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

Harris v. Farmer, Court of Appeals of Michigan, February 4, 2010

Facts:  Defendant served as Plaintiff's court-appointed attorney in a criminal proceeding in which plaintiff was charged with identity theft.  The prosecution alleged that plaintiff attempted to use another individuals social security number to obtain employment.  Plaintiff was convicted and his claim for ineffective assistance of counsel was rejected. 

Plaintiff subsequently filed an action for legal malpractice against his court-appointed attorney, alleging that he had failed to properly cross-examine a witness, failed to object to evidence offered by the prosecution, and failed to present necessary evidence.  The attorney moved for summary judgment, and the lower granted his motion.  Plaintiff appealed.

Issue:  Are counsel's alleged shortcomings at trial actionable as professional negligence? 

Ruling:  No. 

Although an attorney has the duty to fashion a strategy so that it is consistent with prevailing Michigan law, he does not have a duty to ensure or guarantee the most favorable outcome possible

***

[M]ere errors in judgment by a lawyer are generally not grounds for a malpractice action where the attorney acts in good faith and exercises reasonable care, skill, and diligence.

The Court further noted that even if the attorney had done everything Plaintiff complained he did not do, the result of the proceeding would not have been different.  Accordingly, the Court affirmed the dismissal of the malpractice action.

Lesson:  Decisions involving trial tactics or litigation strategy are not subject to attack in an action for legal malpractice pursuant to Michigan law.  This is especially so where counsel's professional judgment was not the cause in fact of his former client's alleged injuries. 

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McHugh v. Litvin, Blumberg, Matusow & Young, 525 Pa. 1, 574 A.2d 1040 (Pa. 1990)

PA Underlying Representation: Personal Injury

Student Contributor: John Anzalone

Facts: Plaintiffs retained Attorney 1 to sue Plaintiff Husband's employer for injuries suffered while working. Attorney 1 later referred Plaintiffs' case to Defendant Attorneys. Defendant Attorneys also were retained by Plaintiff Wife in her action for loss of consortium. The suits were dismissed for improper service. Plaintiffs brought a malpractice suit.

Issue: Was the Plaintiffs' malpractice suit for the loss of the wife's consortium action prohibited because the cause of action only applied to the loss of a wife's consortium when Plaintiff Husband was injured?

Ruling: In reversing the lower court's dismissal of the lost consortium claim, the court held that the wife's consortium claim was valid, based on the following considerations:
1) In Pennsylvania, court decisions changing the law are to be applied retroactively unless the court holds that it's not to be applied retroactively.
2) Since the Plaintiffs had already filed an action when the law was changed, Plaintiffs were entitled to rely on the change of the law.
3) Since the Plaintiffs' claims were pending when the change of law happened, they could rely on the new law.
4) Defendants additionally filed for the loss of consortium claim for the Plaintiffs after the change in the law. The court inferred from this that Defendants believed that the change was applicable to the Plaintiffs. The court held that after filing the claim, the Defendants can not claim that they had no duty to not file it negligently.

Lesson: Attorneys  are responsible for complying with changes in the law that effect the standards of care that occur while cases they are representing clients in are pending. Attorneys especially can not claim that they did not believe that the change in law applied to a case they were representing a client when they made a claim based on that change of law.

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O’Brien v. Cleveland, 2010 Bankr. LEXIS 171 (Bankr. D.N.J. Jan. 22, 2010).

Underlying commercial action

Facts: Debtors filed a chapter 13 bankruptcy after falling behind on their mortgage payments. Even after the Chapter 13 filing, however, the debtors were unable to keep up with their payments under the the court ordered plan. Eventually, the first mortgage holder commenced a mortgage foreclosure on the debtors’ home. To avoid a sheriff’s sale of their property, the debtors entered into a mortgage rescue arrangement with Cleveland.

The rescue plan was a scam by Cleveland to defraud the debtors. It required the debtors to transfer title in their property, worth over $800,000, to Cleveland, with an option to buy it back at $650,000. Cleveland was to take out a new mortgage on the property, pay off the debtors’ old mortgage and some other outstanding debts in bankruptcy, and permit the debtors to continue to occupy the house in exchange for a payment of $5,000 per month to be used to service the new mortgage.

