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

Byrd v. Bowie, 992 So.2d 1202 (Miss. Ct. App. 2008)

MS: Underlying medical malpractice claim

Student Contributor: Laura Stein

Facts: After attorney-Byrd failed to timely designate a medical expert, in the Bowie’s wrongful death/medical malpractice action, the trial court granted summary judgment for the defendants (against his clients). On appeal, Mississippi Supreme Court affirmed. Clients (Bowies) filed a legal malpractice action and also served requests for admission, upon Byrd, that the negligence of Byrd in the action resulted in their sustaining damages in the amount of $2,000,000. Byrd failed to answer the requests within thirty days as required by Mississippi Rules of Civil Procedure and then Bowie filed a motion for partial summary judgment, which was granted as to the issue of negligence. The judge's order granting partial summary judgment as to Byrd's negligence was reviewed by the Mississippi Supreme Court via an interlocutory appeal and they affirmed. Following the supreme court's affirmance on the negligence issue, Bowie filed a motion for summary judgment with the trial court, arguing that they “established their claim of negligence against the Byrd defendants in this case in its entirety, including actual damages proximately caused thereby, in the amount of $2,000,000.” The trial court agreed and entered a final judgment against Byrd for two million dollars.

Issue: Was there proximate cause?

Ruling: The question became whether Bowie's claim of legal malpractice calls for expert testimony in order to establish that the Defendants breached their duty of care. An attorney who fails to designate an expert by a court-mandated deadline and does not provide any reason for doing so, is negligent as a matter of law. Therefore, Bowie was entitled to partial summary judgment as to the Defendants' liability. For the proximate cause of damages, though, the Court has stated that to recover for legal malpractice, the plaintiff must prove by a preponderance of evidence proximate cause of the injury. The plaintiff must show that, but for his attorney's negligence, he would have been successful in the prosecution or defense of the underlying action. The case was proven through Byrd's admittance that his legal error was the proximate cause of Bowie's damages, albeit the admittance of such proximate cause was established by Byrd's failure to answer or deny the requests for admission. Any matter admitted under this rule is conclusively established, unless the court on motion permits withdrawal or amendment of the admission. The admissions served to establish such proximate cause. The Dissent argued that the majority erred in concluding that Byrd's default admissions, regarding the extent of Bowie's damages, eliminates Bowie's obligation to prove Bowie's medical malpractice case within the legal malpractice case that Bowie instituted against Byrd.

Lesson: An attorney who has a legal malpractice action filed against him should take the proper steps, within the required time, to respond, regardless of what merit the attorney believes the plaintiff has or lacks, to avoid any default rulings.
 

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McKnight v. Dean, 270 F. 3d 513

Underlying legal malpractice action

Student Contributor: Clem Durham

Facts: A dispute then arose between McKnight and Gingras, the lawyer who had handled the case in the district court, concerning attorneys’ fees. This dispute led Gingras to sue McKnight in a Wisconsin state court. One of McKnight's defenses in that suit was that Gingras had committed malpractice. McKnight's new lawyer, Kenneth Dean, the principal defendant in the present case filed on McKnight's behalf a diversity suit against Gingras in federal court, charging Gingras with malpractice and thus essentially duplicating the defense that McKnight had raised in Gingras's suit. Gingras obtained a judgment against McKnight in Wisconsin— and then pleaded it as res judicata in the federal malpractice suit that McKnight. The district judge held that the res judicata defensewas valid  as to any claim pertaining to Gingras's handling of the trial of the  underlying discrimination suit (but not the appeal or remand), and thus wiped out any complaint about Gingras's failure at the trial to present evidence in support of reinstatement or his claimed outstanding pay, or to calculate back pay correctly. Gingras had malpractice insurance with a cap of $1 million to cover both
liability and attorneys' fees, and the insurance company had expended $235,000 on the
defense of McKnight's malpractice suit against him. The company offered to settle the case for
the difference between that amount and the $1 million cap, that is, for $765,000 ($475,000 after
Dean deducted his fee). Dean is alleged by McKnight to have told him that this was the most he could expect to obtain, and so he "must" settle for it — concealing from him the fact that any judgment against Gingras could be satisfied out of Gingras's personal assets as well as out of the proceeds of the insurance policy. So McKnight settled, thus setting the stage for this malpractice suit. McKnight claims that Dean committed malpractice in dropping the malpractice defense in the suit that Gingras had brought in the Wisconsin state court and in forcing him to settle for $765,000 rather than holding out for a larger settlement and if necessary proceeding to trial.

