Summary judgment is ordinarily inappropriate for legal malpractice actions, particularly with respect to the issue of proximate cause. However, this generalization is subject to the necessary qualification that the court must determine legal questions that underlie the ultimate decision. Therefore, due to the complex legal issues involved in legal malpractice claims, causation often becomes a question of law, beyond the ken of the average juror’s expertise, and may be appropriately disposed of by summary judgment.
When clients sue their attorneys for legal malpractice, courts require them to prove that, but for their attorneys’ negligence, their claims would have been resolved more favorably. This standard has come to be known as the 'case within a case.' When a showing cannot be made that the client’s attorney ruined an otherwise successful claim, the courts will grant summary judgment on the issue of causation.
The elements of a legal malpractice action against an attorney for professional negligence are the existence of an attorney-client relationship, a duty by the attorney to the client, a breach of that duty by the attorney, and damages to the client proximately caused by the breach of that duty. When it is alleged that an attorney negligently failed to perform some act on behalf of the client, the plaintiff must allege and prove that performance of the act would have benefitted the client.
For example, once a client proves that his former attorney accepted employment and failed to assert a claim timely, the client has established a prima facie case that the attorney's negligence caused him some loss, since it is presumed that the attorney would not have agreed to handle a claim completely devoid of merit. Once a legal malpractice plaintiff proves that negligence on the part of his former attorney has caused the loss of the opportunity to assert a claim, he thus establishes the inference of causation of damages resulting from the lost opportunity for recovery.
In Bauer v. Dyer, 782 So.2d 1133 (La. App. 5 Cir. 2001), Craig Bauer brought a legal malpractice action against his former attorney, Byrne W. Dyer, seeking damages from the dismissal of an appeal of an adverse decision of the parish personnel department following the termination of his employment with the Jefferson Parish Juvenile Services Department. Under the controlling personnel rules, Bauer had to file his administrative appeal within 30 days from the time of his termination in order to contest the adverse employment action of the department. However, Bauer did not retain his attorney, Dyer, until after the deadline had passed. Nevertheless, Bauer filed several administrative appeals, which were consolidated and tried in multiple hearings. On January 14, 1997, the personnel board issued a notice that failure to pay the appeal costs within 20 days would result in dismissal of the appeal. Dyer, who had already received the check Bauer sent to cover the costs of his appeal, failed to meet the 20 day appeal costs requirement. Consequently, the personnel board dismissed Bauer’s appeal and Bauer subsequently sued Dyer for failing to perfect his appeal. In granting summary judgment, the trial court held that Bauer had failed to establish that he would have obtained relief if Dyer had timely paid his appeal costs. The appellate court affirmed because, according to the controlling personnel rules, Bauer’s initial claim to challenge the adverse employment action was untimely, having been made long past 30 days after the date of his termination. As a result, Bauer could not have received relief on appeal and, thus, the alleged negligence of Dyer in failing to perfect Bauer’s appeal was not the cause of his damage. In Jordan v. Beeks, 21 P.3d 908 (Idaho 2001), Chris and Betsy Jordan brought a legal malpractice action against their attorney, Beeks, for advice relating to their unsuccessful underlying action to enforce an oral agreement to purchase a closely held corporation owned by two primary shareholders and a minority shareholder, who never committed to the sale. A condition to the enforceability of the agreement was that all final documents be acceptable to the shareholders’ attorney, who represented the two primary shareholders and the minority shareholder. Beeks sent a letter to the minority shareholder, offering to buy his share of the corporation on the same terms as those in the original agreement between the Jordans and the primary shareholders. The attorney of the minority shareholder advised against the sale. However, Beeks advised the Jordans that the oral agreement was enforceable and recommended filing suit against the two primary shareholders and not the minority shareholder. The suit was disposed of on summary judgment and the Jordans filed then subsequently withdrew an appeal, choosing instead to sue Beeks for legal malpractice. The Jordans alleged that 1) Beeks was negligent in sending the letter to the minority shareholder because that was contrary to their position; 2) Beeks was negligent in not suing the minority shareholder; and 3) Beeks was negligent in not submitting the testimony of the CPA who would have been able to corroborate Chris Jordan’s testimony. The District Court granted summary judgment in favor of Beeks. On appeal, the Supreme Court held that 1) Beeks’ letter asking whether the minority shareholder wished to sell his shares was not negligent because he had already indicated an unwillingness to be bound by the terms of the agreement; 2) Beeks was not negligent in failing to join one shareholder as a defendant in the underlying action because he had successfully intervened; and 3) Beeks was not negligent in failing to submit the affidavit of the CPA because his testimony would have been cumulative.