Cleveland’s attorney, William E. Gahwyler, Jr., prepared all of the closing documents for this transaction, including the HUD-1 statement. The statement contained a number of misrepresentations, including an incorrect sale price, a misrepresentation of Cleveland’s investment in purchasing the property, and a misrepresentation of the debtors’ proceeds from the sale. Moreover, the transaction was never reported by Gahwyler to the bankruptcy court for approval.

The debtors subsequently learned that Cleveland had mortgaged their property for over $100,000 in excess of the outstanding mortgages for its personal benefit. Likewise, the debtors’ $5,000 monthly payments were not being used to satisfy the debt on the property. Eventually, the lender moved to foreclose on the property, and the debtors filed an adversary complaint against Cleveland and its attorney, Gahwyler, alleging fraud, legal malpractice, conspiracy, and violation of a number of statutes.

Issue: Did Gahwyler owe a duty to the debtors in his capacity as attorney for Cleveland?

Holding: The court held that the debtors were entitled to a judgment against Cleveland based on causes of action arising in fraud, violation of the New Jersey Consumer Fraud Act, Truth in Lending Act, Home Ownership and Equity Protection Act, and New Jersey Home Ownership Security Act of 2002.

The court further held that the lack of an attorney-client relationship between the debtors and Gahwyler was no bar to obtaining relief against him:

Mr. Gahwyler should have withdrawn from representing Mr. Cleveland as soon as the nature of the transaction became known to him…[a]s an attorney, Mr. Gahwyler had an ethical obligation to prepare an accurate closing statement and should have withdrawn from representing Cleveland rather than create an inaccurate closing statement . . . had Gahwyler fulfilled his ethical responsibilities, Cleveland could not have carried out his plot. Gahwyler’s failure to perform his ethical obligations proximately caused damages to the debtors in the amount of the increased debt encumbering this house.

Lesson: An attorney who knowingly participates in the fraudulent scheme of his client will be held responsible for damages proximately sustained by a third-party as a result of the deceptive conduct.

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Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA et al., 2010 WL 1558977 (U.S. April 21, 2010).

Facts:  Jerman sued Carlisle, McNellie, Rini, Kramer & Ulrich (the “Defendant law firm”) for, allegedly, violating the Federal Debt Collection Practices Act (“FDCPA”) by representing to Jerman that her debt would be assumed valid unless she disputed the debt “in writing” even though the FDCPA does not require a written dispute.
 

The Defendant law firm argued that their mistake was excused under the FDCPA’s bona fide error defense:

A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

Issue:  Can attorneys avoid liability for a mistake of law under the FDCPA's bona error defense? 

Ruling:  The Supreme Court reversed the Appellate Division and held that the bona fide error defense does not apply to a violation resulting from a debt collector’s mistaken interpretation of the legal requirements of the FDCPA. The Court declined to adopt an expansive reading of the defense and relied upon the “common maxim” that “ignorance of the law will not excuse any person, either civilly or criminally”.

The Court reasoned that the bona fide error defense’s requirement of maintaining “procedures reasonably adapted to avoid any such error…naturally evokes procedures to avoid mistakes like clerical or factual errors”:

The dictionary defines procedure as a series of steps followed in a regular orderly definite way…In that light, the statutory phrase is more naturally read to apply to processes that have mechanical or other such regular orderly steps to avoid mistakes…But legal reasoning is not a mechanical or strictly linear process.

The Court next considered the Defendant law firm’s argument that Congress’ decision to amend only the bona fide error defense in the Truth in Lending Act to specifically exclude “errors of legal judgment” evidenced its intent to include mistakes of law in the FDCPA’s bona fide error defense. The Court disagreed:

[I]t is not obvious that the amendment changed the scope of TILA’s bona fide error defense in a way material to our analysis, given the uniform interpretations of three Courts of Appeal holding that the TILA defense does not extend to mistakes of law.

