Articles Posted in Case Within A Case

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Generally, in Illinois, the successful plaintiff in a legal malpractice action can recover from the lawyer the same damages that he could recover in the underlying case. So, in a personal injury case, the plaintiff can recover (a) economic damages, such as medical bills and lost wages and (b) pain and suffering damages. If a lawyer causes the plaintiff to lose a valid claim, the plaintiff should be able to recover the same damages from the lawyer.  In Webster Bank v. Pierce & Associates, P.C., 16-cv2522, (2-19-2020) the district court held that a plaintiff bank can recover prejudgment interest in a legal malpractice claim against its former lawyer.

The underlying case was a collection action on a promissory note. The opinion does not describe the act of legal malpractice. The defendant law firm filed a motion in limine to bar the bank from seeking pre-judgment interest. The court denied the motion because the bank (had it been successful in the underlying case) could have obtained the same prejudgment interest.  The pertinent discussion follows:

Here, Webster alleges Pierce’s malpractice in a suit-on-note claim against Kristen Jasinski caused its damage. According to Webster, had Pierce been successful in the underlying suit-on-note claim, Webster would have been entitled to a judgment in the amount of the principle of the note plus interest from the date of Jasinski’s default to the date of judgment under the terms of Jasinski’s loan agreement or the Illinois Interest Act, 815 ILCS 205/2. (Dkt. 182, Ex. 1, p. 3) (finance charge calculated by applying the periodic interest rate to the Daily Balance of the loan); 815 ILCS 205/2 (“Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any … promissory note … In the absence of an agreement between the creditor and debtor governing interest charges, upon 30 days’ written notice to the debtor, an assignee or agent of the creditor may charge and collect interest as provided in this Section on behalf of a creditor.”). Webster asserts that the

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One defense to a legal malpractice case is that the plaintiff could never have collected any money from the defendant in the underlying case. This defense is rarely asserted, but it can be very effective. In a malpractice case, you must prove what the outcome of the underlying case would have been absent negligence. This type of proof is imperfect because some speculation is involved.

For example, client sues an entity that is insolvent. Client’s lawyer makes an error that causes the client to lose the case (such as missing the statute of limitations). Client sues his former lawyer. Under the insolvency defense, client loses the case because he could not have collected anyway and thus the lawyer did not “cause” the loss of his recovery.

In Ewing v. Westport Insurance Company, CA – 19-551, the court rejected the insolvency defense. The opinion explains that the defense of insolvency was not proven:

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Illinois has a rule that allows a plaintiff to dismiss a case once. The plaintiff can then refile the case. The rule does not allow multiple dismissals. In Webster Bank v. Pierce & Associates, P.C., No. 16 C 2522 (N.D. IL March 14, 2019), the court denied a defendant law firm’s motion for summary judgment because the law firm had violated the refiling rule.

The Illinois single refiling rule provides that if:

the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, * * * the plaintiff, his or her heirs, executors or administrators may commence a new action within one year or within the remaining period of limitation, whichever is greater, after * * * the action is voluntarily dismissed by the plaintiff.735 Ill. Comp. Stat. Ann. 5/13-217. This provision is understood to “permit[] one, and only one, refiling of a claim.” Flesner v. Youngs Development Co., 145 Ill.2d 252, 254 (1991). The single refiling rule is considered to be an extension of res judicata. Carr v. Tillery, 591 F.3d 909, 915 (7th Cir. 2010) (“The one-refiling rule is thus the extension of the doctrine of res judicata to a class of cases in which the decision deemed to be res judicata is a dismissal without prejudice.”)

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This case, Alerding Castor Hewitt, LLP v. Paul Fletcher, et al, 16-cv-02453 (S.D. Indiana, Indianapolis Division) (April 18, 2019) illustrates the necessity of obtaining expert testimony to support a claim. Fletcher brought a malpractice claim against his former counsel after counsel sued for legal fees. Fletcher alleged that the attorneys were negligent when they represented him in a civil forgery case. The court disagreed and granted summary judgment for the attorneys.

Fletcher could not show that any alleged error by the attorneys proximately caused his loss because he had no expert testimony to support his claims:

To establish the applicable standard of care, Alerding Castor has presented an expert report from attorney David C. Jensen. Jensen’s thorough report discusses his review of the record from the Forgery Lawsuit in light of the applicable standard of care. Dkt. 130-3. Jensen concludes that Alerding Castor exercised ordinary skill and knowledge in litigating the Forgery Lawsuit and met the standard of care they were obligated to provide in its representation of Defendants. Id. at 16. Jensen’s conclusions are amply supported by the facts in the record.

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In this case, Eskridge v. Fletcher, Court of Appeals of Washington, Division One, No. 78013-1-l, a medical doctor sued the lawyers who unsuccessfully represented him in his license revocation proceeding. The record indicated that there was substantial evidence that Dr. Eskridge had acted inappropriately towards other doctors and patients. As a result, the hospital revoked his admission privileges. After an internal review, Dr. Eskridge’s privileges were revoked. On the advice of the defendant lawyers, Eskridge elected not to appeal that determination.

The malpractice lawsuit alleged that, had the appeal been filed, it would have been successful and Eskridge would have retained his privileges.

The trial court disagreed. The Court of Appeals affirmed, holding that he could not show by clear and convincing evidence (the standard used in the medical revocation proceeding) that, but for the error by the lawyer, he would have prevailed in his appeal. The discussion follows:

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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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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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When you sue a lawyer for a breach of the standard of care, you must prove proximate causation. If the underlying matter, was a lawsuit, you must show that, but for the negligence, you would have won the case.

Here, the lawyer was hired to pursue a lawsuit for insurance coverage. The lawyer allegedly missed the deadline to file the case. However, there was no legal malpractice because the underlying case lacked merit. The underlying case claimed that the insurance company did not cover certain losses. The problem was that the policy language excluded those losses. Thus, if the clients had read the insurance policy, they would have known that there was no coverage. Because the coverage case had no merit, the lawyer’s failure to file the lawsuit on time was of no importance. The trial court granted summary judgment for the lawyer and the appellate court affirmed that judgment.

The opinion explains the failure of proof in this fashion:

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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:

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The underlying case was routine and it arose out of an automobile accident. The defendant lawyers filed suit timely as to most of the defendants, but they failed to file a timely case as to one defendant. The underlying case settled for $10,000.

The lawyers won a summary judgment motion in the trial court, but summary judgment was reversed. The plaintiff had submitted sufficient evidence of a breach of duty (missing the statute of limitations) that caused damage to the plaintiff.

Source: ATIENCIA v. PINCZEWSKI, 2017 NY Slip Op 1839 – NY: Appellate Div., 2nd Dept. 2017 – Google Scholar

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