Articles Posted in Case Within A Case

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In a legal malpractice case, the plaintiff is required to prove a case-within-a-case or that had the lawyer met the standard of care the plaintiff would have won the case. The case here is Roumbos v. Vazanellis and Thiros & Stracci,  Case No. 45S03-1710-CT-635. decided by the Indiana Supreme court on April 12, 2018.

The client hired the lawyer to file a personal injury case, against a hospital. The plaintiff who was elderly had fallen when she went to visit her husband at the hospital. The lawyer allegedly failed to file with the limitations period. In the malpractice litigation against the lawyer, the lawyer defended the case on the ground that the plaintiff could not prove that her fall was proximately caused by the negligence of the hospital. The trial court granted summary judgment but the Indiana Supreme Court reversed. It held that the plaintiff had introduced sufficient evidence that the hospital was negligent to proceed to trial.

The opinion is thoughtful and well-written and it does a great job of explaining how the proof of a case-within-a-case works.

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When you sue a lawyer for a breach of the standard of care, you must prove proximate causation. If the underlying matter, was a lawsuit, you must show that, but for the negligence, you would have won the case.

Here, the lawyer was hired to pursue a lawsuit for insurance coverage. The lawyer allegedly missed the deadline to file the case. However, there was no legal malpractice because the underlying case lacked merit. The underlying case claimed that the insurance company did not cover certain losses. The problem was that the policy language excluded those losses. Thus, if the clients had read the insurance policy, they would have known that there was no coverage. Because the coverage case had no merit, the lawyer’s failure to file the lawsuit on time was of no importance. The trial court granted summary judgment for the lawyer and the appellate court affirmed that judgment.

The opinion explains the failure of proof in this fashion:

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One of the more vexing issues in the area of legal malpractice is what happens when the plaintiff settles the underlying case. In most states, the plaintiff would have to prove that but for the negligence of the defendant attorney, he would have obtained a better financial result in the underlying case. North Carolina, however, holds that the decision to settle the underlying case gives the negligent lawyer a complete defense to the legal malpractice action. This is an unpublished decision, but it is worth reviewing because it illustrates how the decision to settle the underlying case protects negligent attorneys.

The plaintiff alleged that the lawyers failed to properly serve a breach of contract lawsuit.  The negligence alleged, if true, is fairly shocking:

On 5 May 2006, the Horne defendants filed a complaint against the Hill defendants in Pitt County Superior Court alleging breach of contract. However, the Horne defendants never served the Hill defendants with a summons or a copy of the complaint, the action was discontinued, and plaintiff was never informed about the status of the action. When plaintiff emailed the Horne defendants on 23 October 2006 to inquire about its status, defendant Horne II responded:

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The underlying case was routine and it arose out of an automobile accident. The defendant lawyers filed suit timely as to most of the defendants, but they failed to file a timely case as to one defendant. The underlying case settled for $10,000.

The lawyers won a summary judgment motion in the trial court, but summary judgment was reversed. The plaintiff had submitted sufficient evidence of a breach of duty (missing the statute of limitations) that caused damage to the plaintiff.

Source: ATIENCIA v. PINCZEWSKI, 2017 NY Slip Op 1839 – NY: Appellate Div., 2nd Dept. 2017 – Google Scholar

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This unpublished opinion resolves an appeal in a legal malpractice case. The plaintiff sued his lawyer despite the fact that the lawyer settled the underlying case (a medical malpractice case) for $1.5 million.

The Defendant attorney moved to dismiss the case on the ground that the plaintiff was judicially estopped from proceeding because he consented to the settlement of the underlying case. The alleged malpractice was the lawyer’s alleged coercion of an expert witness (a medical doctor) into providing an opinion on surgical issues (and not informed consent). The trial court dismissed the case on estoppel grounds reasoning that because plaintiff had approved the settlement, he could not sue for legal malpractice.

The Appellate Court reversed. It held that it was premature to dismiss the case without conducting discovery and without holding a hearing. The key part of the opinion is quoted below:

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This case, Fox v. Seiden, has already made two trips to the Illinois Appellate Court. It is interesting because it is the rare case in which the court granted summary judgment in favor of the plaintiff.

