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

Reilly, Supple & Wischusen, LLP v. Malcolm Blum v. Michael P. Ambrosio (NJ App. Div. March 9, 2011 UNPUBLISHED)

NJ: Underlying legal malpractice action

FACTS:  Attorney Blum was sued by a former client   in an underlying legal malpractice action,   which was dismissed on summary judgment eventhough plaintiff had a legal malpractice expert report.  Blum was represented by the Reilly Supple law firm, which now  sues him for unpaid legal fees.  Apparently seeking contribution from another source to help pay those outstanding legal fees in his successful defense,   Blum filed a third party complaint alleging legal malpractice  against the plaintiff’s legal malpractice expert in the unsuccessful  underlying malpractice case-- Michael P. Ambrosio, a law professor, who had issued the report which could not pass the muster of the summary judgment motion.

ISSUE: 1)  Does the successful defendant in a legal malpractice case have a  right to sue the opposing expert  for legal malpractice where the  opinions expressed by the expert   were rejected by the Court?

RULING: NO.

1. Under NJ law, for a non-client to sue a lawyer, even when that lawyer is on the opposing side, there must be "an invitation to rely and reliance,  [which] are the linchpins of attorney liability to third parties." Petrillo v. Bachenberg, 139 N.J.472, 483-4 (1995); Banco Popular, N.A. v. Gandi, 184 N.J. 161,181 (2005). 

"Far from relying on Ambrosio, Blum successfully opposed Ambrosio's opinion in the underlying malpractice case."

2.  In NJ, the expert witness is protected by the absolute litigation privilege and cannot be sued for the opinions expressed in his expert report.

The court based its decision on  Hawkins v. Harris,  141 N.J. 207 (1995), which adopted California’s  formulation of the litigation privilege, where "the undelrying principles are substantially the same as those underlying the New Jersey privilege":

 The absolute privilege applies to "any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action." Id. at 369. Whether a defendant is entitled to the privilege is a question of law.  

LESSON:  The absolute privilege now applies to the expert witness in legal malpractice cases. Although there are a few cases in other states that appear to offer a different view, the Court  pointed out that there are controls that justify granting the expert witness the absolute privilege which are germane to the legal malpractice expert. Here’s what the Hawkins decision also said: 

Because of their extraordinary scope, absolute privileges "have been limited to situations in which authorities have the power both to discipline persons whose statements exceed the bounds of permissible conduct and to strike such statements from... the record." ... The absolute privilege "does not extend to statements made in situations for which there are no safeguards against abuse." ... ("[I]n strictly judicial proceedings the potential harm which may result from the absolute privilege is somewhat mitigated by the formal requirements such as notice and hearing, the comprehensive control exercised by the trial judge whose action is reviewable on appeal, and the availability of retarding influences such as false swearing and perjury prosecutions * * *.");  

Editor's Note: For examples of where the Court remedied the  broad scope of the absolute privilege of a legal malpractice expert by striking the expert's report or testimony as a "net opinion" see:  Celucci v. Bronstein, 277 NJ Super 506 (1994) and Kaplan v. Skoloff  & Wolfe, 339 N.J. Super. 97 (2001).  

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Waldman v. Beck, 101 Conn. App. 669, 922 A.2d 340 (2007).

CT: Underlying personal injury matter

Student Contributor: Laura Binski

Facts: The client hired the lawyer to represent her in a personal injury claim. The lawyer failed to appear in court on behalf of his client on several occasions and the complaint was dismissed with prejudice. The client filed a legal malpractice claim based on the lawyer’s negligence. During a pretrial conference, the client and lawyer agreed upon a settlement of $20,000, to be paid within ninety days. The day after the conference, the lawyer contacted the client to tell her that he no longer agreed to pay the $20,000. The client then filed for the court to enforce the settlement agreement. The lawyer defended himself on the belief that the contract was unenforceable because of his communication refusing to pay the agreed upon amount. The court ruled in favor of the client and ordered the lawyer to pay the client $20,000 within ninety days.

Issue: Did the trial court properly decide against the lawyer in ordering him to pay the client $20,000 in order to enforce the settlement agreement?

Ruling: No. A trial court generally has the power to enforce a settlement agreement as a matter of law when the terms of the settlement are clear and definite and not in dispute. In this case, the trial court’s judgment award against the lawyer was directly in conflict with the terms of the settlement agreement. Thus, the court inappropriately used its discretion by rendering a judgment that contradicted the terms of the settlement agreement.

Lesson: “The court’s authority in these circumstances is limited to enforcing undisputed terms of the settlement agreement that are clearly and unambiguously before it, and the court has no discretion to impose terms that conflict with the agreement.” Janus Films, Inc. v. Miller, 801 F.2d 578, 582 (2d Cir. 1986). If the court enforced a settlement where the terms are unclear or in dispute, the court has gone beyond the scope of its power.

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Ayyildiz v. Kidd, 220 Va. 1080, 266 S.E.2d 108 (Va. 1980)

VA: Underlying personal injury action

Student Contibutor: Karen Dindayal

Facts: Plaintiff, Ayyildiz is a doctor who was sued for malpractice by his patient, Grubb, and won the suit. Thereafter, Ayyildiz filed a motion for judgment against Grubb’s counsel, Edward S. Kidd, Jr., alleging malicious prosecution, seeking damages by way of money spent to defend the medical malpractice action, loss of present and future earnings and profits in the practice of medicine and injury to Ayyildiz’s professional reputation.

Furthermore, Ayyildiz’s motion contained a second count that alleged that Kidd fell below the legal standards of the community in which he practiced and that Ayyildiz incurred damages due to Kidd’s willful or negligent acts.

The trial court sustained Kidd’s demurrer, holding that an action for malicious prosecution cannot be brought from a civil action unless the plaintiff was arrested, his property was seized or there was a special injury.

Issues:

1. Will an action for malicious prosecution in a civil case be maintained where the plaintiff was not arrested, there has been no seizure of property or special injury?
2. Do allegations of loss of earnings and profits, damage to professional reputation and money spent to defend a maliciously prosecuted medical malpractice action constitute special injury?
3. Is Kidd liable for negligence to Ayyildiz arising out of the medical malpractice case?

Rulings:

1. No. In malicious prosecution actions arising out of civil proceedings, the plaintiff must allege and prove an arrest, seizure of property or special injury incurred to maintain said action.
2. No. Ayyildiz’s allegations do not constitute a special injury to sustain an action for malicious prosecution.
3. No. Kidd was under no legal duty to Ayyildiz and was therefore not liable for negligence to him.

Lesson:  A prevailing party has no cause of action against the adverse party's attorney for malicious prosecution. Generally, an attorney’s liability for damages is only to his client,  based arising from some duty owed to the client.

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Goodstein v. Allen, 222 Va. 1, 278 S.E.2d 787 (Va., 1981)

VA: Underlying contract and tort actions

Student Contributor: Karen Dindayal

Facts: In June 1972, Joseph S. Goodstein and Sheldon Ruben, individually and trading as G & R Associates (G & R) entered into a contract to purchase a tract of land. G & R Associates hired attorneys Allen S. Buffenstein, Jay M. Weinberg and Hirschler & Fleischer to examine the title and to counsel G & R on the purchase of the property.
In 1974, Hirschler & Fleischer filed suit on behalf of G & R against Froehling & Robertson, a survey company, for negligence in its land survey. Then, on June 16, 1975, Hirschler & Fleischer withdrew as counsel for G & R. G & R then mended their motion for judgment and added Hirschler & Fleischer defendant, claiming tort damages against Hirschler and Froehling, and alleged fraud and professional negligence against Hirschler, seeking compensatory and punitive damages.
The trial court found a misjoinder of parties and misjoinder of actions, severed the lawsuits, and required G & R to decide whether to proceed with the action in tort or in contract. G & R opted to proceed in tort, and the contract action was dismissed without prejudice.
G & R then filed another amended motion for judgment against Hirschler based on tort liability, and Hirschler pleaded the statute of limitations. The trial court sustained Hirschler’s plea and G & R appealed.
Thereafter, in August 1977, Hirschler then sued G & R for attorneys' fees for services rendered in the suit against Froehling. G & R filed a counterclaim seeking damages for breach of contract. Hirschler then filed a special plea in bar and plead the statute of limitations.
Meanwhile, the court affirmed the judgment in the tort action. The lower court sustained Hirschler’s two pleas and dismissed G & R’s counterclaim for breach of contract as barred by the doctrine of res judicata.

Issue: Did the trial court err in sustaining the special plea and the plea of the statute of limitations?

Ruling: No. The judgment regarding the tort statute of limitations was res judicata with respect to the contract action because it arose out of the same wrong as the first, tort action.

Lesson: In contract and tort suits for legal malpractice, if the contract remedy arises from the same wrong as the tort remedy, and, if the statute of limitations has not tolled as to one action, then it has is not tolled as to the other.

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Wood v. Hollingsworth, 166, N.C. App 637, 603 S.E.2d 388 (2004)

NC: Underlying Personal Injury Claim

Student Contributor: Vanessa L. Wachira

Facts: After sustaining injuries in an automobile accident on March 8, 1997, Client retained the services of Barbara Hollingsworth (Attorney).  In December 1999 Client instructed Attorney to file suit against the other driver.  In February 2000, Attorney informed Client that her office would be closing and advised her to seek other counsel.  Accordingly, Client terminated Attorney’s services.  After retaining new counsel on April 4, 2000, Client was informed that no lawsuit had been filed on her behalf. The statute of limitations on Client’s personal injury claim had run on March 8, 2000.  Client brought a malpractice action against Attorney, alleging that she failed to exercise reasonable care and diligence, failed to keep her informed as to the status of her case and failed to provide legal services in accordance with the standards of the practice.  The trial court dismissed the action, holding that Client failed to state a claim.

Issue: Was Client’s claim for negligence in legal representation properly dismissed for its failure to state a claim because no attorney-client relationship existed at the time of the injury?

Ruling: No.  In NC, an attorney will be liable for injuries sustained by her client that are a result of her failure to act with the reasonable care and diligence required by someone of her profession.  These acts include a duty to keep her client informed as to the status of her case.  Here, because Client’s complaint listed specific actions and inactions of her attorney that revealed Attorney’s failure to comply with the standards of her profession, Client’s complaint sufficiently stated a claim for malpractice.  Although the attorney-client relationship ended approximately one month before the statute of limitations ran, privity was still present when the events that gave rise to her injury occurred.  The foreseeable of the injury and the inaction of Attorney were sufficient to establish proximate cause. 

Lesson: In an action for malpractice predicated upon a former-Attorney’s failure to comply with the statute of limitations, it is important to remember that the acts that give rise to the injury sustained by the Client occur during the period in which the Attorney could have but failed to file the action and not on the date on which the statute of limitations runs.  

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Farnsworth v. O’Doherty, 85 Conn. App. 145, 856 A.2d 518 (2004).

CT: Underlying negligence case

Student Contributor: Laura Binski

Facts: In 1994, the clients hired the lawyer to help them recover money after the alleged negligent construction of an addition to their home. In 1995, the lawyer filed a complaint for the clients against the building contractor, the building engineer, and the town of Branford. Later that year, the lawyer no longer represented the clients. The clients were unsuccessful in their suit because the town engineer and the town claimed governmental immunity and the building contractor filed for bankruptcy. In 2001, the clients filed a legal malpractice complaint against the lawyer for negligence in failing to name the town building inspector as one of the defendants and failure to assert reckless and wanton disregard for health and safety in the complaint. The lawyer successfully moved for summary judgment on the grounds that §52-577 (the statute of limitations) barred the clients from suing her. The clients now appeal.

Issues: Does the statute of limitations prevent from bringing a legal malpractice claim against the lawyer? May the clients toll the statute of limitations claim under the doctrine of continuous representation?

Holding: Yes and no. §52-577 provides that “no action founded upon a tort shall be brought but within three years from the date of the act or omission complained of.” Since the clients did not file the suit until more than four years after the alleged negligence conduct of the lawyer, they are time barred by the statute of limitations. The continuous representation rule provides that clients may toll the statute of limitations upon a showing that (1) the lawyer continued to represent them with regard to the same underlying matter and (2) either that the client was unaware of the alleged malpractice or the lawyer could still diminish the harm caused by that malpractice during the continued representation period. DeLeo v. Nusbaum, 263 Conn. App. 588, 821 A.2d 744 (2003). Since the lawyer ceased representation of the clients, they have failed the first prong of the continuous representation test and may not toll the statute of limitations.

Lesson: §52-577 is an “occurrence statute,” meaning that the time period within which a client must file a complaint begins at the exact time when the negligence complained of occurs, not the date when the client sustains damage. The “continuous representation” doctrine was established to ease the harsh consequences of the occurrence rule.
 

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Wooten v. Heisler, 82 Conn. App. 815, 847 A.2d 1040 (Conn. App. 2004).

CT: Underlying personal injury matter

Student Contributor: Laura Binski

Facts: The client was injured in a car accident and hired the lawyer to help him recover damages. After the lawyer brought a negligence action against the other driver, the client fired him and hired a new lawyer. The new lawyer settled the case for $70,000. Then, the client filed a legal malpractice action against the lawyer alleging that the lawyer had failed to tell him about medical treatment and testing he would need to help him improve his case. The client claims that if the lawyer had not been negligent, he would have been awarded $150,000. The lawyer filed a motion for summary judgment stating that the lawyers’ duties do not include advising his client about medical treatment. The trial court granted summary judgment and the client appealed.

Issue: Was summary judgment proper in this case? Does the lawyer have a duty to advise his client as to the appropriate course of medical diagnosis and treatment?

Ruling: Yes and no. Summary judgment is appropriate when there is no genuine issue of material fact. In this case, there is no issue of material fact because the lawyer produced evidence that the client had in fact obtained medical advice during the time the lawyer represented him. Thus, the client cannot claim that the lawyer’s failure to tell him to get medical advice kept him from a $150,000 award of compensation. As to the duty to advise, the Court held that “a lawyer has a duty to communicate with the client to the extent reasonably necessary to allow the client to make informed decisions . . . and to provide advice on legal and non-legal matters that are relevant to the client’s case.” (Rules of Professional Conduct 1.3 and 1.4). However, the lawyers’ duties do not extend to offering medical advice to a client for the purpose of increasing the award of damages in a negligence claim.

Lesson: In this case, summary judgment would have been proper even if the court had found that the lawyer has a duty to offer medical advice. The client would not be allowed to sue the lawyer for not advising him to seek medical advice since the client did in fact obtain medical advise during the time he was represented by the lawyer.  

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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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Green v. Simmons, 919 A.2d 482 (Conn. App. 2007)

CT: Underlying premises liability: Long Arm Jurisdiction

Student Contributor: Eric B. Kang

Facts: In 2001, Albert Green hired Reginald D. Simmons & Associates, a law firm based in South Carolina, to represent him in a personal injury action in which Green was injured while he slipped on ice while making a delivery to Sam’s Wholesale Club in Manchester, Connecticut. The law firm sent two letters to Sam’s Club in Connecticut but received no responses. The law firm took no further action until two years later in 2003, when the law firm notified Green that it would no longer represent him. The following year, Green filed a malpractice action against the law firm in Connecticut, alleging that they were negligent for their failure to file suit against Sam’s Club in a timely fashion and for failing to properly pursue his claim. The law firm did not respond to Green’s complaint. The trial court granted Green’s motion for default for failure to appear against the law firm. The law firm showed up at the hearing for damages, but only for the purpose of contesting personal jurisdiction and to file a motion to dismiss on that ground. The court denied the motion and held for Green. The law firm appealed.

Issue: Whether the court properly asserted jurisdiction over the law firm pursuant to the state’s long arm statute?

