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

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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Pierce v. Colwell, 563 N.W.2d 166 (Wis. Ct. Apps. 1997)

WI: Underlying criminal matter

Student Contributor: Jeff Cain

Facts: Client was charged with ten counts of sexual assault. He was represented by another lawyer during the arraignment and the jury trial, which found him guilty. Lawyer Colwell represented him during the sentencing, in which he was sentenced to 20 years in prison. The client unsuccessfully appealed his conviction, arguing among other things, that his due process rights were violated because the criminal court did not personally read the information to him at the arraignment. The client then sued the lawyer for not raising this fact at the sentencing.

Issue: How can a client prove that his former lawyer committed malpractice?

Ruling: To show lawyer malpractice in a criminal action, you must show that you would have succeeded in court if it were not for the lawyer’s failure to exercise reasonable care. In this case, the client had to show that he would have won if the lawyer argued that the client was prejudiced by the failure of the court to personally read the information to the client. To show this, the client would have to provide expert testimony to prove this. Since the client did not name an expert within the time limits, the court dismissed his claim.

Lesson: In Wisconsin, to prove a breach of a duty of care, expert testimony is generally required, since duty of care is outside of the area of common knowledge.

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Seltrecht v. Bremer, 536 N.W.2d 727 (Wis. Ct. Apps. 1995)

WI: Underlying Medical Malpractice

Student Contributor: Jeff Cain

Facts: Patient was prescribed an anti-nausea medication during pregnancy. After baby was born with birth defects, patient retains an attorney. Attorney mistakenly claims that the statute of limitations has ran out on their claim against the doctor. By the time that the patient discovers that this was a mistake, the statute of limitations had run out. The patient sued the lawyer for legal malpractice to collect what the patient would have recovered if the attorney had not provided incorrect legal advice.

Issue: What is the extent of discovery in a legal malpractice suit based on an underlying medical malpractice suit?

Ruling: The extent of discovery in a legal malpractice suit is lower than a medical malpractice suit. In a medical malpractice suit, the doctor is the defendant. In a legal malpractice suit, the defendant is the lawyer, but where the issue depends on the actions of a doctor, the underlying medical malpractice claim must be tried. But the patient’s entire medical history may not be turned over to the opposing party’s attorneys. Medical history must be limited to only the information relevant to the claim, and must exclude all confidential information.

Lesson: Lawyers defending themselves in a legal malpractice case do not have the same access to patient information as doctors do, even though both doctors and lawyers have a duty of confidentiality.
 

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Degenhardt-Wallace v. Hoskins, Kalnins, McNamara & Day 689 N.W.2d 911 (Wis. App. 2004)

WI: Underlying insurance suit: How to contstrue policy language

Student Contributor: Jeff Cain

Facts: Client is involved in a car accident, and retains lawyer. The defendant  driver in the  other car  has a bodily injury liability limit of $50,000. Client’s policy had an underinsured motorist policy with $100,000 limit. Lawyer fails to file suit before the statute of limitations expires. Client sues lawyer for legal malpractice. The lawyer argued that he should not be liable for more than $50,000, since any amount greater than that would be covered by the client’s underinsured motorist policy. The insurance company, who was the carrier for both drivers in the accident, argued that they did not need to pay the client any amount, because the insurance policy said that there is no coverage until the full amount of the bodily injury insurance has been used up, and no insurance had been used in this case due to the lawyer's malpractice in blowing the  statute of limitations.

Issue: Does a lawyer who commits legal malpractice by blowing  the statute of limitations owe the full amount of insurance that the client would have received from both the defendant driver and the client's own underinsured coverage  or only the amount that the lawyer would have recovered  from the underlying defendant driver, if he had successfully filed suit against the offending driver?

Ruling: The lawyer is only liable for the amount that he would have won if he had filed suit against the offending driver. But the under insured carrier is not off the hook. It still owes the client the proceeds of its underinsured coverage even though the liability payment was made by the legal malpractice carrier, instead of driver's carrier. (PS: The liability carrier and the underinsured carrier were the same company).

