Articles Posted in Legal Malpractice

The statute of limitations for legal malpractice claims in Tennessee is one year from the date the action accrues.  Tenn. Code Ann. § 28-3-104(a)(2).  The “discovery rule” determines when the action accrues in most legal malpractice cases.  Tennessee’s discovery rule says that a plaintiff’s time limit to file suit does not start to run until the plaintiff knows or in the exercise of reasonable diligence should know that he or she has an injury as a result of wrongful conduct by a defendant. 

Recently, in Aleo v. Weyant, the Tennessee Court of Appeals examined a case involving a legal malpractice claim against a family law Attorney for failing to include a provision in a marital dissolution agreement and final decree of divorce specifying that the Wife would receive 50% of the Husband’s military pension and that she would be named as beneficiary of the pension.  Attorney raised a statute of limitations defense and the trial court granted summary judgment.

The record showed that Wife went to a Staff Judge Advocate more than a year before she filed suit against Attorney and was advised by the Staff Judge Advocate that she would not get part of Husband’s pension benefits because the divorce decree was silent about that asset.  Since the malpractice lawsuit was not filed within one year of Wife learning that she would not receive pension benefits, the Court of Appeals agreed with the Trial Court and upheld summary judgment.

Wife confronted Attorney after meeting with the Staff Judge Advocate and learning that she would not get the pension benefits and Attorney allegedly reassured her that he would fix the problem and make it right.

Wife attempted to argue that Attorney’s reassurances to her that he would fix things after she discovered the wrong concealed her loss.  She argued that she didn’t actual discover her loss until June 2010 (less than a year before she filed suit) when she learned that the time to file a Rule 60 motion (for relief from judgments or orders) had expired.  The Court of Appeals disagreed with Wife and found that a plaintiff cannot wait until she knows all of the consequences of the defendant’s wrongful conduct before bringing suit.  The date a plaintiff knows there is an injury, the statute begins to run.

Wife also attempted to argue that Attorney should be equitably estopped from raising a statute of limitations defense because, she argued, Attorney misled her and prevented her from recognizing the injury by promising to fix it and make it right.  The Court of Appeals explained that vague statements and ambiguous behavior will not carry the day on an equitable estoppel claim.  Instead, to succeed on an equitable estoppel defense, the plaintiff must show that the defendant misled the plaintiff into failing to file suit by making specific promises and inducements that the defendant knew or should have known would cause the plaintiff to delay filing suit.  The court found that Wife had not provided sufficient evidence to win on equitable estoppel.

The Court of Appeals also briefly addressed Wife’s claim for negligent infliction of emotional distress against Attorney.  The court reminded us of the elements of NIED:

            1.         Defendant owned a duty of care to the plaintiff;

            2.         Defendant breached the duty;

            3.         Plaintiff suffered a loss;

            4.         Causation;

            5.         Plaintiff suffered a serious emotional injury as a result.

            Wife testified that she had not received any treatment from a psychologist or psychiatrist, nor was she taking an medications as a result of her alleged emotional injury.  The trial court and Court of Appeals agreed that Wife had not presented sufficient evidence to sustain a claim for NIED.  The court did not address the issue of whether a duty existed in the context of a lawyer / client relationship.

This result is consistent with the law of statute of limitations applied to other professionals in Tennessee.

 

I am fortunate to receive many calls on many types of cases, some of which fall outside of my normal practice area.  i decided I would seek out a lawyer to whom I could associate on a particular type of case – this lawyer enjoyed a good reputation on cases of this type.  I called him and had a general discussion about the type of calls I was getting and inquired whether he was interested in receiving some referrals.

He said he was, and we had a discussion about how we could work together to assist future clients.  I had a good feeling about the potential of working together.

Then, I asked him to confirm that he carried legal malpractice insurance.  He said he did not,  I told him I could not sleep at night if I did not have legal malpractice insurance for our firm.  He said that if he got sued and put in a position of probable financial loss he would  file bankruptcy and avoid the loss.

And that ended that.  This lawyer will receive no referrals from me.

I have two problems with his position on this subject.  First, he did not have legal malpractice insurance.  I cannot understand why any professional would not have professional liability insurance.  I don’t care how good you are (or think you are) at your profession, sooner or later you will make an error that can’t be fixed that will harm a client.  It will happen.  Or you will be accused of doing so.  In any event, you need professional liability insurance to assist you in hiring a lawyer, providing you with a defense, and paying the claim if it is determined to be valid.  

But even more troubling is the attitude of this lawyer.  By suggesting that he would seek bankruptcy protection in the event that he caused harm to the client, he demonstrated to me that we did not share the same attitude about the relationship between lawyers and clients.

I purchase professional liability to protect myself, but more importantly I purchase it to protect my clients if I make an error that causes them harm  I could save tens of thousands of dollars a year by not purchasing insurance, hoping that I didn’t make a negligent error that hurt a client, and hoping that I could readily afford to pay for the consequences of any such error.  But I don’t want my clients to take the risk that I cannot pay,and I don’t want them harmed by my error.  Therefore, I purchase insurance to protect them – and me – from financial loss.

