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In a recent California legal malpractice case, Andrade v. Purviance, No. A161331, California Court of Appeal, 1st Appellate District 2021, the court upheld the dismissal of a legal malpractice case against a criminal defense attorney where the plaintiff could not show that she had been exonerated.  In recent years, some scholars have criticized the rule, but it remains the majority rule in the United States. The court explained:

The elements of a legal malpractice action are “(1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199 (Coscia).)

However, to succeed on a claim for legal malpractice arising from a criminal proceeding, a plaintiff also must prove that he or she is actually innocent. (Coscia, supra, 25 Cal.4th at pp. 1199-1200.) “In Coscia, the Supreme Court addressed . . . `whether a former criminal defendant must obtain exoneration by postconviction relief as a prerequisite to obtaining relief for legal malpractice.'” (Wilkinson v. Zelen(2008) 167 Cal.App.4th 37, 46.) The Coscia court concluded, “a plaintiff must obtain postconviction relief in the form of a final disposition of the underlying criminal case—for example, by acquittal after retrial, reversal on appeal with directions to dismiss the charges, reversal followed by the People’s refusal to continue the prosecution, or a grant of habeas corpus relief—as a prerequisite to proving actual innocence in a malpractice action against former criminal defense counsel.” (Coscia, supra, 25 Cal.4th at p. 1205, fn. omitted.) This requirement is grounded in the principles that criminal defendants are provided constitutional and statutory guarantees against ineffective assistance of counsel, and that guilty defendants should not be able to profit from their wrongdoing or shift responsibility for the consequences of their illegal behavior to their criminal defense counsel. (Id.at pp. 1203-1204; Wiley v. County of San Diego (1998) 19 Cal.4th 532, 537-538, 542-543.) Moreover, the actual innocence requirement avoids the risk of inconsistent resolutions in criminal and civil proceedings, serves judicial economy by precluding malpractice actions where a criminal defendant has been denied relief on the basis of ineffective assistance of counsel, and encourages attorneys to represent criminal defendants by reducing meritless malpractice claims. (Coscia, at p. 1204.)

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The case is ALPS Prop. & Cas. v. Keller, Reynolds 482 P.3d 638 (Montana, 2021). After purchasing the malpractice insurance policy, the firm sought to tender a malpractice claim to the insurer. Unfortunately for the lawyers, the insurer denied coverage because the law firm knew the basis of the malpractice action before it purchased the insurance policy. The Montana Supreme Court held that there was no coverage under the policy because the law firm (through one of its partners) was aware of the potential claim before purchasing insurance.

The reasoning:

¶16 Here, the Policy contains two provisions—one coverage provision, and one exclusionary provision—that enforce this basic concept. First, in defining the scope of the Policy’s coverage, provision 1.1.2 states that ALPS “agrees to pay on behalf of the Insured all sums (in excess of the Deductible amount) that the Insured becomes legally obligated to pay as Damages, arising from or in connection with a Claim first made against the Insured and first reported to [ALPS] during the policy period, provided that at the Effective Date of [the] Policy, no Insured knew or reasonably should have known or foreseen that the act, error, omission or Personal Injury might be the basis of a Claim….” (Emphasis added.)

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In any lawsuit, the plaintiff must prove proximate causation, that the actions of the defendant caused him injury. Here, in a bankruptcy malpractice case, the plaintiff was unable to prove proximate causation.

Plaintiff alleged that the bankruptcy lawyers breached the standard of care when the failed to extinguish a liability for $2.1 million from a lawsuit. The law firm obtained summary judgment because plaintiff had never paid one penny of that judgment. Thus, whatever law firm allegedly failed to do, plaintiff suffered no actual damages.

Sam v. Ledbetter Law Firm, PLC, Court of Appeals of Arizona, Division One, August 24, 2021. The explanation:

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Horvath v. Budin, Reisman, Kupferberg & Bernstein, LLP, 2021 NY Slip Op 30105 is a legal malpractice claim arising out of a bankruptcy matter. In particular, the claim was that the bankruptcy firm failed to list Horvath’s personal injury case in the bankruptcy schedules, resulting in the loss of that claim. The Law Firm moved to dismiss. The trial court denied the motion to dismiss. The reasoning:

The pertinent facts:

Plaintiff filed an amended complaint on May 19, 2020 alleging, inter alia, that:

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Short v. Grayson, No. 16-cv-2150 N.D. IL, September 3, 2021 is a malpractice case where the plaintiff alleged that his lawyer was negligent in handling litigation. The problem was that the litigation reached a final adverse judgment in 2013, but the malpractice case was not filed for three years. The District Court, in my view correctly, ruled that the case was barred by the statute of limitations. Some of the discussion follows:

The briefs are chock-full of hotly contested issues, but there is a need to address only one. Almost two and a half years after the end of the state court case, Short filed this federal case against his attorneys, alleging legal malpractice. A malpractice claim has a two-year statute of limitations. So he missed the deadline, and the claim expired.