Furthermore, the Court stated that Congress likely did not intend the defense to apply to mistakes of law, since Congress did not expressly include mistakes of law in any of the parallel bona fide error defenses elsewhere in the U.S. Code.

In response to the argument that the threat of liability under the FDCPA might create an irreconcilable conflict between an attorney’s personal financial interest and her ethical obligation of zealous advocacy on behalf of a client, the Court noted that “an attorney’s ethical duty to advance the interests of his client is limited by an equally solemn duty to comply with the law and standards of professional conduct”.

Finally, the Court noted that the FDCPA contains a safe harbor defense for “any act done or omitted in good faith in conformity with any [Federal Trade Commission] advisory opinion” that is more tailored to address the mistake at issue than the bona fide error defense. Although the Court recognized that the Federal Trade Commission has issued only four opinions in the past decade, and has an average processing time in excess of three months, the Court concluded that the existence of this separate, more apposite provision weighs against “stretching” the bona error defense to provide protection for mistakes of law.

Lesson:  An attorney cannot rely upon the FDCPA's bona error defense for misinterpretations of the statute's legal requirements.

Editor's Note:  Jerman involves only a mistake of law under the FDCPA. Accordingly, it is not clear whether Jerman is applicable to mistakes of state law or federal law on issues other than the FDCPA.  The Courts of Appeal have expressed different views on this issue.

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Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, 538 F.3d 469 (6th Cir. 2008)

Facts:  Plaintiff alleged that the Defendant law firm violated the Federal Debt Collection Practices Act (“FDCPA”) by representing to her that her debt would be assumed valid unless she disputed the debt “in writing” even though the FDCPA does not require a written dispute.  Defendants filed a motion for summary judgment on the basis that that they qualified for the FDCPA bona fide error defense. The district court granted the motion and Jerman appealed on two grounds: (1) the district court erred in concluding that the FDCPA’s bona fide error defense may apply to mistakes of law, and (2) even if the defense does apply to mistakes of law, a question of fact remains as to whether defendants maintained procedures reasonably calculated to avoid the violation.
 

Issue:  Was the Defendant law firm's mistake a bona fide error under the FDCPA?

Ruling:  Yes.

The FDCPA bona fide error defense (15 U.S.C. § 1692k(c)) provides:

A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

Whether the bona fide error defense applies to mistakes of law or procedural/clerical error was an issue of first impression for the Court. The Court reviewed the case law from the Sixth Circuit as well as other jurisdictions, and ultimately rejected Jerman’s argument that the FDCPA bona fide error defense should apply only to clerical mistakes because the Truth In Lending Act (“TILA”) bona fide error defense applies only to clerical errors, since the TILA, unlike the FDCPA, is explicitly limited to “clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's obligations under this subchapter is not a bona fide error.” The FDCPA, on the other hand, has no such provision.

The Court also rejected Jerman’s argument that the phrase “maintenance of procedures reasonably adapted to avoid any such error” references clerical errors because “ it makes no sense that a collector can maintain procedures reasonably adapted to avoid mistakes of law”.  The Court stated:

[T]here is nothing unusual about attorney collectors maintaining procedures, such as frequent education and review of the FDCPA.

After concluding that mistakes of law may be considered bona fide errors, the Court held that defendants had , in fact, set up satisfactory procedures in an effort to avoid such errors by:

• Designating a principal of the firm for handling compliance issues;
• Regularly attending seminars on FDCPA issues;
• Subscribing to relevant publications; and
• Counseling attorneys and other employees on the firm’s obligations under the FDCPA and providing them with a procedures manual;

Finally, the Court rejected Jerman’s argument that adoption of the model language contained in the International Guide to the FDCPA of the American Collector’s Association is the only acceptable procedure to avoid the legal error at issue.

Lesson:  Attorneys may be able to rely on the bona error defense to avoid liability under the FDCPA for mistakes of law by incorporating compliance mechanisms into their practice, keeping abreast of pertinent developments, and educating support staff of the firm's obligations under the FDCPA.