Issue: Can there be a malpractice claim for coercing a client to settle when the coercion does not harm the client?

Ruling: No. Although coercing a client to accept a settlement is a violation of a lawyer’s ethical duty to his client, it is sometimes harmless in the context of legal malpractice. McKnight argues that to repel summary judgment all he had to prove was that Dean's malpractice had caused him some injury, however slight — and that would be true if Dean had obtained no money for McKnight. But Dean obtained $765,000, so that his negligence injured McKnight only if, had it not been for that negligence, McKnight could have expected to obtain more than that amount in his suit against Gingras. That he has failed to show.

Lesson: Just because a lawyer’s actions are unethical, does not mean that a malpractice claim will be successful.
 

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

AL: Underlying criminal case

Student Contributor: Farah Shahidpour

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

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

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

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

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Healy v. Finz & Finz PC, 2011 NY Slip Op 1616, App. Div. 2nd Dept., 2011. 

Facts: The plaintiffs retained the defendant law firm to represent them in the underlying medical malpractice action, in which they alleged that the doctors should have delivered plaintiffs' surviving babies immediately after learning that one of the three fetuses had died, and that the delay caused injury to one surviving child.

The plaintiffs' expert medical witnesses were unable to testify as to when the injury occurred, however, and the trial court held that the plaintiffs could not establish the proximate cause element of medical malpractice. The appellate court affirmed. Shortly thereafter, plaintiffs filed suit against their former attorneys. 

Issues: Were plaintiffs' former attorneys liable for the consequences of the experts' inability to testify to key information? 

Ruling: No. 

The defendant attorneys presented affidavits from medical experts in the legal malpractice action alleging that the injury would have occurred immediately upon the death of one fetus in any event - a position directly adverse to that of their former client in the medical malpractice action. The Court allowed this, and in support of its decision to grant summary judgment to the defendants, provided: 

Attorneys are free to select among reasonable courses of action in prosecuting clients' cases without thereby exposing themselves to liability for malpractice...[T]he firm demonstrated that it could not have proven proximate cause in the underlying medical malpractice action, and [] the plaintiffs failed to raise a triable issue of fact in opposition...

Lesson: In New York, the professional judgment rule can serve as a defense to a claim for legal malpractice alleging negligent selection of experts. Further, the Courts will allow the defendant attorneys to submit expert testimony in the legal malpractice action that is directly at odds with the position they advanced on behalf of their client in the underlying action. 

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Masten v. MIller, King & James, LLP, California Court of Appeals, Fourth District, January 21, 2011

Facts: Plaintiff sued Defendant attorneys for malpractice in connection with an underlying medical malpractice matter.  Defendants, in turn, filed a crossclaim against Plaintiff for alleged negligence and intentional misrepresentation during the course of the underlying action which led to many months of work on a "meritless case, to their economic detriment."  Plaintiff filed an "anti-SLAPP [Strategic Lawsuit Against Public Participation]" motion under California statute 425.16 for summary judgment as to Defendants' crossclaim.

The anti-Slapp staute authorizes a motion to strike a cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United State or California Constitution.

The trial court denied Plaintiff's motion, and he appealed.

Issues: Is the anti-SLAPP statute applicable in legal malpractice actions? 

Ruling: Generally, No. 

It is the moving party's burden to establish that the act(s) complained of were taken in furtherance of the party's "right of petition" or free speech "in connection with a public issue."  Here, Plaintiff alleged that the statute applied because Defendants' crossclaim was based entirely on attorney-client communications made in the context of a judicial proceeding.  

The Court disagreed: 

Noting that other courts had refused to apply section 425.16 to a client's claim against a former attorney for breach of fiduciary duty [] and for legal malpractice [], despite the fact the claims against those attorneys followed or was associated with petitioning activity on the clients' behalf, we reasoned [i]t is `the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies, and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.

