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

Armor v. Lantz, 207 W. Va. 672 (2000)

WV: Torts – Products Liability

Student Contributor: Rachel Vincent

Facts: Clients brought legal malpractice action against attorney who acted as local counsel in products liability litigation. Plaintiffs were involved in a car accident in West Virginia on June 3, 1991. In 1993 plaintiffs filed action against Michelin Tire Corp. (Michelin). At the time, plaintiffs lived in Ohio and were represented by Sipe, an attorney licensed to practice in Ohio. The suit was voluntarily dismissed without prejudice. In 1995 Plaintiff reinstituted litigation in West Virginia. Sipe had approached Lantz (defendant) who was to act as local counsel. Sipe provided Lantz with a draft of the complaint. The two attorneys discussed the timeliness of the complaint and Sipe indicated that he intended to rely upon the Ohio savings statute. Lantz was never asked to render an opinion regarding whether the complaints would be timely filed under West Virginia law. However, Sipe testified that he would have expected Lantz to bring to his attention any obvious statute of limitations defects. Lantz did not participate in the decision not to file in Ohio. After the action was filed, Michelin moved for summary judgment on the ground that the action was barred because the requisite statute of limitations had expired and motion was granted. Appellants subsequently filed an action against attorneys alleging profession negligence and breach of contract. Lantz moved to dismiss arguing that the statute of limitation had already run in West Virginia prior to his participation in the case. Summary judgment was granted and Plaintiff appeals.

Issues:

1. Whether Lantz was vicariously liable for the malpractice of the Ohio lawyer based on his association with them?
2. Whether Lantz breached his duty when he failed to alert Sipe of the statute of limitation problem presented in filing in West Virginia?

Rulings:

1. No. Local counsel was not vicariously liable for Ohio lawyer’s conduct based on joint venture theory.
2. No. Local counsel did not have a duty to determine whether clients were time-barred in West Virginia.

Lesson:

Acting as local counsel in case underlying clients’ legal malpractice action is not always sufficient to constitute an express or implied agreement to form a joint venture.  

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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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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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 Community Capital Bank v. Fischer & Yanowitz 47 A.D.3d 667, 850 N.Y.S.2d 508
N.Y.A.D. 2 Dept., 2008

NY: Underlying Commercial Transaction

Student Contributor: Ryan O'Donnell

Facts: Plaintiff filed a legal malpractice action against Fischer & Yanowitz, and Jeffery Yanowitz. Plaintiff filed a motion to join Patricia Fischer and Jeffery Yanowitz as partners based upon partnership law and the doctrine of partnership by estoppel. The Supreme Court, Kings County granted plaintiff’s motion to consolidate, and denied a motion by Yanowitz for summary judgment dismissing the complaint insofar as asserted against him.

Issue: Does a partnership exist between parties who do not agree to share in the profits or losses of a business?

Ruling: A partnership did not exist between Fischer and Yanowitz, as there was no mutual promise or undertaking to share in the profits in the business or to submit to the burden of making good the losses. The doctrine of partnership by estoppel was inapplicable because Yanowitz never represented that him and Fischer were partners, there was no evidence that he consented to Fischer representing him as a partner, nor was there any indication that plaintiff relied on Fischer and Yanowitz being partners in retaining Fischer as counsel.

Lesson: If there is no written agreement between the parties, a court will look to the conduct, intention, and relationship of the parties to determine if a partnership exists. A partnership does not exist if there is no “mutual promise or undertaking of the parties to share in the profits of the business and submit to the burden of making good the losses.”

A court will impose a partnership under the doctrine of partnership by estoppel, Partnership Law §27, when

“a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to any one, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made.”

