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

Bourke v. Conger, US Ct. of Appels, 7th Circ., April 19, 2011. 

Facts: Bourke was convicted of murder in Illinois state court, and after the conviction was turned over on appeal, filed malpractice claims against his defense attorneys. Bourker alleged that defense counsel's voire dire of the jury fell below acceptable standards of care.

Bourke's former attorney's argued that even if they breached their duty to Bourke, he could not establish proximate cause. 

Issue: Did Bourke set forth a valid cause of action for legal malpractice? 

Ruling: No. 

First, the Court stated the elements of a cause of action for legal malpractice: 

A plaintiff asserting a legal malpractice claim based on Illinois law must prove: (1) the defendant attorney owed the plaintiff client a duty of due care arising from an attorney-client relationship, (2) the attorney breached that duty, (3) the client suffered an injury in the form of actual damages, and (4) the actual damages resulted as a proximate cause of the breach.

The Court then explained why Bourke failed to establish proximate cause: 

Bourke depended exclusively on Thomas's expert report to establish the causation element of his claim. While expert testimony is one of the types of evidence that a plaintiff like Bourke could normally rely on to ward off summary judgment, it is well established that an expert report that lacks foundation and depth will be given little consideration by courts. In order for an expert report to create a genuine issue of fact, it must provide not merely ... conclusions, but the basis for the conclusions. As the district court noted, the Thomas report does not support its conclusion that the Appellees' performance during voir dire caused the jury to find Bourke guilty with analysis, facts or reasoning. While the report discusses various ways in which the Appellees could have better represented Bourke's interests (e.g., by using their peremptory challenges, by questioning jurors for their opinions regarding the use of alcohol), this discussion only goes towards establishing that the Appellees breached their duty to Bourke, not causation. The Thomas report fails to identify facts that support its conclusion that the Appellees' alleged errors had any role in causing the jury to find Bourke guilty. This shortcoming prevents the Thomas report from creating a genuine, disputed issue of fact concerning causation.

Lesson: Plaintiff must establish proximate, in Illinois, by showing that "but for" his attorney's negligence, he would not have sustained the actual damages complained of. One way to do it is by expert opinion. However, the opinion must be supported by the "whys and wherefores" of the causal connection between the attorney's breach and the injury or damage complained of. 

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Rivers v. Moore, Myers & Garland, LLC, Supreme Court of Wyoming, Appellate Division, July 28, 2010.

Facts: Rivers alleged that the Defendants committed malpractice by failing to adequately warn him of the subject property's development restrictions, and by delaying in taking action on his behalf to address those development issues.

The trial court granted summary judgment due to RIvers' inability to establish that his alleged damages were proximately caused by the Firm's negligence.  Rivers appealed.  

Issue: How does a plaintiff successfully bear its burden of establishing causation between his damages and his former attorney's negligent conduct? 

Ruling: 

With regard to proximate cause, the Appellate Division noted: 

As observed by both Rivers' own expert and the real estate attorney from which Rivers sought a second opinion, the restrictive covenants governing Lot 7 limit the size of any building on Lot 7 to 4,200 square feet. There is simply no indication in the record that if the Firm had performed its duties differently or more expeditiously that Smith's would have agreed to construction of a building that is over twice the size of the building permitted by the covenants.

Moreover, the Appellate Division noted that Rivers' expert's opinion lacked foundation, and therefore, was not admissible:

It would be helpful to the trier of fact if the expert opinion could explain how the Defendant's breach of the standard of care caused the Plaintiff to not be able to build a larger building. The regulations prohibiting a 10,000 square foot building were a known limitation when the Plaintiff purchased the lot...The expert has not explained how the Defendants' efforts would have made the desired change of heart happen. As a result, his bald assertion that the Defendants' negligence caused the Plaintiff's damages is a conclusion unsupported by foundational facts and is inadmissible...Further [] Rivers has not designated an expert to testify as to the basis for quantifying the percentage chance that may have been lost by the Firm's alleged malpractice.

Accordingly, the Appellate Division affirmed the trial court's summary judgment.

Lesson: It is a plaintiff's burden to establish proximate cause by way of credible evidence, through pleadings, depositions, answers to interrogatories, affidavits, and/or expert opinion based upon admissible facts.

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Gorjuice Wrap, Inc. v. Okin, Hollander & De Luca, LLP, N.J. App. Div., January 12, 2011 (Unpub.)

Facts:  Kang retained Attorney Watkins to assist her in negotiating a commercial lease with the Talmos.  Unbeknownst to Kang, Watkins had been a longtime attorney for the Talmos.  In fact, he had represented them in their purchase of the property Kang now wanted to lease.  Kang relied on Watkins' advice that the property was suitable for her business purposes.  Further, Kang asked Watkins to petition the Planning Board to allow Plaintiff to commence its business operations. Watkins, however, failed to take action and Kang retained another attorney. 

Several months later, the Talmos, with the assistance of Watkins, sold a contiguous parking lot to another business.  As a result of this sale, the Planning Board determined that the available parking was insufficient to support Plaintiff's business.  

Moreover, Plaintiff learned of leaks and structural issues which the Talmos never fixed.  Apparently, Watkins had been aware of these concerns but never brought them to Kang's attention.  