In Praxair, Inc. v. Hinshaw & Culbertson, 235 F.3d 1028 (7th Cir. 2000), Praxair, a former client of Hinshaw & Culbertson, sued the firm for its work in a contract case wherein Praxair had granted an option ending on a date that was a public holiday in Illinois and New York but a regular business day in Canada. When the grantee of the option, Credit Agricole, attempted to exercise the option on the next business day following the date on which it ended, Praxair took the position that this was too late and was sued by Credit Agricole for breach of contract. In defending Praxair, Hinshaw moved for summary judgment without conducting any discovery. Praxair lost the suit and the lower court’s judgment of almost $4 million was affirmed by the appellate court. In its legal malpractice claim against Hinshaw & Culbertson, Praxair argued that Hinshaw could have made a better argument for a January 16 or January 17 deadline and that if it had done so the appellate court would have reached a different result. Praxair argued that reviewing its own records would have revealed that the original contract, drafted by Credit Agricole, had specified an expiration date of January 18 on a 'NY Banking Day' but was later amended to specify an expiration date of January 16, but not on a 'NY Banking Day.' Furthermore, had Hinshaw conducted discovery, it would have learned that Credit Agricole had granted a third party an option essentially identical and peripherally related to the one between Credit Agricole and Praxair, and that Credit Agricole had taken the same position as had Praxair that January 18 was too late. In defending itself against Praxair’s legal malpractice claim, Hinshaw moved for summary judgment, which was granted by the district court. On appeal, the Court of Appeals held that Praxair had failed to show that the contract required Credit Agricole to exercise its option on the close of the business day on January 17. The Court affirmed summary judgment, holding that Praxair did not show that it would have benefitted in some manner in the prior breach of the contract action against it had Hinshaw conducted discovery.
In re Segerstrom, 247 F.3d 218, (5th Cir. 2001), began with a suit brought by the victims of a motor vehicle accident caused by Kayla Segerstrom, who, while answering a cell phone, drove her parents’ company van over the center line and struck the victims’ vehicle. The Colvins, the victims in the accident, sued for negligence, negligent entrustment, and failure to train/vicarious liability. The van had a $75,000 motor vehicle policy issued by Employers Fire Insurance Company (Employers), who hired Touchtone, Bernais, Johnstone, Beal & Smith, LLP (Touchstone) to defend Kayla, her parents, and her parents’ company. A $6.5 million verdict was returned in favor of the Colvins but only against Kayla, against whom the Colvins subsequently filed an involuntary bankruptcy petition. The bankruptcy court granted a motion by the trustee to hire as special counsel a law firm who then sued Touchtone for their negligence, gross negligence, and breach of fiduciary duty. The complaint alleged that Touchtone’s representing Kayla, her parents, and her parents’ company created an inherent conflict of interest causing Kayla to absorb 100% of the liability for the accident and that liability should have been shared with her parents’ company. Kayla signed an affidavit stating that there was no such conflict, that she knew her parents were not at fault, and that she would not lie or instruct her attorney to mislead others or shift blame onto her parents. Touchtone moved for summary judgment, which was granted by the district court. On appeal, the Fifth Circuit held that even assuming Touchtone breached the duty of care it owed to Kayla by jointly representing all defendants, and by not attempting to shift blame for the accident onto her parents or their company, any such breach was not shown to have caused her any injury in a legal sense. The Court held that such an injury was necessary for the trustee of Kayla's bankruptcy estate to successfully pursue a legal malpractice claim against Touchtone. The Court further held that given the complete lack of evidence that Kayla, who had few assets and was living with her parents, would have sought to shift liability had she received separate representation, or that this strategy would have been successful, especially in light of evidence that she was driving the vehicle in contravention of her parents' orders and not on any company business, causation was missing.
Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders in Het Kapitaal Van Saybolt International B.V. v. Schreiber
145 F.Supp.2d 356
S.D.N.Y.,2001.
June 12, 2001. (Approx. 4 pages)
Dutch entity representing former shareholders of Dutch parent of two American companies brought legal malpractice against company's legal counsel and his law firm, alleging that he failed to advise company that involvement by company or its officers in arranging affiliate's payment of bribe in Panama could result in criminal liability. On defendants' motion for summary judgment, the District Court, Rakoff, J., held that: (1) attorney's alleged negligence was not proximate cause of company's damages, and (2) company was collaterally estopped from litigating issue of intent. Motion granted.
Attorney's alleged negligence in erroneously advising company that it would not be criminally responsible for arranging bribe in Panama through foreign affiliate was not proximate cause of resulting damages to company; company's guilty plea to charge of criminally violating Foreign Corrupt Practices Act (FCPA) in arranging bribe necessarily implied that it did not rely in good faith on attorney's advice.
Dan Nelson Const., Inc. v. Nodland & Dickson
608 N.W.2d 267
N.D.,2000.
March 23, 2000. (Approx. 13 pages)
Contractor brought legal malpractice action against his attorney, alleging that attorney was negligent in representing him with respect to contract dispute in Wyoming state court, and in failing to timely appeal entry of summary judgment against him. The District Court, Burleigh County, South Central Judicial District, Joel D. Medd, J., entered judgment in favor of attorney, and contractor appealed. The Supreme Court, Kapsner, J., held that: (1) contractor's failure to give state of Wyoming timely notice of unanticipated subsurface conditions barred his subsequent lawsuit against state seeking compensation for monetary losses under contract; (2) state of Wyoming's actual knowledge of problems contractor was having in completing work under contract and assistance rendered by state employees in drafting preliminary claim form, without more, did not establish waiver or estoppel with respect to timely notice provision of contract; (3) mediation efforts between state of Wyoming and contractor in attempt to resolve dispute did not establish waiver or estoppel with respect to timely notice provision of contract; and (4) contractor's claim did not comply with Wyoming Governmental Claims Act's itemization requirements. Affirmed.
The 'case-within-a-case' doctrine applies to allegedly negligently conducted litigation and requires that, but for the attorney's alleged negligence, the litigation would have terminated in a result more favorable for the client.
Where the underlying action was concluded by a summary judgment that was not appealed because of an attorney's alleged negligence in failing to perfect an appeal, a legal malpractice claimant must prove both the claim that was lost, and also that his attorney's negligence caused that loss.
Walker v. Burnett
526 S.E.2d 109
Ga.App.,1999.
Nov. 23, 1999. (Approx. 3 pages)
Client brought legal malpractice action against attorney who represented client in federal employment discrimination action, in which summary judgment was entered in favor of client's employer. The Superior Court, Fulton County, Downs, J., granted summary judgment for attorney. Client appealed. The Court of Appeals, Eldridge, J., held that client failed to present any evidence to raise jury issue on element of proximate causation. Affirmed.
Client failed to show in legal malpractice action that he would have prevailed in underlying racial discrimination action against his employer but for counsel's alleged negligence; order granting summary judgment for employer was based not on counsel's legal representation or alleged lack thereof, but rather, on client's failure to show that similarly situated white employees were allegedly treated better than client, and on employer's demonstration of legitimate, nondiscriminatory reason for employee's termination.
Client who brought legal malpractice action against attorney who represented client in underlying action failed to present any specific, competent summary judgment evidence to rebut attorney's assertion that, contrary to client's claim, there was no deposition testimony that court could not consider due to attorney's failure to ensure that such depositions had been filed in record; client's few references to allegedly favorable evidence were vague and unsupported by specific evidence in record, i.e., depositions themselves.