Ruling: No. Connecticut’s long arm statute provides that jurisdiction may be exercised over a nonresident who “transacts any business within the state.” Conn. Gen. Stat. § 52-59b (a)(1). Since Connecticut’s long arm statute is modeled after New York’s long arm statute, the court held that New York case law provides guidance on the issue. In NY, an appellate court has held that “written communications, which generally are held not to provide a sufficient basis for personal jurisdiction under the long-arm statute, must be shown to have been used by the defendant to actively participate in business transactions in New York.” Liberatore v. Calvino, 742 N.Y.S.2d 291 (2002). Further,

 “mail contacts are...insufficient unless the defendant projected himself by those means into New York in such a manner that he purposefully availed himself … of the benefits and protections of its laws.”  

The court also noted another NY case that applied this principle and held the attorney not subject to jurisdiction where the non-resident attorney sent three faxes to NY medical care providers, attempted to obtain records from the state police, and sent two letters to the plaintiff, who lived in NY. The court in that case held that the attorney’s actions “did not amount to her projecting herself into NY or purposefully availing herself of the benefits and protections of its laws.” Green v. Simmons, 919 A.2d 482, 486. Similarly, the court here held that the two letters sent by the law firm to Sam’s Club in Connecticut did not subject them to jurisdiction in Connecticut under the state’s long arm statute.

Lesson: No matter what the result of this case, the boundaries of long arm jurisdiction vary from state to state. If a client matter requires that you become involved in the law of a different state, be familiar with those laws as they affect your client, and your prospective liability. 
 

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Mayer v. Biafore, 245 Conn. 88, 713 A.2d 1267 (1998).

CT: Underlying personal injury action

Student Contributor: Laura Binski

Facts: The client hired the lawyer to help him with a personal injury action involving a motor vehicle accident. The lawyer settled the client’s personal injury case for $10,000 (the limit of the tortfeasor’s liability policy), although the client’s injuries exceeded this amount. The client was insured by Aetna with a policy of up to $300,000 in underinsured motorist coverage. However, Aetna refused the client’s request for the underinsured motorist coverage. The client did not file a suit against Aetna to recover the underinsured motorist benefits. Instead, the client filed a legal malpractice complaint claiming that the lawyer’s negligence caused him to lose his rights to pursue a claim for recovery of benefits. The client further claims that this claim became ripe when he was denied the underinsured motorist coverage due to the tolling of Aetna’s statute of limitations. The lawyer claims that the legal malpractice claim will not be ripe until the client actually brings a suit against Aetna and Aetna raises the statute of limitations defense.

Issue: Did the client need to get a judge to decide the underlying case before he can bring a legal malpractice suit against his lawyer?

Ruling: No. There is an actual controversy in this case which makes it ripe for justiciability. Justiciability requires

“(1) that there be an actual controversy between or among the parties to the dispute . . . (2) that the interests of the parties be adverse . . . (3) that the matter in controversy be capable of being adjudicated by judicial power . . . and (4) that the determination of the controversy will result in practical relief to the complainant.”

Pamela B. v. Ment, 244 Conn. 296, 311, 709 A.2d 1089 (1998).

The fact that the lawyers contest the issues of causation and damages does not require the client to file action with Aetna before filing a legal malpractice claim. To require determination of the underlying case would not further the “judicial economy” and would only serve to add extra cases to the already overloaded court docket.

Lesson: All legal malpractice claims are based on an underlying dispute. A requirement that the underlying dispute be settled before a client can file a legal malpractice claim would unduly hinder the client’s ability to obtain redress against a negligent lawyer.

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Douglas v. Monroe, 743 N.E.2d 1181 (Ind. Ct. App. 2001)

IN: Underlying wrongful death claim

Student Contributor: Jeff Cain

Facts: A college freshman drowns in his school’s pool. His mother is too distraught to seek counsel, but his older brother, who is a bank security guard, sees a lawyer in the lobby of the bank. The brother asks the lawyer if there is a time limit to file a suit. The lawyer said that he had two years to file a suit, but she did not tell him about the 180-day notice to file a tort claim, or that he should not rely on her legal advice. The mother retains a lawyer several months later, and learns that she has just missed the 180-day deadline.

Issue: Did the lawyer have an attorney-client relationship with the mother, even though she never met the lawyer, because the mother relied on the lawyer’s advice?

Ruling: No. An attorney-client relationship can be implied when a client seeks advice from a lawyer, the advice sought is within that lawyer’s professional competence, and the lawyer gives the sought advice. In this case, the mother never met or spoke with the lawyer; did not attempt to contact the lawyer, schedule an appointment with the lawyer, or consent to an attorney-client relationship with the lawyer; never entered into a contract with the lawyer or pay her for legal advice; and the mother never thought that the lawyer was representing her in her son’s death.

Lesson: When giving casual legal advice, a lawyer should always tell the recipient that they must not rely on their advice.  Even better, make sure you don't give out casual legal advice. It will come back to haunt you, especially if the recipient relied on the advice and circumstances suggest that the lawyer had reason to believe he or she would so rely. 

 

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Harrison v. Casto, 165 W.Va. 787, 271 S.E.2d 774 (W.Va. 1980)

WV: Underlying  personal injury and legal malpractice actions

Student: Karen Dindayal

Facts: Plaintiff, Paul H. Harrison hired attorney Don Kingery (#1) to file a personal injury action against Piedmont Airlines for injuries allegedly suffered while a passenger on a Piedmont plane. King failed to file the action within the statutory period. As a result, Harrison hired Carroll W. Casto (#2) to file an action against Kingery (#1) for malpractice. Casto (#2) failed to do so, but instead brought a personal injury suit against Piedmont Airlines and was unsuccessful.

Plaintiff then retained another attorney (#3) to sue Casto (#2) for legal malpractice, claiming (a) that Casto (#2) failed to file the instant action within the applicable statute of limitations and (b) breach of contract between Harrison and Casto.

Casto filed an Answer in which she set forth that Harrison’s Complaint lacks a cause of action since the claims against Kingery (#1) can still be brought in contract, since the applicable statute of limitations for breach of contract was ten years if the contract was in writing.

Issue: Was the trial court’s dismissal of the complaint correct?

Ruling: Yes. A malpractice action “could have been brought in contract” if the plaintiff alleged that defendant breached her contractual employment obligations. Harrison’s action on a breach of contract then survived against Kingery, (#1) although the tort action was barred by the statute of limitations. Therefore, Harrison was not deprived of anything and the Complaint was correctly dismissed.

Lesson: When a malpractice action sounds in tort and contract, statute of limitations barring the filing of the action in tort does not necessarily preclude the filing the action on the contract.

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DiTondo v. Meagher, 24 Misc. 3d 720, 883 N.Y.S.2d 690 (Sup 2009).

NY: Underlying negligence action, choice of law

Student Contributor: Nicole Milone

Facts: Joseph DiTondo (“DiTondo”) was injured while unloading a chain link fence he delivered to a National Rent-A-Fence facility in North Carolina. DiTondo hired Frederick J. Meagher, Jr of Meagher & Meagher Law Firm  to represent him in the underlying negligence action. The injury took place in North Carolina, where there is a contributory negligence bar to negligence actions. However, DiTondo lives in New York and Rent-A-Fence has its principal place of business in California, and both states practice comparative negligence law. Meagher brought the action in federal district court in New York. Rent-A-Fence submitted a motion for summary judgment, which went unopposed. Chief Judge Scullin struck Meagher’s opposition papers because they failed to comply with federal rules. The summary judgment motion argued that North Carolina’s law of contributory negligence should apply in this case, which would bar DiTondo’s recovery. The judge determined that North Carolina has the most contacts with this litigation, being the site of the injury and the location of a Rent-A-Fence facility, and applied North Carolina law. However, the judge denied Rent-A-Fence’s motion for summary judgment, finding they did not meet the high standards applied in North Carolina to contributory negligence cases on summary judgment. Before the case went to trial, Meagher filed a motion to withdraw as DiTondo’s counsel, which the judge granted provided he located another attorney willing to take the case.

Issue: Whether a lawyer’s failure to properly research and argue the choice of law in a federal diversity case constitutes legal malpractice?

Ruling: Yes. Meagher failed to meet the proper standard of care in representing his client. If not for his error, DiTondo would have prevailed in the underlying case. Meagher should have argued that applying the New York choice of law rule, or the Neumeier rule, North Carolina was not the proper choice of law. The judge found that North Carolina law applies because it was the site of the accident as well as the location of a Rent-A-Fence facility. However, Meagher should have pointed out that Rent-A-Fence has its principal place of business in California, which means it is domiciled in California. If Meagher had presented this version of the facts to the judge in the underlying case, he would not have applied North Carolina law. North Carolina has no interest in applying its law to these facts because both parties are not domiciled in the state.

Lesson: A lawyer is responsible for zealously advocating on behalf of their client. Failure to do the proper research and argue the relevant law will result in a malpractice action against the attorney. 

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Elliott v. Van Kleef, 830 So.2d 726 (2002).

AL: Underlying personal injury action

Student Contributor: Farah Shahidpour

Facts: Client was injured when he was exposed to hazardous chemicals while working in Arkansas. Client hired an Alabama attorney to represent him in a personal injury action in Arkansas. Attorney was not licensed to practice law in Arkansas, so he contacted an Arkansas Attorney by telephone and requested that he serve as local counsel in Arkansas. This action was voluntarily dismissed. Attorney filed a second action, arising from the same injury. This action was involuntarily dismissed because Attorney allegedly failed to serve the defendant in that action within the time allowed by the Arkansas Rules of Civil Procedure. Client filed an action under the Alabama Legal Services Liability Act §6-5-570 in the Jefferson Circuit Court alleging that the Attorney failed to properly represent him in a personal-injury action filed in Arkansas, resulting in the action being dismissed with prejudice. Attorney made a motion to dismiss for lack of personal jurisdiction. Client appeals, stressing his belief that Arkansas attorney would travel to Alabama to represent him.

Issue: Whether the trial court correctly dismissed Client’s action for lack of personal jurisdiction?

Ruling: Yes. Attorney is licensed to practice law in Arkansas and Texas. He is not licensed to practice law in Alabama and has never applied for a license to practice law in Alabama. Exercise of either general or specific in personam jurisdiction over the Arkansas attorney would violate the Due Process Clause, Rule 4.2, Ala. R. Civ. P. and it does not permit the extension of Alabama’s in personam jurisdiction over the Arkansas Attorney. Telephone calls, fax transmissions, and letters sent from the Alabama attorney & client to the Arkansas attorney are not relevant since they were the, “unilateral activity of another person.” Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985). The Arkansas Attorney did not purposefully avail himself of jurisdiction in Alabama merely by receiving telephone calls, fax transmissions, or by opening mail sent from Alabama.

Lesson: The Due Process Clause of the 14th Amendment permits a forum state to subject a nonresident defendant to its courts only when that defendant has sufficient “minimum contact” with the forum state. If an Attorney merely receives telephone calls and fax transmissions or opens mail from another jurisdiction, he is not “purposely availing himself of jurisdiction from that State.”

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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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Caffery v. Stillman, 79 Conn. App. 192, 829 A.2d 881 (Conn. App. 2003)

CT: Underlying workers’ compensation action

Student Contributor: Laura Binski

Facts: On April 16, 1992, the client sustained injuries while working in the course of his employment for the city of New Britain. The client hired the lawyer to represent him in his workers’ compensation case in 1994. The case settled for $95,000. In 1997, the client sued the lawyer for legal malpractice for failing to adequately represent his case because the client felt he was entitled to more money. The court dismissed the case because the client had not first sought to re-open the workers’ compensation claim. The client then re-opened the workers’ compensation case and the court affirmed the original settlement amount. In 1999, the client again sued the lawyer for legal malpractice for negligence and breach of contract.

Issues: (1) Can the client’s claim be saved by the accidental failure of suit statute? (2) Do the allegations set forth a claim in contract or in tort?

Ruling: (1) No. §52-592, the accidental failure statute, provides that “a plaintiff must file an action for the same cause at any time within one year after the determination of the original action . . .” In this case, more than one year had passed between the date the court dismissed the client’s original action in 1997 and the date when this action was brought in 1999.

(2) The second claim was no more than a tort disguised in contract language. A client may not bring an action in both negligence and contract simply by saying that a lawyer breached the standard of care in the language of his employment contract. In this case, the client alleged that the lawyer had promised to bring a liability action against the city, and that the promise to bring such an action was premised on an inaccurate understanding of the law. The client claims that this incorrect understanding of the law caused him to suffer damages. Thus, the client’s allegation that the lawyer breached his contract by failing to meet the standard of care is in reality a negligence claim.

Lesson: The tort statute of limitations is three years, while a breach of contract statute of limitations does not run for six years. In this case, the client sought to avoid the statute of limitations by sounding his claim in contract rather than tort. This does not often work because the courts are very careful to delineate between tort and contract claims. 

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Pashak v. Barish, 303 Pa. Super. 559, 450 A.2d 67 (1982).

PA: Underlying negligence action

Student Contributor: Laura Binski

Facts: Mr. Pashak was injured working as a longshoreman. He sued the ship’s owner for negligence, claiming that the ship was unseaworthy. Mr. Pashak hired some lawyers who recommended that he settle the case out of court for $100,000. Mr. Pashak agreed to settle the case. He was later notified that contrary to his lawyers’ advice, his statutory compensation benefits would be ended because of the settlement. When Mr. Pashak’s wife found out that she also would not be able to collect statutory compensation benefits as a result of the settlement, she sued the lawyers for legal malpractice. The lawyers defended themselves on the basis that Mrs. Pashak’s loss was too speculative and remote to justify her winning her case against the lawyers. The trial court agreed with the lawyers and dismissed Mrs. Pashak’s complaint with prejudice.

Issue: Was Mrs. Pashak’s loss too speculative and remote to justify her winning a legal malpractice case against her husband’s lawyers?

Ruling: Yes. The court reasoned that a mere breach of professional duty, causing only speculative damage or the threat of future damage is not enough to create a feasible cause of action of legal malpractice. In this case, Mrs. Pashak’s right to compensation would not become available until Mr. Pashak died. Thus, Mrs. Pashak’s right to the benefit was dependent upon her surviving him, and the amount of money she would receive was also dependent on whether the couple had children. Since there were so many conditions placed upon her receipt of the benefits, the court held that Mrs. Pashak’s claim was did not rise to the level of harm necessary in a legal malpractice lawsuit.

Lesson: To give rise to a legal malpractice claim, identifiable harm must exist. “The mere possibility or even probability that the plaintiff will sustain an injury at some future time does not alter the speculative nature of the damage claim or support a cause of action for legal malpractice…damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.” R. Mallen & V. Levitt, Legal Malpractice § 302 (2d ed. 1981). 

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LeBanc v. State Farm Insurance Corporation, 930 So. 2d 296 (La. App. 2006)

LA: Underlying personal injury claim

Student Contributor: Laura Stein

Facts: Clients were husband who was injured in a car accident and his wife. The clients and their hired lawyer, Toce, attended mediation and the matter was settled. After mediation, clients contested the validity of the settlement because they were threatened, coerced and intimidated by their lawyer into accepting the settlement and alleging that he committed malpractice. The defendants in that settlement filed a motion to enforce it and that was granted. After the clients fired Toce, he intervened to collect his fees and expenses. Plaintiffs answered saying he committed malpractice which caused them damage. Toce filed motion for summary judgment which trial court granted and ordered the clients to pay as per their contract. The amount was ordered to be paid from the settlement funds that were deposited into the registry of the court immediately. Clients appealed on the grounds that Toce failed to demonstrate absence of any issue of material fact and failed to controvert their opposition to his motion.

Issue: Does termination of an attorney’s services for cause after he settled his client’s claims affect his rights to payment of attorney fees and expenses according to the contract when they asserted a claim of malpractice against him?

