Articles Posted in Legal Malpractice

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A recent case, Masellis v. Law Offices of Leslie Jensen, 50 Cal. App. 5th 1077, Court of Appeals of California (5th District. June 2020), discusses the burden of proof in a “settle and sue” legal malpractice case. That is a case where the plaintiff (represented by the lawyer) settles the underlying matter and then sues his lawyer alleging that the settlement was insufficient due to legal malpractice.

Here is the summary by Court of the issue and the conclusion:

The main legal question in these appeals is what burden of proof is appropriate in a legal malpractice action alleging an inadequate settlement? The defendant attorney Leslie F. Jensen (Attorney) addresses this question in two steps. First, she contends the elements of causation and damages in a “`settle and sue'” legal malpractice case[1] must be proven to “`a legal certainty.'” (Filbin v. Fitzgerald (2012) 211 Cal.App.4th 154, 166 [149 Cal.Rptr.3d 422] (Filbin).) Second, she contends the legal certainty standard imposes a burden of proof higher than a mere preponderance of the evidence.

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Every plaintiff must surmount the hurdle of proximate causation. You cannot just allege that the lawyer committed malpractice, you must show how the error caused you damage. If you cannot do that, your legal malpractice case will be dismissed.  In Katsoris v. Bodnar & Milone, LLP, 2020 NY Slip Op 05040 (New York Appellate Division Second Department). The lawyers represented Katsoris in his divorce case, which was resolved by settlement. He sued for malpractice but the case was dismissed because Katsoris was unable to allege an error that caused any harm to him. The key discussion:

Here, the complaint failed to adequately allege actual, ascertainable damages. The general allegations that, as a result of the alleged acts of malpractice, the plaintiff was caused to incur “additional legal fees,” and caused to suffer “financial damages and expense,” “adverse financial consequences,” and “direct financial damage,” were all conclusory and inadequate to constitute “actual, ascertainable damages” (Dempster v Liotti, 86 AD3d at 177). To the extent that the complaint addressed the plaintiff’s settlement, the complaint alleged that the defendant’s negligence in its handling of the divorce action caused the plaintiff to suffer “direct prejudice . . . in both trial and/or settlement,” and that, but for such negligence, the plaintiff “would have fared far better at trial and/or in settlement of the Divorce Action.” These allegations are conclusory and lack any factual support, and they are inadequate to sufficiently allege that the stipulation of settlement that the plaintiff entered into with his former wife was “effectively compelled” by the mistakes of counsel (Rau v Borenkoff, 262 AD2d 388, 389; see Benishai v Epstein, 116 AD3d 726, 728). “The fact that the plaintiff subsequently was unhappy with the settlement [he] obtained . . . does not rise to the level of legal malpractice” (Holschauer v Fisher, 5 AD3d 553, 554). “Moreover, the plaintiff failed to plead specific factual allegations showing that, had he not settled, he would have obtained a more favorable outcome” (Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 758; see Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d at 813; Tortura v Sullivan Papain Block McGrath & Cannavo, P.C.,21 AD3d at 1083; Dweck Law Firm v Mann, 283 AD2d 292, 293; Rau v Borenkoff,262 AD2d at 389). Accordingly, we agree with the Supreme Court’s determination to grant that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the first cause of action, alleging legal malpractice.

Here, plaintiff could not explain what the lawyer did that was wrong and why that purported error caused damage.

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The case of Breitenstein v. Deters, 19 -cv-413 (S.D. Ohio Western Division) is unusual. Plaintiff retained the Defendant lawyers to represent her in a medical malpractice case. The underlying case was dismissed, but the plaintiff appealed that decision. While the appeal was pending, she sued her lawyers for legal malpractice. The court dismissed the legal malpractice case because plaintiff filed the case before her underlying case was resolved.  In other words, the plaintiff filed suit too soon. This case was decided in the 6th Circuit, under Ohio law. (In Illinois, the result might have been different.)  The discussion by the court notes that plaintiff might win her appeal and thus the dispute with her lawyers is not ripe.

Here, Defendants contend that dismissal for lack of subject matter jurisdiction is proper because Plaintiff’s claim lacks ripeness. The primary basis for Defendant’s argument is that Plaintiff’s 2013 suit is still pending on appeal. As such, Defendants are still representing Plaintiff. (Doc. 3 at 3). Because the appeal is ongoing, Defendants assert that Plaintiff has not yet suffered any ascertainable damages from the underlying lawsuit. Id. at 1. Further, because Defendants have tolled the statute of limitations, Plaintiff may bring her claims, if appropriate, within a year after the appeal is over. Defendants therefore conclude that Plaintiff does not face a threat of future harm that warrants the Court to entertain the matter before it is ripe. (Doc. 7 at 1-2).

In support of their assertions, Defendants heavily rely on the decision in Kovacs v. Chesley to support their arguments for dismissal. Kovacs v. Chesley, 2000 U.S. App. LEXIS 8989 (6th Cir. 2000). The fact pattern in Kovacs is similar to the current matter: Plaintiff sued her attorneys for negligent evaluation of her medical records during Defendant’s representation of Plaintiff in a medical malpractice lawsuit. When Plaintiff brought the lawsuit against her attorneys, the underlying lawsuit was still undergoing settlement processes. Consequentially, the Court of Appeals for the Sixth Circuit upheld this Court’s dismissal of the case for lack of ripeness. (Id. at 2-3).

