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:
- 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.
- 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.
- 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.
LEGAL MALPRACTICE IN LIGHT OF TOGSTAD ―
LIABILITY FOR CURBSTONE OPINIONS?
Michael J. Hoover, DirectorFtn 1
Minnesota Office of Lawyers Professional Responsibility
Reprinted from Bench & Bar of Minnesota (November 1980)
On April, 11, 1980, the Minnesota Supreme Court decided the celebrated legal malpractice case of Togstad v. Vesely, Otto, Miller & Keefe.Ftn 2 The Togstad decision, holding the defendant lawyers negligent in improperly advising a wife about her husband’s alleged medical malpractice claim, has received considerable attention. The purpose of this article is to analyze Togstad and provide practical suggestions for guarding against its consequence.
FACTS OF THE TOGSTAD CASE
The Alleged Medical Malpractice
John Togstad was admitted to a hospital on August 16, 1971, where tests disclosed that his severe headaches were caused by a large aneurysm. A clamp was surgically implanted on August 27, 1971, in Mr. Togstad’s neck to allow the gradual closure of the artery.Ftn 3
One of the risks associated with the procedure is that paralysis may result if the brain does not receive an adequate flow of blood. If the blood supply becomes so low as to endanger the patient’s health, the clamp can be adjusted to establish proper blood circulation.Ftn 4
Two days after implantation, a nurse observed that Mr. Togstad could neither speak nor move, and called a resident physician, who did not adjust the clamp. Mr. Togstad’s primary physician arrived an hour later and promptly opened the clamp, but Togstad suffered paralysis in his right arm and leg and is unable to speak.Ftn 5
Mrs. Togstad became suspicious about her husband’s treatment “due to the conduct and statements of the hospital nurses shortly after the paralysis occurred”.Ftn 6 She noticed that nurses were “’upset and crying”’ and that her husband’s condition “’was a topic of conversation”’.Ftn 7 One nurse told her that Mr. Togstad was fine at 2:00 A.M., but when she returned at 3:00 A.M., he was unable to move or speak.Ftn 8
Consultation with the Law Firm
About fourteen months after her husband’s hospitalization, Mrs. Togstad met with Attorney Jerre Miller about her husband’s condition. The appointment was made by Mr. Togstad’s former work supervisor who knew the defendant through a local luncheon club. Neither Mr. nor Mrs. Togstad had any prior contact with the firm.Ftn 9
Mrs. Togstad testified that she went to the law firm for legal advice “’what to do, where shall we go from here?”’Ftn 10 She said that she told the defendant “’everything that happened at the hospital”’, and “’about the procedure and what was undertaken, what was done, and what happended.’”Ftn 11 She brought no records with her, but the defendant took notes and asked questions during the 45-minute meeting. At its conclusion, Mrs. Togstad said Miller advised her “’he did not think we had a legal case, however, he was going to discuss this with his partner.”’Ftn 12
When she did not hear from the firm after a few days, she decided that they had concluded there wasn’t a case. There were no fee arrangements, no medical authorizations, and Mrs. Togstad was not billed for the interview.Ftn 13
Although the defendants did agree with most of the basic facts alleged by Mrs. Togstad, there were some significant differences. While the plaintiff alleged that she was seeking the legal opinion of the defendant about whether there was a viable claim, the defendant argued that he was merely asked whether “’she had a case that our firm would be interested in undertaking.’”Ftn 14 At trial, however, the defendant did testify that Mrs. Togstad was “’there to see whether or not she had a case and whether the firm would accept it.’”Ftn 15
The defendant also claimed that he told Mrs. Togstad “’that because of the grievous nature of the injuries sustained by her husband, that this was only my opinion and she was encouraged to ask another attorney if she wished for another opinion’” and “’she ought to do so promptly.’”Ftn 16 This was denied by Mrs. Togstad, as was the defendant’s claim that he advised her that his firm did not have expertise in medical malpractice.Ftn 17
Mrs. Togstad did not consult another attorney until one year after she talked to the defendant because of her claimed reliance upon the defendant’s “’legal advice”’ that they “’did not have a case”’.Ftn 18
At the trial, each of the parties called expert witnesses. The plaintiffs’ expert testified that “’in rendering legal advice regarding a claim of medical malpractice, the ‘minimum’ an attorney should do would be to request medical authorizations from the client, review the hospital records, and consult with an expert in the field.’”Ftn 19
