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In a malpractice case, the plaintiff must show that the lawyer breached the standard of care and that the lawyer’s error cost the client money. In most cases, the only way to prove this is to examine the underlying case. The underlying case is the prior case that was handled by the lawyer who allegedly breached the standard of care.

Because underlying cases can come in a variety of disciplines, we have to learn how to analyze (and sometimes prove-up) the allegations of the underlying case.

An example would be a personal injury case that was dismissed because the lawyer missed the statute of limitations. To prove that the error caused the client to lose the case, we must show that the underlying personal injury case had merit and prove the allegations contained in that case. If the underlying case was not well-founded, the lawyer’s error did not cause the loss. The client would have lost the case anyway.

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The case is Holtzman v. Griffith, 2018 NY Slip Op 04540, decided by the Appellate Division, Second Department.

Holtzman sued for fees and his former client, Griffith, counterclaimed for legal malpractice. The trial court on the basis of an account stated ordered Griffith to pay the legal fees that were due. The trial court dismissed Griffith’s malpractice claim because he had voluntarily settled the underlying divorce case and had agreed that the settlement was fair and equitable.  The explanation:

The plaintiff’s submissions demonstrated that in representing the defendant, who was also the defendant in the divorce action, she exercised the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the stipulation of settlement executed by the defendant in the divorce action was not the product of any mistakes by the plaintiff (see Schiff v Sallah Law Firm, P.C.,128 AD3d 668, 669). The stipulation of settlement recited, among other things, that the defendant reviewed and understood its terms, had an opportunity to consult with counsel and have the legal and practical effect of the stipulation fully explained to him, executed the stipulation voluntarily, without coercion or pressure of any kind, and believed the stipulation to be fair and reasonable (see Chamberlain, D’Amanda, Oppenheimer & Greenfield, LLP v Wilson, 136 AD3d 1326, 1328; Schiff v Sallah Law Firm, P.C., 128 AD3d at 669). In opposition, the defendant failed to raise a triable issue of fact.

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John Crane, Inc. (JCI) was a manufacturer of asbestos. It sued plaintiff lawyers who had filed asbestos-related cases against it. JCI was a citizen of Illinois. One of the defendant law firms was located in Texas; the other in Pennsylvania. JCI argued that the law firms established sufficient contacts with Illinois when they instituted fraudulent litigation against JCI, an Illinois company. The law firms responded that the lawsuits were filed in Pennsylvania and Texas, not in Illinois. Therefore, there were insufficient contacts with Illinois. Although the lawyers directed document requests, interrogatories against JCI and sent those requests to Illinois, that was not sufficient to allow Illinois to assert jurisdiction over the lawyers. Thus, there was no personal jurisdiction over the defendants and the case was dismissed. The Seventh Circuit agreed with this holding and affirmed the dismissal.

The legal standard used in personal jurisdiction cases is legal boilerplate that adds little to the discussion of whether or not there is jurisdiction.

“Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.”Walden v. Fiore, 134  S.  Ct.  1115,  1121  (2014)  (quoting  Daimler  AG  v.  Bauman, 134  S.  Ct.  746,  753  (2014)). The  Illinois  long-arm  statute  requires  nothing  more  than  the  standard  for  federal  due  process: that the defendant have sufficient contacts with the forum state “such that the maintenance of the suit does not offend  traditional  notions  of  fair  play  and  substantial  justice.” Brook v. McCormley, 873 F.3d 549, 552 (7th Cir. 2017).  This vague formulation means that the party being sued has to have taken some action in the state where the lawsuit is brought. Here, suing an Illinois corporation in Texas or Pennsylvania was not sufficient to give Illinois jurisdiction.

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This is an opinion of the Iowa Supreme Court, holding that a legal malpractice case was time-barred. The case is Skadburg v. Gately, 17-0151. Skadburg was the administrator of an estate and alleged that she hired the defendant to give her legal advice. Skadburg claimed that she used funds from a life insurance policy to pay debts of the estate. Skadburg alleged that the lawyer failed to inform her that the life insurance proceeds were exempt from any claims and would pass directly to the beneficiary. Thus, in Skadburg’s view, the lawyer’s failure to advise her that the life insurance was exempt cost her the life insurance proceeds.

The case had one huge problem – the estate was closed on August 18, 2010. The malpractice case was filed more than five years later on August 19, 2015. The trial court held the case was time-barred but the appellate court reversed. The Iowa Supreme Court reversed that decision.

The Iowa Supreme Court found that Skadburg had notice of her cause of action in 2008 when she paid the creditors and that the case was filed after the five-year statute of limitations expired.  The continuous representation exception to the statute of limitations did not apply because the plaintiff had actual or constructive notice of her claim before the attorney-client relationship ended. Further, there was no exception for fraudulent concealment of the cause of action.

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The case is Tebbens v. Levin & Conde, 2018 IL App (1st) 170777. Tebbens believed that his former divorce counsel made an error in drafting the marital settlement agreement and drafted an agreement that was not consistent with what the parties had verbally agreed to.  This is a tough case to win as Tebbens signed the agreement. The defense would ask why he did not read what he had signed. However, Tebbens made a further and fatal error to his malpractice claim.

The Divorce statute allows a lawyer to file a fee petition before the judge who heard the divorce. Here Levin & Conde filed such a fee petition. Tebbens made the mistake of alleging malpractice in his response to the fee petition. The court ruled against him and awarded fees. Then Tebben sued for malpractice. The problem is that the doctrine of res judicata barred his claim because the malpractice issue has already been heard and decided in the fee petition case.