Lesson: Legal malpractice insurer's payment of what would have been paid by a defendant driver's insurer but for  the  lawyer's blowing the statute of limitations in an auto injury case "triggers" the required payment necessary to collect benefits under a first party underinsurance policy. 
 

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Morters v. Aiken & Scoptur, S.C., 712 N.W.2d 71 (Wis. App. 2006)

WI: Underlying personal injury suit

Student Contributor: Jeffrey Cain

Facts: Morters retained Aiken & Scoptur to represent him in an personal injury case stemming from a car accident. Unsatisfied with their work, Mortens sued the firm for legal malpractice. The trial court dismissed the case, since the former client could not prove all of the elements of malpractice. The lawyers sought attorney’s fees based on a state frivolous claim law. The trial court ruled that the suit was not frivolous, and the lawyers appealed. The court of appeals ruled that the suit was frivolous, and remanded the trial court to determine reasonable fees. The court ordered the client to pay $10,123.09 in trial court fees and $17,820.02 in appeals court fees. Mortens appealed the trial court’s determination that the appeal was frivolous.

Issue: Does a trial court have the authority to make a finding that an appeal of a frivolous legal malpractice suit is frivolous?

Ruling: No. The authority to make a finding that an appeal is frivolous in Wisconsin lies in either the court of appeals or the supreme court.

Lesson: Lawyers have no duty to mitigate damages by alleging frivolity at the first hint of frivolousness. They may wait until after the discovery process has begun to allege frivolity, after they obtained objective evidence to prove frivolity.  

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Bolte v. Joy, 150 Wis.2d 744,443 N.W.2d 23(Ct. App. 1989)

Wis. underlying insurance claim

Student contributor: Cheryl Neuman

Facts: Plaintiff owned a building that was destroyed by fire and retained defendant attorney to represent him in an action against his insurance company with respect to the fire. A jury found that plaintiff had set fire to the building, causing the destruction. Plaintiff alleges that defendant was negligent because he didn’t discover in pretrial discovery that an eyewitness to the fire had given a description of the man seen running from the burning building that clearly excluded plaintiff as that man. Plaintiff claims that he was damaged in his business and professional reputation, suffered mental distress and anguish and that he also suffered from an impaired earning capacity. The trial court granted defendant’s motion for summary judgment because the complaints of the alleged injuries were too remote from the defendant’s negligence and were wholly disproportionate with defendant’s culpability.

Issue: Is defendant liable to plaintiff as a result of the alleged negligence?

Ruling: No. Despite defendant’s negligence, it is appropriate to dismiss this claim on grounds of public policy. Although plaintiff did suffer damages and a ruined reputation as a result of litigation, it would be unjust to award the plaintiff damages resulting from defendant’s negligence in this case. Liability does not always flow from a finding of negligence. The plaintiff set fire to his own building to collect insurance money, therefore precluding him from recovery against his attorney’s negligence, as a matter of public policy.

Lesson:

“The determination to not impose liability in instances where a negligent act has been committed and the act is a ‘substantial factor’ in causing the injury rests upon considerations of public policy.” Coffey v. Milwaukee, 74 Wis.2d 526 (Ct. App. 1976).

In this particular case, recovery was denied on grounds of public policy because:
1) The injury was too remote from the negligence
2) The injury is out of proportion to the culpability of the defendant
3) The recovery would place an unreasonable burden on the defendant , and
4) Recovery would enter a field that has no sensible or just stopping point.
If plaintiff would be allowed to succeed in this malpractice litigation, the door to “litigious flyspecking” would open wide, thereby producing a “chilling effect” upon lawyers to zealously represent their clients. Although the lawyer in this case was not held liable on grounds of public policy, it is always important to conduct proper pretrial discovery to avoid unnecessary litigation. 

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