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

Atkinson v. Haug, 622 A.2d 983 (Pa. Super. 1993).

PA: Underlying real estate investment

Student Contributor: Laura Binski

Facts: Atkinson entered into a partnership agreement for an apartment complex with Haug, his friend and business associate. Haug was also a lawyer at Acton & Acton, P.C (“Acton”). The business investment failed, and Atkinson brought a legal malpractice action against Haug for misrepresentation and professional negligence. Atkinson also sued Acton under the theory of vicarious liability, claiming that Haug offered faulty business advice within the scope of his employment at Acton. The trial court entered summary judgment in favor of Acton and Atkinson appealed.

Issue: Did a lawyer-client relationship exist between Atkinson and Haug that would defeat the trial court’s entry of summary judgment?

Ruling: No. “Absent an express contract, an implied lawyer-client relationship will be found if (1) the purported client sought advice or assistance from the lawyer; (2) the advice sought was within the lawyer’s professional competence; (3) the lawyer expressly or impliedly agreed to give the assistance; and (4) it is reasonable for the client to believe the lawyer was representing him” Sheinkopf v. Stone, 927 F.2d 1259 (1st Cir. 1991). Here, there was no express legal agreement, no fee arrangement or retainer, no discussion of legal consequences of the deal, and no indication that Atkinson asked Haug for legal advice. Therefore, there was no express or implied lawyer-client relationship. A subjective belief that a lawyer-client relationship exists is an insufficient basis to defeat summary judgment. If there was no lawyer-client relationship, it follows that Acton & Acton could not be held vicariously liable.

Lesson: Acton could only be held liable under the theory of vicarious liability if Haug was shown to be acting within the scope of his employment or with apparent authority from Acton. The mere fact that Haug happens to be a lawyer does not necessarily characterize everything he says as “legal advice.” Since there was no evidence that Haug was acting within the scope of his employment at Acton, vicarious liability does not exist.  

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Flatow v. Ingalls, Court of Appeals of Indiana, August 16, 2010 (Unpublished). 

Facts:  Ingalls sued the Flatow Defendants for legal malpractice, alleging that defendants were negligent in failing to respond to a cross-motion for summary judgment.  Defendants argued that they had no duty to do so under the parties' Retainer Agreement, which provided that the defendants would represent the Ingalls only as to one particular count in the underlying action by drafting a motion for summary judgment and a reply brief.

Issue:  Under these circumstances, was it appropriate for the defendants to not oppose a cross-motion filed against their clients? 

Ruling:  Yes. 

Indiana Professional Conduct Rule 1.2(c) allows 'the scope and objectives of the representation' to be limited 'if the limitation is reasonable under the circumstances and the client gives informed consent.'  It is appropriate where: 

1.  [T]he client has limited objectives; and 

2.  [T]he terms upon which the representation is undertaken may exclude specific means that might otherwise be used to accomplish the client's objectives.

In light of the specific language of the parties' Retainer, the Court held that a response to a cross-motion against Ingalls was not part of the limited representation to which the parties had agreed. The fact that the cross-motion was related to the particular count for which defendants sought summary judgment was not enough to sway the Court's decision.  Rather, the Court relied on the language of the retainer itself:  "Defendants agreed to file only a motion for summary judgment and reply in [this] matter...[I]t was incumbent upon [Ingalls] to seek any further representation he needed as to the [cross-motion]."

Lesson:  A very specific and unambiguous retainer is key where an attorney agrees to limited representation.  The agreement should spell out the means by which the client's limited objectives will be accomplished.  At least in Indiana, it appears that the agreement will be upheld even where there is an omission by the attorney as to directly related issues.  The attorney would be wise to, as the Flatow Defendants did here, provide prompt notice of all issues that are not within the scope of the agreement, and allow the client to timely seek additional representation.

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U.S. v. Costanzo, 625 F.2d 465 (D.N.J., 1980)

3d Cir.  Underlying Criminal Defense (Attorney-Client Relationship and Duty of Confidentiality) 

Student Contributor: Maninder (Meena) Saini

Facts: Defendant (Costanzo), a government informant, was convicted of conspiracy to possess and possession of stolen checks. In the past, the defendant was represented by attorney (Frank Paglianite) on various civil and criminal matters. Additionally, the defendant consulted Paglianite on numerous illegal activities. Paglianite even arranged for the defendant’s bail after his arrest on the instant matter. The defendant retained another attorney to represent him with the conspiracy charge because Paglianite had a conflict of interest in this matter. The defendant alleged that he discussed trial strategies and tactics with Paglianite during the trial proceeding in which Paglianite relayed that information to F.B.I. agents. The defendant claimed that Paglianite was an informant of the F.B.I during the course of their relationship. Defendant appealed from an order of the district court denying both his motions for a new trial and to vacate the sentence he was then-currently serving. The Appeals Court remanded for an evidentiary hearing as to defendant’s claim of a Sixth Amendment violation.

Issue: Did the defendant make disclosures to Paglianite in his capacity as attorney-adviser with the expectation that it was confidential?

Ruling: The  court held that the fact the attorney was not representing defendant in the instant action does not preclude a finding that an attorney-client relationship existed. A relationship between an attorney and client does not need a payment of fee or a formal contract to be formed. The relationship can be formed implicitly, and any communications are privileged when they concern legal advice of any kind sought from an attorney in such capacity.

Lesson:  The question of whether a person is a client or not is crucial to the issue of what duties the lawyer owes to that person. A relationship can form when the clients seeks legal advice from a lawyer in a professional capacity. Attorneys have an ethical duty of confidentiality not to disclose information received from clients.  The rule of confidentiality is to encourage clients to fully and truthfully disclose information relevant to their case. Attorneys cannot take that information and relay it to others for their disadvantage without impeding their role and the administration of justice.

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Koen Book Distributors v. Powell, Trachtman, Logan, Carril, Bowman & Lombardo, P.C.,
212 F.R.D. 283 (E.D. Pa. 2002).

PA. underlying bankruptcy proceeding

Student contributor: Cheryl Neuman

Facts: Plaintiffs retained Defendants for advice concerning a security interest from one of its customers. After the customer filed for bankruptcy, defendants continued to represent plaintiffs as creditors in the bankruptcy proceeding. Plaintiffs eventually informed defendants that they would be initiating a malpractice action against them due to their dissatisfaction with the defendants’ services. The attorney client relationship was terminated 3 months later. During the time when the defendants were first put on notice about the pending the lawsuit and the time when the attorney-client relationship was actually terminated, defendants consulted with other lawyers in their firm concerning ethical and legal issues regarding the upcoming malpractice action. The plaintiffs wanted access to the documents that were produced as a result of the inquiry within defendants’ law practice.

Issue: Does the attorney-client privilege apply to documents that a lawyer prepared in response to an ethical inquiry concerning the client, who has threatened to initiate a malpractice action against the firm?

Ruling: No. The attorney client privilege does not apply in this situation. The defendants also relied on the work-product doctrine, but this doctrine does not apply where a client, as opposed to another party, seeks discovery of the lawyer’s mental impressions. The documents are therefore discoverable.

Lesson: The purpose of the attorney client privilege is to promote full disclosure and communication between attorneys and their clients, thereby encouraging broader public interests. In this case, had the defendants realized the predicament involved in this situation, they should have either
a) Withdrawn from representing the plaintiff, or
b) They could have requested consent from the plaintiff and continued representation after full disclosure and consultation. 

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