This is a litigation blunder that I have personally witnessed on several occasions. As the Eminem song says “you get one shot, one opportunity” to allege legal malpractice. “Don’t let it slip.” You won’t get a second chance.

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Judicial estoppel is a doctrine that penalizes a litigant who takes one position in one lawsuit and a contrary position in another lawsuit. In other words, the litigant’s position shifts based on the litigant’s interests in a particular case. Kershaw v. Levy, Tennessee Court of Appeals, No. M2017-01129-COA-R3-CV., is a divorce malpractice case where the plaintiff’s claims against her former lawyer ran into the judicial estoppel doctrine. The lawyer entered the divorce case and Kershaw was promptly held in contempt of court and sentenced to 30 days in jail. Later, the lawyer settled the divorce case and obtained an order vacating the contempt finding.  When Ms. Kershaw sued him for legal malpractice the lawyer filed a motion arguing that she was judicially estopped from bringing claims based on the divorce settlement.

The court summarizes the judicial estoppel argument in this fashion:

On March 1, 2017, Mr. Levy filed a motion for summary judgment contending that Ms. Kershaw should be judicially estopped from claiming in the malpractice case that her damages from Mr. Levy’s negligence resulted from an inequitable settlement agreement with Elliot Kershaw when she previously claimed under oath that the settlement had been equitable. Further, Mr. Levy argued that Ms. Kershaw should not be allowed to pursue any malpractice claim against him based on her criminal contempt convictions because they had been vacated and she voluntarily relinquished her right to pursue any post-conviction relief related to them in the MDA. Ms. Kershaw responded in opposition to the motion for summary judgment, asserting the damage resulting from Mr. Levy’s alleged negligence left her with no bargaining power in her settlement negotiations with Mr. Kershaw, and the fact that she entered into an agreement several months after Mr. Levy’s involvement that stated the settlement with Mr. Kershaw was fair and equitable was irrelevant.

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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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The case is Grayson v. Michael J. Korst, P.C., and Michael J. Korst, 16 c 1297 N. D. Ill.  Grayson and his business partner were represented by the Defendants in a transaction in which Grayson and his business partner sold the business (a Domino’s franchise) to a buyer. Grayson alleged that Korst had a conflict in that he represented the company and the two partners and that their interests conflicted. Grayson claimed that Korst failed to notify him that he was entitled to a share of the sale proceeds.

There was also evidence in the record that Grayson was going through a divorce and tried to claim that his interest in the company had a negligible value so that he would not have to make payments to his soon to be ex-wife.

Ultimately, because the case involved complicated conflict issues, Grayson had a duty to obtain an expert. Because he had no expert, he had no ability to explain how the lawyer’s performance failed to meet the standard of care. The lawyer had had both business partners, including Grayson, sign a waiver of any potential conflict, which further weakened the case.

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The case is captioned Camelot, Inc. v. Burke Burns & Pinelli, Ltd., 2017 IL App (2d) 170038-U. The Burke firm had handled shareholder litigation for the plaintiffs. That litigation ended in 2004. Ten years after the representation ended, in 2014, it attempted to serve a lien on certain real property owned by the Plaintiffs. The Plaintiffs sued for declaratory judgment.Plaintiffs obtained summary judgment that the lien was invalid.

The Appellate Court affirmed the grant of summary judgment and held that the lien claim was invalid under the Illinois Attorneys Lien Act 770 ILCS 5/1. The court found a number of problems with the lien claim. First, the lien was asserted ten years after the representation ended, in violation of Illinois law. ¶23. Second, the court held that the “Act does not provide a remedy of foreclosure.” ¶24. The court also held that it lacked jurisdiction to consider the lawyers’ equitable lien claim.

Comment: It took chutzpah to assert a lien on a parcel of real estate ten years after the attorney-client relationship ended. In my view this lien claim was frivolous and the lawyers should have paid the plaintiffs’ attorneys fees.

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This case, KLIGER-WEISS INFOSYSTEMS, INC., Respondent, v. RUSKIN MOSCOU FALTISCHEK, P.C., Appellant. 2015-06404, Index No. 606457/14., 2018 NY Slip Op 01456, was recently decided by the New York Appellate Division. KWI sued its former lawyers for legal malpractice for failing to include a so-called “evergreen” provision in a settlement agreement in an underlying software licensing dispute. The evergreen provision would have renewed the agreement every year. The explanation:

In 2001, the plaintiff, Kliger-Weiss Infosystems, Inc. (hereinafter KWI), entered into an agreement (hereinafter the 2001 agreement) to license and market certain software from STS Systems, LTD, a predecessor in interest to Epicor Retail Solutions Corporation (hereinafter Epicor). In relevant part, the 2001 agreement contained a provision providing for automatic one-year renewals of the 2001 agreement (hereinafter the evergreen provision). In 2004, Epicor’s predecessor in interest commenced an action against KWI and others in the United States District Court for the Eastern District of New York (hereinafter the federal action) seeking, inter alia, to terminate the 2001 agreement due to alleged breaches by KWI. In early 2007, KWI retained the defendant to negotiate a settlement of the federal action, which resulted in a settlement agreement (hereinafter the 2007 settlement agreement). KWI alleges that it instructed the defendant to incorporate the evergreen provision into the 2007 settlement agreement, but that the defendant, unbeknownst to KWI, failed to do so.

In 2011, Epicor commenced an arbitration proceeding against KWI seeking to terminate the 2007 settlement agreement due to KWI’s alleged uncured breaches. The defendant represented KWI in the arbitration, which resulted in a 2013 determination that the 2007 settlement agreement did not contain an evergreen provision.

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