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

Allred v. Rabon, 572 P.2d 979 (1977)

OK.: Underlying employment action

Student Contributor: Manju Sunny

Facts: Client is seeking damages from two attorneys for legal malpractice. The underlying action was the recovery of damages for the breach of an employment contract. Because of the death of the defendant in the underlying case, attorneys brought suit against the executrix but failed to file a claim. Attorneys then amended the petition on behalf of their client, which later lead to the case being dismissed because executrix said that plaintiff did make a demand within the two months. Ultimately, plaintiff filed actions against his attorneys for malpractice, claiming their failure to file a claim with the executrix, which barred his contract action forever. Also, plaintiff alleges that the attorneys fraudulently attempted to conceal their error by filing the amended petition and by advising him to dismiss the case because he had no hope of prevailing. Client seeks actual damages for attorneys’ negligence plus exemplary damages for fraud in concealing their negligence.

Issue: Whether attorneys’ failure to present the claim within the two months of date of first publication of notice to creditors constitutes negligence?

Ruling: No. The law at the time of dismissal was not clear as to the necessity of filing a claim against the estate in a case such as this. An attorney who acts in good faith and in honest belief that his advice and acts are well founded and in the best interest of his client is not answerable for mere error of judgment or for a mistake in a point of law which has not been settled by the court of last resort in his State and on which reasonable doubt may be entertained by well informed lawyers. Because the point of law upon which defendant attorneys reached possibly an erroneous conclusion was unsettled at the time the conclusion was made, attorneys could not be held liable for such error.

Lesson: This situation is not the same as the negligence of an attorney in allowing a staute of limitations to run against his client’s cause of action before he institutes a suit that has been entrusted to him. Here, the suit was filed but was dismissed by the plaintiff before  the court had acted.

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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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Dennis v. Northcutt, 923 So.2d 275 (2005).

AL: #1 Underlying employment discrimination action; #2 underlying legal malpractice action regarding #1.

Student Contributor: Farah Shahidpour

Facts: Client retained Attorney #1 to represent him in an employment discrimination action in federal district court, however, that action was dismissed. Client subsequently retained Attorney #2 to pursue a legal malpractice action against Attorney #1 (“the first malpractice action”). Attorney moved to withdraw himself as Client’s counsel in the first malpractice case. Client pursued the malpractice action against Attorney #1 pro se. The first malpractice action was dismissed. Client then filed another malpractice action against Attorney #2. Attorney #2 filed a motion for summary judgment. The trial court granted Attorney #2’s motion for summary judgment. The appellate court reversed, holding that the discovery exception applied and that Client had filed the legal malpractice claim against Attorney #2 within the six-month window provided by that exception. Attorney #2 filed another motion for summary judgment, which was granted.

Issue: Whether the lower court correctly granted Attorney #2’s second motion to dismiss?

Ruling: Yes, because plaintiff was unable to provide sufficient proof to overcome summary judgment. Client had failed to produce substantial evidence indicating that, but for Attorney #2’s alleged breach of the standard of care, he would have prevailed in either his first malpractice action against Attorney #1 or the employment discrimination action itself.

Lesson: In a legal malpractice case, the plaintiff must show that but for the defendant’s negligence he would have recovered on the underlying cause of action. McDuffie v. Brinkley, Ford, Chesnut & Aldridge, 576 So.2d 198, 199 (1991). To overcome a summary judgment motion in a legal services liability action, a plaintiff must introduce evidence that in the absence of the alleged negligence, the outcome for the underlying case would have been different.
If the liability to damages of a legal services provider is dependent upon the resolution of an underlying action, the court shall upon the motion of the legal services provider, order the severance of the underlying action for separate trial. Ala. Code §6-5-579(a). 

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Beese-Munoz v. Barbone, Esq., N.J. App. Div.  (per curiam) Decided May 20, 2011).

NJ Underlying Work Place Discrimination Claim

Facts: In this legal malpractice case, plaintiff appeals from the order granting defendant's summary judgment motion and dismissing her case. Plaintiff retained defendant to pursue her discrimination claims against the Lakehurst Naval Station and others. Her lawyer drafted and filed a complaint on plaintiff's behalf. The Department of the Navy moved to dismiss on three grounds; two procedural--failure to effect proper service of process and one substantive--failure to state a cause of action. The Judge  granted the motion to dismiss  without prejudice on the basis of improper service of process. Defendant lawyer forgot to notify his client of the dismissal for 13 months.  Plaintiff  alleges defendant's failure to notify her of the  Court's decision in a timely fashion deprived her of the opportunity to cure the procedural deficiency, and thus precluded her from prosecuting her cause of action against the Navy. Now, the defendant lawyer moves for summary judgment dismissing the malpractice complaint for claiming that the client would have been unable to establish proximate cause--that she had no meritorious underlying claim.

Issue: If the client's underlying claim was dismissed without prejudice because of the lawyer's negligence, can the lawyer move to dismiss the malpractice complaint on other grounds?  

