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

Smith v. Sneed, 638 So.2d 1252 (Miss. 1994)

MS: Underlying Murder Charge

Student Contributor: Laura Stein

Facts: Smith sued his appointed lawyer, Sneed, alleging he committed malpractice during his representation on a charge of murder. Smith pled guilty to manslaughter and was sentence to 20 years in prison. 3 years later, through a new lawyer, Smith obtained a copy of the autopsy of his alleged victim that showed the victim died of natural causes so Smith’s conviction was set aside and a new trial was ordered and Smith signed a release and was released from prison. Smith alleges his lawyer was negligent in failing to obtain a copy of this autopsy report before advising him to enter a guilty plea to the lesser charge of manslaughter. Sneed moved for summary judgment saying the 6-year statute of limitations had run and also that the release Smith signed released Sneed and others from any and all claims arising out of the case. The trial judge granted summary judgment to Sneed. Smith appealed.

Issue: Whether the Circuit Judge erred in ruling that the statute of limitations ran from the time Smith entered his guilty plea and whether the Release signed by Smith was freely and voluntarily executed was a question of fact, not law and so it was error to grant summary judgment on the issue.

Ruling: Reversed and Remanded for further proceedings as if the motion for summary judgment had been denied. The statute of limitations does begin to run on the date the client learns or should learn of the negligence of his lawyer and this raises factual questions here and questions of material fact existed with regard to the voluntariness of the waiver executed by Smith. Sneed argued at the latest, the statute of limitations period began to run when he was told about the missing autopsy report by a constable at the prison; Smith argued it did not begin to run until he was released from prison because the full extent of his damages was not ascertainable until that date, or at the earliest, when he received a copy of the autopsy report. The court agreed with the trial judge in rejecting the “continuing injury” principle which applies only in situations where the defendant commits repeated acts of wrongful conduct, not where harm reverberates from a single, one-time act or omission. Alternatively, Smith urged the Court to adopt a “discovery” standard for matters of legal malpractice. The Court held that whether the Constable conveyed the contents of the autopsy report in a sufficient manner to put Smith on notice that Sneed was negligent was a factual question for jury determination, not summary judgment. The court also held that regarding the release signed by Smith, he presented facts which could lead a reasonable juror to conclude that the release was not entered into voluntarily and with a full understanding of his legal rights (he denied ever reading it and only signed it to be released from jail). It was inappropriate to grant summary judgment.

Lesson: A client who signs a release stating that he will not file a lawsuit against state defense lawyers must do so knowingly, intelligently and voluntarily. Some states impose a  discovery window to permit a client to discover the lawyer's malpractice note. 

Note: The release of a lawyer by a client for the lawyer's malpractice is prohibited by the Rules of Professional Conduct in most states. 

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Today, we celebrate the 2nd anniversary of “going live”. At the same time, we just  welcomed the 200,000th visitor to our blog. The Legal Malpractice Law Review has become the #1 site for everything you need or want to know about legal malpractice.

We are grateful to all the Lawyers, litigants, Judges, Professional Liability Insurance professionals, law students, law professors, law clerks, even lay people who have come to visit and utilize our resources. While the overwhelming welcome we have received has been wonderful, we would love to receive your comments to help celebrate this landmark event. Just click the "Comments" button on the lower left of this post and send us a few nice words.

In our short history,  the American Bar Association’s Lawyers Professional Liability Committee took note of us and showcased this blog at its conference for 500+ legal malpractice lawyers and insurance industry executives, underwriters, brokers and claims professionals.

One guru of the legal malpractice bar-- whose treatise we would all would recognize, commented that when it comes to educating law students and practicing lawyers, the way we’re doing it at the Legal Malpractice Law Review, is now “the way to go”. A senior New Jersey Law Journal reporter called us “cutting edge.”

We are a totally web based blog, whose goal is to build an easily searchable archive of all of the most important sources and resources in the law governing lawyers. Over the past two years, we have become the “go to” place for law students, law clerks, judges and lawyers conducting legal research in the field.  We post  case summaries, hyperlinked to a copy of the full text court decision. Case summaries are researched and written by senior law students who are focused on studying legal malpractice law in a full semester law school course in the subject. Experienced legal malpractice practitioners and law professors edit the student’s work before posting.

Our archive of  legal malpractice cases covers the entire country and is easily accessible without any cost to our visitors, at any time, day or night, 24/7. All you need is an internet connection, from your PC, Mac, iPhone, iPad, Blackberry, Droid or other smartphone. Our advanced word search engine on the left hand column will get you right to the cases or other resources you’re looking for. In court, in the law library, in your office or on the go, day or night, you know where to find us. We’re here. For you.

So, from the Editorial Board: Thanks for making this 2nd year so successful! And watch for even more in the coming year. 

