Articles Posted in Legal Malpractice Issues

The Supreme Court of Arkansas has affirmed a summary judgment granted for an attorney in a legal malpractice case. In Evans v. Hamby, a client claimed that his former attorney negligently represented him during a case brought by a creditor seeking to collect on a promissory note against the client’s company.

The client lost the collection suit and then brought a legal malpractice claim against the attorney. The trial court granted summary judgment for the attorney and the client appealed. In order to prove legal malpractice a client must show that the attorney’s improper conduct resulted in loss of the underlying case. In this case, the client alleged that his attorney’s failure to assert the defense of usury and failure to advise him to reinstate the company’s charter amounted to negligence.

Usury laws protect borrowers from lending agreements with excessive interest rates. Here, while the interest rate charged was higher than the limit allowed by law, the court ruled that the client was estopped from raising the defense because there was evidence that he had suggested the rate, preventing a claim that the attorney negligently failed to raise the defense.

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An appellate court in New Jersey has affirmed a summary judgment granted against an attorney who filed a third party complaint against an adverse expert witness in a legal malpractice action in which he was the defendant.

In Reilly, Supple & Wischusen, LLC v. Blum, the defendant attorney claimed in his third-party complaint that the expert lawyer’s opinions were “negligently prepared and constituted malpractice.” The trial court dismissed the third-party complaint for failure to state a cause of action. The attorney appealed.

The appellate court upheld the judgment, finding that the expert witness had no duty of care to the defendant attorney in this malpractice case. The Court did however confirm that in some cases an attorney could owe a duty to a non-client. However, the occasion would arise only if the attorney knew or should have known that (1) the non-clients would rely on that attorney’s representations, and (2) the non-clients relationship with the attorney was not too remote to be entitled to protection.

However, in this case the appellate court found that the exception did not apply because the defendant attorney not only did not rely on the expert lawyer’s opinion, but in fact he directly opposed it.

Decision: Reilly, Supple & Wischusen, LLC v. Blum

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The U.S. Court of Appeals for the Tenth Circuit has affirmed two rulings in favor of an attorney in a legal malpractice case. In Lyon v. Aguilar, a married couple sued their former attorney for malpractice arising from his representation during two cases filed in New Mexico state court. During the proceedings, the attorney filed two summary judgment motions: the first on claims not covered by his malpractice insurance, and the second on all remaining claims. The trial court granted both motions. The couple appealed both.

When the malpractice complaints were filed, the attorney was in a personal bankruptcy proceeding. Consequently, the couple’s case was automatically stayed. The couple then filed an adversary proceeding in bankruptcy court, seeking a ruling that their claims were not dischargeable. Alternatively, they sought to lift the stay on those claims covered by the insurance policy. The bankruptcy court lifted the stay, resulting in dismissal of the adversary proceeding. However, the bankruptcy court ultimately discharged all of the attorney’s debts.

In the appeal, the couple argued that the trial court had usurped the bankruptcy court’s authority by granting the two summary judgment motions. The court rejected this theory, finding that the trial court acted properly, since all of the attorney’s debts, including the insured claims, had been discharged.

The couple had also challenged the summary judgment granted on the uninsured claims. The trial court had ruled that the couple failed to demonstrate that the attorney’s conduct was the proximate cause of their injuries. The appellate court upheld the lower court ruling, finding that the couple’s expert had failed to specify in his written report how the attorney had committed malpractice.

Decision: Lyon v. Aguilar

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A California appellate court has upheld a defense verdict in a legal malpractice action. In Takahashi v. Snell & Wilmer, LLP, a client sued his firm for negligent representation defending him in a partnership dispute. A partner had sued claiming a right to partnership proceeds.

The client sued his former firm after losing a jury trial with his former partner. He claimed that the firm had failed to uncover exculpatory evidence in discovery. The legal malpractice case went to trial before a jury resulting in a verdict for the law firm. The client appealed, claiming that a jury instruction was improper. The jury had been instructed that it could discount the weight of weaker evidence if it found that a party could have produced stronger evidence on the same issue.

The client had declined to testify at the partnership trial regarding repayment of a loan, rather electing to put in documentary evidence of the loan repayment. During closing argument, it was argued that the documents should be discounted because oral testimony would have been stronger rebuttal evidence.

The appellate court found that the jury instruction was proper since both parties could have taken advantage of the instruction. Indeed, the client had specifically argued that the documentary evidence was a stronger representation of the transaction than his own recollection of events, which had occurred years prior. The appeals court affirmed the jury verdict in favor of the law firm.

Decision: Takahashi v. Snell & Wilmer, LLP

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The U.S. Court of Appeals for the Federal Circuit has ruled that a federal court has subject matter jurisdiction over a legal malpractice case arising from a patent infringement dispute. In Warrior Sports, Inc. v. Dickinson Wright, PLLC, a lacrosse equipment manufacturer sued its former attorney for negligent representation in a patent infringement case against another manufacturer. The client claimed that the attorney’s conduct diminished the value of its claim, which it settled prior to adjudication by the court.

