of attorney fees

Student Contributor: Megan Diodato

Facts:  The client hired the attorney to represent her in a divorce. The attorney withdrew and filed a petition for her attorney’s fees in the client’s divorce case. The client contested the attorney’s right to recover fees and also made a claim for attorney fees for her newly retained attorney in the divorce case. A year later, the client sued the attorney for legal malpractice in the handling of her divorce case. The attorney argued that the client’s malpractice claim was barred from suit for failure to raise it as a counter-claim in the underlying attorney fees action. The trial court ruled in favor of attorney and client the appealed.

Issue: Whether the client’s malpractice claims are barred and judgment proper?

Ruling:  Yes.  In the underlying divorce action, the attorney withdrew from representation of the client before judgment was entered. The attorney-client relationship ended with the withdrawal and no legal injury could occur after that because the attorney had no duty to the client. An attorney’s conduct must raise a risk of harm to a client’s legally protected interest. A cause of action generally accrues when the injuring act is committed and damage is suffered. When the attorney intervened and sued the client for attorney fees in the same pending divorce action, the client suffered a legally recognized injury. The attorney intended to collect money from the client for her alleged unlawful malpractice. The client denied owing the attorney anything and argued she should be awarded attorney fees for the services of her replacement lawyer. A claim of attorney malpractice has been held a compulsory counterclaim to a claim for attorneys’ fees under Rule 97(a). CLS Assoc. Ltd. v. A B , 762 S.W.2d 221 (Tex. App. 1998). In this case, the issue of malpractice arose from the same transaction as the attorney’s fees. Because the client chose not to counterclaim for this action, all claims are barred

Lesson: A claim of damages for legal malpractice is a compulsory counterclaim in an action for attorney fees. 

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Patterson v Checkett, 43 S.W.3d 477

MO: Underlying trusts and estate

Student Contributor: Meghan Jean

Facts: The Pattersons retained attorney Checkett to help with their estate planning. After the Patterson’s indicated what they wanted to be placed into the trust, Checkett sent them a letter indicating what could be done with the IRA and verifying that what he had suggested in a previous letter had been done; if so, he informed them that the trust was set-up. To that, the Patterson’s informed him that they had funded their trust. Checkett closed their file.
Several years later, the Patterson’s requested an amendment to the trust. They inquired of Checkett whether or not they should include the their IRA and Keough (the annuities) in the trust. Checkett said no due to the tax consequences. Dr. Patterson, however, died prior to signing the trust amendment, at which point Mrs. Patterson learned that the trust had not been properly funded. As a result, Checkett suggested a post-mortem estate plan that would treat the trust as though it had been executed prior to Dr. Patterson’s death and fully fund the trust.
The estate was severely taxed.

Issue: Whether the placement of the annuities into the trust, resulting in a substantial tax, fell below the standard of care.

Ruling: No. In order to prove negligence, a plaintiff must show that a duty existed that the defendant failed to perform. As a result of that breach in duty, the plaintiff suffered damages. In order to show such a breach in a legal malpractice claim, expert testimony is needed.
Mrs. Patterson did not provide expert testimony to indicate that Checkett’s advice concerning the annuities was improper or below the standard of care. While Checkett advised the Patterson’s of the tax implications of placing the annuities into a trust, there was not enough money in their trusts without the inclusion of those annuities anyway. As a result, the Patterson’s would have been taxed in either circumstance. Checkett therefore cannot be held responsible for any tax consequence incurred.

Lesson: Where a client cannot show that the attorney’s acts would have resulted in damages, or had damaged him/her, there can be no recovery for legal malpractice.
 

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