Ruling:  Yes

Notwithstanding  the  negligent failure to notify plaintiff of the dismissal, plaintiff cannot prevail in this legal malpractice case because her complaint against the Navy was substantively without merit and procedurally barred by her failure to exhaust administrative remedies in that she failed to cooperate with the administrative processing of her discrimination claim. 

Lesson:

The trial court correctly found that defendant's negligence was not a proximate cause of plaintiff's inability to successfully prosecute [the underlying case]. Rather, it was plaintiff's failure to cooperate...This lack of cooperation amounted to failure to exhaust administrative remedies, thus creating an independent procedural bar to the prosecution of her [underlying] claim. The fact that [the Judge in the underlying action] based his decision on a different discrete issue does not preclude the trial court [in the malpractice action] from determining a different and independent basis for dismissing plaintiff's case [in the underlying action]. 

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Beatty v. Wood, 204 F. 3d 713 (7th Cir. 2000)

Underlying claim: Age discrimination case

Student Contributor: Clem Durham

Facts: Plaintiff, Robert Beatty, was employed with the FAA, Department of Transportation from 1962 until his retirement in September 1996. He was an Air Traffic Manager of Willow Run Tower at Detroit Metro from 1987 to 1995, and in 1992 Dennis Ragle became his supervisor. In 1995, Ragle issued Beatty a performance rating of "unacceptable" for the period from August 1993 to March 1995, and on April 10, 1995, Ragle reassigned him to the position of Program Specialist at Detroit Metro. That position was the same pay and grade as Air Traffic Manager, but Beatty contends that in contrast to the Air Traffic Manager position, it was a much lower profile position with no management responsibilities and no possibility for promotion. Beatty refused to report to the reassigned position when it commenced in June 1995, and claimed medical leave for a year. When the FAA sought further proof of eligibility for medical leave after the year, he chose instead to voluntarily retire. During that same time period, Beatty challenged the reassignment and was represented by his attorney, defendant, Wood. Beatty has brought a legal malpractice action against Wood for failing to timely appeal an EEOC dismissal for age discrimination. The age discrimination claim was determined to be meritless.

Issue: Can a claimant receive damages for demonstrating not that his case was meritorious, but by showing that he could have obtained settlement for the nuisance-value of the suit?

Ruling: No. A legal malpractice cause of action is meant to provide a litigant with damages that he would have been entitled to under law had the case been properly handled. It is not a vehicle for compensating a litigant for the damages that could have been extracted by pursuit of a
meritless case. Under Illinois law an element of a legal malpractice claim is the requirement that plaintiff demonstrate that "but for" the attorney's negligence, he would have prevailed in the underlying action. Lucey, 234 Ill.Dec. 612, 703 N.E.2d at 476. We have already held that the thrust of that requirement is that "a malpractice plaintiff cannot prevail merely by showing that his claim which his lawyer booted, though baseless, had some nuisance value."

Lesson: If the underlying claim does not have merit, plaintiffs  cannot prove proximate cause and damages of the cause of action for legal malpractice.

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Draper v. Brennan, 142 N.H. 780 (1998)

N.H.: Underlying  Employment Litigation

Student Contributor: Jason W. Hake

Facts: A former client commenced a legal malpractice action against the law firm that had previously represented him against a bank. Although the law firm had facilitated a settlement agreement in the underlying litigation, the former client alleged that the loss of his health insurance coverage under the settlement agreement was due to the law firm’s negligence in negotiating and attempting to have the settlement agreement enforced. In particular, the former client had expressed concerns over certain language and ambiguities in the agreement and believed that he and his family would be provided with free medical insurance until he reached the age of sixty-five (65) under the same. However, when the law firm had attempted to enforce the settlement agreement, the Court held that the bank could require the former client to pay a portion of his own medical insurance premiums. Although the client was notified in 1991 that he would be required to pay a portion of his own medical insurance premiums, he waited until 1994 to commence a legal malpractice action against his former attorneys. The trial court determined that the former client’s claims were barred by the applicable statute of limitations and the former client appealed.

Issue: Was the former client’s legal malpractice claims barred by the applicable statute of limitations?

Ruling: Yes. The former client’s claims that arose from the date of the settlement in 1998 were barred by the applicable six-year statute of limitations found in the pre-1986 New Hampshire statute. The latest possible date for the accrual of the former client’s claims was when he was advised that he would have to pay a portion of his medical insurance premiums. However, this claim was barred by the amended three-year statute of limitations found in the applicable amended New Hampshire statute. As a result, the determination of the trial court was affirmed.

Lesson: This is a basic statute of limitations scenario. Do not rely upon ambiguities in the law to bolster your time to commence an action. Seek legal assistance as soon as you feel you have been wronged. 

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Elkind v. Bennett, 958 So.2d 1088 (2007).