Ruling: Plaintiffs claimed the trial court erroneously held lawyer was entitled to his full contingency fee for representing them, despite the fact that he was fired for cause. He argued that since he was fired after the settlement was reached, he was entitled to the fee provided in his contract with them. This was a matter of first impression. Because the plaintiffs did not present evidence in opposition to Defendants’ enforcement of the settlement and it was enforced, so there is no basis for withholding his fees and expenses. Any amounts they may recover from him for remaining claims are not presently due and so do not serve as a basis for preventing disbursement of the settlement funds.

Lesson: If the underlying case is settled before a lawyer is discharged and then sued for malpractice, he is still entitled to his fee and expenses pursuant to the contract. 

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Oliver v. Towns, 738 So.2d 798 (1999).

AL: Underlying personal injury action

Student Contributor: Farah Shahidpour

Facts: Client hired Attorney to represent her in a personal injury action after being involved in an automobile accident. She signed a contingency fee contract that provided for the Attorney to receive 40% of any settlement, in return for Attorney’s legal services. Attorney settled the case for $12,000. Client filed a legal malpractice action against Attorney alleging breach of contract, fraud, deceit, and misrepresentation. Attorney allegedly failed to inform Client of the settlement, cashed the settlement check without Client’s consent, and failed to transfer any of the settlement proceeds to Client. The trial court awarded Client $500,000 in compensatory damages and $1 million in punitive damages. Attorney made a motion that the judge recuse himself from the case and another motion for a thorough review of the damages and award for excessiveness. The trial court denied both motions. Attorney appeals.

Issue: Whether the trial court erred in refusing to review the question of excessiveness of the damages?

Ruling: Yes. Attorney properly challenged the amounts of compensatory and punitive damages. Under Ala. Code 1975 § 6-11-20, the court must address whether evidence supporting the punitive award is “clear and convincing.” The court has the duty “to require the trial courts to reflect in the record” the reasons for interfering with an award of damage, on the grounds of excessiveness, or refusing to do so. Hammond v. City of Gadsden, 492 So.2d 374 (Ala. 1986).

Lesson: The trial court must hold a hearing to determine whether a damages award is excessive, upon a timely motion including a request for a hearing on a claim that damages awards are excessive. On remand, the trial court will hold a hearing to consider whether the compensatory award is excessive, whether clear and convincing evidence supports a punitive award, and if so whether the punitive award is excessive. 

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Great Am. Ins. Co. v. Dover, 456 F.3d 909 (8th Cir. Ark. 2006)

AR: Underlying wrongful death

Student Contributor: Meghan Jean

Facts: Darren O’Quinn and David Couch represented Advocat Inc. in the wrongful death of Margaretha Sauer at Rich Mountain Nursing and Rehabilitation Center. Great American Insurance Company insured Advocat. Although O’Quinn and Couch had estimated a potential verdict of $400,000 and $600,000 in compensatory damages and $1.8 million in punitive damages, the trial court awarded the plaintiffs of the suit a total of $26 million in both compensatory. Great American sued the attorneys for inadequate representation.

Issue: Whether a third party, in the state of Arkansas, may bring a malpractice suit against an attorney with whom he or she does not share a privity relationship.

Ruling: No. Under Arkansas law §16-22-310, only those with direct privity with attorneys may file legal malpractice actions. However, there are two exceptions in which case a third party might bring a suit against an attorney:

1. If the attorney’s conduct is fraudulent and intentional; or
2. If the third party is a beneficiary of the attorney’s services.

In asserting the above exceptions, it is imperative that in order for the third-party to recover from a malpractice suit against an attorney with whom he does not have a privity relationship, the attorney must identify him or her either personally, to the client, or in writing, that the third party was entitled to rely on his or her professional services. There was no such intention shown in this case.
In addition, while “equitable subrogation works to prevent the unjust enrichment of parties, including cases such as these where one becomes liable for the debt of another,” it is inapplicable in this case. Because public policy shields attorneys from legal malpractice suits from third parties, the allowance of an equitable subrogation claim for one with whom the attorney owed no privity would undermine the law.

Lesson: Under Arkansas law, an attorney must make clear and certain to whom his or her privity relationship lies. The merging of the lines between a client and third-party and the duty owed to one over the other, may in fact lead to a heightened duty of care to those whom the attorney might not otherwise have a privity relationship. Here, the insurance carrier sued its designated defense counsel who allegedly defended the carrier's insured inadequately.  

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Carney v. Finn, 367 A.2d 458 (1976)

NJ: Underlying Workmen’s Compensation case

Student Contributor: Laura Binski

Facts: In June of 1972, a lawyer handled three claim petitions for the client in the Division of Workmen’s Compensation. The client alleges that the lawyer’s poor handling of the case resulted in the client receiving a lower reward. In January of 1975, the client filed a claim of legal malpractice against the lawyer. The lawyer’s reply to the client’s complaint asserted that the claim was prohibited by N.J.S.A. 2A:14-2, a two-year statute of limitations. The trial judge sided with the lawyer and dismissed the client’s complaint for failure to meet the two-year statute of limitations.

Issue: What is the applicable statute of limitations in this legal malpractice claim?

Ruling: The trial court was incorrect to dismiss the complaint under the two-year statute of limitations. N.J.S.A. 2A:14-1, a six-year statute of limitations, is appropriate in cases of “tortious injury to the rights of another… or for recovery upon a contractual claim or liability.” N.J.S.A. 2A:14-2, the two-year statute of limitations that the trial court relied upon, is only appropriate for “an injury to the person caused by a wrongful act, neglect, or default of any person.” The court reasoned that the two-year statute is only applicable to complaints of physical or emotional injury to the person. Since the client’s complaint is not one of personal injury, but rather of negligent handling of his Workmen’s Compensation claim, the six-year statute should have been applied.

Lesson: This case shows the importance of applying the appropriate statute to a particular complaint. It is necessary to carefully read the language of each statute in order to interpret its meaning. A plain reading of both statutes easily shows that there was no need for the client’s complaint to be dismissed for failure to meet the two-year statute of limitations.  

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Lickteig v Alderson, Ondov, Leonard, & Sween, P.A. 556 N.W.2d 557

MI: Underlying damages for emotional distress in a claim for legal malpractice

Student Contributor: Meghan Jean

Facts: Attorneys were admittedly negligent in the handling of the client, Lickteig’s case. At arbitration, Lickteig was awarded $45,000 in general damages, and $45,000 in emotional distress damages. The attorneys appealed the arbitrators judgment on the award of emotional distress.

Issue: Whether in a legal malpractice suit, a judgment for emotional distress is proper.

Ruling: Not generally. The award for emotional distress is narrow. In order to be awarded under this complaint, it must be shown that the attorney acted negligently or in breach of contract. Extra-contractual damages, including those for emotional distress, are not recoverable for breach of contract except in those rare cases where the breach is accompanied by an independent tort. Where the crux of the complaint is the breaching of a contract or the negligent representation of a client, unless some willful malicious act is done against the client, an award for emotional distress is not justified. Because the client, Lickteig, did not allege any willful or wanton act against her by the attorneys, the trial court’s award of emotional distress damages was improper.

Lesson: Willfully harming your client will not only create a claim for legal malpractice, but will also give rise to damages for emotional distress.

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Hutchinson v. Westport Insurance Corporation, 886 So.2d 438 (La. 2004)

LA: Underlying Personal Injury Action

Student Contributor: Laura Stein

Facts: Plaintiffs filed legal malpractice action against defendant law firm and its insurer for failure to timely file an action for damages sustained by the minor child in a car accident. Hutchinson was representing herself and her son pro se. Plaintiffs served interrogatories and requests for production of documents on the plaintiffs seeking discovery for the trial. Plaintiffs failed to comply with the discovery and defendants filed a motion to dismiss. The trial court dismissed the case and on appeal, that judgment was reversed. The LA Supreme Court granted the defendants’ write and reversed.

Issue: Whether the district court abused its discretion in imposing the sanction of dismissal for plaintiffs’ failure to comply with its discovery order.

Ruling: There are four factors to be considered before a court takes the drastic action of dismissal: whether the violation was willful or resulted from inability to comply; whether less drastic sanctions would be effective; whether the violations prejudiced the opposing party’s trial preparation; and whether the client participated in the violation or simply misunderstood a court order or innocently hired a derelict attorney. The Supreme Court found that although dismissal is a harsh remedy, this case was deserving of a harsh remedy as these tactics delay and frustrate the judicial system: the record was fraught with evidence of Hutchinson’s willful disobedience and fault to justify dismissal. Much of the discovery was very simple, e.g. name, date of birth of injured, names of hospitals, copies of medical bills, etc. Her failure to cooperate made it impossible for the defense to proceed and placed them at a disadvantage if they were to proceed without the discovery.

Lesson: Litigants cannot refuse to make a good faith effort to respond to discovery and if they do they “run the risk of incurring sanctions” up to and including dismissal and default.

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Taylor v. Stevenson, 820 So.2d.810 (2001)

AL: Underlying action for battery and invasion of privacy 

Student Contributor: Farah Shahidpour

Facts: Client hired Attorneys to represent her in a suit for battery and invasion of privacy against her employers. Client considered herself a victim of sexual harassment. The court entered judgment against one employer, but not the other. Attorneys filed a motion for judgment notwithstanding the verdict on three different grounds, but the court denied this motion. Attorneys failed to file a motion for a new trial and failed to file a motion to set aside the verdict on the ground that the verdict in favor of one of the employers was inconsistent with the verdict against the other employer. After the losing employer moved to set aside the verdict against him, the court rendered final judgment in favor of this employer. This left the client with no recourse against either employer. Client sued Attorneys alleging acts of legal malpractice. Attorneys moved for dismissal of, or summary judgment claiming that legal malpractice claims were barred by the statute of limitations. The court ruled against the Attorneys, and Attorneys now appeal.

Issue: Whether the trial court correctly denied Attorneys’ motion to dismiss or for summary judgment in the malpractice action?

Ruling: Yes. The lawyers failed to establish that their not filing a motion for directed verdict on Client’s battery and invasion of privacy claims constituted any malpractice at all. Attorneys also failed to argue that Clients lacked evidence to prove malpractice claim. The court rules that in the absence of malpractice, the statute of limitations could not have begun running.

Lesson: Without malpractice or any act of malpractice, “a client’s two-year time limit for suing the lawyers for the malpractice could not have begun running under any theory of accrual of the cause of action.” Ex parte Panell, 756 So.2d 862 (Ala. 1999). 

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Caffery v. Stillman, 79 Conn. App. 192, 829 A.2d 881 (Conn. App. 2003)

CT: Underlying workers’ compensation action

Student Contributor: Laura Binski

Facts: On April 16, 1992, the client sustained injuries while working in the course of his employment for the city of New Britain. The client hired the lawyer to represent him in his workers’ compensation case in 1994. The case settled for $95,000. In 1997, the client sued the lawyer for legal malpractice for failing to adequately represent his case because the client felt he was entitled to more money. The court dismissed the case because the client had not first sought to re-open the workers’ compensation claim. The client then re-opened the workers’ compensation case and the court affirmed the original settlement amount. In 1999, the client again sued the lawyer for legal malpractice for negligence and breach of contract.

Issues: (1) Can the client’s claim be saved by the accidental failure of suit statute? (2) Do the allegations set forth a claim in contract or in tort?

Ruling: (1) No. §52-592, the accidental failure statute, provides that “a plaintiff must file an action for the same cause at any time within one year after the determination of the original action . . .” In this case, more than one year had passed between the date the court dismissed the client’s original action in 1997 and the date when this action was brought in 1999.

(2) The second claim was no more than a tort disguised in contract language. A client may not bring an action in both negligence and contract simply by saying that a lawyer breached the standard of care in the language of his employment contract. In this case, the client alleged that the lawyer had promised to bring a liability action against the city, and that the promise to bring such an action was premised on an inaccurate understanding of the law. The client claims that this incorrect understanding of the law caused him to suffer damages. Thus, the client’s allegation that the lawyer breached his contract by failing to meet the standard of care is in reality a negligence claim.

Lesson: The tort statute of limitations is three years, while a breach of contract statute of limitations does not run for six years. In this case, the client sought to avoid the statute of limitations by sounding his claim in contract rather than tort. This does not often work because the courts are very careful to delineate between tort and contract claims.
 

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Kelly v. Logan, Jolley, & Smith, L.L.P., 383 S.C. 626 (S.C. App. 2009)

SC: Underlying medical malpractice action

Student Contributor: Karen Dindayal

Facts:  Kelly gave birth to her son, Watavious Barker who was born with irreversible brain damage and other permanent injuries. After spending the first two years after birth in the hospital, Watavious was then placed into foster care. When the child was about two-years old, Kelly retained Georgia counsel who got Logan, Jolley, & Smith, L.L.P. to file suit against the hospital, the delivering doctors, for medical malpractice. Counsel sued on behalf of the infant’s father, Barker, in his individual capacity and in his capacity as natural father and guardian ad litem for Watavious. Mother, Kelly, signed a letter indicating that she did not want to participate in the lawsuit as an individual party-plaintiff to the action.

The court later granted Counsel’s motion to substitute Kelly as guardian ad litem in the action, but denied its part of the motion to amend the Complaint to name Kelly as an individual party-plaintiff. By this time, the statute of limitations had run on any of Kelly’s possible medical malpractice claims . After the claims against the hospital were settled, Counsel moved to be relieved  in the remaining claims against the doctors and practice, to which Kelly agreed.

After the hospital settlement, Watavious’ foster parents moved to and were successful in terminating Kelly as gardian ad litem and naming themselves instead. Soon after, the claims against the doctors were also settled. Close to three years later, Kelly sued her former Counsel, Logan, Jolley, & Smith, L.L.P., alleging that they failed to represent her individual interests and sue for personal injuries suffered during the birth of the infant. Logan responded with a motion for summary judgment on the grounds that the statute of limitations had expired on Kelly’s legal malpractice claim. After the circuit court granted Counsels’ motion, Kelly appealed.

Issue:  Did the circuit court correctly grant Logan, Jolley, & Smith, L.L.P’s motion for summary judgment due to expiration of the statute of limitations?

Ruling: Yes. The statute of limitations is triggered by “diligently acquired” facts that are enough to put give an injured party notice of a cause of action for legal malpractice. Epstein v. Brown, 363 S.C. 372, 376, 610 S.E.2d 816, 818 (2005).

Lesson:   In SC, there is a three (3) year statute of limitations for actions for legal malpractice, that courts will adhere to in the interests of stimulating action on the part of the plaintiff  and in  reducing burden on the courts of trying “stale” cases when a plaintiff has sat on her rights. McKinney v. CSX Transp., Inc., 298 S.C. 47, 49-50, 378 S.E.2d 69, 70 (Ct.App.1989). Therefore, a plaintff should be mindful of any facts that could give rise to a legal malpractice claim, as they become ripe, to protect their rights. 

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Ex parte Gregory, 378 S.C. 430 (S.C. 2008)

SC: Underlying tort action-settlement

Student Contributor: Karen Dindayal

Facts:  Jerry Bittle sustained brain injuries from an automobile accident, rendering him mentally incompetent. Bittle’s mother, Melton, retained Malloy to represent Bittle for his injuries. Melton and Bittle reached a settlement with the insurance company for the claims made, and made several attempts to contact Malloy regarding receiving the settlement funds, but could not reach him. As a result, Melton terminated Malloy’s services for failing to account for the settlement money. Melton then retained Gregory to represent her and Bittle in recovering the settlement funds from Malloy. Fearing that the statute of limitations would soon run, Gregory filed the instant action against Malloy alleging causes of action for negligence, conversion, breach of contract, breach of contract accompanied by a fraudulent act, and constructive trust.

