The underlying case was a personal injury case. The plaintiff hired a lawyer to represent her in that case and the lawyer obtained a settlement of the lawsuit that the plaintiff accepted. Despite accepting the settlement, the plaintiff sued for legal malpractice. The trial court dismissed the lawsuit and the appellate court affirmed. The fatal flaw with the case was that the plaintiff did not allege how the lawyer breached any professional duty to the plaintiff.
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 This is an unpublished decision, but it is worth reviewing because it illustrates how the decision to settle the underlying case protects negligent attorneys.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:
This unpublished opinion resolves an appeal in a legal malpractice case.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: