Articles Posted in Legal Malpractice

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

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.

The Ohio Supreme Court has ruled that a plaintiff in a legal malpractice case must prove the collectibility of damages in "the case within the case" to recover them from a negligent lawyer.  In doing so, it specifically rejected the notion that the defendant lawyer must prove the lack of collectibility as an affirmative defense.

Colorado, Iowa, Massachusetts, Minnesota, Nebraska, and South Dakota have a similar rule.  I think Tennessee does, too, but there is one case that suggests to the contrary.

For my previous posts on this subject go here.

Negligence without causation is like a biscuit without country ham (or blackberry jam). 

Now, I’m not so sure that juries pay as much attention to the concept as lawyers and judges, but causation is an element of every cause of action in the tort world.

This decision out of Michigan reminds us that causation must be proved in a legal malpractice case.  The lawyer blew the deadline for filing a notice of appeal – clearly negligence – but was not found liable as a matter of law because the appeal was denied on the merits.  Read the decision in McCabe vs. Miller & Associates, LLP,  No. 275498 (MI. Ct. App. October 9, 2007) here.

Rudolf fired his lawyers after a jury trial that resulted in a 50% finding of comparative fault and a total verdict of $250,000.  He then hired a new lawyer, got a new trial, and then settled his case for $750,000. 

Next, he sued his original lawyers for malpractice, saying that he failed to submit an appropriate jury instruction in the first trial and failed to object to the charge as given.  "In his damages claim, plaintiff sought payment of the legal fees associated with the motion to set aside the verdict and the appeal, as well as the expert witness fees and expenses incurred for the second trial. Plaintiff also requested approximately $190,000 in interest that would have accrued at nine percent per annum on the $750,000 had that sum been awarded at the conclusion of the first trial in January 2002."

The Defendants admitted negligence, but denied that Plaintiffs were damaged by it.  The New York court disagreed, saying that "plaintiff incurred litigation expenses to correct defendants’ error and paid a second time for expert fees for the retrial. These expenditures were readily ascertainable and calculated at $28,703.27 by Supreme Court. Although plaintiff achieved a $750,000 settlement as a result of the second trial, that sum represented compensatory damages in the underlying personal injury action and was not designed to reimburse plaintiff for the fees and expenses caused by
defendants’ negligence. We therefore agree with Supreme Court that plaintiff is entitled to consequential damages of $28,703.27."

The Hawaii Supreme Court has ruled that two law firms who represented a party in a business dispute cannot be sued by the adversary party for intentional interference with contractual relations.

Plaintiff had a dispute with a business partner – the two were general partners of a partnership that ran a hotel.  The defendant law firms represented the non-plaintiff partner.  The dispute ended up in arbitration, and Plaintiff demanded to see certain books and records of the hotel partnership.  The law firms took possession of those documents, and Plaintiff sued them for interfering with its right to access to the books and records.  The law firms said, inter alia, that the suit was barred by the litigation privilege.

The Court did a nice review of the history of the litigation privilege and ruled that the lawyer’s conduct was protected by the privilege.  The Court explained that the fact that the arbitration process was temporarily stayed at the time the dispute arose  was immaterial.

Last Fall I wrote several posts ( here and here) on a one portion of the causation issue in legal malpractice cases.

A summary of my view:  I believe that a plaintiff in a legal malpractice case arising out of a claim that a personal injury case was mis-handled must prove that amount of damages that would have been collectible in the underlying tort case. First, the plaintiff would ordinarily prove the amount of liability insurance, if any, available to the original defendant. Second, if the plaintiff wants to collect a judgment more than the amount of the liability insurance originally available, he or she should have to prove that it was more likely than not that the plaintiff could have collected more than that amount from the tortfeasor. This will require proof of the income, assets and liabilities of the original defendant. In appropriate cases, the lawyer defendant will want to demonstrate that the income, etc. of the original defendant is such that the plaintiff cannot prove that the judgment would not have been collectible above the amount of liability coverage or that the evidence offered is insufficient to prove that any monies could have been obtained over and above the insurance monies.

I think the burden of proving collectibility should be on the plaintiff because it should be deemed part of the causation argument. More specifically, the plaintiff has to prove damages by reason of the alleged malpractice of the lawyer. (The lawyer failed to have process re-issued in a timely fashion, and the case was dismissed with prejudice). That means plaintiff must prove that what damages, if any, he would have been able to collect in the underlying tort action against the original defendant. The plaintiff should not be able to collect more damages from the lawyer defendant that he would have been able to collect against the original defendant. What the plaintiff lost was the right to proceed to trial against the original defendant, and therefore what he should be able to collect from the lawyer is what he could have collected from the original defendant.

The Court of Appeal of California has ruled that a lawyer may be sued for failure to warn a client that the failure to settle a claim against the client  would put the client at risk for paying the adversary’s attorneys fees.  The Court held that it was not appropriate to dismiss the client’s claim against the attorney on that issue, and remanded the case to the trial court for consideration of the merits.

There is no need to state all of the facts here, but suffice it to say that the plaintff was upset about having the pay their original adversary’s attorney’s fees of over $600,000 (and their own attorney over $350,000) in a dispute that originally involved less than $20,000.

The case is Charney v. Cobert, B188087 (Cal. Ct. App. Div. 7 11/28/06); read it here.