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

Black v. California Appellate Project, Court of Appeals of California, Second District, Division Four, June 4, 2010 (Unpublished).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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Black v. White, Court of Appeals of California, Second District, Division Four, April 27, 2010

Facts:  Plaintiff filed this malpractice action against his criminal attorney after his conviction for first degree burglary was affirmed.  The trial court sustained the attorney's demurrer to Plaintiff's complaint on the basis that actual innocence is a prerequisite to filing a malpractice action in California.  Plaintiff appealed and argued that his petition for writ of habeas corpus had not yet been decided.  Accordingly, he alleged that the trial court was required to stay the action pending resolution of the underlying matter. 

Issue:  In the event plaintiff pursues a malpractice action in California prior to obtaining the necessary postconviction relief, should the court stay the action or dismiss it for failure to establish one of the necessary "elements" of a legal malpractice action? 

Ruling:  The action ought to be stayed until the underlying matter is resolved.  In California, actual innocence is a necessary element of plaintiff's malpractice action: 

[P]ermitting a convicted criminal to pursue a legal malpractice claim without requiring proof of innocence would allow the criminal to profit by his own fraud, or to take advantage of his own wrong, or to found [a] claim upon his iniquity, or to acquire property by his own crime. As such, it is against public policy for the suit to continue in that it would indeed shock the public conscience, engender disrespect for courts and generally discredit the administration of justice.

The Court further discussed that this policy promoted judicial economy, since issues litigated to obtain postconviction relief, including ineffective assistance of counsel, would be duplicated in a malpractice action.

This requirement of exoneration, however, poses a statute of limitations dilemma for the criminal defendant.  In California, a legal malpractice action must be filed within one year of the client's discovery of the malpractice, or four years from the date of actionable malpractice, but in no event can the time to commence to the action exceed four years.  In matters involving postconviction proceedings, however, the statute of limitations would run long before the individual established his "actual innocence". 

Accordingly, the Court applied the "two-track approach":  Although plaintiff must file the malpractice action within the applicable limitations period, the court should stay the action during the period in which plaintiff "timely and diligently" pursues postconviction remedies.

Lesson:  A criminal defendant may pursue his action for legal malpractice within the statute of limitations.  In the event he is not able to establish "actual innocence" because the criminal matter is not yet concluded, the malpractice action will be stayed pending a decision in the underlying action.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Robert A. Borissoff v. Taylor & Faust et al., 33 Cal. 4th 523 (Cal. 2004)

CA Underlying probate matters

Student Contributor: Evan Michael Hess

Facts: A special administrator in probate court retained the Defendants Taylor and Faust to provide assistance in tax matters relating to the execution of a will. Without authorization, the administrator borrowed approximately $115,000 from the estate for personal reasons. After some time, the administrator sought assistance from Defendant Faust. Faust later informed the administrator that he could no longer provide representation. Representation was then assumed by attorney McGovern. An IRS form was not filed by McGovern, which would have extended for three years the estate’s rights to claim a tax refund for administrative expenses related to the will contest. A malpractice action was initiated against Faust and McGovern, to which both Defendants asserted affirmative defenses that that they owed no duty as attorneys to plaintiff, with whom they did not stand in privity of contract, and that the statute of limitations barred plaintiff's claims. The Court of Appeals agreed, as did the trial court, that the Plaintiffs lacked standing to sue the defendants.

Issue: May the successor fiduciary of an estate in probate assert a professional negligence claim against attorneys retained by a predecessor fiduciary to provide tax assistance for the benefit of the estate?

Ruling: Yes. The Supreme Court held that:

1) “[the probate] code's relevant provisions strongly support the inference that a successor fiduciary does have standing to sue an attorney retained by a predecessor fiduciary to give tax advice for the benefit of the estate”;
2) “While privity of contract may not exist, the successor has the same powers and duties as the predecessor, including the power to sue”; and
3) the successor’s fiduciary must have standing to sue the predecessor’s attorney for malpractice if the successor is to have standing to sue for the same.

Lesson: Even if  privity of contract does not exist, if an attorney breaches a duty to a predecessor, a successor fiduciary may sue the attorney for malpractice.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

CA Underlying corporate transaction

Student Contributor: Evan Michael Hess

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

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

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

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

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

 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Beal Bank, SSB v. Arter & Hadden, LLP, 42 Cal. 4th 503 (Cal. 2007)

CA.  Underlying collection practice

Student Contributor: Evan Michael Hess

Facts: Plaintiff, Beal Bank, retained Defendant law firm to collect payments on loans by debtors. The Defendant assigned associate Steven Gubner to represent Beal Bank in bankruptcy proceedings. Gubner filed a motion for summary judgment to recover the default interest, and received an unfavorable ruling. Beal Bank appealed the ruling to the District Court. Just over seven months later, Gubner left Defendant firm and began his own practice, taking with him Beal Bank. Under the representation of Gubner’s firm, the District Court affirmed the ruling of the bankruptcy court. Following appeal to the Ninth Circuit affirming the same.