After serious flooding damaged Plaintiff's property, Kang filed a claim with the insurance carrier for loss of business revenue and property damage.  Indeed, Kang later testified that the day of the flood was the last day Plaintiff was in business.  

In the meantime, Plaintiff had defaulted on its rent obligation and was locked out of the premises. Kang alleged that she was never provided the opportunity to remove valuable computer equipment, disks, books, and records.  At that point, Kang retained De Luca to secure the return of the personal property, and another firm to commence a malpractice action against Watkins.

According to De Luca, the Talmos notified him that they would allow Kang to enter the premises and gather her belongings in or around June 13, 2001.  Kang disputes that De Luca ever forwarded the message to her.  According to Kang, the new owners of the building allowed her to enter in or around November, 2001.  By that time, however, all of her property had allegedly been removed.  

In the meantime, Kang settled with the insurance carrier for $152,000 for "the whole loss and damage" caused by the flood.  She acknowledged that a portion of the payment was for "business loss."  

Plaintiff's action against Watkins alleged conflict of interest, failure to file an appropriate and timely site plan approval, failure to advise Plaintiff of its right and remedies against the Talmos, and other violations of the Rules of Professional Conduct.  Watkins' carrier settled the matter for $250,000.

Plaintiff then filed suit against De Luca for his failure to secure the removal of its property after the lockout.  In this regard, Plaintiff served damage reports claiming lost profits of approximately $8,000,000.

The trial court granted De Luca's motion for summary judgment and Plaintiff appealed.

Issue:  Did De Luca violate the applicable standard of care.  If so, could Plaintiff establish proximate cause and damages? 

Ruling:  De Luca violated the standard of care, but Plaintiff could not establish proximate cause and damages for lost profits.

In granting De Luca's motion for summary judgment, the trial court relied on Puder v. Buechel for the proposition that Plaintiff could not settle its case and then sue its attorney for an additional recovery. The Appellate Division held that the trial court's application of Puder was erroneous.  First, the Appellate Division noted that Plaintiff had not indicated that the settlements in the underlying matters were "fair" or "acceptable."  Moreover, De Luca was not involved in the underlying settlements.  The Appellate Division noted that "[n]othing in Puder prevents [Plaintiff] from asserting a malpractice action against De Luca that does not arise out of legal services provided in connection with the settlement of those prior matters."

The trial court also relied on "judicial estoppel" in granting De Luca's motion for summary judgment. The Appellate Division held that to be erroneous as well:

[T]he doctrine of judicial estoppel only applies when a court has accepted a party's position, a party ordinarily is not barred from taking an inconsistent position in successive litigation if the first action was concluded by a settlement.

Nevertheless, the Appellate Division granted De Luca's motion in part because Plaintiff could not establish proximate cause and damages.  The Appellate Division found that De Luca's failure to secure the return of the property had nothing to do with Plaintiffs' lost profits, since the business had been shut down even before the lockout.  Moreover, lost profits were not available as "damages" under the new business rule:

[A]lleged lost profits that are dependent on entry into unknown markets, or the success of a new and unproved enterprise, cannot be recovered because the business venture is so risky as to preclude recovery of lost profits in retrospect.

The Appellate Division reversed the trial court in part to allow a jury to determine when De Luca advised Kang that she could reenter the premises to retrieve any property left behind, and if he did not timely advise her, for a determination as to the value of the property lost.

Lesson: Puder's holding is not applicable to a malpractice suit commenced against an attorney where the attorney did not provide legal advise in related underlying settlements.  Further, showing a violation of the standard of care is not enough to win in a legal malpractice action.  Establishing proximate cause and damages are essential to recovery.  

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Suder v. Whiteford, Taylor & Peston, LLP, Court of Appeals of Maryland, April 9, 2010. 

Facts:  Suder filed an action for legal malpractice against her former attorneys, alleging failure to timely file a request for a fifth extension which, ostensibly, caused her to receive approximately $270,000 less under a will than she otherwise would have.  The defendant attorneys admitted that they failed to timely request an extension, but argued that that omission was not the cause of Suder's alleged damages.  

The defendant attorneys argued that even if they had timely filed a request for a fifth extension, Suder would not have collected her statutory share because of the invalidity of her original request for extension at which time she was not represented by the defendant attorneys.  Accordingly, the attorneys contended that their "mistake" did not place Suder in a worse position, and that Suder could not prove proximate cause under the "case within a case" doctrine. 

Suder argued that the "case within a case" doctrine constitutes a "hypothetical...rewrite of history," and even if it is to be used, the defendant attorneys must be limited by the underlying defendants' waiver of their right to challenge a previous extension. 

Issue:  Must Plaintiff establish proximate cause by proving the underlying case in the malpractice case?  If so, are the former attorneys limited to only those defenses previously raised by the underlying adversary?

Ruling:  Suder must show proximate cause under the "case within a case" doctrine.  The defendant attorneys were not limited to only those defenses raised previously by Suder's adversary in the underlying action. 

The trial-within-a-trial doctrine is "the accepted and traditional means of resolving issues involved in the underlying proceeding in a legal malpractice action. It should be applied where there is no bright line malpractice... The trial-within-a-trial doctrine exposes "what the result `should have been' or what the result `would have been'" had the lawyer's negligence not occurred.