Note: The US Supreme Court has granted cert. See 129 S.Ct. 2863 (2009),  as  there is conflict among the circuits with the 2d, 8th and 9th circuits holding that the bona fide error defense does not apply to violations resulting from legal mistakes. Stay tuned. We will keep  you posted as soon as the Court rules. 

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The American Bar Association's Lawyers' Professional Liability Committee's National Legal Malpractice Conference in Washington DC has been a smash hit, with 500+ lawyers in attendance.

The Legal Malpractice Law Review was showcased at a well-attended roundtable discussion called  "Teaching Tomorrow's Lawyers to Avoid Legal Malpractice". It  demonstrated this blog as the latest cutting edge internet based method for teaching law students --and practicing lawyers, about how malpractice occurs and how to avoid those risks.  Pointing out that  a mere 10 per cent of the 193 ABA approved law schools in the US offer their students a full semester course on legal malpractice, panelists Ben Wasserman, Susan Fortney, Mitch Simon and Jett Hanna, sought to enlist  the professional liability insurance industry in a pro-active drive to encourage more law schools to offer such a course to their law students.  Ron Mallen, co-author of the leading treatise, Legal Malpractice,  has long called for legal malpractice to be taught as a required course in law school and he was there to join in the discussion. 

The two and a half day conference started off with a wonderful presentation by Associate Supreme Court Justice Antonin Scalia, who spoke with Bryan A. Garner of Law Prose, Inc. about the basics contained in  their new book, Making Your Case: The Art of Persuading Judges. (very worthwhile reading)

A central theme of the Conference focused on how emerging legal technology is reshaping the lawyer's  standards of care in the 21st century and how this brings new malpractice risks to practicing lawyers.

And as the lawyers at the Conference saw this web-based cost-free educational blog and heard from  Hofstra Law  students who helped to create it, the Legal Malpractice Law Review welcomed the 30,000th "visitor"  to its pages in the less than 6 months since it went live. "A great blog" , one lawyer in attendance at the Conference immediately "tweeted".  

Kudos to the Committee for a job well done!

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McMahon v. Shea, 547 Pa. 124 (1997)

Student Contributor: Justin Lieberman

Underlying Divorce Matter

Facts: The husband in an underlying divorce action brought a professional malpractice suit against his attorneys, claiming that they had failed to properly advise him in his divorce settlement. More specifically, the husband claimed that his attorneys had failed to advise him as to the length of his duty to pay alimony and to generally read and review the alimony agreement in its entirety.

The wife remarried two months after the divorce was finalized, and husband moved to terminate his alimony payments. The court denied the termination of alimony payments, holding that the alimony agreement survived the divorce since it was not merged with the divorce decree. The court ordered continued payment of alimony until the parties’ youngest child turned twenty-one. Consequently, husband further alleged that his attorneys had been negligent in advising him to stipulate that the alimony agreement be incorporated but not merged with the divorce decree.

The attorneys argued that husband’s action had to be dismissed, since a dissatisfied plaintiff may not file a malpractice suit following a settlement to which he agreed, unless he could show he was fraudulently induced into settling the action.

Issue: Can an attorney be held liable for advice rendered to a client in a settlement to which the client subsequently agreed?

Holding: The Court rejected the attorneys’ argument and held that an attorney’s use of ordinary skill and knowledge extends to the conduct of settlement negotiations:

The fact that the legal document at issue had the effect of settling a case should not exempt his attorneys from liability…An attorney may not shield himself from liability in failing to exercise the requisite degree of professional skill in settling the case by asserting that he was merely following a certain strategy or exercising professional judgment.

Lesson: Negligence in failing to advise a client as to the controlling law applicable to a contract is actionable as malpractice, even if the contract serves to settles the underlying dispute.

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Smith v. Spisak, 130 S.Ct. 676 (Jan. 12, 2010).

Underlying Criminal Matter

Facts:  Frank G. Spisak, Jr. was convicted in an Ohio trial court of three murders and two attempted murders. He was sentenced to death. He filed a habeas corpus petition in federal court alleging constitutional errors at trial. Spisak claimed that he suffered significant harm, in part, as a result of his counsel’s inadequate closing argument at the penalty phase of the proceeding. The Federal Court of Appeals accepted Spisak’s argument and ordered habeas relief. The State of Ohio sought certiorari and the United States Supreme Court granted the petition.