After the action was commenced, Malloy transferred the funds in dispute to Gregory, and filed a motion for Rule 11 Sanctions and counsel fees and expenses against Gregory, claiming specifically that the allegations of conversion were frivolous. Malloy reasoned that Sanctions were appropriate since Gregory relied soley upon Melton’s statements that she did not know where the settlement funds were, instead of conducting a thorough and independent investigation himself to determine the status of the funds.

Issues:  

Did the circuit court correctly find that the suit against Malloy was frivolous because Gregory failed to conduct a proper investigation?

Did the circuit court properly award Malloy attorney fees and expenses?

Ruling:  Yes. An attorney may be sanctioned and subject to counsel fees and expenses for bringing a frivolous claim due to that attorney’s failure to first conduct a proper and reasonable investigation into the facts.

Lesson: Before commencing an action, it is important to first always conduct a thorough and reasonable investigation to ensure a sufficient basis for the action(s) being brought. 

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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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Phillips v. Moran & Kufta, P.C., 53 A.D.3d 1044, 862 N.Y.S.2d 875 (2008)

NY: Underlying personal injury claim against municipality

Student Contributor: Michael Park

Facts: The plaintiff retained attorney in an underlying personal injury claim which occurred on municipal property. Attorney failed to commence an action against the municipality and also failed to make an application for leave to serve a late notice of claim against the municipality. Attorney made a motion for summary judgment and the trial court denied it. The attorney then appealed.

Issue: Was the motion for summary judgment properly denied?

Ruling: Yes. In affirming the decision by the Supreme Court, Monroe County, the Supreme Court, Appellate Division, Fourth Department held for the plaintiff for the following reasons:
1) The Court relied on the decision in Ippolito v. McCormack, Damiani, Lowe & Mellon, 265 A.D.2d 303, 696 N.Y.S.2d 203 and ruled that it is the burden of the defendant in bringing the motion for summary judgment to show that the plaintiff is unable to prove at least one of the elements of their legal malpractice claim, of which elements are:
1. the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community
2. proximate cause
3. damages
4. the plaintiff would have been successful in the underlying action had the attorney exercised due care

2) Defendant failed to meet their burden and actually raised a triable issue of fact on “whether discretionary leave to file a late notice of claim...would have been available”.

Lesson: The defendant in a legal malpractice case needn't disprove every element of the plaintiff's case. Rather, they just need to establish that at least one of the elements cannot be proven by the plaintiff. In creating a triable issue of fact, the defendant actually helped the plaintiff by showing that a trial would be required to see if the plaintiff could have been successful in the underlying action.

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Silberman v. Reisman, Abramson, P.C.  55 A.D.3d 402, 866 N.Y.S.2d 42 (2008)

NY: Underlying Workers Compensation proceeding

Student Contributor: Josh Aronson

Facts: Plaintiff brought a malpractice action against the defendant arising out of the defendant’s representation of the plaintiff in a worker’s compensation proceeding. The plaintiff is claiming that the defendant was negligent in failing to obtain the plaintiffs medical records for an intervening accident that occurred 7 years after the original accident to show that the intervening accident had no effect on her present claim that she was unable to work. Furthermore, the plaintiff claims that because of the defendant’s failure to obtain these medical records, the Worker’s compensation Board rejected a reopening of her original claim.

Issue: Did the plaintiff sufficiently prove that the content of the medical records would have shown that the intervening accident had no effect on her claimed present inability to work?

Ruling: No. The plaintiff failed to demonstrate an issue of fact as to proximate cause of the Worker’s Compensation Board failing to reopen the original case. The plaintiffs claim is dismissed due to her failure to show that “but for” the defendants negligence, the original Worker’s Compensation claim would have been reopened.

Lesson: Failure to demonstrate an issue of fact as to proximate cause requires dismissal of a legal malpractice action regardless of whether the attorney was negligent.
 

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Kituskie v. Corbman, 452 Pa.Super. 467, 682 A.2d 378 (Pa. Super. Ct. 1996)

PA Underlying Representation: Personal Injury Lawsuit

Student Contributor: John Anzalone

Facts: Plaintiff sued Defendant Attorney and his law firm for failing to file a personal injury action within the statute of limitations. Plaintiff prevailed below after the judge excluded evidence of the potential collectibility of the underlying judgment.

Issues: 1) May Attorneys raise collectibility as a defense in a legal malpractice case?
2) Whose burden is it to prove that the collectibility of the underlying judgment?

Ruling: In reversing the lower court's ruling, the Superior Court held that it's the Defendant's Burden to raise and prove the collectibility of the underlying judgment, based on the following considerations:
1) Attorneys may invoke "collectibility" as a defense in a legal malpractice case.
2) Here, the jury was not allowed to hear evidence that the underlying judgment would be uncollectible, so its decision must be vacated.
3) This limitation was permitted because the court held that legal malpractice Plaintiffs should only be able to recover against the Attorney for the actual damages they suffered from the Attorney's malpractice.
4) It was the defendant's burden to prove because the plaintiff should not have an additional burden added because the plaintiff was allegedly wronged by the attorney as well as the underlying defendant.

Lesson: In Pennsylvania, the defendant attorney has the burden of raising and proving the defense of the lack of "collectibility" of the underlying judgment.

Editor's Note: The case was affirmed by the PA Supreme Court,  Kitsuskie v. Corbman, 552 Pa. 275 (1998). 

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Ammon v. McClosky 440 Pa.Super. 251, 655 A.2d 549 Pa.Super (1995)

PA: Underlying personal injury action

Student Contributor: Ryan O'Donnell

Facts: Ammon was injured in an automobile accident and sued the driver of the car, Schussler. They settled for $14,000, and executed a release which discharged Schussler of liability. In another action against the owner of the other vehicle in the accident, Schussler was subsequently joined as a defendant. At that trial, Schussler’s attorney did not introduce evidence of the release of liability reached in the previous settlement until after a judgment was reached in favor of Ammon for $220,000. In response to a post-trial motion to introduce the release, the trial court deemed that the release had been negligently waived. Schussler then hired new counsel who negotiated a deal with Ammon to assign Schussler’s malpractice claim in return for a covenant not to enforce the judgment against Schussler. Ammon then commenced a legal malpractice action against Schussler’s former attorney and was awarded the $220,000 in damages that had previously been entered against Schussler. The former attorney appealed on the grounds that the plaintiff-assignee had failed to prove that the assignor had suffered any economic loss as a result of the attorney’s alleged negligence.

Issue: Is a claim for damages based on legal malpractice assignable?

Ruling: Yes. The Court follows the precedent set by Hedlund Mfg. Co., Inc v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357 (1988), that a claim for damages based on legal malpractice is assignable. The elements of the malpractice action still need to be proven however and defendant’s claim that there were no actual damages proven was rejected by the court. They reasoned that the judgment against Schussler constituted the actual damages necessary to maintain a malpractice action, and no further proof of damages was necessary. The court considers the right to assign a malpractice claim akin to a transferrable property right

Lesson: A judgment against a client-assignor constitutes actual damages. No further proof than the entry of judgment against a client-assignor is necessary to prove actual harm when an assignee prosecutes an assigned malpractice claim. When prosecuting an assigned malpractice claim, the assignee stands in the shoes of the assignor, so it is only necessary to prove that the assignor suffered actual damages 

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Fuschetti v. Berman 128 N.J. Super. 290, 319 A.2d 781 (Law Dvi. 1974)

NJ: Underlying personal injury action; statute of limitations

Student Contributor: Ryan O'Donnell

Facts: Plaintiff slipped and fell as she was leaving the General Motors exhibit at the World’s Fair. She consulted defendant who was then an attorney at law in New Jersey to help her make a personal injury claim. Plaintiff claims that for the next 6 years she phoned defendant 2 to 3 times a year to inquire about the case, and was told that it was moving slowly. After consulting with another attorney she found out that no personal injury suit had been instituted on her behalf, and that the New York statute of limitations barred her personal injury claim after 3 years. In the ensuing malpractice trial the plaintiff contended that since she lost the potential for settlement, expert testimony as to what a reasonable settlement would have been should be admitted.

Issue: In a malpractice action, can an expert testify as to what a reasonable settlement value for a settlement that was never reached would have been?

Ruling: No. Expert testimony as to the reasonable value of a would be settlement is inadmissible because it is questionable whether or not a settlement would have been able to have been reached.

“Because no expert can suppose with any degree of reasonable certainty the private blends of hopes and fears that might have come together to produce a settlement before or during trial, expert testimony as to reasonable settlement value will be excluded as irrelevant.”

The court found that the probative value of such testimony would be outweighed by the risk that it will confuse the issue and necessitate an undue consumption of time.

Lesson: Expert testimony will not be allowed to determine what a reasonable settlement would have been in the underlying case of a malpractice action. An expert can testify as to whether a previously reached settlement agreement was reasonable, but if no settlement was ever reached he can not testify as to the speculative value of a settlement that would have occurred. 

Editor's Note: For a different and more current view, see Kelly v. Berlin, 300 N.J. Super 256 (App. Div. 1997), which allowed expert testimony on settlement value. 

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Williams v. Bashman, 457 F. Supp. 322 (E.D. Pa. 1978)

 PA: Underlying  tort action.

Student Contributor: Colleen Gaedcke

Facts: The plaintiff retained the defendant, a partner at the defendant law firm, to represent her in her personal injury case against the a homeowner and the city of Philadelphia. A year passed without any communication between the plaintiff and the defendant, until the plaintiff sent the defendant a letter inquiring about the status of her case. The plaintiff received a letter from another attorney at the defendant law firm stating that he was representing her in her case against the City. Plaintiff did have one conversation with the defendant partner where he assured her that the case was in court. Another year passed and the defendant partner left the defendant law firm. The defendant law firm never filed the plaintiff’s case. The plaintiff claimed that the “defendant firm failed to exercise within the scope of their employment reasonable professional care and diligence in their representation of the plaintiff.” As a result of this failure the plaintiff claims that she was unable to recover compensation for her injuries and that her claim was barred by the statute of limitations.

Issue: Whether the plaintiff defendant law firm was liable for legal malpractice?

Ruling:  Yes.

1.) “When a plaintiff alleges that the defendant lawyer negligently provided services to him or her as a plaintiff in the underlying action, he or she must establish by the preponderance of the evidence that he or she would have recovered a judgment in the underlying action in order to be awarded damages in the malpractice action, which are measured by the lost judgment.”

2.) Here, the court found that the defendant law firm was responsible for her case, including conducting discovery to determine the merits of her case and proving the elements if necessary at trial.

3.) The defendant law firm owed the plaintiff a duty to exercise reasonable profession in the prosecution of her claim and they negligently breached that duty which was the proximate cause of the plaintiff’s loss of damages.

Lesson: An attorney who signs a retainer agreement with a client has a duty to exercise reasonable care in representing that client. A breach of this duty may be the proximate cause of the client’s damages and thus the attorney will be liable for legal malpractice.

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Gamer v. Ross, 2008 NY Slip Op. 2107 (App Div. 2d Dept)

NY: Underlying personal injury action; missing discovery causes summary judgment dismissing complain

Student Contributor: Josh Aronson

Facts: In the underlying case, the plaintiff was injured when he tripped and fell over wires and debris while roller skating on a public sidewalk adjacent to a construction site. The plaintiffs retained the defendants to commence a negligence action against the owner of the construction site as well as a contractor who had performed construction work on the site. Both of the plaintiff’s complaints were dismissed on summary judgment and motion to dismiss respectively. The plaintiff then brought action against the defendant to recover damages for legal malpractice, alleging that the defendants were negligent in their handling of the two underlying actions by failing to conduct proper discover that would have enabled them to successfully oppose the summary judgment and motion to dismiss. The defendant claims that the plaintiffs could not have succeeded in the underlying actions because the wires and construction debris over which the plaintiff tripped were open and obvious conditions that were not inherently dangerous. Furthermore, the defendant contends that the plaintiffs could not have succeeded in the underlying actions because they failed to adduce any evidence showing that the landowner of the construction site or its contractor caused or created the alleged dangerous condition.

Issue: Must the defendant in a legal malpractice action establish that their negligence would not have prevented the dismissal of the plaintiffs underlying actions?

Ruling: Yes. The court found that the landowner and its contractor would have had sufficient notice of the dangerous condition and therefore would have been liable for injuries resulting from its failure to correct the danger. As a result, the Court found that the burden was on the defendants in the malpractice action to establish that the missing discovery—which they failed to do, would not have prevented the dismissal of underlying actions.

Lesson: The defendant in a legal malpractice action must establish that “but for” the negligence claimed by the plaintiff, the outcome of the underlying action would not have changed.  

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Moores v. Greenberg 834 F.2d 1105, (1st Cir. 1987)

Fed'l Underlying Longshoreman's Act personal injury

Student Contributor: Ryan O'Donnell

Facts: Longshoreman was injured during the course of his employment and was able to collect compensation benefits through his employer. He then retained an attorney to bring a  liability claim against the ship owners. The ship owners allegedly made two settlement offers of $70,000 and $90,000, which the attorney did not communicate to the client. The third party liability claim was subsequently lost, and the client brought this malpractice claim against the attorney claiming that he would have accepted the settlement offer had he been informed of it. The attorney was found to be liable for $12,000, and he appealed the verdict claiming that the settlement offers were too meager to be relayed.

Issue: Is a lawyer required to communicate all reasonable settlement offers?

Ruling: Yes. A lawyer has a duty to use a degree of skill, diligence, and judgment necessary to the practice of his profession and which others who are similarly situated ordinarily possess. “As part and parcel of this duty, a lawyer must keep his client seasonably appraised of relevant developments, including opportunities for settlement.” The court implies that an attorney might not have a duty to communicate offers only when they are “so divorced from a realistic appraisal of the merits,” and unresponsive to the upside and downside of the litigation.

Lesson: A lawyer has a duty to keep his client informed of relevant developments, including opportunities for settlement. Lawyers are obliged to promptly communicate to the client settlement offers and all matters that may be relevant to the client’s appreciation and understanding of the matter.

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Chatterjee v. Due, 511 F. Supp. 183, 1982 A.M.C. 2970 (E.D. Pa. 1981)

Admiralty Law: Wrongful Death Settlement

Student Contributor: John Anzalone

Facts: Decedent was killed in a maritime ship collision in Pennsylvanian waters. Plaintiff, mother of the deceased, sues Defendant Law Firm that negotiated on behalf of one ship owner with her son-in-law in his suit to collect damages for her son's death. Plaintiff claims no settlement regarding son's death occurred because her son-in-law was not authorized to represent her interest as her son's sole heir. Defendant entered into the settlement without her consent and her son-in-law received the proceeds of the settlement based on his forgeries.

Issue: Did Defendant-Lawyers owe the non-client Plaintiff any legal duty? 

Ruling: The court granted Defendant's motion to dismiss, holding that Defendant owed the plaintiff no legal duty of representation, based on the following considerations:
1) The theory allowing beneficiaries to sue a testator's attorneys despite a lack of privity is not applicable here because the protection of a beneficiary's interest and the testator's intent only occurs if a will is validly drawn. Further, in a will, an attorney is on notice that the testator's intent depends on their services. Will beneficiaries are allowed to sue because they are intended successors to a continuing attorney-client relationship between the attorney and the testator
2) Here, there is no will involved that would become defective through the acts of Defendant
3) Additionally, a reasonable attorney would have no reason to question his opponent's authority to enter into a settlement.
4) Furthermore, Plaintiff's claim fails because she cannot show that she was damaged by Defendant's negligence unless she was foreclosed from some right or property because the settlement was valid and not effected by fraud. Her allegations against her son-in-law undermine this because if they were true, the settlement would be invalid and not binding upon her.
5) Even if there was a valid settlement binding upon her, there is no duty running between Defendant and Plaintiff.