I can’t imagine not wanting to give that financial protection to a client.  I just cannot imagine it.  I think most lawyers feel the same way.

Coincidentally, I received an email from a well-known Nashville lawyer about the same time as the discussion described above.   It turns out that he investigated a legal malpractice case and neither the potential lawyer defendant or the lawyer’s firm had malpractice insurance.  The client was left holding the bag.

What in the heck is going on?  Is the legal economy so bad that lawyers are dropping their malpractice insurance?  Or is it just that there is just some number of lawyers out there who are willing to go bare, risking their own net worth and not having any particular concern for their clients? Or do these lawyers just think that they won’t make a mistake?  Really, what is going on?

One last point to ponder.  Tennessee law permits fee splits in referrals of personal injury and wrongful death cases if (a) the fact of the referral fee is disclosed to the client and (b) each lawyer remains jointly and severally liable for the work of the other.   Remember that next time you want to make a referral.

 

 

The defendant and his law firm was hired to bring a wrongful death action for decendent’s (Anderson’s) estate and to assert loss of consortium action by Anderson’s wife. The case was dismissed, arguably after the experts in the case were thrown out after a Daubert challenge..  Lawyer did not timely appeal the dismissal of the case. Several years later, Anderson’s two children – one still a minor – sued Atty for malpractice. They asserted the statute of limitations for malpractice was tolled by their infancy. Atty resisted discovery and quickly moved for summary judgment, asserting he had no attorney-client relationship with the children. 

Notably, Pete had not asserted a claim for damages for the children  

The trial judge dismissed the case, saying that   did not have privity with Pete, and thus did not enjoy an attorney-client relationship with Pete and lacked standing to sue for professional negligence.

On appeal, the children argued that

(1) that an attorney-client relationship actually existed and is supported by Elizabeth’s [ the decedent’s wife] reasonable belief that Pete was representing her children as well as herself and the Estate; (2) that although the wrongful death claim was brought on behalf of the Estate, an estate is only a nominal party in a wrongful death action and the real parties in interest are the beneficiaries under the statute (which included Elizabeth, Malik, and Michael in the present case); and (3) in the alternative, even if privity did not exist, an attorney in this jurisdiction is liable for damage caused by his negligence to any party intended to be benefited by his performance.

The Court found that a factual issue was present on the issue of whether the decedent’s wife believed that Pete was representing the children as well as the Estate.  However, the Court went further and ruled as follows:

 if Pete is found not to be in privity with Michael and Malik because discovery reveals that the parties contracted for him to represent Elizabeth solely and not the children, he will still have owed duties to Michael and Malik as intended beneficiaries of the wrongful death action. Thus, the result is inescapable that Pete owed a duty to Michael and Malik — whether as attorney to client or as attorney to intended beneficiary.  [emphasis supplied by the Court]

My belief is that the same result would be reached if this case had arisen under Tennessee law.  Under Tennessee wrongful death law,  certain people have the right to file a wrongful death suit, but they bring the case on behalf of beneficiaries.  Those beneficiaries are usually known before suit is filed.  The beneficiaries have no right to file suit on their own unless they fall within the definition of those authorized to file suit.  Thus, they must depend on the named-plaintiff to protect their interests.  It only makes sense that the lawyer owes a duty to the beneficiaries.

Let me hasten to add that I have no idea whether this claim has any merit.  The question presented was  one of standing to sue, and nothing else.  

The case is Anderson v. Pete,  No. 2010-CA-000472-MR, (KY. Ct. App. Oct. 7, 2011).

I serve on the Standards Committee of the National Board of Trial Advocacy, a division of the National Board of Legal Specialty Certification.  Our members have a duty to report legal malpractice claims that have been filed against them, so from time to time I see claims filed by liability  insurance companies against defense counsel that the companies hired to defend insureds.

So, when I saw this article in the Spring 2011 edition of the Federation of Defense and Insurance Counsel Quarterly, I thought it deserved to be seen by a broader audience. 

The article explains that

When an attorney commits malpractice in defending an insured, the damage is often  shouldered by the insurer rather than the insured.  Even if the insured suffers some of the  damage, the amount may not be sufficient to motivate the individual to pursue a malpractice  claim against her attorney, especially given the fact that she has likely already been involved  in litigation for some time. The insurer, on the other hand, likely suffers the lion’s share  of the damage caused by the malpractice. As one court noted, it is inequitable to require an insurance company to absorb the loss due to negligent defense counsel without a legal remedy.  Accordingly, allowing these claims provides a remedy to the insurer when the insurer has suffered detriment due to the negligence of its hired defense counsel.
 
(Footnotes omitted.)
 
The article then gathers and explains the law on the issue of the right of the insurer to bring a claim and the various theories of recovery.
 
