This is a legal malpractice case in which the plaintiff alleged that her lawyer failed to file a lawsuit on time and missed the applicable statute of limitations. The Kentucky Supreme Court upheld the claim and addressed other issues as well. The court held that punitive damages are not recoverable against an attorney in a legal malpractice case.
The opinion reaffirms that the plaintiff in a legal malpractice case must prove a case within a case. The court set forth the method for proving the case within a case requirement:
“The manner in which the plaintiff can establish what should have happened in the underlying action, but for the attorney’s conduct, will depend on the nature of the attorney’s error. When dealing with a situation such as the instant case where a claim is lost, including, but not limited to, because it is barred by an applicable statute of limitations, a plaintiff must recreate an action that was never tried. The plaintiff must bear the burden the plaintiff would have borne in the original trial. And the lawyer is entitled to any defense that the defendant would have been able to assert in the original trial. This is what is commonly known in Kentucky law as the suit-within-a-suit approach. While this approach has been repeatedly affirmed, the actual procedure for trying such a case remains elusive. Here, we are presented with the question of how a jury should be instructed in a suit-within-a-suit.
When trying a suit-within-a-suit, especially when the reason for the lost claim is the expiration of the relevant statute of limitations, “all the issues that would have been litigated in the [barred] action are litigated between the plaintiff and the plaintiff’s former lawyer.” And, in recreating the litigation, the usual instructions that should be given in the underlying case, including any special verdict forms, are those to be used in the malpractice trial. Several states have used this commonsense approach to instructing the jury.“
One justice dissented on the punitive damages issue.
Edward X. Clinton, Jr.