Lesson: A plaintiff has to be actually damaged before they can sue a lawyer for malpractice. Additionally, attorneys can agree to make payments from their client to their adversary if a reasonable lawyer would conclude that there was no reason to doubt their adversary's authority to agree to the settlement. 

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Pechko v. Gendelman,  20 A.D.3d 404; 799 N.Y.S.2d 80 (2nd Dept. 2005)

NY Underlying Medical Malpractice Action

Student Contributor: Natalie Resto

Facts: The plaintiff underwent a mammogram while a patient with Doctor #1, who, she claimed, told her that the mammogram was normal. Later that year she underwent a mammogram with Doctor #2 and was diagnosed with cancer. The surgeon recalled seeing in the first mammogram certain “micro-calcifications” that were “suspicious of cancer.” The plaintiff sued Doctor #1 for medical malpractice. During the course of representation, the attorney who was representing her forwarded the mammogram films to a radiologist for evaluation, who before the evaluation misplaced them. The plaintiff then retained an appellate law firm to represent her in the medical malpractice action. Doctor  #1 moved for summary judgment arguing that the films constituted key evidence, and that the loss of that evidence irreparably prejudiced his ability to defend the action. The lower court granted the doctor’s summary judgment because the plaintiff failed to counter the motion with expert affidavits sufficient to create issues of fact. The plaintiff then brought this action against the law firm to recover damages for legal malpractice for failing to properly defend her against the summary judgment motion in the medical malpractice action.  The law firm argued that because it was not responsible for the loss of the mammogram film, which occurred before it was retained, its negligence was not the proximate cause of the plaintiff’s damages. The law firm moved for a motion to dismiss for failure to state a claim. The lower court denied it and the law firm appealed.

Issue: Was the law firm negligent in its representation of the plaintiffs in a medical malpractice action?

Ruling: Yes. The court found that the motion was properly denied because the absence of the mammogram films did not require the conclusion that the plaintiff would be unable to establish the law firm’s negligence. Here the firm did not rebut the plaintiff’s claim that they were negligent in failing to obtain secondary evidence concerning the films.

Lesson: Even when a court’s determination in an underlying medical malpractice action may be read as holding that the plaintiff will be unable to establish the merits of the medical malpractice action, that determination should not be given collateral estoppel effect against the plaintiff when he or she has alleged that the determination in the underlying action was the result of his or her attorney’s negligence.

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Pollicino v. Roemer & Featherstonhaugh, 277 A.D.2d 666; 716 N.Y.S.2d 416 (3rd Dept. 2000)

NY Underlying Personal Injury Action; Notice of Claim vs. municipality

Student Contributor: Natalie Resto

Facts: Plaintiff retained defendant law firm to represent him in a personal injury action against the New York City Transit Authority when he lost sight in his eye after a bus ran over a glass bottle causing a shard of glass to strike him in the eye. The notice of claim that the law firm actually served incorrectly listed the date of the accident, which was also repeated in the summons and complaint. About a month later the law firm amended the pleadings correcting the accident date but it made no motion to similarly amend the notice of claim until some three years after service of the erroneous notice of claim. The Transit Authority cross-moved to dismiss the complaint on the ground that the plaintiff’s notice of claim was defective and the action should be dismissed. The lower court denied the law firm’s motion to amend the notice of claim on the ground that the 4 ½-year delay in seeking to amend the notice of claim was prejudicial to the Transit Authority.
The plaintiff then commenced this malpractice suit against the law firm. The lower court granted the defendant law firm’s motion for summary judgment on the ground that the underlying decision holding that the plaintiff’s negligence action would have been dismissed regardless of the alleged malpractice, was entitled to preclusive effect. The plaintiff appealed.

Issue: Does collateral estoppel preclude the malpractice action?

Ruling: Here the court found that the lower court’s comment that the plaintiff’s action would have been dismissed was not entitled to preclusive effect because it was dicta and not necessary to resolve the issue. The court found that the law firm’s failure to serve a proper notice of claim was the error that required dismissal, and that the complaint was dismissed on that ground.

Lesson: To invoke the doctrine of collateral estoppel it must be shown that there is an identity of issue that has necessarily been decided in the prior litigation and which is decisive of the present action, and that the party sought to be estopped had a full and fair opportunity to contest the decision that is now claimed to be controlling.

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Alaimo v. McGeorge, 893 N.Y.S.2d 331 (3rd Dept. 2010)

Underlying Personal Injury Action

Facts:  Plaintiffs initiated a pro-se personal injury action in 1999.  In May, 2004, Plaintiffs retained the defendant attorneys to prosecute their claims.  Approximately one month later, Plaintiffs' action was struck for failure to present a medical expert.  Plaintiffs were given one year to restore the case, but failed to timely comply.  Defendants subsequently refunded the retainer and terminated representation. 

Shortly thereafter, Plaintiffs moved to restore their complaint pro-se.  The Supreme Court denied the motion and dismissed the case with prejudice for failure to present a reasonable excuse for not refiling the personal injury action within the one year time limit.  The Court further noted that the reports from Plaintiffs' medical providers with the motion to reinstate "failed to establish any causal connection between any allegedly improper conduct [and the injuries complained of]."

Plaintiffs subsequently sued the defendant attorneys for legal malpractice.

Issue:  Is Plaintiffs' legal malpractice action barred by the doctrine of collateral estoppel, since the Court had already made a determination as to the Plaintiffs' inability to succeed in the underlying personal injury matter?  Did Plaintiffs state a cause of action for legal malpractice in light of the Supreme Court's finding that they failed to establish proximate cause?

Ruling:  Plaintiffs stated a cause of action for legal malpractice and the doctrine of collateral estoppel did not apply. 

The Appellate Division explained the elements of collateral estoppel:

• An identical issue decided in the prior action that is decisive of the instant action; and
• The party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior determination.

The Court ruled that collateral estoppel did not apply, since Plaintiffs' motion to reinstate the case required a showing of merit sufficient to establish a triable issue of fact, and that in that setting conclusory allegations are insufficient.  In contrast, on defendants' motion to dismiss, even conclusory allegations with respect to the medical evidence are deemed to be true.  Accordingly, defendants failed to establish that the showing of proximate cause as to Plaintiffs' alleged injuries was identical in the underlying action and the malpractice action.

Similarly, although the medical evidence may not have been sufficient for purposes of the motion to reinstate the underlying matter, it was entitled to the benefit of every reasonable inference on a motion to dismiss for failure to state a claim.   

Lesson:  Where the plaintiff's burden of proof is heavier in the underlying action than in a preliminary motion in the malpractice action, plaintiff's claims will not be barred based upon its failure to meet a heavier burden in the underlying matter.  

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Kohler v. Hawkins, 15 Ill.App.3d 455, 304 N.E.2d 677(App. Ct. 1973)

IL. underlying tort action

Student contributor: Cheryl Neuman

Facts: Two men were killed a car accident. Their estates hired defendant attorney in an action against the driver of the car in which the two men were killed. The defendants filed demands for arbitration and the arbitration hearings were held and damages were awarded. The award was subsequently vacated because the demand for arbitration was not filed within two years of the death of the decedents as required by the Injuries Act (Ill.Rev.Stat. 1965, ch. 70, pars. 1 and 2.). After the denial of a petition for leave to appeal, the defendants told the administrators of the estates that there would not be any recovery. The administrators then filed a complaint against the defendants alleging that the defendants were negligent and carelessly filed the demand for arbitration after the two year statutory allowance, thereby causing the administrators and heirs of the decedents the lost value of the arbitrator’s award. The defendants contend, however, that the statute of limitations has run and the plaintiffs can no longer sue them for a legal malpractice action.

Issue: Whether the statute of limitations for legal malpractice commences at the time of the negligent act or when the client discovers or should discover the facts establishing the elements of his cause of action?

Ruling: The cause of action for legal malpractice does not accrue until the client discovers or should have discovered the facts establishing the elements of his cause of action. Therefore, the complaint for legal malpractice was timely filed in this case. The statute of limitations did not begin to run until the administrators of the estates were advised by the defendant that they wouldn’t be able to recover in the underlying suit. Complaints filed within 5 years from that date were considered proper and timely filed.

Lesson: It is unrealistic and unfair to bar a negligently injured party’s cause of action before he had an opportunity to discover that it exists. The court reasoned that a client may not realize the negligence of an attorney when it occurs and to require a professional to check the work of the attorney would be impractical and would destroy the confidential relationship between attorney and client.
 

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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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Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (Pa. 1989)

PA Underlying Personal Injury and Medical Malpractice

Student Contributor: John Anzalone

Facts: Plaintiff retained Defendant Attorney to represent him in a personal injury case against Philadelphia and in a related medical malpractice case. Settlement offers were made by Philadelphia and were not conveyed to Plaintiff before Defendant rejected them. Later, at defendant's suggestion, Plaintiff settled the personal injury case, believing the medical malpractice case was viable since Defendant claimed that it was. A fee dispute then took place between Defendant and Plaintiff's prior attorney, in which the attorneys' claims for 50,000 dollars in an escrow account were rejected by the court which ordered that the funds be returned to Plaintiff. However, Defendant was later able procure them from Plaintiff as a "gift." The medical malpractice case was subsequently dismissed on summary judgment. Plaintiff then sued for legal malpractice alleging negligence and a breach of the attorney's fiduciary duty. The lower court held for Plaintiff.

Issue: Was an expert witness's testimony regarding the breach of the standard of care required?

Ruling: In affirming the lower courts ruling, the Pennsylvania Supreme Court held an expert witness's testimony regarding the breach of the standard of care was not required, based on the following considerations:
1) Attorneys commit malpractice if they fail to use "ordinary skill and knowledge" in settlement negotiations and that failure damages their client.
2) Defendant had a duty to investigate the settlement offers made and to convey them to his client. His failure to do so breached his duty to the client. This breach was accompanied by harm, so malpractice occurred.
3) The court held that this breach of duty does not require an expert witness's testimony. The average person would know that failing to investigate a settlement offer is a breach of the attorney's duties.
4) Expert testimony was also not needed about the breach of fiduciary duty because the Code of Professional Responsibility establishes these duties and prohibits an attorney from suggesting that the client make a gift to the lawyer. (Code of Professional Responsibility EC 5-5).

Lesson: Expert testimony is not required in Pennsylvania when the breach would be obvious to an average person or when the rules governing professional conduct in the state have been violated. 

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O’Callaghan v. Weitzman, 436 A.2d 212 (Pa. Super. Ct., 1981)

PA Underlying Tort Action.

Student Contributor: Colleen Gaedcke

Facts: The plaintiffs, husband, wife and daughter, brought a fraud and legal malpractice action against the defendant resulting from the defendant’s representation of in a vehicular negligence accident. The defendant hired a colleague to handle the plaintiff’s case who in turn hired another attorney to institute the suit on the plaintiff’s behalf. By the time the attorney attempted to commence the action, the statute of limitations had run as for the two adult plaintiffs. The attorney alerted the defendant and his malpractice insurer as to his error. Without any authority to do so, the defendant negotiated with the attorney’s insurer and obtained a $9,000 settlement offer for the plaintiffs. The plaintiffs accepted the offer under the impression that the settlement was for the original automobile accident. The defendant deducted 40% contingent fee from the $9,000 and gave the plaintiffs a personal check for the remainder of the balance. When the plaintiffs learned the truth behind the settlement they brought this action against the defendant for fraud and legal malpractice.

Issue: Whether the lower court erred in granting the plaintiffs motion for a new trial on the issue of fraud?

Ruling: No. The plaintiff’s evidence was sufficient to warrant submission of the issues of fraud and damages to the jury.
1. “Fraud is composed of a misrepresentation fraudulently uttered with the intent to induce the action undertaken in reliance upon it to the damage of its victim..[and] the evidence must be sufficient to ‘enable the jury to come to a clear conviction, without hesitating, of the truth of the precise facts in issue’.”
2. The jury could come to a clear conclusion that the defendant defrauded the plaintiffs because the defendant failed to truthfully inform the plaintiff about the nature of the settlement in an effort to avoid being sued for malpractice.
3. Furthermore, as a result of the defendant’s actions the plaintiff was denied the opportunity to have a disinterested advocate pursue a malpractice claim against the attorney for missing the statute of limitations.

Lesson: A deliberate nondisclosure by a lawyer of a material will amount to fraud and legal malpractice for which the client can sue the lawyer.

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Yousian v. Eisenberg, 34 A.D.3d 228 (2006)

NY Underlying Medical Malpractice Action

Student Contributor: Ally Shuster

Facts: Plaintiff went to hospital complaining of gastrointestinal pain. Over the next few months, Plaintiff underwent a series of tests in order to diagnose his condition. He underwent a sonogram, the results of which showed that he had stones in his gallbladder. Subsequently, he underwent surgery and was left with debilitating pain that he alleges to be a result of the surgery. Plaintiff retained Defendants and sued for medical malpractice. The Defendant attorneys failed to timely re-calendar the case, which is the  basis for this legal malpractice claim.

Issue: Is there a valid legal malpractice claim?

Ruling: No. There is no issue of fact as to whether the treatment Plaintiff received at the Hospital constituted medical malpractice.

Lesson: In order to win a legal malpractice claim, a Plaintiff MUST prove that he could win the underlying case. Although it was troubling that Defendant attorneys failed to timely re-calendar the case, Plaintiff did not prove that he would have been successful in the underlying case but for the Defendant attorneys’ negligence.

“In order to prevail in a legal malpractice suit, the clients must prove that their former attorneys were negligent and that they could have prevailed and recovered a judgment but for that negligence.” Tanel v. Kreitzer & Vogelman, 293 A.D.2d 420
 

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Montes v. Rosenzweig, 21 A.D.3d 460, 800 N.Y.S.2d 444 (N.Y. App. Div. 2005)

NY Underlying Litigation: Wrongful Death and Negligence

Student Contributor: John Anzalone

Facts: Decedent retained Defendant Attorney to represent her in her claim against a building owner after she was injured by a faulty elevator. Decedent shortly thereafter died from complications from her injuries before an action was commenced against the building owner. Defendant brought suit on her estate's behalf, but failed to get letters of administration. Consequently, the suit was dismissed for lack of standing. After failing in his attempts to obtain letters of administration, Defendant told Plaintiffs that he was withdrawing and that the action had been dismissed. However, Defendant continued to represent the Plaintiffs in their attempts to get letters of administration so that they could sue the building owner. Defendant later told Plaintiffs that a suit against the building owner had become practically impossible to maintain because the statute of limitations that had run several years earlier. Plaintiffs sued Defendant Attorney. The case was dismissed based on time bar and failure to state a cause of action.

Issue: Was the statute of limitations tolled by the "continuous representation doctrine?"

The Ruling: In reversing the lower court, the Appellate Division held that the "continuous representation doctrine" tolled the statute of limitations, based on the following considerations:
1) The "continuous representation doctrine" tolls the three year statue of limitations doctrine period in the matter in which the alleged malpractice occurred.
2) The doctrine is triggered when there is a "continuing attorney-client relationship" after the malpractice occurs.
3) Here, the defendant continued to represent the Plaintiffs after first failing to obtains letters of administration to bring the negligence and wrongful death suits,
4) The alleged malpractice occurred because Defendant failed to obtain letters of administration before both statue of limitations expired.
5) After the malpractice occurred, Defendant allegedly led the plaintiffs to believe that a suit could still be filed against building owner if the letters of administration were obtained.
6) The Defendant did not inform the plaintiffs until well after the statute of limitations against the attorney had run that it was practically impossible from the Plaintiffs to sue the building owner.

The Lesson: Although the statute of limitations may have run for a malpractice claim against an attorney, that period may be tolled if the Attorney continually represents the plaintiff during the period after the cause of action accrues.
 