Beal Bank then filed an action for legal malpractice against Gubner’s firms, and Arter & Hadden, LLP. Gubner then withdrew as counsel for the Plaintiff in bankruptcy court, and all parties entered into a tolling agreement for 15-month period. Beal Bank then dismissed the action. One day short of the end of the tolling period, Beal Bank filed an action for legal malpractice. The Respondents to the action demurred on the basis that the one-year statute of limitations had tolled upon the bankruptcy court’s entering of an adverse ruling.

Issue: When an attorney leaves a firm and takes a client with him or her, does the tolling in ongoing matters continue for claims against the former firm?

Ruling: The California Supreme Court, in reversing the judgment of the Court of Appeal and sustaining the demurrer held that:

1) there existed a conflict of authority under Beane v. Paulsen, 21 Cal.App.4th 89 (1993) and Crouse v. Brobeck, Phleger & Harrison, 67 Cal.App.4th 1509 (1998);
2) Crouse is more persuasive authority because it takes into account controlling California Code and legislative intent; and
3) “When a lawyer leaves a firm and takes a client with him, the firm's representation of the client ceases. There is no risk the firm will attempt to run out the clock on the statute of limitations by offering reassurances and blandishments about the state of the case. Conversely, the firm loses all ability to mitigate any damage to the client.”

Lesson: “If [case law] is ambiguous, [the Supreme Court] may consider a variety of extrinsic sources in order to identify the interpretation that best effectuates the legislative intent.” The Supreme Court held that risks envisioned by the legislature in stopping the tolling period were not applicable when a firm’s representation of a client ceases.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

          The Editorial Board of the

Legal Malpractice Law Review 

is pleased to welcome 

Ellen A. Pansky, Esq. 

as our Contributor of content covering

CALIFORNIA

Just scroll down to  Ellen's current blog post immediately below. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Costco Warehouse v. Greg Randall (2009 CAL LEXIS 12375) (pdf)

Decided Nov. 30, 2009.

CA: Attorney Client Privilege

FACTS: In June of 2000, Costco retained Sheppard, Mullin, Richter & Hampton to provide legal advice regarding whether certain warehouse managers in California were exempt from California wage and overtime laws. One of Sheppard’s wage and hour law attorneys interviewed warehouse managers and produced a 22-page opinion letter on the issue. Costco, the interviewed managers and the lawyer all testified that they understood the communications between the managers and Hensley were, and would remain, confidential.
Several years later, a group of Costco employees filed a class-action suit against Costco alleging that between 1999 and 2001, Costco had misclassified some of its managers as ‘exempt’ and had therefore failed to pay overtime wages. In the course of the litigation, Costco employees sought to compel discovery of the lawyer’s opinion letter. Costco objected on grounds that the letter was subject to the attorney-client privilege and the attorney work product doctrine. Plaintiffs argued that the letter contained unprivileged information and that Costco had waived the privilege by placing the contents of the letter in issue.

RULING: Overruling the intermediate appellate court, the California Supreme Court reiterated California’s strong policy in favor of maintaining client confidences and secrets.

1. In Costco, after finding that an attorney-client privilege existed by virtue of an opinion letter written by independent counsel who had interviewed and taken witness statements from company employees, the Supreme Court found the entire letter, including the witness statement summaries, to be privileged.

2. Additionally, the majority ruled that, while the court can require an in camera hearing to determine whether the relationship constituted an attorney-client relationship, there is no authority for allowing the court to require in camera disclosure of the communications themselves. Those communications are privileged from disclosure, even in camera. If “ the dominant purpose” of the relationship was to provide legal advice from lawyer to client, no disclosure of communications is permitted.

3. Additionally, the Supreme Court held that it was not necessary to demonstrate any harm resulting from the disclosure; the intrusion into the attorney-client relationship was deemed to be harm in itself.

'[T]he privilege is absolute and disclosure may not be ordered, without regard to relevance, necessity or pany particular circumstance peculiar to the case.'

LESSON: From a legal malpractice point of view, it is crucially important to maintain client confidences, even in the face of a judicial order to reveal confidential material in camera. At least in California, it has long been held that a lawyer has a duty to preserve client secrets and confidences, even in the face of a contempt citation. See, In Re Navarro, 93 Cal. App. 3d 325,330 (pdf). 

• Email This
• Print
• Comments (8)
• Trackbacks
• Share Link