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 March 9, 2011 UNPUBLISHED)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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Beecher v. Greaves, 73 Conn. App. 561, 808 A.2d 1143 (Conn. App. 2002)

CT: Underlying foreclosure action

Student Contributor: Laura Binski

Facts: The lawyer represented the client in two foreclosure actions in 1996. In 1997 and 1998, the client brought a legal malpractice action grounded in professional negligence against the lawyer. The client claims that the lawyer was negligent in allowing the foreclosure sale to be significantly lower than the property appraisal. The client intended to call Mr. Heberger as an expert witness on the issue of causation, and Mr. Weinstein as an expert witness on the issue of liability. However, the client did not disclose her intention to call Mr. Heberger until shortly before trial. As a result, the court precluded Mr. Heberger’s testimony and directed verdict for the defendant. The client now appeals the rulings of the trial court.

Issue: Did the trial court improperly exclude the testimony of the client’s expert witness and improperly direct verdict in favor of the lawyer?

Ruling: No. “Any party expecting to call an expert witness at trial must disclose the name of the expert, subject matter on which the expert will testify, and summary of the facts and opinions about which the expert will testify to all other parties within a reasonable time prior to trial.” In this case, the client should have provided notice much earlier that she intended to call Mr. Heberger as an expert on causation issues. The late notification might unduly prejudice the defendant and interfere with the orderly progress of the trial.

“A trial court must direct a verdict for the defendant if a jury could not reasonably and legally reach any other conclusion than that the defendant is entitled to prevail.” Here, the client’s expert Mr. Weinstein only discussed issues of liability. Causation is a requisite element in legal malpractice cases. The client’s failure to provide an expert on the issue of causation was fatal to her legal malpractice claim, so the trial court was correct to direct verdict in favor of the defendant.

Lesson: This case serves as a reminder for clients to be prompt in choosing and disclosing their expert witnesses. In this case, the client filed the legal malpractice actions in 1997 and 1998. However, she waited until just a few weeks before her trial in 2001 to disclose her intention to call Mr. Heberger to testify about causation. As a result, the expert was not permitted to testify, and the client lost her entire case. 

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Cadle Co. v. Sweet & Brousseau, PC, (US Dist. Court, ND Texal, Dallas Div. 2006)

TX: Underlying litigation

Student Contributor: Megan Diodato

Facts:   The client brought this action against former attorney and designated a former Texas Supreme Court Justice as an expert witness concerning legal malpractice issues in this case. Former Justice issued an expert report stating that the firm and their employee lawyer was negligent and guilty of malpractice in their conduct. The Justice opined that if an opposing lawyer asks the court to take judicial notice of the court’s file, the other lawyer’s duty is to either know exactly what is in file or call for a recess to determine what’s in there before he can agree that the judge take judicial notice of it. The attorney filed a motion to exclude this expert testimony.

Issue: Can client qualify a former Justice as an expert witness offering testimony on legal malpractice under the Federal Rules of Evidence.

Ruling: No.  In evaluating whether expert testimony may be admitted the key factors are reliability and relevance. The client did not produce sufficient evidence to qualify witness as an expert because of the failure to produce evidence hat Justice has sufficient specialized knowledge to assist the trier of fact in deciding the malpractice issues in this case. The client only provided evidence that when the Justice has conducted expert work it was primarily in legal malpractice cases. The particular issues the Justice addressed in such cases is unknown. A person who may be licensed attorney or Judge, who holds years of experience in the practice of law will not qualify him/her to give an expert opinion on every legal question. The client and expert did not demonstrate the facts or data relied upon in reaching opinion and therefore not the product of reliable principles and methods.

Lesson: Lifetime experience as a lawyer or Judge does not qualify one as an expert in all areas of law-specialized knowledge in particular area is necessary.

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Allbritton v. Gillespie, Rozen, Tanner & Watsky, P.C.180 S.W.3d 889 (Tex. App. 2005)

TX:  Underlying Contract Litigation

Student Contributor: Evan Kusnitz

Facts: Attorneys represented Client 1 and Client 2 in a breach of contract suit against their employer. Attorneys told the two clients to calculate their own damages for presentation at the trial. Client 2 had a financial background; Client 1 did not. Both clients testified at trial regarding their damages. The jury found for both clients on the breach of contract claim. However, while it awarded Client 2 $4,000,000, it awarded nothing to Client 1.

In Client 1’s subsequent malpractice suit against Attorneys, he alleged that Attorneys were negligent because they failed to hire a damages expert, because Client 1 had no financial background. In response to Attorneys’ summary judgment motion, Client 1 filed two affidavits: one from Expert Attorney, and the other from Expert Accountant.