The only claim against Donner is legal malpractice. Under Illinois law, a malpractice claim has a two-year statute of limitations. A malpractice claim “must be commenced within 2 years from the time the person bringing the action knew or reasonably should have known of the injury for which damages are sought.” See735 ILCS 5/13-214.3(b).

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Thanks to Lawline for hosting this program.

 

https://www.lawline.com/course/avoiding-malpractice-in-family-law-matters?utm_medium=email&utm_source=transactional&utm_campaign=course-live

The program discusses typical malpractice claims made against family law attorneys. Family law attorneys, unfortunately, are often involved in highly contentious matters with emotional parties. That is a breeding ground for claims.

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Frequently we get calls from a former client of an attorney who believes that legal malpractice may have occurred. Please note that if a case is voluntarily dismissed, the client has one year to refile the case. 735 ILCS 5/2-1009. Until that time period has expired, there is no legal malpractice case because the mistake or error can be corrected by the attorney or another attorney. Often a dismissal for want of prosecution is without prejudice and is not final so, again, that is not malpractice.  The question we ask is “Can the alleged error be cured?” If the problem can be cured, there is no malpractice.

Ed Clinton, Jr.

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Addali v. Boyer, No. 410, 2020 (Supreme Court of Delaware) holds that a legal malpractice plaintiff must obtain an expert witness to prevail at trial. In the Addali case the court affirmed the grant of summary judgment to the Defendant attorney.

Ed Clinton, Jr.

www.clintonlaw.net

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This case is captioned Khoury v. Kathleen Niew, Stanley Niew, and Niew Legal Partners, 2021 IL App (2d) 200388. Kathleen Niew converted funds of the plaintiffs that were held in her firm’s trust account. The only issue on appeal was whether the trial court properly held that Stanley Niew also had a fiduciary duty to the plaintiffs. The Appellate Court reversed the judgment and held that Stanley Niew did not owe a fiduciary duty to the plaintiffs. The court’s reasoning is important for all lawyers to read and understand:

¶47 Plaintiffs do not contend that they had a fiduciary relationship with Stanley as a matter of law based on an attorney-client relationship. This is wise, as the formation of an attorney-client relationship is a consensual relationship in which the attorney must indicate acceptance to work on behalf of the client, and the client must authorize the attorney to work on their behalf. …The record shows that plaintiffs and Stanley barely communicated at all, much less demonstrated a consensual relationship for Stanley to work on their behalf. Plaintiffs admit that they never spoke with Stanley via phone, e-mail, or text and at most Jamal could recall three short interatctions, which can be fairly described as small talk.The record does not support that Stanley ever agreed to perform work on their behalf, performed work on their behalf, or billed them for his services.

The court held that there was no attorney-client relationship with Stanley and held that the trial court erred in failing to grant summary judgment on his behalf.

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Like many other states Illinois prohibits a legal malpractice plaintiff from obtaining punitive damages. However, if the plaintiff is a litigant who had punitive damages awarded against him, can he recover against his attorney? A recent decision answered that question with a “Yes.”  In Midwest Sanitary Service, Inc. v. Sandberg, Phoenix & Von Gontard, P.C., 2021 IL App (5th) 190360, Midwest was assessed punitive damages. Midwest sued its former lawyers for negligence alleging that, but for the negligence of the attorneys, no punitive damages would have been awarded.

¶ 15 Having examined the reasoning of the circuit court in distinguishing the case at bar from Tri-C, we agree with its conclusion that

“it appears that the unique characteristics associated with legal negligence claims for lost punitive damages, and for which the Illinois Supreme Court [in Tri-C] and the Ferguson court expressed concern, do not necessarily attend legal negligence claims for the recovery of paid or incurred punitive damages. Absent those unique characteristics, it seems to this court that there * * * exists no just reason to deny the plaintiff in this case the opportunity to recover its actual loss. It should be remembered that `[t]he general rule of damages in a tort action is that the wrongdoer is liable for all injuries resulting directly from the wrongful acts * * *, provided the particular damages are the legal and natural consequences of the wrongful act imputed to the defendant, and are such as might reasonably have been anticipated. * * *’ Haudrich v. Howmedica, Inc., 169 Ill. 2d 525, 543 (1996).”

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