Legal Malpractice Law Review

Ben Wasserman

Editor-in-Chief

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Bank of New York v. Sheff, 382 Md. 235, 854 A.2d 1269

MD: Underlying Bond Issuance

Student Contributor: Vanessa L. Wachira

Facts: In a complex sale of nearly $50 million tax-exempt revenue bonds held by Prince George’s County involving numerous borrowers, Bondholders (represented by The Bank of New York (“Trustee”)), underwriters and attorneys, Piper & Marbury (“Attorneys”) was assigned the duty of drafting several critical documents. Among these, the Loan Agreement and the Trust Indenture each provided that Borrowers—the health care providers receiving the bond proceeds—would be responsible for filing all financing statements. Financing statements were needed to perfect a lien that Bondholders had placed on Borrowers’ assets as part of a security for repayment. Because the Borrowers included health-care providers located in both PG County and DC, filing was required in both locations. However, Attorneys drafted and circulated only the financing statements for filing in Maryland. Prior to the closing, a binder of all documents relating to the transaction was circulated to all parties; the binder did not contain any financing statements for DC. In 1997, Borrowers agreed to sell certain accounts receivables, which should have been subject to Bondholder’s 1993 lien, to Daiwa-Healthco-2 LLC (“Purchaser”). At some point between June and September of 1998, an analyst with one of the municipal bond funds holding the 1993 bonds became aware of and expressed concern to Trustee about Borrowers’ agreement with Purchaser. On November 20, 1998, he discovered that there were no financing statements on file in DC and that, consequently Bondholders did not have a perfected lien on the assets sold to Purchaser. On November 23, 2001, Trustee filed suit against Attorneys in DC. Finding that Maryland had a substantial interest in having the case litigated there, the DC court dismissed the action. Trustee re-filed in PG County on August 28, 2002.

Issue: Whether Bondholder were barred by the statute of limitations from asserting claims against Attorneys for their failure to perfect a lien on Borrower’s assets.

Ruling: Yes. In Maryland, a claim for legal malpractice must be brought within three years of the date upon which it accrues. Under Maryland’s “discovery rule,” an action is held to accrue, and the statute of limitations begins to run, at the moment a “plaintiff has knowledge of circumstances which would cause a reasonable person in the position of plaintiff to undertake an investigation which, if pursued with reasonable diligence, would have led to knowledge of the alleged cause of action.” Here, Attorneys argued that Trustee had knowledge of the alleged cause of action as early as 1993 when it received the binder of documents which lacked the DC paperwork. The Court, however, determined that, although the claim was statutorily barred, the statute of limitations began to run at some point between September and November 20, 1998 when Trustee was explicitly informed of the missed filing.

Lesson:  Not all states give plaintiffs the benefit of a "discovery rule" to prolong the time period for bringing claims. Check the applicable jurisdictions' rules and cases carefully to make sure. 
 

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Marcus v. St. Paul Fire and Marine Insurance Co., 651 F.2d 379 (1981).

AL: Underlying action based on a professional liability insurance policy

Student Contributor: Farah Shahidpour

Facts: Attorney chose St. Paul, an insurance company, to protect against his professional liability in connection with his legal practice. Specifically, the policy stated that the insurer would be responsible for, “paying all sums which the Attorney should become legally obligated to pay as damages arising out of the performance of professional services for others in the Attorney’s capacity as a lawyer and caused by the lawyer…” Clients gave Attorney money for investment purposes. Attorney agreed to pay back money to clients with interest. Attorney failed to repay money, and judgments were entered against him. Attorney could not pay awards, and clients were forced to initiate parallel actions in state court against St. Paul. St. Paul was granted summary judgment since the obligations did not arise out of the performance of professional legal services as covered by the policy. Attorney filed suit in district court against St. Paul alleging breach of contract in that they wrongfully refused to defend, and did not appear in several suits filed against the former clients. The district court granted St. Paul’s motion for summary judgment against Attorney on grounds of “stare decisis and collateral estoppel, if not res judicata.” The court concluded that this policy did not cover the Attorney in a debtor-creditor relationship, even if those relationships were with former clients.

Issue: Whether there is substantial evidence probative of policy coverage?

Ruling: Yes. Substantial evidence indicated that the judgments rested on obligations arising from the attorney-client relationships rather than in a debtor-creditor context.

Lesson: Regardless of whether summary judgment is proper under the federal standard, in certain circumstances, a summary judgment motion can be denied for policy reasons. Even if it seems that an attorney-client relationship is more like a debtor-creditor one, if that attorney-at-law acts in a fiduciary capacity his conduct can be considered as professional services as one described in the insurance policy above.

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Waldman v. Beck, 101 Conn. App. 669, 922 A.2d 340 (2007).