This article will give a jump start to those researching the law on the right of an insurance company to sue a defense lawyer for legal malpractice.

A plaintiff in a car accident lawsuit has become a legal malpractice plaintiff.

Sharon Langford has sued a law firm with office in Kentucky and Florida and made some very serious allegations.   Basically, she was alleged to seek health care for her injuries from a specific provider and  that there was a business relationship between the provider and the lawyers.  She also alleges that the provider and the law firm advised her not to submit the bills to her health insurer and that she did not receive documentation of the charges made by the health care provider.

She alleges that the undisclosed relationship between the health care provider and the lawyers resulted in financial and other losses.   Here is a copy of the complaint.

I have no idea whether the allegations of the complaint are true and, quite frankly, I hope they are not.  I believe that there is nothing wrong with a lawyer referring a client to a competent doctor for treatment.  Likewise, there is nothing wrong with a lawyer recognizing a health care provider’s lien on a recovery.  But these allegations of misconduct go far beyond that and, if true, are something that should be condemned by all responsible lawyers. 

Thanks to Shannon at The Kentucky Trial Court Review for informing me about this litigation.

 Legal Malpractice Law Review brought to my attention an interesting legal malpractice case from 1979 in Pennsylvania, Schenkel v. Monheit, 226 Pa. Super. 396 (Pa. Super. Ct. 1979). 

The plaintiff’s lawyer in the underlying case (and now the defendant) failed to sue the original defendant’s employer in an auto accident case.  Plaintiff received a jury verdict of $10,000 in the original case, but said he would have received more had the employer, a corporation, been sued.  So, he sued his lawyer seeking the "extra" money.

The appellate court in the malpractice action disagreed, saying that the corporate employer’s liability was vicarious only and that joining the employer would have only enhanced collectability of the judgment.  The failure to add the employer did not cause damage to the plaintiff because the original judgment was collected in full.

Do you agree or disagree with this result?  As you evaluate your answer, remember T.P.I – Civil 1.04:

The fact that a corporation is a party must not influence you in your deliberations or in your verdict.  Corporations and persons are equal in the eyes of the law.  Both are entitled to the same fair and impartial treament and to justice under the same legal standards.

Also remember that jurors are presumed to follow the instructions of the trial court.  See, e.g. State v. Williams, 977 S.W. 2d 101 (Tenn. 1998).

I have written in the past about whether a plaintiff in a legal malpractice action arising out of the alleged mishandling of the plaintiff’s underlying case should have to prove not only that the firm committed malpractice and  that damages would have been awarded if malpractice had not occurred but also that the damages were collectable. This post will link you other posts on this subject.

The Texas Supreme Court has ruled that "(1) the amount of damages that would have been collectible in the prior suit is the greater of the amount of a judgment for damages that would have been either paid or collected from the underlying defendant’s net assets; and (2) the time at which collectibility is determined is as of or after the time a judgment was first signed in the underlying case."

The case is AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. v. NATIONAL DEVELOPMENT AND RESEARCH CORPORATION,  No. 07-0818 (Texas Oct. 30, 2009).  Read the opinion here.

I know I did a post on this subject a couple of weeks ago, linking to a site that had some techniques to help lawyers avoid malpractice claims.  But here is another site with yet another handy list of fourteen ways to avoid a claim.

A sample taken directly from the site:   

11. REJECTING CERTAIN CLIENTS AND CASES

As attorneys gain experience, they learn that certain clients and certain cases are better off rejected at the outset. Some red flag warnings follow:

  • Beware of the client who is changing attorneys.
  • Look out for the case that has already been rejected by one or more other firms.
  • Avoid the case that has an element of unavoidable urgency.
  • Beware of the client who has already contacted multiple government representatives to plead his case.
  • Beware of the client who wants to proceed with his case because of principle and regardless of cost.
  • Beware of a client who has done considerable legal research in propria personal on his case.
  • Beware of the client who is obviously recognizable as being impaired by chemical substances, alcohol, drugs, etc.
  • If your first impression of the client or his course of action is unfavorable, think twice before accepting his case.
  • If you and your client cannot easily agree on fee and retainer, you may be dealing with a difficult client.

 

This post from the New York Attorney Malpractice Blog includes the full text of an article from New York Lawyer titled "Legal Malpractice Cases May Surge as the Economy Tanks."

The article says that " [a] recent American Bar Association (ABA) study that looked at legal malpractice claims filed between 2004 and 2007 found that the total number of claims increased by more than 36% compared to the previous three-year period."  CNA expects a increase in claims this year that are related to the downfall in the economy.

The American Bar Association has a nice paper titled "The Top Ten Malpractice Traps and How to Avoid Them."  The paper is excerpted from  "Desk Guide Legal Malpractice."  Not all of the "traps" are applicable to those who do tort work on a full-time basis, but there is a lot to be learned from this 11-page document.

Here it is.