Spisak claimed that his counsel’s closing argument at the sentencing phase of his trial was so inadequate as to violate the Sixth Amendment. In his closing argument at the penalty phase, Spisak’s counsel allegedly portrayed him as “sick, twisted and demented…[that he] was never going to be any different”, and that even if Spisak was not legally insane so as to warrant a verdict of not guilty by reason of insanity, he nonetheless was sufficiently mentally ill to lessen his culpability to the point where he should not be executed. Counsel further argued that “humanity” required the jury to weigh the evidence “fairly”.

Spisak claimed the closing argument was constitutionally inadequate because it (1) emphasized the gruesome nature of the killings and Spisak’s threats to continue his crimes, (2) understated the facts that demonstrated Spisak’s mental illness; (3) said nothing about mitigating circumstances; and (4) made no explicit request for a verdict against death.

Issue:  Did the flaws in counsel's oral argument constitute valid grounds for Spisak's claim for ineffective assistance of counsel? 

Ruling:  The Supreme Court found that there was no reasonable probability that a better closing argument would have made a significant difference, given counsel’s concerted effort to bring Spisak’s mental illness to the forefront by producing three experts who testified at length with respect to the connections between Spisak’s crimes and his mental illness. More importantly, the Court found that Spisak’s own damning testimony that Adolf Hitler was his “spiritual leader in a war for survival…[and] his duty [was] to inflict the maximum amount of casualties on the enemies…again and again and again and again” left no doubt that counsel’s closing argument did not make any significant difference in the jury’s decision to sentence Spisak to death. Furthermore, the Court noted that Spisak could point to no mitigating circumstances, and counsel’s references to “humane people” and “humane society” were sufficient appeals for mercy.

Lesson:  Any inadequacies in counsel's arguments at trial may be rendered moot if the client's admissions leave no reasonable probability that a more adequate performance by counsel would have changed the jury’s verdict.  

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Rosemary E. Smith v. Jerome R. Lewis,  12 Cal. 3d 349 (Cal. 1975)

CA Underlying divorce action

Student Contributor: Evan Michael Hess

Facts:  Defendant attorney was retained to represent Plaintiff in a divorce proceeding. The Plaintiff brought the malpractice action asserting Defendant negligently failed to assert Plaintiffs community interest in the retirement benefits of her husband. Defendant alleges that the law with regard to retirement benefits was unclear at the time of representation, thus insulating him from liability for failing to assert said claim.

Issue: How much research is enough for an attorney to avail oneself from malpractice?

Ruling: The Supreme Court of California held:

I.

 “The law is now settled in California that "retirement benefits which flow from the employment relationship, to the extent they have vested, are community property subject to equal division between the spouses in the event the marriage is dissolved." (In re Marriage of Fithian, 10 Cal.3d 592, 596, (1974) citing Waite v. Waite, 6 Cal.3d 461 (1972));

II.

“In determining whether defendant exhibited the requisite degree of competence in his handling of plaintiff's divorce action, the crucial inquiry is whether his advice was so legally deficient when it was given that he may be found to have failed to use "such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake." (Lucas v. Hamm, 56 Cal.2d 583, 591 (1961))”;

III.

“an attorney does not ordinarily guarantee the soundness of his opinion . . . he is expected, however, to possess knowledge of those plain and elementary principles of law which are commonly known by well informed attorneys, and to discover those additional rules of law which, although not commonly known, may readily be found by standard research techniques.”

Lesson: Regardless of the state of the law, an attorney must, at the very least conduct due diligence to assure that the advice he gives his client is legally sound. If an attorney conducts a reasonable assessment of the state of the law, an attorney will not be held liable for failing to anticipate how that unsettled point of law will be resolved.

Note: Smith v. Lewis was overturned on other grounds in In re Marriage of Brown, 15 Cal. 3d 838, 851 (Cal. 1976).