***

Although respondents' claims in their cross-complaint stem from their representation of appellant in a judicial proceeding and thus are related to litigation activities, we conclude the principal thrust or gravamen of the acts complained of in the cross-complaint derive from the parties' private dealings with each other as attorney and client, devolve out of that contractual relationship and are based on the duties and responsibilities of the parties in carrying out that relationship.

Lesson: The protection afforded by California's anti-SLAPP statute generally does not extend to claims arising out of the attorney-client relationship. 

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Bush v. Goren, Michigan Court of Appeals, February 1, 2011. 

Facts: In 2005, Plaintiffs consulted the defendant attorneys with respect to a medical malpractice claim related to a cardiac surgery completed on August 24, 2004 to evaluate the safety of a new vascular closure device.  After obtaining opinions of various cardiologists and vascular surgeons, the Defendant attorneys opted not to pursue the matter. On June 5, 2006, advised Plaintiff that the statute of limitations for her claim may expire within the next two months.  

Plaintiff was not successful in locating another attorney, allegedly because of the two-month time frame remaining for her medical malpractice claim.  She subsequently filed a malpractice action against the Defendants alleging that they were negligent in not advising her that the products liability statute of limitations did not expire for another year, until August, 2007.

Defendants argued that their decision not to mention the products liability claim, or the applicable statute of limitations, was protected by the "attorney judgment rule."  In other words, they believed "in good faith" that plaintiff would advise any subsequent attorney about the use of the medical device, and that attorney would know the statute of limitations.

Issue: Did Defendants commit malpractice by not addressing each of Plaintiffs' potential claims and applicable statute of limitations in their disengagement letter? 

Ruling: Maybe. 

In drafting his closing letter to his clients, defendant was not making a tactical decision in which he had to choose between courses of action in an adversarial situation whose viability turned on many factors beyond his control such as the actions of an opposing counsel or the unknown views of a judge or jury. Rather, defendant, in the controlled environment of his own office was advising plaintiffs, whose case he had declined, what options they retained and what they had to do to exercise those options. We reject the argument that giving only partial advice about a matter as fundamental as the applicable statute of limitations when sending a closing letter to a client can be viewed as a matter of tactics. An attorney and his or her advice certainly need not be perfect or infallible. However [] all attorneys have a duty to behave as would an attorney of ordinary learning, judgment or skill under the same or similar circumstances.

While the failure to include the information in the disengagement letter was not protected by the "attorney judgment rule," it may or may not have been "malpractice":

Plaintiffs presented the trial court with affidavits from two attorneys. One stated that, in his professional opinion, the standard of practice for a lawyer in defendant's position required him to tell plaintiff of both statutes of limitations applicable to her claims and that the failure to do so constituted a breach. The other relied on Michigan Rule of Professional Conduct (MRPC) 1.4(b) and a Michigan Ethics Opinion discussing that rule to state that he concluded that defendant's action violated that rule. Based on the rule and the opinion, he also opined that plaintiff could not make an informed decision about how to pursue her products liability claim when she was not informed of the applicable statute of limitations; and that defendant's position that he was justified in withholding information from plaintiff on the ground that he believed it to be in her best interest was without merit.

The Court held that whether or not Defendants exercised reasonable care, skill and diligence under the circumstances would be a fact question to be ultimately resolved by a jury. 

Lesson: The attorney judgment rule does not automatically shield an attorney who provides an allegedly incomplete legal analysis to his or her client.  To err on the safe side, a disengagement letter might lay out the facts presented by the client to the attorney, each of the potential causes of action, and the amount of time within which the client must act to preserve each potential claim.

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Elyousef v. O'Reilly & Ferrario, LLC, Supreme Court of Nevada, November 18, 2010

Facts:  Homayouni entered into a transaction with his law firm's client, Elyousef, to acquire interest in Nevada Oil and Land Development ("NOLD").  Perceiving this as a conflict of interest, Homayouni's firm opposed the transaction.  Homayouni left the firm to complete the transaction. 

When the business relationship soured, however, Homayouni sued Elyousef.  Elyousef counterclaimed and was awarded upwards of $375,000.  Eventually, however, he settled for $50,000, plus the return of his interest in NOLD.  After settling with Homayouni, Elyousef brought a number of claims against Homayouni's former firm, including legal malpractice and breach of fiduciary duty.  The trial court held that Elyousef's claims were barred by the doctrine of double recovery and issue preclusion. 

Issue:  Was Elyousef barred from pursuing claims against the law firm after entering into a settlement with Homayouni? 

Ruling:  Yes. 

The Court first noted that "under the double recovery doctrine, "there can be only one recovery of damages for one wrong or injury...Thus, [a] plaintiff may not recover damages twice for the same injury simply because he or she has two legal theories."  

Valuing Elyousef's interest in NOLD at $2 million, the Court held that Elyousef had fully satisfied his judgment against Homayouni and could not now proceed for a double recovery against the O'Reilly firm.  The Court noted that "settlement prevents further recovery from another party for the same injury when the total amount of damages is established before settlement and the settlement fully satisfies those damages."  The Court did not address application of the doctrine where a party chooses to, voluntarily and knowingly, enter into a settlement for less than the value of his judgment. 

The Court further ruled that Elyousef was barred from re-litigating his damages as a result of Homayouni's conduct in a new suit against the O'Reilly firm, since the issue had been fully litigated and decided on the merits in the first litigation. 

Lesson:  The double recovery doctrine will be applied where a party seeks recovery under a legal malpractice theory after entering into a settlement that fully satisfies damages awarded in a separate litigation for the same injury.  

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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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Kituskie v. Corbman, 452 Pa.Super. 467, 682 A.2d 378 (Pa. Super. Ct. 1996)

PA Underlying Representation: Personal Injury Lawsuit

Student Contributor: John Anzalone

Facts: Plaintiff sued Defendant Attorney and his law firm for failing to file a personal injury action within the statute of limitations. Plaintiff prevailed below after the judge excluded evidence of the potential collectibility of the underlying judgment.

Issues: 1) May Attorneys raise collectibility as a defense in a legal malpractice case?
2) Whose burden is it to prove that the collectibility of the underlying judgment?

Ruling: In reversing the lower court's ruling, the Superior Court held that it's the Defendant's Burden to raise and prove the collectibility of the underlying judgment, based on the following considerations:
1) Attorneys may invoke "collectibility" as a defense in a legal malpractice case.
2) Here, the jury was not allowed to hear evidence that the underlying judgment would be uncollectible, so its decision must be vacated.
3) This limitation was permitted because the court held that legal malpractice Plaintiffs should only be able to recover against the Attorney for the actual damages they suffered from the Attorney's malpractice.
4) It was the defendant's burden to prove because the plaintiff should not have an additional burden added because the plaintiff was allegedly wronged by the attorney as well as the underlying defendant.

Lesson: In Pennsylvania, the defendant attorney has the burden of raising and proving the defense of the lack of "collectibility" of the underlying judgment.

Editor's Note: The case was affirmed by the PA Supreme Court,  Kitsuskie v. Corbman, 552 Pa. 275 (1998). 

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Speeney v. Powers, et al., United States Court of Appeals, Third Circuit, March 11, 2010

Facts: Appellants were alleged victims of harassment by a university professor. The university retained a law firm to represent it in connection with the professor's de-tenure hearing and to defend the university in a lawsuit instituted by the professor. Appellants believed they had an attorney-client relationship with the law firm. Eventually, the university settled with the professor, but appellants were not consulted during the settlement negotiations.

Appellants thereafter filed suit against the law firm, the professor, and the university. As against the law firm, appellants alleged that the firm violated the attorney-client relationship and breached its fiduciary duty and ethical obligations. Appellants also moved to disqualify the law firm as counsel to the university based on a conflict of interest between appellants and the firm.

The court held an evidentiary hearing to make a determination on the motion to disqualify. The Court found that there was no attorney-client relationship between appellants and the law firm. The firm then moved for summary judgment with respect to appellants' malpractice claims based on the "law of the case" doctrine.

Issue: Can a factual determination made to determine one issue in a case also decide another claim in the same matter that has not otherwise been fully litigated?

Ruling: No. The "law of the case" doctrine limits relitigation of an issue once it has been decided in an earlier stage of the same litigation in order to promote finality, consistency, and judicial economy. The doctrine, however, is discretionary rather than a restriction on the Court's power. It only precludes relitigation of issues that the parties had a full and fair opportunity to litigate.

Here, the Court had made it clear that the evidentiary hearing was not a trial of the merits of appellants' claims and was limited to the issue of disqualification. Moreover, appellants' lawyer had stated that if he had been trying to prove his malpractice case, he would have pursued more discovery.

Appellants further argued that there is an exception to the "law of the case" doctrine when new evidence is presented. The Court agreed:

Reconsideration of a previously decided issue may, however, be appropriate in certain circumstances, including when the record contains new evidence...This exception to the law of the case doctrine makes sense because when the record contains new evidence, the question has not really been decided earlier and is posed for the first time...But this is only if the new evidence differs materially from the evidence of record when the issue was first decided and if it provides less support for that decision.

Lesson: A factual determination during one phase of a matter will not necessarily be determinative of a professional negligence claim where the claim has not otherwise been fully litigated, or new evidence has since been uncovered to support the claim.

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Black v. California Appellate Project, Court of Appeals of California, Second District, Division Four, June 4, 2010 (Unpublished).

Facts: Plaintiff was convicted of first degree burglary, and based on his prior criminal history, was sentenced to 38 years to life.  Plaintiff appealed and the appellate court affirmed his conviction.  Shortly thereafter, Black filed an action for negligence against the California Appellate Project, the organization that had appointed his defense counsel.  The trial court dismissed Black's negligence action and Black appealed.

Issue: Is a public interest organization liable for the quality of legal services rendered by an attorney that it selects and appoints to handle pro bono matters? 

Ruling: Yes. 

CAP argued that, based upon prior California decisions, Plaintiff first needed to establish a duty on the part of a government entity that could lead to potential tort liability for professional malpractice.  It argued that under the California Tort Claims Act, government tort liability depends on the existence of a statute, and Plaintiff failed to cite any statute guaranteeing that CAP would provide him with legal representation free of attorney neglect or fault. 

The Court, however, looked to CAP's website which provided that its duty included not only the appointment of counsel on behalf of indigent criminal defendants, but also the evaluation of "appointed counsel's performance in order to match attorney skill and experience with the complexity level of each particular case," "review appointed counsel's work," and "provide a quality control function, helping to ensure that panel attorneys have available the resources necessary to provide effective representation..."

The Court further noted that CAP was not a "governmental entity" and, moreover, its work did not involve the type of "policy decisions" that are insulated from liability under the Tort Claims Act. 

Finally, the Court rejected CAP's argument that it was entitled to quasi-judicial immunity: 

[T]he availability of the immunity turns on whether the person is functioning as an advocate or a nonadvocate...[T]he acts performed by [CAP was] not judicial in nature...[The acts] involved selecting defense counsel; they may also have involved substantive review of appointed counsel's appellate representation.  [CAP's] role n no way involved fact-finding or other quasi-judicial functions.

Lesson: Public interest organizations that engage in something more than the mechanical process of appointing counsel do not appear to be protected from professional negligence actions in California.

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Pollicino v. Roemer & Featherstonhaugh, 277 A.D.2d 666; 716 N.Y.S.2d 416 (3rd Dept. 2000)

NY Underlying Personal Injury Action; Notice of Claim vs. municipality

Student Contributor: Natalie Resto

Facts: Plaintiff retained defendant law firm to represent him in a personal injury action against the New York City Transit Authority when he lost sight in his eye after a bus ran over a glass bottle causing a shard of glass to strike him in the eye. The notice of claim that the law firm actually served incorrectly listed the date of the accident, which was also repeated in the summons and complaint. About a month later the law firm amended the pleadings correcting the accident date but it made no motion to similarly amend the notice of claim until some three years after service of the erroneous notice of claim. The Transit Authority cross-moved to dismiss the complaint on the ground that the plaintiff’s notice of claim was defective and the action should be dismissed. The lower court denied the law firm’s motion to amend the notice of claim on the ground that the 4 ½-year delay in seeking to amend the notice of claim was prejudicial to the Transit Authority.
The plaintiff then commenced this malpractice suit against the law firm. The lower court granted the defendant law firm’s motion for summary judgment on the ground that the underlying decision holding that the plaintiff’s negligence action would have been dismissed regardless of the alleged malpractice, was entitled to preclusive effect. The plaintiff appealed.

Issue: Does collateral estoppel preclude the malpractice action?

Ruling: Here the court found that the lower court’s comment that the plaintiff’s action would have been dismissed was not entitled to preclusive effect because it was dicta and not necessary to resolve the issue. The court found that the law firm’s failure to serve a proper notice of claim was the error that required dismissal, and that the complaint was dismissed on that ground.

Lesson: To invoke the doctrine of collateral estoppel it must be shown that there is an identity of issue that has necessarily been decided in the prior litigation and which is decisive of the present action, and that the party sought to be estopped had a full and fair opportunity to contest the decision that is now claimed to be controlling.

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Erdman v. Dell 50 A.D.3d 627, 854 N.Y.S.2d 755 N.Y.A.D. 2 Dept., 2008.

NY Undelrying personal injury; worksite accident; scaffolding

Student Contributor: Ryan O'Donnell

Facts: Client filed a legal malpractice suit against attorney arising out of the attorney’s representation of client in an underlying NY Labor Law  § 240 (1) action. Plaintiff was injured while working on a scaffold doing pipe work in a building at 100 Broadway. Defendant’s mistaken brought an action against the owners of the building at 100 Pine street. By the time the mistake was realized, the statute of limitations had already expired. There was some questions as to whether the plaintiff had followed certain safety precautions that may have helped avoid the accident, and whether plaintiff had secured safety locks on the wheels of the scaffolding that may have prevented the accident.

Issue: Is an attorney liable for malpractice if he is not the proximate cause of the plaintiff’s damages, even if the attorney negligently allowed for the statute of limitations to expire?

Ruling: No. "In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney 'failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession' and that the attorney's breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages" An attorney is not liable for damages to his client if he was not the proximate cause of those damages. Since there were questionable issues of fact as to what the proximate cause of the accident was, the defendant’s conduct was not a proximate cause of plaintiff’s damages.

Lesson: Summary judgment for legal malpractice liability is precluded if there is a genuine issue of material facts of proximate cause in the underlying action. But  even if an attorney fails to name a proper party as a defendant and the  statute of limitations expires, the  attorney is not liable for malpractice if a plaintiff can not prove that but for the attorney’s failure to file a timely suit the client would have succeeded in the underlying cause of action.

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Alevras v. Tacopina, 399 F.Supp.2d 567, (N.J. 2005); 

NJ Underlying criminal action.

Student Contributor: Colleen Gaedcke

Facts: The plaintiff was prosecuted and indicted on various counts of criminal violations in federal criminal court. He was appointed counsel but later retained the defendants to represent him. With the advice of his attorneys the plaintiff accepted an unfavorable plea agreement and began serving his sentence. After the plaintiff entered his guilty plea, he brought a 20 U.S.C. β 2255 motion, pro se, alleging ineffective assistance of counsel. His motion was denied by the District Court and the plaintiff appealed to the Third Circuit. The District Court held four evidentiary hearings on remand regarding the plaintiff’s motion, but the plaintiff’s petition was denied for a second time and affirmed by the Third Circuit. Then the plaintiff filed a seven count civil complaint against the defendant alleging legal malpractice. The defendant moved to dismiss the complaint and made a motion for summary judgment.

Issue: Whether the doctrine of collateral estoppel bars a criminal defendant from making civil legal malpractice claims for criminal malpractice where claims for ineffective assistance of counsel have been adjudicated, decided and rejected in a 20 U.S.C. β 2255 criminal proceeding?

Ruling: Yes. In granting the defendants’ motion for summary judgment and dismissing the plaintiff’s complaint with prejudice, the District Court held that the doctrine of collateral estoppel bars a legal malpractice claim against a criminal defense attorney based on the following reasoning:
1) The doctrine of collateral estoppel prevents a party from re-litigating issues that have previously been adjudicated and decided previously by another court of competent jurisdiction. Thus, where the issue of ineffective assistance of counsel has been fully litigated in the post-conviction proceeding, it may not be considered again in a civil proceeding.
2) As a matter of public policy, we cannot allow criminal defendants to re-litigate issues in civil court where the same issue was litigated by a court of competent jurisdiction. To allow otherwise would undermine the effective administration of the judicial system.  

Lesson: A criminal defendant cannot bring a legal malpractice case concerning the quality of his criminal defense counsel when he raised or had a full and fair opportunity to raise the issue  of ineffective assistance of counsel and he knew the facts regarding the attorneys alleged malpractice during the criminal proceedings.