One of the defendants’ experts testified that when an attorney is asked whether he will take a case, his only responsibility in refusing it “’is to so inform the party.’”Ftn 20 He did say, however, that if an attorney is asked a legal opinion on the merits of a malpractice claim, he should check hospital records and consult with an expert before giving an opinion.Ftn 21
The second defense expert testified that when a person consults him about a medical malpractice action, he has to make a decision “’as to whether or not there probably is or probably is not, based upon that information, medical malpractice.’”Ftn 22 If there is not, he continued, he would then inform the client but would never render a “’categorical”’ opinion.Ftn 23 He did acknowledge that if he were consulted for a legal opinion regarding medical malpractice fourteen months after the questioned incident, “’ordinary care and diligence’” would prompt him to tell the party about the two-year statute of limitations.Ftn 24
The jury submitted a special verdict finding the hospital and the doctor negligent and finding that the doctor’s negligence was a direct cause of Mr. Togstad’s injuries. The jury also found an attorney/client relationship between Mrs. Togstad and the defendant, that the defendant was negligent in rendering advice regarding the possible claims of the Togstads, and but for his negligence, they would have been successful in their action against the doctor. The jury also found that the Togstads were not negligent in pursuing their claims against the doctor. Mr. Togstad was awarded $610,500, and Mrs. Togstad $39,000.Ftn 25 The Supreme Court affirmed the denial of a motion for judgment notwithstanding the verdict.
THE LEGAL MALPRACTICE ISSUES ON APPEAL
The Court noted that in a legal malpractice action, there are four necessary elements:
1. An attorney/client relationship;
2. Negligence by the defendant or breach of contract;
3. The negligence or breach of contract must be the approximate cause of the plaintiffs’ damages; and
4. But for the defendant’s conduct, the plaintiffs would have been successful in the prosecution of their claim.Ftn 26
Either tort or contract may serve as a basis for legal malpractice liability. In fact, some commentators have characterized malpractice suits as being neither in contract nor in tort, but as lying in a “borderland” area between the two.Ftn 27
The Court observed that many of its recent legal malpractice decisions have analyzed the attorney/client considerations in contractual terms. Under the contract theory, the basis of liability is the reliance by the recipient on the advice given.
In Togstad, the trial court applied a contract analysis in ruling on the attorney/client relationship question. One statement of the contract analysis is as follows:
“Generally speaking, the relation of attorney and client is a matter of contract . . . A valid offer and acceptance will constitute the relation of attorney and client. Thus, the contract of employment, in general, consists of an offer or request by the client and an acceptance or assent by the attorney . . . Formality is not an essential element of the employment of an attorney. The contract may be express or implied and it is sufficient that the advice and assistance of the attorney is sought and received, in matters pertinent to his profession. An acceptance of the relation is implied on the part of the attorney from his acting in behalf of his client in pursuance of a request by the latter. (Emphasis supplied.)Ftn 28
The Court noted that one law review comment suggested that the proper analysis in Togstad was to apply principles, of negligence. Under such an analysis, liability arises if the defendant renders legal advice under circumstances which make it reasonably foreseeable to him that if such advice is negligently given, the individual receiving it may be injured.Ftn 29
After discussing the alternative theories of liability, the Court refused to base its decision on either analysis, but instead held that “under either theory the evidence shows that a lawyer/client relationship is present here.”Ftn 30
REACTION TO TOGSTAD
Togstad has been greeted with apprehension by the bar. It has also been the subject of considerable commentary.Ftn 31 The decision even evoked an unusual expression of sympathy for the profession from a lay source, who said he would be “worried sick” if he were a member of a Minnesota professional partnership, and added:
“How can we expect professional people to serve the public prudently, wisely and fully professionally with that kind of an ax hanging over their heads?