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Collas v. Garnick, 425 Pa. Super. 8; 624 A.2d 117 (1993)

Underlying PA Tort Action

Student Contributor: Colleen Gaedcke

Facts: The plaintiff employed the defendant to represent her in an automobile tort action. The defendant reached a settlement with the plaintiff for $245,000. The plaintiffs were asked to sign a general release, which discharged the driver and all other parties who might be liable for the damages. The plaintiff asked the defendant whether the release would have any effect on her desire to sue the manufacturer of the vehicle. The defendant responded that it would not. In reliance on his advice she signed the release. She subsequently filed an action against the manufacturer, which the court dismissed stating that the action was barred by the release. The plaintiff then filed this action against the defendant for legal malpractice.

Issue: “If a lawyer negligently advises a client regarding the effect of a release and the client, in reliance on the lawyer’s advice, signs a release which unintentionally has the effect of barring an action contemplated by the client, is the lawyer immune from liability because the release was executed as part of the settlement of a prior, separate action?”

Ruling: No.

1) A lawyer has a duty to know how a proposed settlement will affect his client…conducting  legal research sufficient to allow the client to make an informed decision.

2) Here,

the fact that the written agreement was prepared as part of the settlement of their prior action was incidental; it did not relieve counsel of an obligation to exercise care in determining the effect of the agreement which his clients were being asked to sign…counsel was required to exercise the same degree of care as he or she would have exercised in advising a client about a complex agreement not a part of the settlement of a legal action. 

Lesson: An attorney is not expected to be perfect.  But, where the attorney gives erroneous advice that falls below standards that the client has a right to expect form their lawyer they will be held liable for malpractice.

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Darby & Darby, P.C. v. VSI International, Inc. 95 N.Y.2d 308 (2000)

NY Underlying insurance coverage

Student Contributor: Maninder (Meena) Saini

Facts: Defendant (VSI International Inc.), a Florida corporation retained plaintiff (Darby & Darby) a New York law firm to represent it in two Florida lawsuits. Even though defendant paid a portion of a substantial legal bill, the defendant still owed nearly $200,000 in outstanding legal fees. Plaintiff moved to withdraw as counsel because the defendants did not pay them. The plaintiff was relieved as counsel in October 1993. In August 1996, plaintiff commenced an action to recover the outstanding amount in legal fees, plus interest and incidental costs. The defendant then asserted a counterclaim, alleging the plaintiff committed legal malpractice and breached a fiduciary duty by failing to advise defendant that its then-existing general liability insurance policy could have covered defendant’s litigation expenses.

Issue: Does a NY law firm specializing in patent litigation,  retained to defend a corporate client in a Florida patent infringment action have a duty to advise the client about possible insurance coverage to cover the cost of litigation?

Ruling:

 ...attorneys should familiarize themselves with current legal developments so that they can make informed judgments and effectivey counsel their clients... However, [the law firm] should not be held liable for failing to advise [the client] about a novel and questionable theory pertaining to their insurance coverage.

In a legal  malpractice action, a party must demonstrate that an attorney failed to employ “the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession”. What is reasonable skill and knowledge is to be determined at the time of representation.

Lesson: The standard of reasonable care applicable even to specialist-attorneys does not require attorneys to comply with   novel and questionable theories of law. An attorney only has a duty to represent a client in a manner that is reasonable and consistent with the law, as it existed at the time of representation.

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Levinson v. D'Alfonso & Stein, 320 N.J.Super. 312 (App. Div. 1999)

NJ Underlying personal injury action

Student Contributor: Michael Park

Facts: Plaintiff hired attorney to handle his personal injury/automobile negligence claim. Plaintiff and attorney entered into a written retainer agreement, which contained a clause that provided that any settlement would require plaintiff's authorization before being accepted. However, at some time during the case, the attorney accepted settlement on plaintiff's behalf, despite not having authorization. The client filed an action against the attorney alleging negligence-professional malpractice, fraud, and breach of contract, but failed to provide an affidavit of merit. The action was then dismissed for failure to provide the affidavit of merit.

Issue: Was an affidavit of merit required to file a complaint of negligence-professional malpractice?