The underlying case was captioned Multiut Corp. v. Draiman. The current case was brought on behalf of Miriam Draiman, one of the defendants in the Multiut case. In 2001, the court found that Draiman’s husband had engaged in deceptive trade practices and assessed attorney fees against “the defendants.” Plaintiff sought fees of $1,317,026.85. There was a big problem with this finding in that Miriam Draiman was not found liable on the consumer fraud act count. Thus, the judge erred in awarding attorney fees against “the defendants.”

Seiden appeared for Miriam Draiman in the post-trial proceedings. The Appellate Court describes the alleged error as follows:

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This case illustrates an important difference in the law. In Pennsylvania, a party cannot sue for legal malpractice if that same party settled the underlying case, unless that party can prove that it was fraudulently induced into entering the settlement agreement.

In Kachmar, the plaintiff sued his former matrimonial lawyer on the ground that the lawyer failed to include a waiver of spousal support in a prenuptial agreement. Unfortunately, Kachmar settled the underlying divorce case, which meant that he could not bring a legal malpractice case.

Illinois does not follow this rule. In Illinois, a party which has settled the underlying case can sue for legal malpractice. Where a case is settled, it is often difficult to prove that but for the lawyer’s negligence, the party could have obtained a better result.

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This opinion of the Seventh Circuit discusses a legal malpractice case arising out of a class action. The plaintiff, Carlos Rocha, brought a class action against Federal Express. He alleged that Federal Express did not properly classify his employment. Shortly before the underlying case settled, he fired his lawyers. Rocha then refused to participate in the settlement of the underlying case. The court dismissed him as a plaintiff without prejudice. Rocha then filed a legal malpractice case against the lawyers who had represented him.

The district court dismissed the legal malpractice case because Rocha’s claims were viable when Rocha terminated his lawyers. If the case was viable, the lawyers could not have made an error that caused Rocha to lose the case. The Court of Appeals agreed and affirmed. The court explains its reasoning as follows:

“In the present case, Rocha’s Fluegel claims were still viable in September 2012, when Defendants were discharged. As an initial matter, Rocha retained Johnson as counsel before discharging Defendants in September 2012.[2]

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This is an important issue for legal malpractice attorneys. Is a former criminal defendant required to show actual innocence before he can sue for legal malpractice? Most courts have answered this question with “Yes,” but some states are beginning to deviate from the doctrine. The Iowa Supreme Court held that actual innocence is not required to bring a malpractice suit and but that guilt/innocence determinations are relevant to proof of proximate causation.  In other words, you can’t show the lawyer’s actions were the proximate cause of the conviction if you were really guilty.

Regarding actions for malpractice by a criminal defendant, the Restatement concludes that “it is not necessary to prove that the convicted defendant was in fact innocent,” although it notes that “most jurisdictions addressing the issue have stricter rules.” Restatement (Third) of the Law Governing Lawyers § 53 cmt. d, at 392 (Am. Law Inst. 2000) [hereinafter Restatement]. The Restatement adds,

As required by most jurisdictions addressing the issue, a convicted defendant 166*166 seeking damages for malpractice causing a conviction must have had that conviction set aside when process for that relief on the grounds asserted in the malpractice action is available.

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An Ohio court has affirmed a verdict in favor of a legal malpractice plaintiff. By itself, that would not be worth discussing. However, the result of the case, a verdict of $1,192.12, was a clear disappointment for the plaintiff.

The underlying case was an auto accident in which the plaintiff suffered apparently minor injuries. He hired a lawyer to file a case. Unfortunately, the lawyer missed deadlines and voluntarily dismissed the case. The lawyer then missed the deadline to refile the case and the claim became time-barred.

There is no question that the lawyer made an error. During the legal malpractice trial, the lawyer conceded that he had been negligent but contested the issue of damages. The jury then awarded $1,192.12 in damages. In sum, a great deal of work was done to prove a legal malpractice claim but the jury decided that the damages were minor.

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