Accordingly, the Court held that the "case within a case" method was the appropriate way to determine whether Suder's adversary in the underlying litigation would have successfully challenged her requests for extensions, had the defendant attorney timely requested a fifth extension.  In that regard, the Court noted that Suder's adversary in the underlying litigation was permitted to challenge the validity of any extension throughout the appellate process, up until close of the estate administration.  

Moreover, the Court noted that the defendant attorneys were limited to those defenses Suder's adversary "would have" raised in the underlying action upon the filing of a fifth extension, rather than only those defense that had been raised previously:

Here, [the defendant attorneys are] given the chance to present the defense as merely the knife that severs the causal link between its own negligence and Suder's damages in this malpractice action. Relitigating the underlying action for the purposes of a malpractice suit is simply a tool by which the litigants are able to wind back the clock to determine whether the attorney proximately caused the injury.

To ascertain what defenses Suder's adversary would have raised with regard to a fifth extension, "the trier of fact should examine the record of the underlying controversy and hear testimony from the parties and counsel."

Lesson:  The "case within a case" method continues to be the golden test for proximate cause in legal malpractice matters.  In defending against malpractice actions, attorneys will be limited to those defenses the underlying adversary "would have" raised -- a fact sensitive determination. 

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Guyton v. Hunt, Court of Civil Appeals of Alabama, July 23, 2010.

Facts:  Guyton was convicted of sexually abusing a minor.  After his conviction, he retained Hunt to prepare and file a motion for new trial, and if that was denied, file an appeal.  Hunt's motion for a new trial was denied, but he never advised Guyton or Guyton's family members.  Shortly thereafter, Guyton filed an action against Hunt alleging fraud and legal malpractice, arguing that the delay in learning his motion had been denied caused a delay in filing his notice of appeal.  Guyton further argued that he incurred damages by paying another attorney to handle his appeal even though Hunt had already been paid to do so.  

The lower court dismissed the complaint against Hunt for failure to produce an expert report. Guyton appealed.

Issue:  

1. Could Hunt pursue a fraud claim separate and apart from a legal malpractice claim against Guyton?
2. Was Hunt's negligence a blatant error, or was expert testimony necessary to establish a breach of the duty of care? 
3. Was Hunt's negligence the proximate cause of any damage sustained by Guyton? 

Ruling: 

Alabama's Legal Services Liability Act provides, in pertinent part, as follows: 

(1) Legal service liability action. Any action against a legal service provider in which it is alleged that some injury or damage was caused in whole or in part by the legal service provider's violation of the standard of care applicable to a legal service provider. A legal service liability action embraces all claims for injuries or damages or wrongful death whether in contract or in tort and whether based on an intentional or unintentional act or omission. A legal services liability action embraces any form of action in which a litigant may seek legal redress for a wrong or an injury and every legal theory of recovery, whether common law or statutory, available to a litigant in a court in the State of Alabama now or in the future.

Accordingly, Guyton's claim for fraud was subsumed by his claim for legal malpractice.  

The Appellate Court, however, disagreed with the lower court and held that "failure to notify a client of a ruling on a motion in time for the client to timely file an appeal constitutes a breach of the standard of care that is so apparent that expert testimony is not required for a layperson to understand that breach."  Nevertheless, the Appellate Court affirmed the lower court's dismissal of the malpractice action, since: 

Any delay, if indeed there was a delay, in filing Guyton's notice of appeal that may have been caused by Hunt's failure to "timely" notify Guyton of the denial of his postjudgment motion obviously did not preclude Guyton from timely filing his notice of appeal or prevent the Court of Criminal Appeals from considering his appeal. Guyton has not demonstrated that Hunt's delay, if any, caused Guyton harm. Furthermore, we conclude that based upon the record before us, Guyton failed to demonstrate that the outcome of his criminal case, i.e., his conviction and sentence, would have been any different had Hunt notified him of the denial of his postjudgment motion.

Moreover, with regard to damages, the Appellate Court noted that there was no evidence "Guyton himself contributed to [attorneys' fees].  Because Guyton did not pay any portion of the attorneys' fees in the underlying criminal action, he cannot claim he was damaged as a result of any allegedly unnecessary payments incurred because of Hunt's conduct."

Lesson:  In Alabama, multiple claims against a legal services provider will be subsumed under the "legal malpractice" umbrella.  Even where an attorney commits blatant negligence, the claim will be dismissed unless the former client is able to establish that he sustained damages as a result of the attorney's errors and omissions. 

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Vlahakis v.Mendelson & Associates, 54 A.D.3d 670, 863 N.Y.S.2d 479 (App. Div. 2d Dep’t 2008).

NY: Underlying bankruptcy proceeding

Student contributor: Nicole Milone

Facts: John Vlahakis retained Mendelson & Associates to advise him in his bankruptcy proceeding. The attorneys assured their client that he would not have to pay the arrears he owed on his home mortgage. Based upon this advice from counsel, Vlahakis did not pay. He then continued to live in his home for seven years without paying mortgage, taxes, and insurance.. Eventually, Vlahakis was required to pay the bank what he owed on his home mortgage. However, he did not provide any evidence to support his claim that this amount was more than the money he saved by living in his home for seven years without paying mortgage, taxes, and insurance.