The alternative of course is to load up the firm with vast insurance coverages the cost of which, inevitably, must be passed on to the public in the form of higher fees and to conduct the practice with an exhaustive and costly pursuit of and study into every possible contingency that might develop . . . a kind of defensive sort of practice in the face of the malpractice suit threat.
And we wonder why professional service costs keep rising.”Ftn 32
The remainder of this article will focus on preventing malpractice in Togstad situations.
Rejecting the Case on the Merits
One commentator, in an article written prior to the Supreme Court’s decision in Togstad, described its significance as follows:
“The fundamental proposition underscored by the Minnesota case is that a lawyer cannot reject any case brought to him for consideration by a potential client on the basis of the lawyer’s judgment as to the merits of the case unless the lawyer makes a careful investigation of the facts and the legal issues involved. If the plaintiff’s position in the Minnesota case is sustained, it will be forcibly brought home that any ‘undertaking’ to advise a party professionally brings into play all of the lawyer’s professional responsibility to a client.”Ftn 33
In Togstad, the posture of the case required an assumption by the Court that Mrs. Togstad sought and received legal advice from the defendant. In rendering the advice, the defendant appeared to the client to be rejecting the case on the merits.
According to plaintiffs’ experts, consultation with an expert and review of medical records is an absolute minimum which should be performed by the attorney before an opinion on the merits is rendered.Ftn 34 The general rule, as stated by the Court, is that an attorney must “perform the minimal research that an ordinarily prudent attorney would do before rendering legal advice.”Ftn 35
It thus appears from Togstad that in any situation where an attorney undertakes to render an opinion on the merits of a case, he will be required to do more or less, depending upon the exact nature of the case. In a commercial case, where the facts may be clear, legal research may be sufficient. In other cases, both factual investigation and legal research may be required. In other cases, such as medical malpractice cases, an attorney may need to go even further, and consult with experts in the particular field. In any event, ‘the attorney must’ perform the minimal acts which a reasonably prudent lawyer would perform before rendering an opinion on the merits of the case.
Rejecting the Case Other than on the Merits
In Togstad, the client and the attorney differed on the nature of the opinion rendered by the attorney. The client felt, the jury found, and the Supreme Court assumed, that the lawyer rendered legal advice concerning the merits of the case. The attorney argued that the advice given was merely concerning whether the case was one which the firm was interested in accepting.
There are, of course, many settings in which an attorney may decline proffered employment and in which the refusal has nothing to do with the merits of the case. There may be ethical conflicts of interest, the attorney may not do the kind of work involved in the offered case, the attorney may be too busy to handle the matter, or he may simply desire to avoid the case without having a specific reason.
One of the defendant’s experts testified that when a lawyer refuses a case, his only duty is to inform the client if the refusal is for reasons other than the merits of the case. It appears from Togstad, however, that more is required. It has been suggested that if a case is rejected other than on the merits, the fact that it is so rejected must be communicated to the client.Ftn 36
It has also been suggested that besides communicating the exact reasons for the rejection of the case, if it is rejected other than on the merits, the person should be advised to consult another attorney, and should be advised about the statute of limitations which applies to the case, or “at a minimum, that the passage of time may cut off the right to bring the case.”Ftn 37
The Necessity of a Writing
One commentator has stated as follows:
Finally, there is no escaping the clear message of the Minnesota case, which is that in all events a letter must be written.”Ftn 38
The initial reaction of many practitioners to this statement must inevitably be “why?”. Secondary considerations must be to whom such writing should be sent, and what they should contain.