Ruling: The Superior Court, Appellate Division affirmed in part, and reversed and remanded in part the decision by the Superior Court, Law Division for the following reasons:
1) The court affirmed that the Affidavit of Merit statute, N.J.S.A. 2A:53A-26 to 29, applied to the plaintiff's claims of malpractice because the legally significant facts that gave rise to the cause of action did not occur until after June 29, 1995, the effective date of the statute. The court deferred to the Supreme Court's interpretation in Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218 (1998), where an affidavit requirement was not applicable where the principal facts that gave rise to a cause of action that occurred before the statute's effective date. Therefore, the plaintiff should have provided an affidavit from an appropriate licensed person, which would state that there is a reasonable probability that a departure from acceptable standards occurred.
2) The fraud alleged by the plaintiff was simply a repeat of the malpractice charge with the word “fraud” tacked on, and should therefore be dismissed.
3) The court reversed and remanded the decision by the lower court to dismiss the breach of the retainer agreement's approval-of-settlement clause because an expert evaluation is not needed to see that a simple breach of contract had occurred.

Lesson: When a complaint against an attorney alleges legal malpractice, an affidavit of merit must be provided, with few exceptions. The only way for the court to know whether a standard of care has been deviated from is if an expert in that profession will attest to that possibility by affidavit. For matters that would be obvious to laymen or those which do not involve a deviation from a professional standard of care,  such as breach of a  clause in a contract, an affidavit of merit is not required.

Practice Note:  Play it safe. Get your expert's affidavit of merit before you file your Complaint. You might even attach the Affidavit to your Complaint and file and serve them together. That eliminates the chance of missing the time limitations for timely serving an affidavit of merit, which can then lead to a dismissal of an otherwise meritorious Complaint. 

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Toth v. Vazquez, 3 N.J. Super. 379 (Ch. Div. 1949) (PDF with permission of Thomson West)

Student Contributor: Anthony J. Forzano

NJ Underlying Real Estate Transaction

Facts: Plaintiff, a potential land buyer, brought an action for legal malpractice against the defendant-attorney, Arthur A. Wolpin, who had been engaged by the plaintiff to examine the title and procure a survey of the premises prior to closing.  Plaintiff alleged that Wolpin failed and neglected to obtain an accurate survey.

Issue: Can an attorney be held liable for malpractice for failing to find a deficiency in the work of another professional, even though he acted in a prudent manner in selecting that professional on behalf of his client?

Ruling: No. Although it is the duty of an attorney who is retained to examine the title to real estate to make a reasonably diligent and zealous investigation of the public records, and to impart to his client all of the observable defects, deficiencies, and imperfections of the title, he is required only to exercise ordinary care, skill and diligence.

Given that Wolpin inspected all pertinent records and rendered an accurate report of record title, he had satisfied the standard of “ordinary care, skill, and knowledge”. The Court further noted:

“Nor is it evident that this defendant in acting for the plaintiffs failed to exercise reasonable care and precaution in the selection of a competent surveyor, even assuming a duty so to do. Assuredly, this defendant did not expressly agree to warrant the precision and accuracy of the survey”.

Lesson: An attorney must act in a reasonably diligent fashion in terms of his investigation of the pertinent issues and retention of other professionals, and cannot be held liable for malpractice as a result of damage incurred by his client owing to the negligence of others involved in the transaction.

Editor's Note: What if the attorney had engaged a process server who negligently failed to properly serve a complaint and the statute of limitations ran?  The lawyer's immunity for the negligence of an independent contractor hired to aid in the representation of a client is not so clear. See, e.g., Kleeman v. Rheingold, 81 N.Y.2d 270 (1993):

As plaintiff's attorneys, defendants had a non-delegable duty to her and, accordingly, they cannot evade legal responsibility for the negligent performance of that duty by assigning the task of serving process to an "independent contractor."