Issue: Whether summary judgment dismissing a malpractice case was proper when the lawyer in the underlying matter gave a client inaccurate advice?

Ruling: Yes. Summary judgment was properly dismissed because the lawyer demonstrated the client did not sustain any damages due to the inaccurate advice.

Lesson: Even when an attorney makes a clear error and the client relies on that advice to his detriment, if the client cannot prove damages related to the mistake, there will not be an actionable claim for legal malpractice.

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Schorsch v. Moses & Singer LLP, 60 A.D.3D 557, 876 N.Y.S.2d 367 App. Div. 1st Dep’t 2009).

NY: Underlying insurance claim

Student Contributor: Nicole Milone

Facts: M.R.S. Antiques was a family-owned business that sold art and antiques. The business was run by Margaret Schorsch, her brother David Schorsch, their mother Marjorie Schorsch, and two other unrelated employees. M.R.S. Antiques had an insurance policy through Utica Mutual Insurance Company (Utica). On September 23, 1995, M.R.S. Antiques was robbed. Their inventory, valued at roughly $2 million dollars, was missing. M.R.S. Antiques reported the theft to the police and filed a claim of loss with Utica. Margaret Schorsch believed that her brother David had committed the theft. Based on this belief, she retained Moses and Singer, LLP (Moses) to represent her and the company in an action against her brother. Moses also came to represent M.R.S. Antiques in the Utica insurance claim regarding the theft. In 1997, Utica denied M.R.S. Antiques’ claim due to the “dishonest acts exclusion” of their policy. The policy denies coverage for a loss caused by dishonest acts committed by anyone with an interest in the property. Utica mistakenly quoted the wrong policy in their letter informing M.R.S. Antiques that they were denying the claim. However, the policy quoted in the letter is materially the same as the policy that covers M.R.S. Antiques in this claim.

Issue: Whether the lower court erred in dismissing the client’s case where the attorney did not pursue a legal action against an insurance company who mistakenly cited an incorrect policy when denying client’s insurance claim?

Ruling: No. The error made by the insurance company and the lawyer’s failure to pursue a cause of action against them for their mistake would not have changed the outcome of the underlying matter. The policy incorrectly cited by the insurance company was only slightly different than the policy that actually covered M.R.S. Antiques. The “dishonest acts exclusion” still applies because Margaret Schorsch claimed David Schorsch, an employee with an interest in the company, committed the theft. This clearly applies as an exclusion under the insurance policy, proving that coverage was properly denied.

Lesson: Even if an error was committed in the underlying matter by opposing counsel which goes unnoticed by their adversary, that does not guarantee a legal malpractice claim. A client must prove their attorney’s negligence was the proximate cause of their damages.

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Nason v. Fisher, 36 A.D.3d 486; 828 N.Y.S.2d 51 (2007)

NY: Underlying Commercial Transaction

Student Contributor: Colleen Gaedcke

Facts: The plaintiff retained the defendant attorneys based on one of the defendant attorneys representation that he was experienced in handling commercial partnership cases. The plaintiff brought a cause of action against the defendant for false representation in violation of NY Judiciary Law section 487, but the court dismissed the action for the plaintiff’s failure to establish the statutory requirement of “chronic and extreme pattern of legal delinquency.” Additionally, the plaintiff also brought a legal malpractice claim against the defendants. The plaintiff’s claimed that the defendant’s alleged violation of Disciplinary Rules are evidence of malpractice.

Issue: Whether the court properly granted the defendant’s motion for summary judgment, dismissing the legal malpractice claim?

Ruling: Yes.

Lesson: Allegations of violations of Disciplinary Rules may be evidence of malpractice, however such a violation alone will not establish that the attorney’s conduct was the “but for” cause of the plaintiff’s loss.

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Gamer v. Ross, 2008 NY Slip Op. 2107 (App Div. 2d Dept)

NY: Underlying personal injury action; missing discovery causes summary judgment dismissing complain

Student Contributor: Josh Aronson

Facts: In the underlying case, the plaintiff was injured when he tripped and fell over wires and debris while roller skating on a public sidewalk adjacent to a construction site. The plaintiffs retained the defendants to commence a negligence action against the owner of the construction site as well as a contractor who had performed construction work on the site. Both of the plaintiff’s complaints were dismissed on summary judgment and motion to dismiss respectively. The plaintiff then brought action against the defendant to recover damages for legal malpractice, alleging that the defendants were negligent in their handling of the two underlying actions by failing to conduct proper discover that would have enabled them to successfully oppose the summary judgment and motion to dismiss. The defendant claims that the plaintiffs could not have succeeded in the underlying actions because the wires and construction debris over which the plaintiff tripped were open and obvious conditions that were not inherently dangerous. Furthermore, the defendant contends that the plaintiffs could not have succeeded in the underlying actions because they failed to adduce any evidence showing that the landowner of the construction site or its contractor caused or created the alleged dangerous condition.

Issue: Must the defendant in a legal malpractice action establish that their negligence would not have prevented the dismissal of the plaintiffs underlying actions?