CT: Underlying personal injury matter

Student Contributor: Laura Binski

Facts: The client hired the lawyer to represent her in a personal injury claim. The lawyer failed to appear in court on behalf of his client on several occasions and the complaint was dismissed with prejudice. The client filed a legal malpractice claim based on the lawyer’s negligence. During a pretrial conference, the client and lawyer agreed upon a settlement of $20,000, to be paid within ninety days. The day after the conference, the lawyer contacted the client to tell her that he no longer agreed to pay the $20,000. The client then filed for the court to enforce the settlement agreement. The lawyer defended himself on the belief that the contract was unenforceable because of his communication refusing to pay the agreed upon amount. The court ruled in favor of the client and ordered the lawyer to pay the client $20,000 within ninety days.

Issue: Did the trial court properly decide against the lawyer in ordering him to pay the client $20,000 in order to enforce the settlement agreement?

Ruling: No. A trial court generally has the power to enforce a settlement agreement as a matter of law when the terms of the settlement are clear and definite and not in dispute. In this case, the trial court’s judgment award against the lawyer was directly in conflict with the terms of the settlement agreement. Thus, the court inappropriately used its discretion by rendering a judgment that contradicted the terms of the settlement agreement.

Lesson: “The court’s authority in these circumstances is limited to enforcing undisputed terms of the settlement agreement that are clearly and unambiguously before it, and the court has no discretion to impose terms that conflict with the agreement.” Janus Films, Inc. v. Miller, 801 F.2d 578, 582 (2d Cir. 1986). If the court enforced a settlement where the terms are unclear or in dispute, the court has gone beyond the scope of its power.

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Ayyildiz v. Kidd, 220 Va. 1080, 266 S.E.2d 108 (Va. 1980)

VA: Underlying personal injury action

Student Contibutor: Karen Dindayal

Facts: Plaintiff, Ayyildiz is a doctor who was sued for malpractice by his patient, Grubb, and won the suit. Thereafter, Ayyildiz filed a motion for judgment against Grubb’s counsel, Edward S. Kidd, Jr., alleging malicious prosecution, seeking damages by way of money spent to defend the medical malpractice action, loss of present and future earnings and profits in the practice of medicine and injury to Ayyildiz’s professional reputation.

Furthermore, Ayyildiz’s motion contained a second count that alleged that Kidd fell below the legal standards of the community in which he practiced and that Ayyildiz incurred damages due to Kidd’s willful or negligent acts.

The trial court sustained Kidd’s demurrer, holding that an action for malicious prosecution cannot be brought from a civil action unless the plaintiff was arrested, his property was seized or there was a special injury.

Issues:

1. Will an action for malicious prosecution in a civil case be maintained where the plaintiff was not arrested, there has been no seizure of property or special injury?
2. Do allegations of loss of earnings and profits, damage to professional reputation and money spent to defend a maliciously prosecuted medical malpractice action constitute special injury?
3. Is Kidd liable for negligence to Ayyildiz arising out of the medical malpractice case?

Rulings:

1. No. In malicious prosecution actions arising out of civil proceedings, the plaintiff must allege and prove an arrest, seizure of property or special injury incurred to maintain said action.
2. No. Ayyildiz’s allegations do not constitute a special injury to sustain an action for malicious prosecution.
3. No. Kidd was under no legal duty to Ayyildiz and was therefore not liable for negligence to him.

Lesson:  A prevailing party has no cause of action against the adverse party's attorney for malicious prosecution. Generally, an attorney’s liability for damages is only to his client,  based arising from some duty owed to the client.

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Summer v. Allran, 100 N.C.App. 182, 394 S.E.2d 689 (N.C.App. 1990)

NC: Underlying separation agreement

Student Contributor: Karen Dindayal

Facts: Plaintiff, Summer retained defendant William J. Allran to prepare a separation agreement with her ex-husband. Allran prepared three drafts of the agreement, and the parties signed the final draft on February 5, 1982.  A few months thereafter, Summer filed suit against her former husband for equitable distribution of marital property, temporary alimony and subsistence, and for the separation agreement to be set aside. The court dismissed the alimony and subsistence claims, and granted the claim for setting aside the separation agreement. In addition, Summer brought an action for legal malpractice against attorney Allran, alleging negligent legal representation, in that Summer lost alimony, reduced child support, and an inadequate share of the couple's marital property.

The trial court granted Allran’s motion for directed verdict and Summer appealed.

Issue: Did the trial court err in granting defendants' motion for directed verdict at the close of all the evidence?

Ruling: No. Allran was entitled to a directed verdict because Summer failed as a matter of law to show actionable negligence.

Lesson: In a legal malpractice action, a plaintiff must show actionable negligence by proving by the greater weight of the evidence that the attorney breached the duties owed his client, and that said negligence proximately caused plaintiff’s damages.

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