The differences in the testimony of the client and attorney in Togstad clearly indicate the primary reason for sending a letter. A carefully drafted letter may be both a source of advice to the recipient as well as a record of what transpired between the recipient and the attorney. In cases where the recollection of the attorney and the recipient differ, the letter may resolve the conflict.
To whom should such letters be sent? Office visitors and drop-ins? Yes. Telephone callers? Probably. Curbstone contacts? Possibly. In short, the letter should be sent to anyone to whom statements were made which could reasonably be interpreted as legal advice upon which a reasonable person might rely, or as a result of which, if such statements were made negligently, the individual receiving them might be injured.Ftn 39
In all cases where employment is declined, the client should be advised of the reason for declining the employment. In other words, it should be clear to the client whether the decision to reject the case is based upon the attorney’s opinion about its merits or for other reasons. Whatever the reasons for declining the case, it also seems advisable to mention the applicable statute of limitations. In mentioning the statute of limitations, the client should clearly be advised that once the deadline passes, it is likely that no lawsuit will ever be possible. Where there are questions about the statute of limitations, it may be best to discuss those briefly, and indicate to the client the “conservative” estimate of when the statute expires.
It is always desirable to suggest to a person whose case has been rejected, for whatever reason, that another attorney may or should be consulted. As desirable as it is in cases where the case is rejected on the merits, such as suggestion is crucial in cases where the attorney has rejected the case for reasons other than its merits.
While the foregoing would seem to be minimal ingredients of rejection letter, other information may be desirable. It may be desirable for the lawyer, in summary form, to state the times and content of the recipient’s conversations and contacts with the lawyer. If the lawyer is rejecting the case on the merits, a statement of the facts as he understands them and a summary of his research, consultations, and investigation is desirable.
It should be noted that the rejection of a case is not the only event in which a letter is desirable:
“The thought is that every new client contact should be followed up promptly with a letter which describes exactly what the lawyer has undertaken to do. This letter would include reference to significant follow-up actions to be taken by the client; any limitations on the lawyer’s undertaking; major factual assumptions; and reference to fee and cost arrangements.”Ftn 40
Togstad has real ramifications for Minnesota attorneys. Before rendering an opinion rejecting a case on its merits, an attorney may be required to do legal research, factual investigation, and consult with experts. If the case is rejected other than on its merits, the attorney may still be required to advise the rejected client about the statute of limitations and to suggest that another attorney be consulted promptly. In all cases of rejection, and indeed in cases of limited acceptance, the attorney should formally communicate his decisions, their bases, and the minimal advice required by Togstad to the clients in writing.
To some, these suggestions, especially the formal written requirement, may seem burdensome. The essential common ingredients, if not the specific contents, of rejection letters should, however, be fairly easy to standardize in a law office. The alternative, as the defendants in Togstad found, is a substantial pecuniary penalty.
1 The opinions expressed herein are the personal opinions of the writer, and should not be attributed to the Lawyers Professional Responsibility Board. The author also expresses thanks to St. Paul attorney Terry L. Wade and to third-year law student Richard Harden for their assistance and suggestions.
2 291 N.W. 2d 686 (1980).
3 Id. at 689.
6 Id. at 690.
14 Id. at 691.
17 Id. at 690-91.
18 Id. at 690.
19 Id. at 691-92.
20 Id. at 692.
26 Id; See also Christy v. Saliterman, 288 Minn. 144, 179 N.W. 2d 288 (1970).
27 Prosser, The Borderland of Tort and Contract, and Selected Topics on the Law of Torts, 380 (1954).
28 7 C.J.S., Attorney and Client, §65.
29 Togstad at 693, citing Comment, Attorney Malpractice: Use of Contract Analysis to Determine the Existence of An Attorney/Client Relationship, 63 Minn. L. Rev. 751 (1979).