Ruling: Yes. The court found that the landowner and its contractor would have had sufficient notice of the dangerous condition and therefore would have been liable for injuries resulting from its failure to correct the danger. As a result, the Court found that the burden was on the defendants in the malpractice action to establish that the missing discovery—which they failed to do, would not have prevented the dismissal of underlying actions.

Lesson: The defendant in a legal malpractice action must establish that “but for” the negligence claimed by the plaintiff, the outcome of the underlying action would not have changed.  

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Pechko v. Gendelman,  20 A.D.3d 404; 799 N.Y.S.2d 80 (2nd Dept. 2005)

NY Underlying Medical Malpractice Action

Student Contributor: Natalie Resto

Facts: The plaintiff underwent a mammogram while a patient with Doctor #1, who, she claimed, told her that the mammogram was normal. Later that year she underwent a mammogram with Doctor #2 and was diagnosed with cancer. The surgeon recalled seeing in the first mammogram certain “micro-calcifications” that were “suspicious of cancer.” The plaintiff sued Doctor #1 for medical malpractice. During the course of representation, the attorney who was representing her forwarded the mammogram films to a radiologist for evaluation, who before the evaluation misplaced them. The plaintiff then retained an appellate law firm to represent her in the medical malpractice action. Doctor  #1 moved for summary judgment arguing that the films constituted key evidence, and that the loss of that evidence irreparably prejudiced his ability to defend the action. The lower court granted the doctor’s summary judgment because the plaintiff failed to counter the motion with expert affidavits sufficient to create issues of fact. The plaintiff then brought this action against the law firm to recover damages for legal malpractice for failing to properly defend her against the summary judgment motion in the medical malpractice action.  The law firm argued that because it was not responsible for the loss of the mammogram film, which occurred before it was retained, its negligence was not the proximate cause of the plaintiff’s damages. The law firm moved for a motion to dismiss for failure to state a claim. The lower court denied it and the law firm appealed.

Issue: Was the law firm negligent in its representation of the plaintiffs in a medical malpractice action?

Ruling: Yes. The court found that the motion was properly denied because the absence of the mammogram films did not require the conclusion that the plaintiff would be unable to establish the law firm’s negligence. Here the firm did not rebut the plaintiff’s claim that they were negligent in failing to obtain secondary evidence concerning the films.

Lesson: Even when a court’s determination in an underlying medical malpractice action may be read as holding that the plaintiff will be unable to establish the merits of the medical malpractice action, that determination should not be given collateral estoppel effect against the plaintiff when he or she has alleged that the determination in the underlying action was the result of his or her attorney’s negligence.

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Primis Corp. v. Milledge, Court of Appeals of Texas, Fourteenth District, Houston, May 27, 2010

Facts:  Defendants agreed to represent the plaintiffs in a certain lawsuit and plaintiffs paid the defendants a $5,000 retainer.  Plaintiffs contend the retainer was a "general retainer", while Defendants contend the retainer was specifically for the work to be performed on the particular lawsuit. 

Several weeks after plaintiffs paid the retainer, they were served with another suit wherein plaintiff sought confirmation of an arbitration award rendered against Primis Corporation.  Plaintiffs delivered the citation to the Milledge law office when no attorneys were present.  Soon thereafter, Samuel Milledge sent plaintiffs a letter noting the deadline to file an answer and requesting a retainer.  Plaintiffs never furnished the retainer and, eventually, a default judgment was entered. 

Primis then filed suit against Milledge asserting claims for negligence, breach of contract, and violations of the Texas Deceptive Practices Act.  The trial court found that Milledge owed Primis a duty to clearly and unambiguously advise Primis that Milledge would not be filing an answer for Primis.  Although the court noted that Milledge failed to give advice when legally obligated to do so and delayed handling a matter entrusted to his care, no damages were assessed against Milledge since Primis did not present expert testimony to establish that Milledge's negligence was the proximate cause of its injuries. 

Issue:  Whether expert testimony was necessary to establish proximate cause? 

Ruling:  Yes.

In a legal malpractice case predicated on professional negligence during litigation, expert testimony generally is required to determine whether the result of the underlying litigation would have been different but for the attorney's alleged negligence.

***

[Here] the trier of fact would have to assess whether, with reasonably prudent counsel, the trial court would have vacated or modified the arbitration award against Primis Corporation...The causation inquiry was beyond the trier of fact's common understanding, therefore, expert testimony was necessary for Primis to prove causation.

Lesson: To prevail in a legal malpractice action, Plaintiff must present expert testimony to establish that "but for" his attorney's negligence he would have prevailed in the underlying litigation. 

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Yousian v. Eisenberg, 34 A.D.3d 228 (2006)

NY Underlying Medical Malpractice Action

Student Contributor: Ally Shuster

Facts: Plaintiff went to hospital complaining of gastrointestinal pain. Over the next few months, Plaintiff underwent a series of tests in order to diagnose his condition. He underwent a sonogram, the results of which showed that he had stones in his gallbladder. Subsequently, he underwent surgery and was left with debilitating pain that he alleges to be a result of the surgery. Plaintiff retained Defendants and sued for medical malpractice. The Defendant attorneys failed to timely re-calendar the case, which is the  basis for this legal malpractice claim.

Issue: Is there a valid legal malpractice claim?

Ruling: No. There is no issue of fact as to whether the treatment Plaintiff received at the Hospital constituted medical malpractice.