Issue: Can a non-lawyer provide expert testimony in a legal malpractice case?

Ruling: Yes. A non-lawyer expert may testify to an issue in controversy that is within his expertise. Furthermore, sometimes an expert attorney’s testimony is insufficient to establish causation, and a non-legal expert would be required. See Rangel v. Lapin, 177 S.W.3d 17 (Tex. App. 2005) (accident reconstruction expert needed in addition to attorney expert).

Lesson: A non-lawyer expert can testify in a legal malpractice case to matters within his expertise. 

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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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Antonis v. Liberati 821 A.2d 666 (Pa. Cmwlth. 2003)

Student Contributor: Evan Kusnitz

PA Underlying Mortgage Transaction

Facts: Plaintiff hired Attorney to prepare a mortgage and note as a security on a loan to Borrower. Attorney delivered the documents to the Recorder of Deeds. Plaintiff called Attorney several times to ask if the mortgage was recorded correctly, and Attorney repeatedly assured him that it was. However, due to a clerical error, the mortgage was in fact not recorded correctly. As a result, Borrower was able to sell the land subject to the mortgage without disclosing the existence of the mortgage, and without paying anything to Plaintiff. Plaintiff successfully sued Attorney. On appeal, Attorney argued that the trial court erred by not requiring expert testimony to show that he had a duty to Plaintiff to ensure that the mortgage was recorded correctly. Attorney also argued that Borrower’s fraud was an intervening cause of Attorney’s harm.

Issue:

1. Is expert testimony required to show that an attorney has a duty to a client to ensure that a mortgage is recorded correctly?
2. Is a borrower’s fraud––selling mortgaged land without disclosing the incorrectly recorded mortgage––an intervening cause of any harm caused by an attorney’s failure to ensure the mortgage was correctly recorded?

Ruling: In affirming the decision of the trial court, the appellate court ruled:

1. Expert evidence . . . is not required when the issue of negligence is clear enough to be concluded as a matter of law.

Since it is the responsibility of the mortgagee to ensure that the mortgage has been properly recorded, that duty undoubtedly falls upon his attorney, who represents him in the matter.

2. A borrower’s fraud is not an intervening cause of the harm caused by an attorney who failed to ensure that a mortgage was correctly recorded. If the attorney did not breach his duty to his client, the fraud could have never happened.

Lesson:

1. A mortgagee’s attorney has a duty to ensure that the mortgage is recorded correctly.

2. When an attorney’s negligence is obvious, expert evidence may not be required.

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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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Kaplan v. Skoloff & Wolfe, P.C. 770 A.2d 1258 (N.J.Super.A.D., 2001)
NJ Underlying Divorce Action Settlement

Student Contributor: John Anzalone

Facts: Attorney represented Plaintiff in a divorce proceeding. Plaintiff alleged that because of the attorney negligence in negotiating a property settlement agreement, she received less than she was entitled to when she accepted it. Plaintiff's expert concluded that the settlement was not adequate by comparing what she received to anecdotal evidence as to what he got for one former client recently. As a professional negligence action, an expert opinion on liability was required, But the court found Plaintiff's expert testimony inadmissible because it was based on anecdotal experience of the expert that were unsupported by facts.

Issue: What constitutes an inadmissible expert net opinion?

Ruling: In affirming the dismissal, the Appellate Division held that the expert's opinion on liability was properly excluded, based on the following factors:

1. In New Jersey, expert opinions that are solely conclusions and that fail to provide the basis for the conclusions are considered "net opinions" and are inadmissible as evidence.
2. To get an expert's opinion admitted into evidence, the expert must provide evidence of the accepted practice by lawyers that the defendant failed to adhere to.
3. The expert here failed to provide evidence other than anecdotal evidence regarding a case he handled in the recent past and otherwise only established that he would have done something different in the case, and not what reasonable attorneys' would have done in this case.

...the net opinion rule requires the expert witness 'to give the why and wherefore of his expert opinion, not just a mere conclusion...'

... Plaintiff's expert offered no evidential support establishing the existence of a standard of care, other than standards that were apparently personal to himself.

The Lesson: For the expert's opinion to be admissible in a legal malpractice case, he must define the standard of care and must support its definition by reference to evidence that other experts rely on and which are applicable to lawyers in similar circumstances. The expert's opinion must not be solely based on the expert's own personal view and experience. Once the expert esablishes the applicable standard of care or practice, he must then, through reference to the factual evidence, express the opinon how the defendant lawyer deviated from that standard and how that deviation was the cause of the alleged damage.

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