30 Togstad at 693.
31 See, e.g., 63 Minn. L. Rev. 751, supra; Gates, The Minnesota Malpractice Case, Legal Malpractice Review, (May-June, 1980) (St. Paul Fire and Marine Insurance Company).
32 Tilton, “Something Else to Worry About”, West St. Paul Sun (Aug. 6, 1980).
33 Gates, supra. at 31.
34 Togstad at 691-93.
35 Id. at 692.
36 Gates, supra. at 31. Although the focus of this article is on legal malpractice, it is interesting to note that the proposed Model Rules of Professional Conduct now pending in the ABA could have an impact in this area. Rule 1.15(c) is proposed as follows:
“(c) A lawyer may limit the nature and purposes of the representation provided to a client if: (1) the client’s interest will not be materially impaired by the limitation; and (2) the limitation is adequately disclosed to the client before the representation is undertaken.”
Arguably, to the extent that an attorney has “undertaken” to reject a case on the merits, his responsibility to the client cannot be limited. If he desires to limit his liability in an “undertaking” to reject a case other than on the merits, it would seem that he must make adequate disclosure to the client.
37 Gates, supra at 31.
39 Togstad, supra. at 693, f.n. 4.
40 Gates, supra. at 31.
Forming the Attorney-Client Relationship
By Edward J. Cleary, Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted from Bench & Bar of Minnesota (December 2000)
In most instances, members of the legal profession are well aware of when they have established a relationship with an individual or a business entity creating an attorney-client bond. Indeed, one could argue that attorneys spend a great deal of their time in cultivating relationships with others with the hope that some day members of that public will either become clients or refer prospective clients to the lawyer. Some members of the profession become too aggressive in their quest, confuse "ambulance chasing" with "rainmaking," and find themselves facing solicitation complaints in violation of 7.3, MRPC. But what of the opposite problem? What are an attorney's obligations to an individual or a business entity with whom they have had contact, but not to the extent they consider an attorney-client relationship to have formed? Where is the line drawn?
A LOOK BACK
For those of us who have been around since 1980, the Togstad case can still bring on shudders.Ftn 1 As many of you will recall, Mrs. Togstad consulted a Minnesota attorney with regard to a possible medical malpractice claim. They discussed the matter for less than an hour at the attorney's law office; no fee arrangements were discussed or authorizations requested. At that point, there were 10 months left before the 24-months statute of limitations would render any claim meaningless, at least any claim against medical providers. There was a dispute between the attorney and the client as to what was said at the consultation, but in any case Mrs. Togstad was left with the impression that her case was weak and that the attorney would consult with others to discuss the case, only getting back to her if she had a viable claim. A year later, after not hearing from the attorney, Mrs. Togstad consulted with another attorney only to find that the statute of limitations had run. Eventually the original law firm was held liable for $649,500, the amount the jury found Mrs. Togstad would have received if she had proceeded with her case in a timely manner. The results sent a shock wave through the local bar and it is fair to say that office procedures addressing the duty to prospective clients were tightened-up considerably in the wake of the decision.
MORE RECENT EXAMPLES
While the office interview is one instance where a lawyer may take on a number of obligations to a prospective client, several recent cases, in the context of both professional liability and professional responsibility, have examined when the attorney-client relationship attaches within the litigation context. As a general rule of thumb, an attorney who appears before a tribunal on behalf of a person is presumed to represent that person as a client, although this presumption may be rebutted.Ftn 2
In California, an attorney made an appearance in court "as a courtesy to the attorney of record." When the attorney of record was sued by the client, so was the attorney who had made the court appearance. The California appellate court, refusing to "distinguish between an association for an entire case and an association for the purpose of hearing on a single motion," found an attorney-client relationship could arise without any direct dealings between the client and the attorney. Consequently, while we all may agree that a single brief appearance on behalf of a client is quite different than "full" representation, the court felt that it was a difference in degree rather than in kind.Ftn 3
In addition to the situation where a lawyer appears on behalf of the attorney of record as a favor, lawyers can also find themselves in trouble when they make a "brief" court appearance for what they consider to be a former client. Recently this office received a complaint regarding a lawyer who had appeared in court to respond to an order to show cause. He did not oppose the motion and told the court he was simply appearing at the request of the individual who was the former president of the now defunct enterprise that he had represented (thus converting his client into "former" status in the lawyer's mind). He objected to the addition of the former president as an additional defendant and otherwise looked out for the former president's interests. Later, the attorney was served discovery, failed to answer the discovery, and the opposing party was awarded $500 in sanctions against him for his failure to respond. He attempted to vacate the judgment on the grounds that he had no duty to answer discovery for the former client. When this argument failed and the court denied the motion to vacate the judgment, he refused to pay the judgment. He was given an admonition by this office for violating 8.4(d) in part since "a lawyer cannot assert, in good faith, that no 'valid' obligation exists once a debt is reduced to judgment and a lawyer's legal challenges have been exhausted."Ftn 4
FORMING THE RELATIONSHIP
A relationship of client and lawyer arises when:
(1) a person manifests to a lawyer the person's intent that the lawyer provide legal services for the person; and either
(a) the lawyer manifests to the person consent to do so; or
(b) the lawyer fails to manifest a lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services . . . .Ftn 5
As the Restatement notes, the focus will often be on the reasonable reliance of the prospective client. So how should an attorney conduct herself with a prospective client to avoid problems?
An attorney should be aware that at the very least, information learned at an initial consultation must be kept in confidence. As the Comment to Rule 1.6, MRPC, notes "the lawyer (must) preserve confidences and secrets of one who has employed or sought to employ the lawyer." Further, as Togstad reminds us, in offering an assessment or giving advice, an attorney has an obligation to be competent and thorough. While you may limit the objectives of representation with client consent under 1.2(b), MRPC, the Comment to that provision notes that "the client may not be asked to agree to representation so limited in scope as to violate 1.1" requiring competent representation. Following-up an initial consultation in writing outlining the reasons for turning down a matter; highlighting the statute of limitations as a warning to the client; and reminding the client of the option to seek another opinion within the remaining time available, have become a common response to an initial consultation in the two decades since Togstad. Also note that any papers or property you may receive from a prospective client should be treated as a client's papers and property and carefully returned if you decide not to take the case.Ftn 6
As to court appearances, the cases mentioned should serve as a reminder that most courts will conclude that appearing in court on behalf of a client creates a presumption (that will be difficult to rebut) that the attorney has authorization to do so and that consequently an attorney-client relationship, however brief or tenuous, exists.
When a lawyer interviews a prospective client, duties of confidentiality and the safekeeping of papers and property attach immediately. The attorney must be careful; presuming that no relationship exists--or that an "informal" attorney-client relationship exists that is somehow distinguishable from a "formal" one--is a mistake and may well lead to trouble. First and foremost, in the absence of written proof to the contrary, it is the client's perception that will carry the day. When there is a disagreement as to the status of the relationship, the focus will be on what the client reasonably believes as a result of the lawyer's statements and/or conduct. If a court appearance takes place, the lawyer should presume that by appearing on behalf of a party, she is announcing to others, including the presiding judge, that an attorney-client relationship exists. While all practicing attorneys want clients, choosing which clients to represent will always be preferable to having clients you don't wish to represent thrust upon you.
1 Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980).
2 See Restatement (Third) "The Law Governing Lawyers" § 25 (ALI, 2000).
3 Streit v. Covington & Crowe, No. E023862 (Cal. App. July 20, 2000). See also 25 Professional Liability Reporter 304 (September 2000) which notes that a similar result was reached in another recent case in Illinois.
4 In re Stanbury, 561 N.W.2d 507, 511 (Minn. 1997).
5 See Restatement (Third) "The Law Governing Lawyers" § 14 (ALI, 2000).
6 See Restatement, ibid, § 15 (ALI, 2000).