Lesson: In order to win a legal malpractice claim, a Plaintiff MUST prove that he could win the underlying case. Although it was troubling that Defendant attorneys failed to timely re-calendar the case, Plaintiff did not prove that he would have been successful in the underlying case but for the Defendant attorneys’ negligence.

“In order to prevail in a legal malpractice suit, the clients must prove that their former attorneys were negligent and that they could have prevailed and recovered a judgment but for that negligence.” Tanel v. Kreitzer & Vogelman, 293 A.D.2d 420
 

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Ryan v. Powers & Santola, LLP, 2010 NY Slip Op 03827 (3^rd Dept. May 6, 2010)

Underlying Personal Injury Action

Facts:  Plaintiff Ryan was struck on the head by highchair while dining at a restaurant.  He then retained Powers & Santola to represent him in a negligence action against the restaurant. 

In response to the defendants’ motion to compel production of a verified bill of particulars and responses to outstanding discovery demands, the trial court issued an order in the underlying action providing that the matter would be dismissed if Ryan failed to provide the outstanding discovery.  Although Ryan eventually served discovery responses, a number of responses required more specific answers.  The trial court, thereafter, extended the discovery schedule twice with a conditional order that the action would be dismissed if plaintiff continued to fail to provide responses.  Ryan failed to comply and the matter was in fact dismissed. 

Subsequently, Ryan commenced a legal malpractice action against Powers & Santola for “failing to follow court orders…consenting to conditional orders…and failing to move to vacate the dismissal order”.  Ryan moved for partial summary judgment on the issue of liability. 

Issue:  Is Ryan’s alleged failure to cooperate with counsel in preparing discovery responses a viable defense to his action for legal malpractice?

Ruling:  Yes.  The Court held that:

A claim of legal malpractice will be sustained if the plaintiff establishes…that [he] would have succeeded on the merits of the underlying action but for the attorney’s negligence…We agree…that the plaintiff’s conclusory assertions – that ‘but for’ defendants’ alleged negligence, they ‘would have been able to prosecute all causes of action to a successful outcome’ – failed to establish their prima facie entitlement to summary judgment…There are questions of fact as to whether plaintiff failed to cooperate with defendants in providing them with information and documents necessary for motion practice after the underlying action was dismissed.

Lesson: A former client’s failure to cooperate is a question of fact in assessing the liability of the attorney in a malpractice action.  Failure to cooperate, more likely than not, would prevent plaintiff from establishing that “but for” his former counsel’s malpractice, he would have prevailed in the underlying action.   

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Michael Viner et al. v. Charles A. Sweet et al. 30 Cal. 4th 1232 (Cal. 2003)

CA Underlying corporate transaction

Student Contributor: Evan Michael Hess

Facts: Plaintiffs retained Defendant and his law firm for a corporate transaction. After negotiating an employment termination agreement, the Plaintiffs brought a legal malpractice suit alleging seven claims, encompassing and array of agreements stemming from negligent representation / misrepresentations by the Defendants to the Plaintiffs. A jury awarded the Plaintiffs damages on all seven claims, with the Court of Appeals reducing the damages award. On appeal, the Defendants contend that in a transactional
malpractice action, the plaintiff must show that but for the alleged malpractice, a more favorable result would have been obtained, and that the Plaintiffs would not have entered into the transaction (a “no deal” scenario).

Issue: Must the plaintiff in a transactional legal malpractice action prove that a more favorable result would have been obtained but for the alleged negligence?

Ruling: Yes. The Supreme Court of California held that:

1) there is “nothing distinctive about transactional malpractice that would justify a relaxation of, or departure from, the well-established requirement in negligence cases that the plaintiff establish causation by showing either (1) but for the negligence, the harm would not have occurred, or (2) the negligence was a concurrent independent cause of the harm”;
2) “Determining causation always requires evaluation of hypothetical situations concerning what might have happened, but did not. In both litigation and transactional malpractice cases, the crucial causation inquiry is what would have happened if the defendant attorney had not been negligent”;
3) There must be investigation into what would have happened but for the lawyer’s alleged negligence.

Lesson: Plaintiffs seeking damages in an action for legal malpractice stemming from an underlying transaction must show both but for causation, just as in litigation malpractice actions. A malpractice case will not be successful if the Plaintiff does not prove that the underlying case had merit.

 

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Milbank, Tweed, Hadley & McCloy v. Boon, 13 F.3d 537 (2nd Cir. 1994)

NY Underlying Representation: Prospective Purchase of Bankrupt Company's Assets

Student Contributor: John Anzalone

Facts: Defendant Law firm represented Plaintiff through an agent in her attempt to purchase the assets of a bankrupt company. Problems occurred with the deal and the Agent was dismissed by the Plaintiff. Agent then told Firm that he wanted to buy the assets of the bankrupt company. Despite knowing that Plaintiff still sought to purchase the assets, Firm told Plaintiff that it would represent Agent in his attempt to purchase the assets. Plaintiff objected to this subsequent representation of Agent. Agent outbid Plaintiff with Firm's assistance. The jury found that Firm's representation of Plaintiff's Agent breached its fiduciary duties to her and was a "substantial factor in preventing her from obtaining assets she sought in the transaction."