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The case is Iliescu v. Hale Lane Peek Dennison and Howard, No 76146, Supreme Court of Nevada.This is a complicated case and factual scenario that does often come up in legal malpractice cases. It goes like this:

A. Your client loses a ruling in a trial court in the underlying case.

B. Your client fires you.  (Next, they sue you for malpractice).

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In Sherman v. Ellis, K18CC-006-009, the Superior Court of Delaware considered a legal malpractice action filed by a former client against the attorney who had drafted his prenuptial agreement. The case is unusual because the divorce court ruled in Sherman’s favor and held that the prenuptial agreement was valid and binding. Despite having won the underlying litigation, Sherman sued his lawyer and alleged that the lawyer should have included an additional provision in the prenuptial agreement. Had the lawyer included this provision, according to Sherman, his ex-wife would not have challenged the prenuptial agreement in the divorce case and he would have not had to incur legal fees defending the prenup.

Comment: once you read those facts, you should realize that this was a very unsympathetic case for the plaintiff. He received good legal work from his lawyer and won his case and he still sued.

The Delaware court in a well-considered published opinion dismissed the legal malpractice case beause there was no evidence that the ex-wife would have agreed to the so-called Silver Bullet provision.

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Zander v. Carlson and the Illinois Fraternal Order of Police, 2019 IL App (1st) 181868, is a legal malpractice opinion which holds that a union member who retains a union appointed attorney to represent him in challenging an employment action, cannot file a malpractice claim because filing such a claim would circumvent the collective bargaining agreement.

The facts and procedural history are set forth as follows:

¶ 4 Under the Illinois Municipal Code, a police officer facing discharge is entitled to a hearing before the local Board of Fire and Police Commissioners (police board), unless a collective bargaining agreement between the municipality and the officer’s union provides for arbitration of such disputes. See 65 ILCS 5/10-2.1-17 (West 2018). The collective bargaining agreement between the Village and the FOP provides that an officer may elect to challenge his discharge either before the police board or through the agreement’s ordinary grievance-arbitration procedure. On Carlson’s advice, Zander elected to proceed via arbitration. After a two-day hearing, the arbitrator upheld the decision to terminate Zander’s employment.

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There are a number of issues that you should consider before you file a legal malpractice claim against a lawyer. Your lawyer should discuss these issues with you so that you understand how to proceed:

  1. Did the lawyer cause your harm or was it caused by someone or something else? You are required to prove that the lawyer was the proximate cause of the loss of your case. Consider whether you would have won the case absent whatever error you believe the lawyer made. Play Devil’s Advocate – even if the lawyer had done what he was supposed to do, would I have won the case? Often the answer to this question is “No” because the case could not be won under any circumstances.
  2. Am I prepared to waive the attorney-client privilege? When you sue your lawyer you are almost always deemed to have waived the attorney-client privilege. That privilege shields communications from you to the lawyer and from the lawyer to you. It allow you to seek legal advice without fear that your own words will come back to haunt you. But if you sue a lawyer, you waive the privilege. Consider carefully whether the waiver of the privilege is worth it to you.
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An engagement letter can be very important in that it sets limits on the attorney-client relationship. A good engagement letter defines what the lawyer will do and what the lawyer will not do. In the case captioned, Attallah v. Milbank Tweed, Hadley & McCloy, 168 A.D.3d 1026 (2019), 93 N.Y.S.3d 353, the Appellate Division of the Supreme Court of New York affirmed the dismissal of a legal malpractice case based on the precise terms of the engagement letter.

The law firm agreed to represent Attallah on a pro bono basis to investigate whether or not he could be reinstated by a school that had expelled him.  The engagement letter made it clear that the law firm’s engagement did not include litigation with the professional school.  It provided:

To that end, the parties executed a letter of engagement dated July 7, 2011. The letter of engagement provided, in relevant part, that: “Our services will include all activities necessary and appropriate in our judgment to investigate and consider options that may be available to urge administrative reconsideration of your dismissal from the New York College of Osteopathic Medicine (the `College’). This engagement does not, however, encompass any form of litigation or, to the extent ethically prohibited in this circumstance, the threat of litigation, to resolve this matter. This engagement will end upon your re-admittance to the College or upon a determination by the attorneys working on this matter that no non-litigation mechanisms are available to assist you. The scope of the engagement may not be expanded orally or by conduct; it may only be expanded by a writing signed by our Director of Public Service.”

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This case, Ostrolenk Faber LLP v. Sakar International, Inc., 2019 NY Slip Op 31303(U), holds that a counterclaim for legal malpractice against an intellectual property firm stated a claim. Sakar retained Ostrolenk to defend it in a patent infringement lawsuit. In the underlying case, a plaintiff alleged that a product manufactured and sold by Sakar to Office Depot violated plaintiff’s patent.The case was eventually settled.

The current case involved (a) the law firm suing for legal fees; and (b) the former client, Sakar, filing a counterclaim for legal malpractice.  The counterclaim alleged that the law firm failed to promptly research the “prior art” in the particular invention. Had it done so, the law firm would have realized that the patent infringement claim against Sakar had no merit. Instead, the firm engaged in other litigation activity which, in Sakar’s view, ran up costs.

The court held that the counterclaim stated a claim and reasoned as follows:

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