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Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Wuerth, 122 Ohio St.3d 594, 2009-Ohio-3601

Underlying Action: Insurance (Ohio)

Student Contributor: Candice L. Deaner

Facts: The plaintiff retained a law firm’s partner, Wuerth, to defend them against a lawsuit. During the trial, Wuerth informed partners and the trial judge that he was sick and subsequently was taken to the hospital. His doctor advised the court that Wuerth was not capable of continuing with the trial. His firm filed an unsuccessful motion for a mistrial, then assigned attorneys to complete the trial. Plaintiff lost the trial and filed suit claiming that Wuerth had committed legal malpractice, that his firm was vicariously liable for Wuerth’s malpractice, and that the firm itself committed malpractice. While Plaintiff alleged wrongful acts by the firm, Wuerth was the only individual named as a defendant in the complaint. On a motion for summary judgment, the district court dismissed Wuerth from the action because Plaintiff had filed its complaint after the expiration of the one-year statute of limitations under Ohio law. Because the statute barred them against Wuerth, the district court also dismissed claims for vicarious liability against firm. Finally, the district court determined that the firm cannot be held directly liable for legal malpractice because it is not an attorney and does not practice law and Plaintiff appealed.

Issue: Can a legal malpractice claim be maintained directly against a law firm when all of the relevant employees have either been dismissed from the lawsuit or were never sued in the first instance?

The Ruling: The Supreme Court of Ohio held a law firm is vicariously liable only when one or more of its principals or associates are liable for legal malpractice:

 “Although a party injured by an agent may sue the principal, the agent, or both, a principal is vicariously liable only when an agent could be held directly liable the liability for the tortuous conduct flows through the agent by virtue of the agency relationship to the principal. If there is no liability assigned to the agent, it logically follows that there can be no liability imposed upon the principal for the agent’s actions.”

The Lesson: A law firm as an entity does not engage in the practice of law and therefore cannot commit legal malpractice directly. A law firm cannot be vicariously liable for legal malpractice unless one of its principals or associate attorneys is found liable for malpractice.

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Staron v. Weinstein, 305 N.J. Super. 236 (App. Div. 1997).

Student Contributor:  Daniel Schick

NJ Underlying Personal Injury Action

Facts:  Staron was allegedly injured in an auto accident in October, 1985 and retained Weinstein to represent her in the pursuit of her personal injury claims.  The parties signed an "An Agreement to Provide Legal Services", the first page of which referred to "Sheldon G. Weinstein, Esq." as the "law firm" being retained.  The next page of the Agreement, however, listed "Robert C. Thelander, Esq.".  Weinstein further submitted a request for Personal Injury Protection benefits on Thelander's stationery with Weinstein listed as "Of Counsel".  Thelander disassociated himself from Weinstein's practice in September, 1986.  Weinstein continued to represent Staron through 1989, but never timely filed a Complaint with regard to her personal injury claims.

Several years later, Plaintiff bought a suit for legal malpractice against Weinstein and Thelander.

Issue:  Did Thelander owe any duty to Staron? 

Ruling:  Yes.

In the context of a motion for summary judgment, plaintiffs made a sufficient showing that Thelander's firm became counsel for plaintiffs by virtue of both the retainer agreement and the fact that defendant had at least apparent authority to enter into such agreements on behalf of the firm...Having become counsel for plaintiffs, it was the responsibility of the Thelander firm to either terminate the representation or give notice that it was terminated by virtue of Weinstein's departure.

In reaching its holding, the Court further noted that Thelander's role in Weinstein's cases and his entitlement to a share of the proceeds of any recovery obtained by Weinstein was not clear.  Moreover, it was not know what, if any, control mechanisms Thelander had in place to determine in what matters Weinstein had been retained in his capacity as "Of Counsel" to his firm. 

Lesson:  A law firm and its principals are ordinarily liable for wrongful acts and omissions of lawyers who have an "Of Counsel" relationship with the firm.  The scope of liability for acts of an "Of Counsel" lawyer may be affected by the terms of the Of Counsel relationship and the extent of the lawyer's affiliation to the firm apparent to the lawyer's clients.

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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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