 

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Ellison v. Schenck, Price, Smith & King, 654 A.2d 1024 (N.J.Super.A.D. 1995)

NJ: Underlying Real Estate and Litigation

Student Contributor: John J. Anzalone

Facts: Plaintiff's entered into a lease for developing cemetery grounds. Defendant represented both Plaintiff and the Cemetery. The Defendant also represented the plaintiff in negotiating the terms of the sublease of leased land. After the lease had become unprofitable for Plaintiff, Plaintiff sued Defendant. Plaintiff asserted that they relied on defendant's advice to enter into the contract because they were wrongly led to believe there was nothing preventing the lawful lease of the land. Plaintiff also claimed they suffered loses because the defendant failed to put an escalation clause in the contract with the person they sublet to.

Issue: Could the statute of limitations only have started to run when Plaintiff's income from the property decreased and thus entitle defendant to dismissal of the case?

Ruling: In affirming the lower court's decision on other grounds, the Appellate Division held that the lower court erred in dismissing the case based on the statute of limitations because there was a question of fact regarding when the actual damages occurred, based on the following consideration:
1) The cause of action arises when the plaintiff knows or should have known that they were actually damaged by the attorney's negligence.
2) The actual damage did not necessarily occur when Plaintiff's profits were lessened by the increased rent, they could have also occurred when the rate increase made the sublease unprofitable.

Lesson: Statute of limitations for legal malpractice start to run once the Plaintiff knew or should have known that they were actually damaged by the attorney's negligence. This determination is fact sensitive. Thus, in practice a lawyer bringing a suit against the other lawyer for malpractice should not assume that the actual damage that the plaintiff knew or should have known about occurred when it seems the Plaintiff was first injured by the alleged negligence. 

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Albee Associates v. Orloff, Lowenbach, Stifelman and Siegel, P.A., 317 N.J.Super. 211 (App. Div. 1999)

NJ Underlying Civil Litigation

Student Contributor:  Joshua D. Aronson

Facts: Defendant attorneys were hired by the plaintiffs to represent them in a civil fraud action. An entry of default was granted in favor of the plaintiffs. Following the entry of default, one of the defendants in the underlying action filed for Chapter 7 Bankruptcy. The defendant attorneys failed to list the plaintiffs as creditors in the bankruptcy petition and, subsequently, failed to file an adversary proceeding for non-dischargeability of the debt before the passing of the bar date. This prevented plaintiffs from collecting any money from the debtors due to the discharge in bankruptcy, and thereafter, plaintiffs pursued an action for legal malpractice against their former attorneys. The defendant attorneys submitted a motion for summary judgment under the theory that even if the plaintiffs were successful in a non-dischargeability complaint, they would still not have been able to collect due to the financial status of the debtors. The trial court granted the defendants’ motion for summary judgment, holding that even if the plaintiffs’ judgment had not been discharged, the debtor would not have had the assets to be able to satisfy plaintiffs’ judgment. Plaintiffs appealed the trial court’s decision.

Issue: Did the trial court improperly grant the attorneys’ motion for summary judgment in the legal malpractice action based upon the plaintiff’s inability to collect on their judgment against the debtors?

Ruling: The Appellate Division reversed and held that collectibility is ultimately a question of proximate cause. It remanded for a fuller factual record. The evidence submitted to the motion court  did not clearly establish that a reasonable juror could conclude that the debtor would have been unable to satisfy plaintiffs’ judgment.

By virtue of the "no-asset" Chapter 7 bankruptcy proceeding, [the debtor] may, at the time of the asset searches at least, have had no assets. But he was, as far as the record reveals, at one point capable of maintaining an income and acquiring assets.   To the extent a substantial portion of his prior debts have been extinguished, he has benefited from the bankruptcy and there is nothing in the record that would suggest that his "no-assets" status is anything but temporary or that he does not now have viable income.

Lesson: It would seem that in order to prevail in a legal malpractice case, the burden of proving a former client's inability to collect an underlying debt, might well have shifted in some cases to the malpractice defendant. Of interest, see also Hoppe v. Ranzini,  (PDF) with permission of Thomson/Reuters, Westlaw.

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