Articles Posted in Proximate Causation

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The case, Herren v. Armenta, No. 1-CA-CV-18-0381 (Arizona Court of Appeals January 14, 2020) is a legal malpractice case where Herren lost her underlying case, a business dispute. As we shall see, despite evidence of negligence she also lost the legal malpractice case.

In the underlying matter, Herren hired Armenta to defend a lawsuit by Tonto Supply over a gravel-mining contract. The defense did not go well as we can see from this quote:

¶4 Tonto Supply then filed a multi-claim lawsuit against Herren, and Herren hired Arizona-licensed Holden and her firm to assist with the lawsuit. After Appellees filed an answer and counterclaims on Herren’s behalf, Tonto Supply filed five motions for partial summary judgment on various claims and counterclaims and sent Herren a request for admission of 25 factual matters. Appellees did not respond to the request for admissions and failed to timely respond to the partial summary judgment motions. Appellees were late responding to four of the motions, even after obtaining an extension following the initial deadline, and Appellees neglected to respond at all to one of the motions.

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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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The case is Iliescu v. Hale Lane Peek Dennison and Howard, No 76146, Supreme Court of Nevada.This is a complicated case and factual scenario that does often come up in legal malpractice cases. It goes like this:

A. Your client loses a ruling in a trial court in the underlying case.

B. Your client fires you.  (Next, they sue you for malpractice).

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In Herren v. Armenta, 1-CA-CV-18-0381, the plaintiff sued her former lawyers alleging that they committed legal malpractice when the represented her in another case (the underlying case). In the underlying case, Tonto Supply, Inc., sued Herren for breach of contract and other torts. Herren alleged that her lawyers were negligent because they failed to timely respond to requests to admit and to several motions for summary judgment, resulting in a judgment against her.

This case presented a common problem with legal malpractice actions – would Herren have won the underlying case if the lawyers had responded in timely fashion?

In the malpractice case, Herren had the burden to prove that the lawyer’s negligence was the cause of her loss.  She was unable to meet that standard, despite the fact that she hired an expert. The court explains its decision to affirm the dismissal of the malpractice case:

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The case, Nancy Setterquist v. Law Offices of Ted D. Billbe, P.C., N0. 18-35880, is an unpublished decision of the Ninth Circuit that raises important issues. The case is a divorce malpractice case. Setterquist alleged that her lawyer allowed the court to enter an erroneous order. Based on the text of that order, her ex-husband filed a post-decree claim against her for maintenance and was able to recover. The facts are not summarized well in the opinion, unfortunately, leaving me with questions about what happened and why it happened.

The defense strategy was to move to dismiss on the basis that Setterquist engaged a new lawyer post-decree. The defense argued in a motion to dismiss that successor counsel could have corrected the error made by Billbe and defeated ex-husband’s claims.

The district court dismissed the case on the basis that Setterquist could not allege proximate causation because she employed successor counsel.

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There are a number of issues that you should consider before you file a legal malpractice claim against a lawyer. Your lawyer should discuss these issues with you so that you understand how to proceed:

  1. Did the lawyer cause your harm or was it caused by someone or something else? You are required to prove that the lawyer was the proximate cause of the loss of your case. Consider whether you would have won the case absent whatever error you believe the lawyer made. Play Devil’s Advocate – even if the lawyer had done what he was supposed to do, would I have won the case? Often the answer to this question is “No” because the case could not be won under any circumstances.
  2. Am I prepared to waive the attorney-client privilege? When you sue your lawyer you are almost always deemed to have waived the attorney-client privilege. That privilege shields communications from you to the lawyer and from the lawyer to you. It allow you to seek legal advice without fear that your own words will come back to haunt you. But if you sue a lawyer, you waive the privilege. Consider carefully whether the waiver of the privilege is worth it to you.
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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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Sometimes things get missed or lost in the shuffle when clients change lawyers. It is often difficult to get the new lawyer up to speed in time to get a case ready for dispositive motions or trial.  When I see that the client had numerous lawyers involved in a case, that is usually a good signal that the case cannot be won. Each lawyer will blame another lawyer and its tough for the plaintiff to recover. You can sue everybody, but you will be subject to motions to dismiss and separate defenses.

This is a legal malpractice case recognizing the successor counsel defense. Ryan was represented by the Simmons firm in certain litigation. It was undisputed that they withdrew before the statute of limitations on some of Ryan’s claims ran. Successor counsel appeared 13 weeks before the pleadings closed in the litigation. The court quotes the law, which is well-settled:

Our supreme court has acknowledged the rule that “[a]n attorney cannot be held liable for failing to file an action prior to the expiration of the statute of limitations if he ceased to represent the client and was replaced by other counsel before the statute ran on the client’s action.” Ruden v. Jenk, 543 N.W.2d 605, 612 (Iowa 1996) (quoting Steketee v. Lintz, Williams & Rothberg, 694 P.2d 1153, 1159 (Cal. 1985)). Other courts have further explained the effect of successor counsel in legal malpractice claims. See Norton v. Sperling Law Office, P.C., 437 F. Supp. 2d 398, 402-03 (D. Md. 2006). The actions of successor counsel may create “an intervening cause that breaks the chain of causation arising from the prior attorney’s negligence.” Id. at 402. In order to rely on this rule, the prior attorney must show “a sufficiently long time gap between the severing of the attorney-client relationship and the lapse of the statute of limitations.” Id. at 403. “Courts have not set a minimum baseline for what constitutes `sufficient time,’ although one court has deemed as little as thirty days sufficient.” Id. (citing Sherotov v. Capoccia, 555 N.Y.S.2d 918 (App. Div. 1990)); but see id. at 403 (finding ten weeks was not sufficient time for successor counsel to bring a personal injury case where the proper forum was not clear); Villarreal v. Cooper, 673 S.W.2d 631 (Tex. App. 1984)(finding seventy-seven days was not sufficient time for successor counsel to bring a tort case when prior counsel had the case for sixteen months and evidence and witnesses could no longer be located).

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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 captioned Kalomakls Management v. Lawrence & Walsh, P.C., 2018 NY Slip Op 00282. The plaintiff filed an arbitration proceeding against a contractor who worked on the renovation of Plaintiff’s diner. The Defendant law firm represented the plaintiff during that trial. The arbitrator ruled in favor of the contractor and dismissed Plaintiff’s claims. Plaintiff then sued the law firm for legal malpractice. The law firm obtained summary judgment and that decision was affirmed on appeal because the Plaintiff could not prove that absent the negligence it would have won the underlying case. Because plaintiff could not prove proximate causation (or negligence) the grant of summary judgment was affirmed.

Ed Clinton, Jr.

http://www.clintonlaw.net

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