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Fraser v. Bovino, 317 N.J.Super. 23 (App. Div. 1998)

Student Contributor: Lisa Larato

NJ Underlying Real Estate/Land Use Transaction

Facts: A deal for the sale of land fell through due to delays caused by challenges to the municipal approval of a condominium project. The real estate agent (Fraser) and the landowners (Genlaws) brought an action against the adjoining landowner (Defendant Bovino) who objected to the condominium project, his attorney, and others involved in ruining the deal. Fraser asserts that Bovino’s attorney (Allen) committed malpractice and acted unethically. The Genlaws also filed a claim against their attorneys Martini and Blessing who had been retained to prosecute their action against Bovino and his attorney.

The only claims still viable for the Genlaws were those which fell under the six year statute of limitations. It was undisputed that the attorneys returned the Genlaws’ file to them a few weeks before this statute of limitations expired, on January 28, 1997. The complaint, however, was not filed until April 25, 1997.

The Superior Court, Law Division, granted summary judgment to certain defendants in both actions. Appeals were filed and consolidated.

Issues: (1) Is Bovino’s attorney liable to the real estate agent, Fraser, for legal malpractice? (2) Are Martini and Blessing liable to the Genlaws for failure to file a timely complaint?

Ruling: (1) Bovino’s attorney (Allen), representing an individual who contested the proposed land use application, did not owe Fraser, the broker, even a limited duty of care. (2) Since Martini and Blessing returned the Genlaws’ file to them several weeks before the statute of limitations on their claims expired, their withdrawal from representation did not adversely affect the clients’ interests so as to warrant liability.

Lesson:

• Allen, who was not Fraser’s attorney, but the attorney of his adversary, did not owe Fraser any level of a duty of care so as to make him liable to Fraser under a professional malpractice claim.
• Under New Jersey Rule of Professional Conduct 1.16, Martini and Blessing did not commit malpractice because they (1) did not wait for the statute of limitations to run before withdrawing, and (2) left enough time for the Genlaws to file their complaint within the statute of limitations. That the Genlaws failed to file their complaint with the prescribed period of time, was entirely their own negligence, and bore no relation to the decision of Martini and Blessing to withdraw as counsel in a timely manner.

Editor's Note: In  all cases, make sure that before withdrawing, there is a reasonable amount of time left for the client to get substitue counsel to file a complaint before the statute of limitations runs. If it's getting close, consider filing a pro se complaint for the client thus giving the client even more time to get new counsel and thereby preventing the client's claim from becoming time barred. Do what is reasonable to help the client preserve their cause of action if you're not going to continue with representation, at least until they get new counsel.

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Joyce A. Popwell v Law Offices of Broome and Horn, 363 N.J. Super. 404 (App. Div. 2002)

NJ Underlying  Personal Injury action

Student Contributor: Candice Deaner

Facts: After the court appointed arbitrator found that plaintiff had no cause of action for negligence against the underlying defendant plaintiff’s attorney failed to file for a trial de novo within the time limits set out by R. 4:21A-6(b)(1),  A trial de novo filing would have preserved plaintiff’s claim for trial and would not have subjected it to dismissal. Defendants made a cross motion to dismiss, alleging that Plaintiff’s failure to submit an affidavit of merit in the legal malpractice action,  as required by statute, required the  grant  of summary judgment  dismissing the malpractice complaint.

Issue: Does the Plaintiff’s failure to submit an expert's affidavit of merit  to support its allegation of legal malpractice when it was common knowledge that failure to file a timely application for a trial de novo amounts to negligence per se for which no expert affidavit or testimony would be necessary.

Ruling:   The requirement of the filing of an affidavit of merit is not applicable in this matter because Plaintiff's allegations do not require the testimony of an expert in order to permit the jury to determine the issue of negligence.  Affidavits of merit are not required where, as here, it was  “common knowledge” that the defendant attorney was negligent in blowing a time limit the consequences of which included the dismissal with prejudice of plaintiff's causes of action.

Lesson: In clear cases of attorney negligence, where it is common knowledge that the attorney was negligent by violating a statutory time limit  that caused plaintiff to forefeit her claim, no expert's affidavit is required,  because the jury can determine whether the Defendants is negligent based on "common knowledge" and without the need for expert testimony.

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