Issue: Was the determination that Firm breached its duty to its former client by representing Plaintiff's agent in the same transaction incorrect?

Ruling: In affirming the lower court, the Second Circuit held that the Firm breached its fiduciary duty to Plaintiff, based on the following considerations:
1) Firm committed a serious breach of its fiduciary duties to Plaintiff as a former client by representing a party with interests adverse to the Plaintiff in the same transaction.
2) The nature of this breach triggers the prophylactic rule so plaintiff has to prove that Firms' actions were a substantial factor in its damages instead of the normal requirement of proximate cause.
3) The jury could have found that Firm's action were a substantial factor in Agent purchasing the assets rather than Plaintiff because their presence could have given Agent more credibility. The jury could have found that the deal moved forward because Agent and Firm agreed to use Plaintiff's money in an escrow account for Agent's purchase too. This potential usage also could have been held as interfering with Plaintiff's negotiations because she had to take action to protect her funds from usage by her former agent.
4) There was factual evidence supporting that Firm used confidential information gained from Plaintiff in its representation of Agent because it knew that Plaintiff was not willing to bid higher than she had previously stated to them. 

Lesson: If an attorney or a law firm is alleged to have breached their fiduciary duty to the client they are subject to the prophylactic rule that will make it easier for a plaintiff to prove the proximate cause element of the legal malpractice cause of action. The burden will be reduced from “but for” to “substantial factor”.

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Leder v. Spiegel 9 N.Y.3d 836, 872 N.E.2d 1194 (2007)

NY: Underlying Will Contest

Student Contributor: Ryan O'Donnell

Facts: Defendant represented plaintiff in an underlying probate matter. Rather than accept a settlement offer, plaintiff decided to continue to trial, where they were unsuccessful in challenging the will. The plaintiff bases his malpractice claim on defendant’s advice on the prospect of success in the underlying case, and that he would have accepted the settlement were it not for his attorney’s advice. There was no documentary evidence showing that plaintiff refused to settle strictly based on defendant’s advice.

Issue: Is an attorney liable for legal malpractice if he was not the proximate cause of the client’s damages, even if he negligently represented his client?

Ruling: No.

"In order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action 'but for' the attorney's negligence"

The failure to demonstrate proximate cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent. Since there was no evidence that the defendant’s advice was the sole basis for refusing the settlement, the defendant was not the proximate cause of the plaintiff’s loss, the defendant attorney was not liable for malpractice.

Lesson: Even an attorney who negligently represents his client will not be liable for malpractice if he is not the “but for” cause of the client’s damages. To establish liability based on the loss of a settlement opportunity, the plaintiff must prove that but for the attorney’s negligence he would have accepted the settlement offer. A court will not rely on bare allegations of fact by a plaintiff without documentary evidence to prove proximate cause. 

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Leder v. Spiegel, 9 N.Y.3d 836, 840 N.Y.S.2d 888 ( 2007)

Student Contributor: Maninder (Meena) Saini

NY Underlying will contest

Facts: Plaintiff (attorney) unsuccessfully represented defendants (clients) in a will proceeding and the defendants refused to compensate the plaintiff for the work done on their behalf. The plaintiff then petitioned for legal fees. The defendants counterclaimed for legal malpractice, alleging that “but for” the plaintiff’s negligent representation, which was failing to anticipate that certain evidence would be inadmissible, they would have settled. The plaintiff moved for an order dismissing the defendants’ counterclaim. The lower court dismissed the defendants’ counterclaim. Defendants appealed.

Issue: Did the defendants allege a prima facie case of legal malpractice?

Holding: The appellate division held that the defendants’ counterclaim alleging that the plaintiff failed to anticipate the court’s evidentiary ruling does not establish proximate cause. The plaintiff actively encouraged the defendants to settle but they refused to accept it. Thus, the defendants failed to make a prima facie case of legal malpractice. The lower court’s decision was affirmed.

Rule: “In order to sustain a legal malpractice claim, a client must establish that the attorney failed to exercise ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages, and that the client would have succeeded on the merits of the underlying action “but for” the attorney's negligence.”
Lesson: The plaintiff must be able to show that the attorney’s negligence was the proximate cause of the damages. The dismissal of a legal malpractice action is warranted if the plaintiff fails to demonstrate proximate cause regardless of whether the attorney was negligent. 

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Aquino v. Kuczinski, Vila & Associates, P.C. 39 A.D.3d 216, 835 N.Y.S.2d 16 (A.D.1st Dpt. 2007)

Student Contributor: Maninder (Meena) Saini

NY Underlying personal injury action

Facts: On July 4, 2002, plaintiff-client slipped and fell in the lobby of a casino that caused back injuries. On July 9, 2002, plaintiff retained an attorney to represent her in this matter. The attorney wrote letters to the casino on two separate occasions, advising them of the plaintiff’s claim and requesting insurance information and surveillance footage. The casino failed to send the requested information. In July 2004, the plaintiff contacted the attorney where he told her no action was commenced and the two-year statute of limitations had expired. Plaintiff then brought a lawyer malpractice action against the attorney and law firm alleging the failure to investigate plaintiff’s case and to timely commence an action.

Issue: Did the plaintiff show that “but for” the negligence of the attorney she would have prevailed in the litigation?