FL: Underlying labor dispute

Student Contributor: Farah Shahidpour

Facts: Client hired Attorney to represent himself, his business venture, and his business partner in a labor dispute brought against the business. The suit was one for harassment. The matters were settled, and Attorney signed the settlement on behalf of Client. Six months later, Attorney wrote a latter to the trustees of the business, revealing confidential information he learned from his prior representation of Client. The company used this information to have Client fired and removed from the venture, causing him damage. Client sued Attorney, alleging legal malpractice. The trial court dismissed the complaint because Client had not stated a cause of action for legal malpractice. The court noted that Attorney had disclosed the confidential information obtained from Client after his representation of Client, and thus was not in privity with Client at the time of disclosure. The trial court reasoned that the complaint should be dismissed for failure to allege privity. Client now appeals.

Issue: Whether the trial court properly dismissed Client’s action for legal malpractice for failing to allege privity?

Ruling: No, the trial court improperly dismissed Client’s action for legal malpractice because Attorney had a continuing duty to his Client not to disclose confidences. This duty continued even past the termination of the matter for which representation was sought.

Lesson: Florida recognizes a cause of action for disclosure of confidential information. In a legal malpractice action, a plaintiff must prove three elements: the attorney’s employment, the attorney’s neglect of a reasonable duty and that such negligence resulted in and was the proximate cause of loss to the plaintiff. Brennan v. Ruffner, 640 So.2d 143, 145 (1994). A plaintiff must allege what confidence was breached and how its disclosure damaged the Plaintiff.
 

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Brock v. Owens, 532 A2d 1168 ( PA. 1987).

PA: Underlying employment discrimination case

Student Contributor: Laura Binski

Facts: Brock (client) was a professor at Lincoln University. She believed she was the victim of race and gender discrimination, so she hired a lawyer. She first hired Kalemjian, but he withdrew from the case. Next, the client hired Wusinich. She replaced Wusinich with Owens. The client sued all three of the lawyers for legal malpractice after the court dismissed her case for lack of subject matter jurisdiction. The client represented herself in the lawsuit against the lawyers, and asserted that all three handled her case negligently. At a jury trial, the lawyers filed a motion for non-suit. The motion was granted and the client now appeals.

Issue: Did the trial court properly grant the motion for non-suit in favor of the lawyers?

Ruling: Yes. To avoid non-suit in the case, the client had to show (1) the employment of the lawyers as a basis for their duty to her, (2) the lawyer’s failure to exercise ordinary skill and knowledge in handling the case, and (3) that the lawyer’s failure to handle the case diligently was a cause of the damage to the client. Here, the client presented no evidence to show that the lawyers failed to exercise ordinary skill or knowledge in handling the case, or that she would likely have prevailed in her suit against Lincoln, or that the lawyers handling of her case was a proximate cause of her failure to win the lawsuit against Lincoln. Thus, the client did not meet the requirements to establish her malpractice claim.

Lesson: The client here failed to prove malpractice because she did not show that the lawyers handled her case with less than the requisite ordinary skill and care or that their handling of the case was a proximate cause of her failed claim against Lincoln. She also did not present any evidence to show that it is more likely than not that she would have won her underlying lawsuit if not for the lawyers’ negligence. If the client does not present any evidence that the lawyers failed to exercise ordinary skill and knowledge or evidence that she would likely have won her case against Lincoln University, the client cannot prevail in the legal malpractice claim.
 

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Walker v. Burnett,  241 Ga. App. 105,526 S.E.2d 109 (1999)

Underlying Action: Discrimination Action (Georgia)

Student Contributor: Candice L. Deaner

Facts:  Legal malpractice action against attorney who represented Plaintiff in federal employment discrimination action, in which summary judgment was entered in favor of Plaintiff's employer. The Superior Court, granted summary judgment for Defendant attorney. Client appealed.

Issue: Whether an Attorney is permitted to pursue a claim of malicious prosecution against a former client who brought a legal malpractice case against them?

Ruling: The Court of Appeals held that client failed to present any evidence to raise jury issue on element of proximate causation.
1) Plaintiff failed to show that he would have prevailed in underlying racial discrimination action against his employer but for Defendant's alleged negligence.
2) The order granting summary judgment for employer was based not on counsel's legal representation or alleged lack thereof, but rather, on client's failure to show that any discrimination had occurred.
3) Plaintiff failed to present any specific evidence to rebut Defendant attorney's assertion that there was no deposition testimony that court could consider due to attorney's failure to ensure that such depositions had been filed in record; plaintiff's few references to allegedly favorable evidence were vague and unsupported by specific evidence in record.

Lesson: When clients sue their attorneys for legal malpractice, courts require them to prove that, but for their attorneys’ negligence, their claims would have been resolved more favorably. This standard has come to be known as the 'case within a case.' When a showing cannot be made that the client’s attorney ruined an otherwise successful claim, the courts will grant summary judgment on the issue of causation. If a Plaintiff had lost their case due to the merits (or lack thereof) of the cause of action and not due to the actions of the attorney, then a subsequent legal malpractice action will be dismissed. Only if the Plaintiff lost their case based on the attorney’s actions would the Plaintiff have been successful.

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