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Court Dismisses Transactional Legal Malpractice Case Based on Prenuptial Agreement

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.

First, the court set forth the facts:

During their divorce proceedings in 2015, Mr. Sherman’s wife challenged the Agreement’s enforceability in Family Court. The Family Court found it to be unconscionable and thus unenforceable. The Delaware Supreme Court, however, reversed the Family Court’s decision. In the end, the Agreement successfully barred her challenges.

Notwithstanding Mr. Sherman’s success after appeal, he now sues Mr. Ellis because he did not include a waiver of disclosure clause in the draft agreement. According to Mr. Sherman’s expert, it would have been a “silver bullet” removing the incentive for his ex-wife to engage in protracted litigation. Mr. Sherman claims that this expanded litigation in turn expanded his costs and fees. He now seeks to recover those attorney and expert fees from Mr. Ellis.

The court then reached the issue – an issue which arises frequently in malpractice cases – even if the lawyer had asked for the provision, would the other side have accepted it? I have filed such cases and have found them to be difficult cases. Sometimes, the clause that was missed is standard in such agreements. Then, it is possible to establish a breach of the standard of care.  Here the court found that the proposed clause would not have been acceptable to ex-wife or her attorneys. Thus, the proof was speculative.

The court’s reasoning:

Proving causation in a transactional malpractice claim, as in a litigation malpractice claim, requires proof that, but for the attorney’s negligence, the plaintiff would have obtained a more favorable result. While ultimate success in litigation in a case like Mr. Sherman’s does not per se bar a malpractice claim, when the claim involves alleged negligence in not proposing or including an additional term in a proposed agreement, the plaintiff-client must first show that the other party would have agreed to the omitted term. Without evidence of record supporting a reasonable inference that the opposing party would more likely than not have agreed to the term, there is no genuine issue of material fact regarding proximate cause of damages.

The opinion is thoughtful and discusses several cases from other jurisdictions. It is well worth the time of any lawyer interested in legal malpractice law. I have posted a link to this excellent opinion below.  The issue presented in this case is a real one and it can often present real challenges for a plaintiff.

Ed Clinton, Jr.

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