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Ryan v. Powers & Santola, LLP, 2010 NY Slip Op 03827 (3^rd Dept. May 6, 2010)

Underlying Personal Injury Action

Facts:  Plaintiff Ryan was struck on the head by highchair while dining at a restaurant.  He then retained Powers & Santola to represent him in a negligence action against the restaurant. 

In response to the defendants’ motion to compel production of a verified bill of particulars and responses to outstanding discovery demands, the trial court issued an order in the underlying action providing that the matter would be dismissed if Ryan failed to provide the outstanding discovery.  Although Ryan eventually served discovery responses, a number of responses required more specific answers.  The trial court, thereafter, extended the discovery schedule twice with a conditional order that the action would be dismissed if plaintiff continued to fail to provide responses.  Ryan failed to comply and the matter was in fact dismissed. 

Subsequently, Ryan commenced a legal malpractice action against Powers & Santola for “failing to follow court orders…consenting to conditional orders…and failing to move to vacate the dismissal order”.  Ryan moved for partial summary judgment on the issue of liability. 

Issue:  Is Ryan’s alleged failure to cooperate with counsel in preparing discovery responses a viable defense to his action for legal malpractice?

Ruling:  Yes.  The Court held that:

A claim of legal malpractice will be sustained if the plaintiff establishes…that [he] would have succeeded on the merits of the underlying action but for the attorney’s negligence…We agree…that the plaintiff’s conclusory assertions – that ‘but for’ defendants’ alleged negligence, they ‘would have been able to prosecute all causes of action to a successful outcome’ – failed to establish their prima facie entitlement to summary judgment…There are questions of fact as to whether plaintiff failed to cooperate with defendants in providing them with information and documents necessary for motion practice after the underlying action was dismissed.

Lesson: A former client’s failure to cooperate is a question of fact in assessing the liability of the attorney in a malpractice action.  Failure to cooperate, more likely than not, would prevent plaintiff from establishing that “but for” his former counsel’s malpractice, he would have prevailed in the underlying action.   

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Aduddell v. Parkhill, 821 S.W.2d 158 (Tex. 1991)

TX: Underlying asbestosis personal injury clam; statute of limitations

Student Contributor: Jean Moss Sullivan*

Facts: Plaintiff was diagnosed on April 24, 1983 with asbetosis and retained the defendant lawyers to sue asbestos manufacturers for plaintiff’s injuries. The plaintiff’s statute of limitations for the asbestos injuries expired on April 24, 1985. Lawyers did not file the suit until May 20, 1985. The federal district court entered judgment for the asbestos manufacturers because the plaintiff’s claim was filed after the 2-year statute of limitations.
Plaintiff sued Lawyers for breaches of express and implied warranties under the Deceptive Trade Practices Act and for negligence. Lawyers moved for summary judgment because the plaintiff’s suit was filed after the two-year statute of limitations for his legal malpractice claim. The plaintiff then pled the discovery rule but the trial court granted Lawyers’ motion to strike the amended petition as untimely. The trial court granted summary judgment in favor of Lawyers. The court of appeals affirmed the summary judgment, holding that when the plaintiff fails to timely plead the discovery rule, the legal injury rule applies in determining when a negligence cause of action accrues and when the statute of limitations begins to run. The plaintiff’s legal injury by the defendants occurred on April 24, 1985, the date the statute of limitations ran in the underlying case.

Issue: Whether the plaintiff’s claims against the defendants begin to toll before all of the appeals for the underlying claim are exhausted.

Ruling: When an attorney allegedly commits litigation malpractice, the court held that the statute of limitations does not begin tolling until all appeals of the underlying claim are exhausted.

Lesson: A plaintiff may wait to file suit for a legal malpractice claim until all appeals for the underlying claim have been exhausted. A plaintiff is able to consider the final outcome of the underlying claim before filing suit for legal practice. If the discovery rule applies, it is necessary to plead it in a timely fashion. Malpractice litigators should be aware of the burdens in asserting limitations defenses and relying on discovery and other tolling rules.

 
Jean Moss Sullivan is a third year student at Texas Tech University Law School and is a J.D. Candidate for May 2010. She received her B.A. in Religion from Southwestern University in 2007.

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Olds v. Donnelly, 291 N.J.Super. 222 (App. Div. 1996).

Underlying Personal Injury Claim

Student Contributor:  Jason Klien

Facts: On June 27, 1985 Robert Olds underwent hernia surgery and sustained significant injuries. Two months later Plaintiff consulted with an attorney, Donnelly, about bringing a medical malpractice claim against his surgeon, Dr. Donahue. Plaintiff signed a retainer agreement with Donnelly on or about August 27, 1985. On June 25, 1987, two days before the statute of limitations was to expire, Donnelly advised Olds that he could no longer represent him. Plaintiff’s case against Dr. Donahue was, therefore, barred by the applicable statute of limitations.

Plaintiff subsequently brought this action against Donnelly for legal malpractice, alleging that the Defendant deprived him of the opportunity to seek compensation for his post-surgical injuries. The jury returned a verdict of $500,000 in Plaintiff’s favor, and Donnelly moved for a judgment notwithstanding the verdict. The court granted the motion on the grounds that there was nothing within the record to support a finding of legal malpractice against Dr. Donahue. Plaintiff appealed.

Issue: Can the trial court grant a judgment notwithstanding the verdict on the basis of a lack of “credible” evidence?

Ruling: No. In deciding whether such a motion should be granted, the court must accept as true all the evidence which supports the position of the party defending against the motion, and must afford that party all legitimate inferences which could be deduced therefrom. If at that point the court could sustain a judgment in Plaintiff’s favor, the motion must be denied.

Lesson: The Court may not weigh the credibility of the evidence presented by the defendant attorney against the evidence presented by the Plaintiff in support of his claims and allegations. This is within the sole province of the jury, and therefore, cannot be the basis of a judgment notwithstanding the verdict:

[T]he trial court presented with such a motion is not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the party opposing the motion.

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Shaw v. Manufacturers Hanover Trust Co.,  68 N.Y.2d 172, 499 N.E.2d 864(App. Div.1986)

NY: Underlying  Personal Injury Action--Fee Dispute

Student Contributor: Candice L. Deaner

Facts: The Plaintiff brought a personal injury claim and retained the law firm  on a contingent fee basis. The agreement did not mention appeals. After the trial ended in a verdict for the defendant, the Plaintiff wanted to appeal. The law firm agreed, on the condition that Plaintiff advance the litigation expenses. Plaintiff refused and retained new counsel and eventually obtained an award of $1.5 million in the retrial. The original law firm then sought to collect on the award and the client objected.

Issue: Whether an attorney can collect on a contingency fee agreement when the terms of representation were not clearly stated?

Ruling: The New York State Court of Appeals denied the fee request.

1)  Retainer agreements should be clear on the scope of representation. The Court said,

"The importance of an attorney's clear agreement with a client as to the essential terms of representation cannot be overstated. The client should be fully informed of all relevant facts and the basis of the fee charges, especially in contingent fee arrangements.”

2) The contract should be viewed in a light most favorable to the client. The court held “Had the client maintained that the retainer agreement required respondent's representation through conclusion of the matter, that would have been the mandated interpretation. But here, the client has asserted that the contract terminated upon entry of an adverse judgment. We hold that the agreement must be construed so to provide."

3) The court found that the agreement only spoke of adjudicating the claim. Even if the contract applied to an appeal, the law firm breached the contract by insisting on an additional term for handling the appeal; namely, advancing  expenses. The retainer agreement only addressed the computation of the ultimate fee, it made no provision for expenses.

The Lesson: Retainer agreements should contain clear language stating the legal services to be provided. The attorney should be sure that the client understands the scope of the attorney’s representation.. Attorney’s can safeguard themselves by including any and all limitations in writing, so that there is no question as to what the scope of employment was from the beginning of the attorney/client relationship.

Note: From a malpractice viewpoint, a clear "scope of the engagement" clause is critical to protecting the lawyer from liability for services that are beyond the scope of the engagement.

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Piluso v. Cohen, 2000 P.A. Super. 335, (2000).

PA underlying medical malpractice action.

Student Contributor: Colleen Gaedcke

Facts: Appellant sued two doctors and the hospital for medical malpractice. Attorney for the appellant, the appellee, entered into a settlement agreement for $100,000 with doctor A and the hospital. Appellant was not present for the settlement negotiations. Appellant argues on appeal that the appellee settled the case without her consent or knowledge. Appellant stated that she did first learned of the settlement at trial when asked the appellee why the other defendants were not present at the trial. However, the appellant did not repudiate the settlement, but rather proceeded to trial against doctor B. The jury entered a 1.5 million dollar verdict in favor of the appellant, holding the hospital and doctor A liable. After the verdict was entered, the appellant tried to repudiate her attorney’s authority to enter into the settlement for the first time. Appellant brought a malpractice claim against the appellee. The lower court grated summary judgment in favor of the attorney and the woman appealed.

Issue: Whether a client can repudiate a settlement that was entered into by his or her attorney without his or her expressed authority?

Ruling: In affirming the lower courts grant of summary judgment in favor of the appellees, the Superior Court held:
1) “A client ratifies his attorney’s act if he does not repudiate it promptly upon receiving knowledge that the attorney has exceeded his authority.”
2) As a matter policy, settlements are favored by the law and must be sustained in the absence of fraud and mistake.

“We foreclose the ability of dissatisfied litigants to agree to a settlement and then file suit against their attorneys in the hope that they will recover additional monies…[because] to permit otherwise…places an unnecessarily arduous burden on an overly taxed court system.”

Lesson: If an attorney makes a decision to settle their client’s case without their clients authority or knowledge and the client does not attempt to immediately repudiate the authority of his counsel to enter into a settlement, but rather accepts the benefits flowing from the settlement, the client has ratified the act of the attorney and will be prevented to bring a malpractice claim against his or her attorney.

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Rudolf v. Shayne, Dachs, Stanisci, Corker, & Sauer,8 N.Y.3d 438; 867 N.E.2d 385 (2007).

N.Y. underlying personal injury action

Student contributor: Cheryl Neuman

Facts: Plaintiff was walking across Sunrise Highway when he was struck by a car. He suffered personal injuries and retained defendants to represent him in his case against the driver. There was a traffic signal that controlled the intersection where the accident occurred. There was conflicted testimony as to whether plaintiff was in the crosswalk at the time that the car struck him. Defendants requested, at the completion of testimony, that the court should instruct the jury regarding the statutory requirements of Vehicle and Traffic Law § 1151. Section 1151 concerns intersections without traffic signals. The provision also imposes a duty on pedestrians not to “suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impractical for the driver to yield.” The jury returned a verdict that both plaintiff and driver were negligent, apportioning 50% of the liability to each party. Plaintiff retained new counsel to set aside the verdict, claiming that the court gave the wrong charge to the jury.

Issue: Whether it was legal malpractice for the defendants to request a jury charge of §1151, when §1111 was the appropriate section that defendants should have requested?

Ruling: Yes, the failure to object to the §1151 jury charge and not to request §1111 was legal malpractice. Section 1111 applies to intersections regulated by traffic signals and grants pedestrians “facing any steady green signal the right of way within a crosswalk.” The erroneous charge was a fundamental error requiring a new trial because it affected the jury’s consideration of the plaintiff’s liability.

Lesson: Damages in a legal malpractice case are designed to make the injured client whole. A plaintiff’s damages may include litigation expenses incurred in attempt to avoid, minimize, or reduce the damage caused by the attorney’s wrongful conduct. The plaintiff in this case was therefore entitled to litigation expenses he incurred in the legal malpractice lawsuit. 

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Gautum v. Conte, 239 N.J. Super.362 (App. Div. 1990)

Student Contributor: Daniel Schick

NJ Underlying Medical Malpractice Action

Facts: Plaintiffs retained Conte to represent them in a medical malpractice claim. Conte then joined the law firm of De Luca and filed the medical malpractice action. Plaintiffs' complaint was dismissed for failure to answer interrogatories and comply with a court order. Despite plaintiffs' numerous requests for information, Conte never apprised them of the dismissal and in October, 1980 they learned of it from the trial court.

In 1983, Plaintiffs filed a legal malpractice action against Conte and De Luca seeking compensatory and punitive damages. Plaintiffs alleged that their suit was dismissed as a result of the attorneys’ malpractice, and that they had acted deliberately in failing to advise them of the dismissal of their personal injury action.

A jury awarded Plaintiffs both compensatory and punitive damages. De Luca appealed and Conte improperly filed a Notice of Joining Appeal which failed to transform De Luca's appeal into a joint appeal. The Appellate Division reversed the judgment against De Luca alone on the ground that the jury instructions were erroneous. The Law Division subsequently held that the earlier reversal also applied to Conte, and therefore, vacated the judgment against him. The Gautams appealed the Law Division’s decision to vacate the judgment as to Conte.

Issue: Is Conte entitled to the benefit of the judgment entered in favor of his codefendant De Luca even though he was not a party to the appeal?

Ruling: Although Conte had ignored well-settled and fundamentally sound procedural rules of appellate procedure, it would be manifestly unjust to deny him the benefit of the Appellate Division’s judgment in favor of De Luca on the basis of a jury charge which was materially deficient. Accordingly, the Appellate Division affirmed the Law Division’s decision to vacate the judgment against Conte and remanded the matter to the trial court for a new trial as to Conte alone.

Lesson: The trial court has the inherent power to vacate or set aside a judgment against a non-appealing party to avoid unjust results.

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Brizak v. Needle  239 N.J. Super. 415 (App. Div. 1990)

Student Contributor: Maninder (Meena) Saini

NJ Underlying  Medical Malpractice Action

Facts: Plaintiff-client commenced a malpractice lawsuit against defendant-attorney, alleging the defendant was negligent by failing to file a medical malpractice claim before the expiration of the statute of limitations (“SOL”). The defendant argued that the SOL did not start until there was expert opinion recognizing that medical malpractice had occurred. The facts are as followed: In 1981, plaintiff sustained an arm injury and was treated by Dr. Shafi. Instead of conducting surgery, the doctor simply placed her arm in a hanging cast. On December 5, 1983, plaintiff retained defendant to pursue an action against Dr. Shafi because she was still suffering from the affects of her arm injury. In May 1984, the defendant requested a copy of the hospital records. Next, in March 1985, the defendant obtained an opinion from a radiologist who advised defendant that no malpractice transpired. In June 1987, defendant obtained another medical expert opinion that found that malpractice had occurred.

Issue: When does the “discovery” rule apply in any given case?

Rule: The “discovery rule” tolls the statute of limitations when one “is either unaware that he has sustained an injury, or although aware that an injury has occurred, he does not know that it is, or may be, attributable to the fault of another.” When one knows or has reason to know of the injury, the statute of limitations starts to run.

Issue: Whether an attorney has the duty to investigate the basis of their client’s claim?

Rule: An attorney must undertake a reasonable diligent investigation to determine if there is a reasonable basis for commencing an action.

D]efendant’s clearly erroneous advice to plaintiff that she need not be concerned about the time limitations until she found a physician to support her claim was itself a sufficient basis for linking his negligence to her failure to commence a timely action against the doctor.

The SOL started in December 1983 when the plaintiff had suspicion of the malpractice and retained a lawyer.

Lesson: The defendant was not diligent in his investigation of medical malpractice. An attorney has a duty to take any steps reasonably necessary to properly handle the case, which includes the duty to investigate and to file any action necessary for recovery within the applicable time period.

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Wausau Ins. Companies v. Fuentes,  215 N.J. Super. 476, 522 A.2d 440 (1986).

NJ Underyling Worker’s Compensation Lien on legal mal cause of action .

Student Contributor: Anthony J. Forzano

Facts: Worker, who suffered job-related accidental injury and received workers' compensation benefits, brought a legal malpractice action against attorney that had failed to file products liability action within limitations period against manufacturer of machine upon which worker was working at time of injury. Worker obtained a compensation settlement of $115,000 and $670 a month for the rest of defendant's life. Workers' compensation carrier then asserted lien. The Superior Court recognized compensation carrier's lien, and appeal was taken. The Appellate Division held that worker's compensation lien stops at the payments actually made by a third person whose tortious conduct contributed to happening of industrial accident; therefore, worker's compensation carrier had no lien upon settlement fund recovered in legal malpractice action brought against attorney. The insurance company appealed.

Issue: Does a lawyer who committed malpractice take on the legal status of a “Third Person” as it pertains to the ability for an Insurance company to assert a lien for workers compensation benefits paid?

Ruling: No.  

“We hold that plaintiff's right of recovery goes no further than to payments actually made by the “third person” whose tortuous conduct contributed to the happening of the industrial accident. The lawyer whose delinquency deprived the employee of a possible recovery from the machine manufacturer does not take on the identity of the statutory “third person.”

The court in part based their opinion on the that fact that it would not have been known whether the compensation payments covered by the carrier's compensation lien would even have been recoverable in the malpractice action. The court held

“Since only the carrier was entitled to those monies, and it was able to sue for them in its own right, N.J.S.A. 34:15-40(f), they could hardly be claimed as an element of damage suffered by defendant as a result of her former attorney's malpractice or contemplated as such by the malpractice settlement.”

Lesson: If a third party with a pecuniary interest in a case wishes to bring an action for malpractice against an attorney on the grounds that his malpractice damaged them, then they must follow the statutory guidelines and bring the action themselves. One cannot rely on the result of a malpractice case, then attempt to recover money on a lien claiming that the attorney was a statutory “third person” who contributed to the original negligence.

Editor's Note: Make sure to see Frazier v. NJ Manufacturers' Ins. Co., 142 NJ 590 (1995), a more recent statement of the law in NJ on the workers compensation lien and whether it attaches to the legal malpractice cause of action. 

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Thompson v. Seligman 53 A.D.3d 1019, 863 N.Y.S.2d 285 (N.Y.A.D. 3 Dept., 2008)

NY: Underlying personal injury; workers compensation

Student Contributor: Ryan M. O'Donnell

Facts: Plaintiff was employed by AMFAC Recreational Services, Inc. AMFAC regularly provided cleaning services to the Gideon Putnam Hotel. While performing her duties cleaning at the Gideon, plaintiff suffered injuries and retained defendant attorney to represent her in a workman’s compensation claim. When plaintiff inquired about a possible claim for pain and suffering against the Gideon, defendant advised her that she could not pursue a claim, based on his mistaken belief that plaintiff was employed by the hotel. Plaintiff then consulted with a different attorney who advised her that she did have a claim against the Gideon, except for that the statute of limitations had expired.

 Issue: Can a mistaken assumption by an attorney give rise to a legal malpractice claim?

Ruling: Yes.

“An attorney has the responsibility to investigate and prepare every phase of his or her client’s case.”

There was sufficient documentation that stated plaintiff’s employer was AMFAC, not the Gideon. Had defendant made the appropriate inquiry he would have known that plaintiff was not employed by the Gideon, and that plaintiff could have a third party claim against the Gideon for pain and suffering. The defendant’s failure to investigate the availability of a third party claim by plaintiff raises a question of fact whether the defendant exercised an appropriate duty of care to the client. 

Lesson: As an attorney, you have the responsibility to investigate and prepare every phase of your client’s case. If there is information that will further the interests of your client that is easily ascertainable, and you fail to use such information, you have breached your duty of care to your client. Unless the client actively misrepresents information to you, you can be liable for malpractice if your mistaken assumption would have been corrected by further inquiry.

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Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (Penn. 1989)

PA Underlying med mal and personal injury cases

Student Contributor: Evan Michael Hess 

Facts: The clients retained the  attorney in a case arising from a medical malpractice  against a physician and hospital and a personal injury suit against the city of Philadelphia. The attorney did not seek to have the two suits joined, and reassured the clients that the medical malpractice case was still viable. The jury in the personal injury lawsuit returned a verdict for the clients.  The medical malpractice case was dismissed soon thereafter based upon a lack of evidence and that the personal injury suit had fully compensated the clients for the injuries sustained. The clients initiated the legal malpractice action alleging the attorney negligently settled the personal injury case, breached his fiduciary duties, and improperly accounted for costs and expenses. A bench trial was conducted, and the clients were awarded damages.

Issue: Was the trial court correct in finding in favor of the client that the attorney breached his professional duties, and were the damages awarded reasonable?

Ruling: The Supreme Court of Pennsylvania held that:

1) An attorney's must communicate all settlement offers to clients;

2) Failure to investigate offers that were proposed constituted malpractice;

3) Aggrieved clients are entitled to recover as damages the difference between actual recovery and the amount they would have recovered if the attorney was not negligent; and

“The necessity of an attorney’s use of ordinary skill and knowledge extends to the conduct of settlement negotiations.”

Lesson: The attorney must fully communicate to his client all proposed settlement offers in addition to completing due diligence in investigations on the client’s behalf. If an attorney fails to perform her/his duties in accordance with the standard of professional care, they must make the client whole by paying the difference between what the client did receive and should have received in a settlement. 

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Builders Square, inc. v. Saraco,  868 F. Supp. 748 (E.D. Pa. 1994).

PA. underlying products liability suit

Student contributor: Cheryl Neuman

Facts: Plaintiff was a defendant in an underlying products liability lawsuit. Plaintiff was a retailer of the allegedly defective product. The distributor of the product was also named as a defendant. The distributor had $1 million of liability insurance coverage. Plaintiff retained defendant lawyer in the product liability suit. The plaintiffs in the underlying products liability offered to settle for $1 million, which was the limit of the insurance policy. Defendant lawyer, however, rejected the offer to settle and did not inform his client (plaintiff) about the settlement offer. After plaintiff found out about the settlement offer defendant attorney withdrew from representation. At trial, the parties agreed to settle for $4.25 million, of which the plaintiff was responsible for $3.25 million. Plaintiff therefore alleges that defendant’s failure to pursue the earlier settlement agreement placed plaintiff in a much weaker position to defend or settle the case.

Issue: Does a lawyer have the duty to explore and timely communicate to his client all settlement offers?

Ruling: Yes. An attorney had the duty to tell his client about all settlement offers as well as other important information relating to the representation.

Lesson:  The plaintiff in this case was dissatisfied  at having to settle a case on terms that were more disadvantageous than the terms of  the initial settlement negotiations.  Allowing this type of lawsuit to go forward heightens awareness and provides incentives to lawyers to fully communicate all settlement offers to their clients. It is, after all, the client's right to settle the case. 

Editor's Note: See RPC 1.4 re the lawyer's duty to communicate to the client. 

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Salamoni v. Karoly, 2005 WL 3823056, 74 Pa. D. & C.4th 378 (Pa.Com.Pl. 2005)

PA Underlying personal injury claim

Student Contributor: Christopher S. Henn

Facts: Plaintiff suffered personal injuries after being struck by a car. Plaintiff engaged the Defendant attorney, Karoly, to seek recovery for his injuries in the accident. Defendants filed for issuance of a summons one day before the expiration of the applicable two-year statute of limitations. It was issued the same day but expired a month later because it was never delivered to the sheriff for service.

After the summons was reinstated, however, Plaintiff's case was dismissed on summary judgment because of the expiration of the statute of limitations. Subsequently, Plaintiff filed suit against Defendant Karoly and his associate for legal malpractice. Despite naming two Defendants, Plaintiff submitted a single certificate of merit as to both defendants. The Clerk of the Court, therefore, dismissed the malpractice action for failure to prosecute.

Issue: Is a single certificate of merit sufficient where there are multiple defendants?

Ruling: The Court held:

It was not the clerk's function to evaluate the sufficiency of this certificate. The clerk was without authority to enter a judgment of non pros under these circumstances…Where several defendants acting together are responsible for the same negligent act or omission, a single certificate of merit naming both or all defendants [is sufficient].

Lesson: The purpose of filing a certificate of merit is to ensure that the Plaintiff has not asserted a frivolous claim against the Defendant for professional negligence. Although the Plaintiff here did not comply with the technical requirements of Pennsylvania’s Certificate of Merit rule for each separate Defendant, the Court found that the purpose of the requirement had been fulfilled “[w]here both parties [were] jointly responsible for the same negligent act or omission”.

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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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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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Katz v. Herzfeld & Rubin, P.C., 853 N.Y.S.2d 104 (2 Dept. 2008)

NY Underlying Personal Injury Action

Student Contributor:  Jason Klein

Facts: Plaintiffs retained Defendant attorneys as counsel for a personal injury action which was eventually settled. Subsequently, Plaintiffs commenced an action for legal malpractice alleging that Defendants refused to pursue a claim for loss of income, and as a result, Plaintiffs were forced to settle their personal injury action for an amount far below what they could have recovered. Defendants filed a motion to dismiss arguing that because Plaintiffs dismissed Defendants and hired new counsel five months prior to settling, the Defendants’ actions did not proximately cause the alleged damages. The trial court granted the Defendants’ motion to dismiss and Plaintiffs appealed

Issue: Did the trial court properly grant Defendants’ Motion to Dismiss in light of Plaintiff’s decision to terminate their representation five months in advance of the settlement of which they now complained?

Ruling: Yes. Successor counsel had been retained in a timely fashion and had every opportunity to protect the Plaintiff’s rights in advance of the time of their decision to enter into a settlement.

Lesson: Plaintiffs had sufficient time in which to pursue its claims with successor counsel, and therefore, could not establish that any alleged damages resulting from their decision to settle were proximately caused by the acts or omissions of their former 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 Negligence Action for a Slip and Fall

Student Contributor: Candice L. Deaner

Facts: Plaintiff’s attorney failed to file for a trial de novo in the time frame set out by R. 4:21A-6(b)(1), after the court appointed arbitrator found that plaintiff had no cause of action for negligence against the underlying defendant. A trial de novo filing would have preserved plaintiff’s claim 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 as required by statute is enough to grant summary judgment and dismiss the complaint

Issue: Whether the Plaintiff’s failure to submit an affidavit of merit is enough to grant summary judgment in favor of the Defendants and dismiss the complaint, or if the failure to submit the application for a trial de novo within the statutory time limit is per se legal malpractice, and thus requires no affidavit of merit.

Ruling:  . The requirement of the filing of an affidavit of merit is not applicable in this matter because the malpractice plaintiff's  allegations do not require the testimony of an expert  to determine the issue of negligence. The jury can exercise its  own “common knowledge”  is such cases.  

Lesson: In some very clear cases, such as here with the violation of a statutory time limit,  the lawyer's failure constitutes per se legal malpractice and no expert’s affidavit of merit is necessary. An affidavit of merit is not required from an expert for this case because the jury can determine whether the Defendants should be held liable for the late filing of the application for a trial de novo by using common knowledge without the need for expert testimony.

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Ingemi v Pelino & Lentz  866 F. Supp. 156 (D.N.J. 1994)

NJ Underlying Action-Claim for pension benefits

Student Contributor: Candice L. Deaner

Facts: Plaintiff instituted a malpractice suit against related New Jersey and Pennsylvania law firms due to their mishandling of the underlying litigation. Plaintiff specified her desire to have a New Jersey attorney and the New Jersey law firm was retained as local counsel. They then petitioned the court to admit pro hac vice two lawyers from the Pennsylvania firm. The New Jersey firm argued that one of the Pennsylvania lawyers was the only one to give advice and act “on the judgmental and strategic issues,” and contended that the New Jersey firm served “merely” as local counsel, performed ministerial tasks, and undertook “discovery and motion practice in a manner that did not require making judgments or giving advice regarding prejudgment remedies or settlements,” and therefore was not liable in this action.

Issue: What is the role of local counsel when pro hac attorneys are admitted to handle the case?

Ruling: The Court found that the New Jersey firm “underestimated the role of local counsel” and stated that “by virtue of submitting the pro hac vice application, the New Jersey firm was responsible for the ‘conduct of the cause.’” Local court rules “require local counsel to take more than a de minimis role in the representation,” and clearly indicate “that local counsel is the counsel of record with attendant responsibilities, not out-of-state counsel admitted pro hac vice.”

The Court held that

“Local counsel must also supervise the conduct of pro hac vice attorneys and must appear before the court in all proceedings. Even if pro hac vice attorneys attempt to delegate solely routine or ministerial tasks to local counsel, local counsel remains counsel of record and wittingly or unwittingly exposes itself to liability for penalties such as sanctions.”

Lesson: A law firm retained as local counsel has equal responsibility even though other counsel is actually handling the prosecution of the case. ,  Liability is not delegated to the pro hac vice attorneys. Local counsel must continue to supervise the pro hac vice attorneys and appear in court. A law firm cannot avoid liability by claiming that other counsel was primary. The responsibility still lies with the local counsel to supervise and handle the case.

Editor's Note: For other cases holding local counsel potentially liable  for malpractice to client, see also:. Ortiz v. Barrett, 278 S.E.2d 833, 838 (Va. 1981);  Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp. 1121 (N.D. Ohio 1990); Neel v. Magana, Olney et al., 98 Cal. Rptr. 837, 491 P.2d 421 (1971); Wildermann v. Wachtell, 267 N.Y.S. 840, 841 (1933), affirmed, 271 N.Y.S. 954 (1934). 

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Donohue v. Kuhn, 696 A.2d 664 (N.J. 1997) (PDF)

Student Contributor: John Anzalone

Facts: Plaintiffs retained Defendant attorney to represent them in a wrongful death and survivorship suit. The attorney failed to file the cases before the applicable statute of limitations.  The Plaintiffs secured another attorney after the statute of limitations passed, but the suit for wrongful death was dismissed for not being filed within the statute of limitations period. While the survivorship claim case was on going, the plaintiffs brought this malpractice suit.

Issue: Does the "entire controversy doctrine" prevent the Plaintiffs from suing Defendant attorney because they failed to add a legal malpractice claim against Defendant attorney in the survivorship case that was still before the trial court?

Ruling: In reversing the Appellate Division, the New Jersey Supreme Court held that the entire controversy doctrine did not require that the Plaintiffs had to amend their complaint to add an attorney that allegedly committed legal-malpractice claims in the survivorship suit to that case for their suit against the Defendant attorney to go forward.

Lesson: Legal malpractice claims are exempt from the entire controversy doctrine in NJ. A plaintiff's failure to add a claim  against a malpracticing attorney to an ongoing case in which it is alleged that the attorney committed an act or acts of negligence that harmed the plaintiff is not grounds for dismissing the case.

Editor's Note: This case was one of three on this issue decided by the New Jersey Supreme Court on the same day. See Olds v. Donnelly, 150 N.J. 424  (PDF).  See also, NJ Court Rule 4:30A.

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Moores v. Greenberg 834 F.2d 1105, 9 Fed.R.Serv.3d 1314 (1987)

PA: Underlying personal injury

Student Contributor: Ryan O'Donnell

Facts: Longshoreman was injured during the course of his employment and was able to collect compensation benefits through his employer. He then retained an attorney to bring a third party liability claim against the ship owners. The ship owners allegedly made two settlement offers of $70,000 and $90,000, which the attorney did not communicate to the client. The third party liability claim was subsequently lost, and the client brought this malpractice claim against the attorney claiming that he would have accepted the settlement offer had he been informed of it. The attorney was found to be liable for $12,000, and he appealed the verdict claiming that the settlement offers were too meager to be relayed.

Issue: Is a lawyer required to communicate all reasonable settlement offers?

Ruling: Yes. A lawyer has a duty to use a degree of skill, diligence, and judgment necessary to the practice of his profession and which others who are similarly situated ordinarily possess. “As part and parcel of this duty, a lawyer must keep his client seasonably appraised of relevant developments, including opportunities for settlement.” The court implies that an attorney might not have a duty to communicate offers only when they are “so divorced from a realistic appraisal of the merits,” and unresponsive to the upside and downside of the litigation.