Ruling:: The Appellate Court held that plaintiff failed to show she would have succeeded on the merits of the case “but for” the attorney’s negligence. Specifically, the court stated that “[d]efendants' negligence in failing to investigate plaintiff's case and timely commencing an action does not relieve plaintiff of her burden of proving that she would have prevailed in that litigation but for defendants' negligence”.

 In order for a plaintiff to succeed on a lawyer malpractice claim, a plaintiff must plead and prove  a prima facie case of legal malpractice. The proximate cause element of he cause of action requires that she demonstrate that she would have succeeded on the merits of the underlying claim “but for” the attorney's negligence.

Lesson: Even though the attorney was negligent in failing to investigate the plaintiff’s case and timely commence an action, the plaintiff failed to prevail  because she could not demonstrate a "but for" causation utilizing the "trial within a trial"  method of proof.  

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The Texas Supreme Court’s new opinion (October 30, 2009) in Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Development and Research Corporation  holds that

1. “collectibility” must be determined no earlier than the time of the underlying judgment, and
2. “a malpractice plaintiff may recover damages for attorney’s fees paid in the underlying case to the extent the fees were proximately caused by the defendant attorney’s negligence.”

The first holding seems non-controversial, whereas the second may or may not open Pandora’s box (more on that in a separate comment posted immediately below this one).  Yet there is another consequence of the Akin Gump decision – hidden and significant – that reporters and commentators may have missed.

Because the holding on the first two issues required reversal, the Texas Supreme Court declined to review the lower court’s ruling regarding contingent fee offsets. The contingent fee offset issue is simple: If a lawyer’s malpractice results in the loss of a collectible judgment of $1,000, but the client had a 40% contingent fee agreement with the lawyer, is the client entitled to recover $1,000 or $600? If one applies a pure “but for” causation analysis the answer should be $600, because even if the case had been handled perfectly, the client would only have netted $600. Yet, the Dallas Court of Appeals held that the client’s damages are not to be offset by the amount of the lawyer’s contingent fee. Because the Supreme Court declined to review this issue, the Dallas Court’s ruling remains the law.

The Dallas Court observed:

Akin Gump was entitled to its contingency fee only if NDR prevailed in the [underlying] Panda lawsuit. Due to Akin Gump's negligence, NDR did not prevail and thus Akin Gump did not earn its contingency fee. To give the firm a credit for a contingency fee it failed to earn would be to reward its wrongdoing.

Is this logical? Does it conform the Texas Supreme Court’s reaffirmation of the “but for” standard for causation in Akin Gump? Are there any other reasons to disregard a lawyer’s contingent fee interest in determining the amount of damages?

The Dallas Court also held:

To secure the damages it would have been awarded in the Panda lawsuit, NDR was required to pay two sets of lawyers and endure the aggravation of a second lawsuit and a second appeal. The attorney's fees and expenses incurred to prosecute a legal malpractice suit are not recoverable as damages, absent some statute or agreement not applicable here. Simply put, NDR must pay attorneys twice to be in the same position it would have been in absent Akin Gump's malpractice. It should not be forced to “pay” a contingency fee that Akin Gump never earned. (citation omitted).

Does the Texas Supreme Court’s new ruling that attorneys’ fees may be recovered as damages remove the logical underpinning for the Dallas Court’s ruling on the contingent fee offset?

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The Texas Supreme Court’s new opinion in Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Development and Research Corporation holds that

a malpractice plaintiff may recover damages for attorney’s fees paid in the underlying case to the extent the fees were proximately caused by the defendant attorney’s negligence.

Prior to this holding, Texas courts had generally disfavored the recovery of attorneys’ fees qua damages unless allowed by statute or contract.

At first glance, the Akin Gump Court’s holding appears straightforward and logical, and in some cases will be easy to implement. For example, if a lawyer fails to file an answer, resulting in a default judgment, the plaintiff should be able to recover the fees it must pay a second attorney to have the default set aside. In this example, 100% of the extra fees are attributable to cleaning up the first lawyer’s mistake. Most cases, however, are not so cut and dried. 

I fear several unintended consequences from the Court’s ruling: 

• First, will there be a new class of cases in which there are no damages but attorneys fees? For example, if a lawyer obtains a total victory for the client, will the client (perhaps hoping to bargain for a fee reduction) comb the record for inconsequential errors that nevertheless may have increased the total fee by some amount?
• Second, will the new rule be used to avoid summary judgment in cases in which the undisputed facts prove the negligence caused no damages? Take appellate malpractice. If a trial court decides as a matter of law that the client would have lost the appeal regardless of the malpractice, will the client’s claim now survive based on a “fact issue” regarding increased appellate costs due to the negligence?
• Third, how much will the rule expand the number and costs of mandatory expert witnesses? Expert testimony is needed to prove causation in all but the most obvious situations. Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113 (Tex. 2004).(PDF) Doesn’t this mean a new set of experts will be needed in every malpractice case in which the plaintiff seeks attorneys’ fees as damages? The experts will need to review the record and opine whether the malpractice proximately caused an increase in attorneys’ fees and, if so, how much.

Question: Does Akin Gump open Pandora’s box or is it simply a logical extension of “but for” causation? Are there any special rules or limits that should apply?

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