The client sued for malpractice alleging that the attorney had (1) “mischaracterized the structure” of the lacrosse stick at issue in the patent application and (2) failed to pay the maintenance fee for the patent. The client claimed that these actions reduced the settlement value of the claim, from millions to the $275,000.00 that it received.

The original action was filed in Michigan, but was transferred to the U.S. District Court in Eastern Michigan. Federal courts generally have exclusive jurisdiction over patent based cases. However, the Michigan federal court dismissed the action for lack of subject matter jurisdiction, finding that the patent claims were merely tangential to the malpractice action.

The attorney appealed. The Appeals Court reversed and remanded the case to the District Court, ruling that there was federal jurisdiction because the patent law issues were essential to proving the causation element of the malpractice case. Those issues had never been adjudicated, since the case settled before trial. Thus, the district court had jurisdiction to decide the patent infringement issues.

Decision: Warrior Sports, Inc. v. Dickinson Wright, PLLC

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An appellate court in California has upheld a trial court’s dismissal of a legal malpractice case because the former client was unable to prove the attorney’s negligence caused her damages. In Bye v. Cooper, a woman was injured after she tripped and fell on a sidewalk at her apartment complex. The difference in height between the two slabs of sidewalk, which allegedly caused her fall, was only 1.25 inches. She hired an attorney to bring a personal injury claim against the property owner. The court awarded the woman $85,000 at a judicial arbitration, but on the advice of her attorney, she rejected the award. The attorney eventually dismissed the case after receiving the client’s consent.

The client then filed a legal malpractice action against her former attorney claiming he negligently advised her to reject the arbitration award. The attorney moved for summary judgment arguing that his alleged negligence did not cause her loss, because the woman would not have prevailed at trial in the personal injury case. The attorney asserted the trivial defect doctrine, which precludes recovery against property owners for injuries caused by insignificant defects. Agreeing that 1.25 variance in the sidewalk was trivial, the trial court granted the attorney’s motion.

The client also argued at the summary judgment hearing that failing to advise her of the trivial defect doctrine was further evidence of her attorney’s negligence. However, the woman never alleged this in her complaint, which the trial court ruled was a bar to alleging these facts at the summary judgment hearing. The court also denied her request to amend her complaint to include these additional facts. The woman appealed. The appellate court upheld both lower court rulings, reasoning that the woman had known that her attorney would argue the trivial defect doctrine after he had filed his summary judgment motion, but unjustifiably failed to seek to amend her complaint until the summary judgment hearing, two months later.

Decision: Bye v. Cooper

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An appellate court in California has affirmed a motion for summary judgment granted in favor of an attorney in a legal malpractice action. In Lewellen v. Phillips, a woman alleged that her lawyer committed malpractice for inadequately representing her at a settlement conference in a property dispute. At the conference, the woman signed an agreement consenting to a 70/30 split of the proceeds from the sale of the property. A few days later, the woman decided she was no longer willing to settle. However, the court confirmed the settlement agreement and the appellate court upheld the trail court’s decision.

The woman then sued the attorney claiming he failed to obtain her informed consent and “badgered” her into signing the agreement. The attorney subsequently filed a motion for summary judgment, which the trial court granted. The woman then appealed the ruling.

The appellate court found that the attorney had adequately explained the settlement agreement to the woman, and also had presented her with various settlement options before the conference. The attorney had also informed the woman that he did not recommend the settlement, but she feared proceeding with a trial. In light of the evidence, the appellate court found that there was not a triable issue of fact and summary judgment for the attorney was appropriate.

Decision: Lewellen v. Phillips

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After reviewing an interlocutory order, a Pennsylvania appellate court has ruled in favor of a client in a legal malpractice action. In Epstein v. Saul Ewing, LLP., a client sued his former attorney for negligently handling his appeal of an adverse judgment.

The underlying case involved a fee dispute between a client, her attorney and a referred attorney handling a civil rights case. The referring attorney was the guardian ad litem for a foster child who had been placed in an abusive foster home. The civil rights resulted in a settlement and a legal fee of nearly 1.3 million dollars. The referring attorney claimed that she was entitled to 1/3 of the fee. A trial judge ruled in favor of the referring attorney, and ordered the client to pay $430,000 in legal fees, and an additional $645,000 in punitive damages.

The client appealed and hired another attorney who submitted a brief, containing 104 separate issues on appeal. The appellate court dismissed the appeal due to the “preposterous number of issued identified”, which significantly impeded the court’s ability to assess the case, also finding that most of the issues had been waived.

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A California appellate court has affirmed a jury verdict for an attorney in a legal malpractice claim. In

Tong v Rucker a client alleged that her new attorney negligently represented her in a malpractice suit against her old lawyer. In the first case, the client had attempted to back out of a settlement she had reached with the old attorney, but the court enforced the settlement agreement. At the trial against the new attorney, the jury gave a verdict in favor of the new attorney, finding that the client had not successfully proved causation.

The client appealed the jury verdict, claiming that the trial court allowed jurors to discuss the case prior to deliberation. In fact, the record showed that the trial judge had repeatedly instructed the jury that the jurors were not permitted to discuss the case until they began deliberations. The judge had mentioned that it was permissible for jurors to discuss a case while it was ongoing in some jurisdictions, but made it clear that this was not the law in California.

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