Lesson: A lawyer has a duty to keep his client informed of relevant developments, including opportunities for settlement. Lawyers are obliged to promptly communicate to the client settlement offers and all matters that may be relevant to the client’s appreciation and understanding of the matter. 

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Frazier v. New Jersey Manufacturers Insurance Company, 142 N.J. 590, 667 A.2d 670 (1995) (pdf)

NJ: Underlying litigation; workers compensation lien

Student Contributor: Michael Park

Facts: Plaintiff was injured on the job while working for a third-party general contractor, and his attorney filed a worker's compensation claim against his employer's insurance carrier. However, his attorney failed to file a complaint against the third-party general contractor before the statute of limitations had run out. Plaintiff then retained a new lawyer to file a malpractice claim against his former attorney, and obtained a settlement. After learning of the settlement, the insurance carrier said it would file a lien against the recovery for legal malpractice. The matter went to court and the trial court ruled that the workers' compensation lien could not attach to his legal malpractice settlement. However, the Appellate Division reversed and held for the insurance carrier, and the plaintiff appealed.

Issue: Can a workers' compensation lien attach to the proceeds of a malpractice suit brought to recover damages from an attorney who failed to institute an action against the third-party tortfeasor responsible for the worker's injury?

Ruling: In affirming the Superior Court, Appellate Division, the Supreme Court held that a worker's compensation lien can attach to a legal malpractice settlement.

“It was the tortious act of the third party (the general contractor) that was the predicate for Frazier's malpractice action against his former attorney. But for the third-party tortfeasor's tortious conduct, Frazier would not have recovered against his attorney...No apparent justification exists for allowing an injured employee who receives a legal malpractice recovery to be in a better position than an injured employee who recovers directly from the tortfeasor. Malpractice claims that are derivative of third-party claims are therefore subject to the workers' compensation lien under N.J.S.A. 34:15-40."

Lesson: The Court did not want to allow the plaintiff to receive double recovery, pocketing the money from the legal malpractice settlement that arose from the attorney not filing a complaint against the original tortfeasor, and the money he received for workers' compensation for being injured. If the lien did not attach, he would be receiving compensation twice for the same injury. 

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Schenkel v. Monheit, 226 Pa. Super. 396 (Pa. Super. Ct. 1979)

Student Contributor: Melissa Goldberg

PA Underlying personal injury action.

Facts: Plaintiff was injured in an automobile accident when his vehicle was struck from behind by a car driven by Charles Salem. Plaintiff thereafter retained Defendant as his attorney to prosecute Plaintiff's civil action against Salem. When Defendant filed this action, he did not join Salem's employer, as Defendants in the underlying action. Plaintiff claims that at the time of the accident, Salem was "on the job" and was within the scope of his employment and that the employer should have been joined as Defendants. Plaintiff’s dissatisfaction with Defendant handling of the personal injury action led appellant to dismiss Defendant before trial and retain other counsel to complete the case. Plaintiff was awarded 10,000 dollars in the personal injury case, which he collected in full. Plaintiffs alleged that the jury would have awarded him a larger verdict in the personal injury action if the corporate employer had been joined as a Defendant.

Issue: Was Defendant’s alleged negligence the proximate cause of damages to Plaintiff? 

The Result:  The failure to join the corporate employer should not have affected appellant's damages. The tort was the same in this case, whether or not the corporate employer was a party to the action.

1) The actual tortfeasor, was made a Defendant; the corporate employer would only arguably be liable under agency principles, not as an independent tortfeasor.

2) Joinder of the corporate employer would simply have increased the number of parties against whom Plaintiff could enforce any judgment he received.

3) He received the full judgment.

Lesson: Failure to name a necessary party, when full recovery from the main tortfeasor was had,  did not proximately cause any injury to the plaintiff. If, on the other hand, the named tortfeasor did not have adequate insurance coverage to pay the judgment and if the unnamed party would have been vicariously liable, the result would have been different since then part of the judgment would remain unsatisfied. 

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Campagnola v. Mulholland, Minion & Roe, (pdf)
76 N.Y.2d 38 (N.Y. 1990); 555 N.E.2d 611

N.Y. Underlying personal injury action

Student Contributor: Jason Klein

Facts: Plaintiff was struck by a car while working as a crossing guard and was permanently disabled. Plaintiff retained Defendant to pursue a claim for personal injuries and agreed to a contingency fee of one third for any money recovered. The owner of the car that struck Plaintiff was insured for only  $10,000. Plaintiff herself was insured under a Government issued policy for underinsured benefits for $100,000. The Government policy required consent prior to the settlement of any claim against the person deemed responsible for the insured’s injuries. Defendant failed to notify the Government insurance company before settling with the car owner for $10,000, of which $3,150 was deducted as a fee and $550 for expenses. When Plaintiff submitted a claim under the Government issued policy, her claim was denied because the settlement with the car owner was made without consent. Plaintiff commenced this action against Defendant seeking $100,000 in damages for malpractice and Defendant asserted an affirmative defense to reduce any recovered damages by the amount Defendant would have received as attorneys’ fees and expenses in the personal injury action.

Issue: In a malpractice action against an attorney, can the attorney deduct the “hypothetical” fee that would have been payable to the attorney in the underlying action?

Ruling: No. An attorneys’ malpractice constitutes a failure to honor faithfully the loyalty owed to a client. Thus, the plaintiff’s recoverable damages are not limited by a deduction for the fee that she would have paid the defendant had the defendant  properly performed the contract of representation.

The Lesson: A reduction in the plaintiff’s recovery  equal to what the attorney would have earned but for his negligence, is impermissible because a negligent attorney is precluded from collecting a fee. 

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Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343 (2004)

Student Contributor:  Melissa Goldberg

NJ Underlying  Litigation (Personal Injury Action)

Facts: In this case, Plaintiff settled an underlying action involving a car crash and later alleged that her lawyer had negligently failed to include a responsible party in the underlying lawsuit. Plaintiff attempted to include this necessary, responsible party as a defendant in the underlying suit, but summary judgment was granted in favor of the new defendant under the statute of limitations. In the malpractice action, Plaintiff argued that failure to include the responsible party lessened her po-tential recovery. The attorney argued that (1) Plaintiff’s settlement barred any recovery in the mal-practice action; and (2) the value of her claim would have been no different with or without the new defendant. Plaintiff, however, proceeded to prove her case using expert testimony regarding the settlement and other evidence regarding her case. The defendant objected to the expert testimony and argued that the “suit within a suit” method, where Plaintiff presents evidence that would have been presented at trial in the underlying action had the malpractice not occurred, was the only way the Plaintiff should be allowed to prove her case.

Issue: Is the “suit within a suit” method the only way to prove proximate cause in a  legal malpractice case based on underlying litigation?

Ruling: No.

The proper approach in trying a legal malpractice action will depend on the facts, the legal theories, the impediments to one or more modes of trial, and, where two or more approaches are legitimate, on Plaintiff’s preference.

Lesson: Alternative approaches to the “suit within a suit” method are permitted to prove  the causation element  in legal malpractice, so long as the jury is provided with an independent basis to determine the effect of the alleged malpractice and the value of plaintiff’s losses.

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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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Brizak v. Needle,  239 N.J. Super. 415, 571 A.2d 975 (1990)

Student Contributor: Maninder (Meena) Saini

NJ Underlying Statute of Limitations and Duty to Investigate

Facts: Plaintiff-client commenced a malpractice lawsuit against defendant-attorney, alleging the defendant was negligent by failing to file a medical malpractice claim before the expiration of the statute of limitations (“SOL”). The defendant argued the SOL did not start until there was expert opinion recognizing that medical malpractice had occurred. The facts are as followed: In 1981, plaintiff sustained an arm injury and was treated by Dr. Shafi. Instead of conducting surgery, the doctor simply placed her arm in a hanging cast. On December 5, 1983, plaintiff retained defendant to pursue an action against Dr. Shafi because she was still suffering from the affects of her arm injury. In May 1984, the defendant requested a copy of the hospital records. Next, in March 1985, the defendant obtained an opinion from a radiologist who advised defendant that no malpractice transpired. In June 1987, defendant obtained another medical expert opinion that held malpractice had occurred.

Issue: When does the “discovery” rule apply in any given case?

Ruling: The “discovery rule” tolls the statute of limitations when one “is either unaware that he has sustained an injury, or although aware that an injury has occurred, he does not know that it is, or may be, attributable to the fault of another.”  When one knows or has reason to know of the injury, the SOL starts to run.

Issue: What is the scope of a lawyer's duty  to investigate the basis of a client’s claim?

Ruling: An attorney must undertake a reasonably diligent investigation to determine if there is a  basis for commencing an action and when the statute of limitation starts to run.
The appellate court stated the “[d]efendant’s clearly erroneous advice to plaintiff that she need not be concerned about the time limitations until she found a physician to support her claim was itself a sufficient basis for linking his negligence to her failure to commence a timely action against the doctor.” The SOL started in December 1983 when the plaintiff had suspicion of the malpractice and retained a lawyer.  

Lesson: The defendant was not diligent in his investigation of the  medical malpractice nor of the ascertaining the date the cause of action accrued in order to determine the correct statute of limitations. . An attorney has a duty to take any steps reasonably necessary to properly handle the case which includes the duty to investigate and to file any action necessary for recovery within the applicable  time period.

Moreover, said the Court:

...[the] attorney who litigates a legal malpractice claim without the opinion testimony of a legal expert unnecessarily exposes his client to a serious risk...

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Muhammed v. Strassburger, McKenna, Messer, Shilobod and Gutnik
526 Pa. 541, 587 A.2d 1346 (Pa. 1991)

PA Underlying Medical Malpractice Litigation

Student Contributor: Justin B. Lieberman

Facts: Former client sued attorney for legal malpractice after the client was unhappy with the settlement received in the underlying medial malpractice action. In the underlying action clients accepted a settlement offer at a pre-trial conference, and then recanted the acceptance after their lawyer informed the opposing side of acceptance. The opposing side sought enforcement of the settlement and the trial court, at an evidentiary hearing, upheld the settlement, as did the Superior Court on appeal. The clients filed suit against the attorneys. The law firm defended on the following grounds: that the action should be dismissed as the claims were too speculative and settling clients were seeking to relitigate the settlement. The case was brought to the Supreme Court of Pennsylvania.

Issue: Can a settling defendant sue his/her lawyer for malpractice although they agreed to settle the underlying claim?

Ruling: A client cannot bring a malpractice claim against a former attorney because of their later dissatisfaction of a settlement to which they agreed,  unless they can show some fraudulent conduct by the attorney  in advising the client on accepting the settlement. Here, the clients, were dissatisfied not able to renegotiate their settlement after they had already voluntrarily accepted an offer. They were thus, not fraudulently induced to settle by their attorney.

We foreclose the ability of dissatisfied litigants to agree to settlement and then file suit against their attorneys in the hope that they will recover additional monies.

Lesson: An attorney may not be held liable when a client later decides they are unsatisfied with a settlement they willingly agreed to at a prior time, unless the attorney fraudulently induced or intentionally misadvised the client to accept the settlement.

Editor's note: This was the law in PA for many years. The stringent rule in this case, of barring a malpractice suit against the lawyer who represented the settling party-- has  since  been substantially limited  and liberalized.

See, e.g., McMahon v. Shea, 441 Pa. Super. 304, 657 A.2d 938 (1995).

The holding in Muhammad has been rejected in New Jersey (Ziegelheim v. Apollo, 128 N.J.250, 607 A.2d 1298 (1992) and Connecticut (Grayson v. Wofsey, Rose, Kweskin & Kuriansky, 231 Conn. 168, 646 A.2d 1994).

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Gilles v. Wiley, Malehorn & Sirota,
345 N.J. Super. 119, 783 A.2d 756 (N.J.Super.A.D., 2001)

NJ Underlying case: Litigation; Medical Malpractice

Student Contributor: Geri Mulligan

Facts: Lawyer represents plaintiff in a medical malpractice case. Six months after getting a favorable expert witness report, lawyer writes to client that his firm has reconsidered and will not file suit. Lawyer suggests client immediately find a new lawyer and even recommends others who might take the case. Lawyer also stated that client had two years from the malpractice incident to file suit and failure to do so would forfeit client's right to sue. By the time plaintiff met with a new lawyer the statute of limitations had run.

Issue: How long does the lawyer's duty to the client last even after the attorney-client relationship has come to an end?

Ruling: The trial court dismissed the complaint against lawyer. The Appellate Division reversed, holding that lawyer breached his duty of care based on these factors:

1. There was an established lawyer-client relationship. Lawyers had to protect the client's cause of action. Therefore, lawyer's termination of the relationship so close to the expiration of the statute of limitations, without preserving client's cause of action is a breach of duty.
2. RPC 1.16 (b) provides that "where the conduct of the client does not justify the attorney's withdrawal, the attorney may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interest of the client." RPC 1.16 (d) further provides: "upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interest." 
3. Lawyer had the information necessary to file a complaint six months before withdrawing from the case at which point he could have made the determination of whether to continue representation.
4. Although the letter discontinuing representation mentioned the two-year statute of limitations and advised client to obtain new counsel, it failed to provide the date that the statute began to run. Also, the time between termination and expiration of the statute was too short to find new counsel to thoroughly review the case and go forward with filing a complaint.

A lawyer who agrees to represent a client has to preserve the client's cause of action. If the lawyer terminates the representation he must do so in a timely fashion so the cause of action won't become time-barred.

Editor's Note: What could the lawyer have done to preserve the cause of action under these circumstances? 1) With client's consent, file the complaint to stop the statute of limitations and then farm the case out to another lawyer who will substitute into the case. Having done the investigation, gotten a favorable expert report and then filed the complaint will entitle the lawyer to get a fee from substitute counsel; (2) file the complaint pro se for the client and then help client arrange to secure new counsel. After filing pro se Complaint make sure it is timely and properly served.

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Togstad v. Vesely, Otto, Miller & Keef
291 N.W.2d 686 (Min. 1980)

Facts: Plaintiff had consulted with an attorney about bringing a medical malpractice claim. At the conclusion of the consultation, the attorney decided not to take the case, but failed to inform the client about the applicable statute of limitations, that he was not an expert in the field, or that she should consult with another attorney. Relying on the lawyer’s silence, the client did not bring an action until after the statute of limitations had run.

Issue: Was an attorney client relationship formed between the non-client and the attorney?

The Ruling: The trial court held that there was sufficient evidence to create an attorney-client relationship, and the Minnesota Supreme Court affirmed the decision based on the following factors:

1. The attorney acted as a legal advisor on the viability of the plaintiff’s claim. The non-client reasonably relied on that advice and on the attorney’s silence that his firm would not take the case.
2. It was reasonable for the non-client to rely on the attorney’s advice. An attorney-client relationship is created when one asks and receives legal advice from an attorney in circumstances where a reasonable person would rely on such advice.
3. The attorney’s advice injured the non-client. An attorney-client relationship comes into effect when an attorney gives legal advice, where it is reasonably foreseeable that the client will rely on the advice and could be damaged if the advice given by the attorney was incorrect.

The Lesson: When consulting with a non-client giving an opinion about the viability of a case will create an implied attorney-client relationship because he/she has the right to rely on the lawyer’s professional legal opinion. In order to prevent liability, its a good idea to send a “non-engagement” letter informing the prospective client about the applicable statute of limitations for his or her cause of action, and clearly stating that you are not their lawyer and that they should promptly seek other counsel to protect their legal rights. You might even gve them the local bar association's lawyer referral service.

Editor’s Note: For how little it takes to form an attorney-client relationship which can give rise to liability, see, Restatement of Law Governing Lawyers §14.

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