(This article appeared in "Los Angeles Daily Journal")
A legal malpractice lawsuit is based on negligently performed legal services in an underlying claim or other legal matter. For the lawyer prosecuting or defending a legal malpractice case, thorough examination of the underlying case is imperative. For every lawyer confronted with the possibility of his or her own legal malpractice, a like examination of the underlying case is imperative. This article discusses some significant professional pitfalls in the evaluation of legal malpractice cases and ways to avoid them.
To establish a cause of action for professional negligence, the plaintiff must prove a breach of the duty of care that results in injury and actual loss. Nominal damages alone are insufficient to state a cause of action. A legal malpractice action may be based on the negligent failure to provide an adequate defense, but this article will focus only on claims that an underlying -- or prior -- plaintiff's case was lost due to malpractice. To recover damages in such a legal malpractice action, the plaintiff must establish not only the tort, but also that the underlying case was meritorious and would have resulted in a collectible judgment in the plaintiff's favor.
Major pitfalls arise when there are faulty assumptions that (1) the underlying case had merit, (2) the bad result was malpractice, instead of judicial error, (3) the malpractice caused the client to lose all of his rights and (4) the statute of limitations expired because of the passage of one year.PITFALL 1: CAUSATION: Don't Assume the Underlying Case Had Merit
It's not murder to fire a bullet into a dead body, and it's not battery to swing at someone's nose and miss. Similarly, it's not legal malpractice to make a mistake that causes no harm. A legal malpractice case is viable only if there is underlying causation. That is to say, "no harm - no foul." The inquiry begins with the former case, also known as the "underlying" case. For example, in Harris v. Smith (1984) 157 Cal.App.3d 100, the previous attorney had not filed the complaint before the expiration of the one-year statute of limitations. However, the subsequent legal malpractice case resulted in a non-suit because the plaintiff was unable to prove that the underlying action was meritorious. Similarly, in Sukoff v. Lemkin (1988) 202 Cal.App.3d 740, the previous attorney did not investigate the assets of his client's husband in a dissolution of marriage case, but the plaintiff lost her legal malpractice case because she did not prove that the attorney's failure to investigate the assets would have actually led to a higher award.
These legal malpractice cases were unsuccessful because the plaintiffs could not prove that their underlying cases had merit or that the result would have been different. It is not enough that the prior lawyer was negligent; his or her error must have caused damage. There are, in reality, two cases which must be proven in legal malpractice litigation. After it is proven that the prior lawyer was negligent, the plaintiff must essentially try (or re-try) the underlying case. This is called "the case-within-the-case." The evaluation of the underlying case must be the starting point of the lawyer considering whether to accept a legal malpractice case.
Evaluation of the underlying case where the former lawyer has been negligent is no different from evaluation of any case. For example, if no one was hurt in a car accident case, no lawsuit for personal injuries would be justified. Similarly, a medical malpractice case can't be based on a claim that "If I had taken the pills that the doctor negligently prescribed, I would have died." Sure, the doctor was negligent, but no harm came of it. In both of these situations, a lawyer's negligence would not turn the underlying case into a winner. Therefore, a lawyer should not accept a legal malpractice case until he or she is confident that the underlying case can be proven to have had merit.
Collectibility of the lost judgment in the underlying case cannot be overlooked. Even if there was admitted negligence in the underlying case that would have resulted in a jury verdict for a million dollars, no cause of action for legal malpractice can be established if it would have been uncollectible. If, for example, an uninsured and unemployed driver caused a significant injury to the plaintiff, there would be little likelihood that a judgment would be collected. Accordingly, a lawyer's negligence that results in the loss of the plaintiff's right to sue that driver would not cause the plaintiff any damage, since no money would have been collected from the negligent driver, even if the case had been prosecuted to judgment.
Proving collectibility can sometimes be a challenge, and that factor must also be taken into consideration in undertaking a legal malpractice case. If the former defendant had liability insurance, the policy can be obtained as evidence. In non-insurance litigation, however, proving personal worth poses many problems. For example, can the former defendant, who is not a party to the malpractice case, be compelled to testify and produce documents relating to his income, savings, and investments? It might be argued that it is an invasion of privacy. Even if the case had been prosecuted against the former defendant, evidence of wealth would not have been admissible, or even discoverable (except where punitive damages were sought.) If it would have been an invasion of privacy in the underlying case, a judge may not allow such inquiry in a subsequent legal malpractice case. The challenge, therefore, will be to determine whether such proof can be adduced from other means. If it can't be proven, the legal malpractice case will fail.
Sometimes, a claim of legal malpractice occurs because the previous attorney kept ignoring a case that he did not like, possibly because of causation problems, collectibility problems, or minimal damages. A previous attorney may have accepted a case and inflated his client's expectations without having first performed an adequate investigation. In such situations the client may contend that his previous attorney's negligence prevented the prosecution of a valuable case. The next attorney should, therefore, make a thorough investigation of the underlying case before making a commitment to handle the legal malpractice case.PITFALL 2: Don't Assume That the Bad Result Wasn't Judicial Error
A judgment in the underlying case is not proof that the previous lawyer was in error; the judge may have been wrong. In a legal malpractice case that I defended, the previous attorney had been retained by the fiancee of a young man who was killed in an accident. The young couple's possessions were in storage together since they were planning to wed soon. When the decedent's family came to collect his belongings, they took hers as well, and then would not return them. The attorney filed an action against the estate and the executor for conversion.
The trial judge sustained a demurrer without leave to amend, believing that a probate claim had to precede any legal action. A judgment of dismissal was later rendered. By the time the demurrer had been sustained, the time in which to file a probate claim had expired. The client was advised by another lawyer to file a legal malpractice action for the value of her lost property.
Unfortunately for the client, her new lawyer erroneously assumed that the trial judge was correct and that the previous lawyer had been negligent. Actually, the reverse had been true. The trial judge had erred. A probate claim is necessary only if the decedent owed a debt to the claimant/creditor. By the time plaintiff's new lawyer filed the legal malpractice case, the time to file an appeal (which would have been successful) had expired. In the legal malpractice case, the issue was whether the trial judge erred.
One trial judge may rule that another judge of equal jurisdiction rendered such an erroneous judgment that it would have been reversed on appeal had one been taken. [Pate v. Henderson (1954) 124 Cal.App.2d 487, 490.] The successful defense established that the failure of plaintiff's subsequent attorney to take an appeal had been the sole cause of the loss of the plaintiff's rights. The second lawyer was then exposed to a malpractice claim.PITFALL 3: Don't Overlook the Availability of Alternative Remedies
If a lawyer's error has caused the loss of a remedy for a client, the lawyer must determine whether there is an alternate remedy that can be pursued. If such a remedy existed but was not considered, the lawyer compounded the error. A second lawyer who files a legal malpractice case without considering whether an alternate remedy still exists in the underlying case, may, himself, be committing malpractice. There are many examples of alternate remedies. A federal claim may be available in a case that is time barred in state court. A product liability claim that has not been filed in time in California might be filed against the out-of-state manufacturer in federal court, utilizing the longer statute of limitations of the foreign state. A negligence cause of action might have been lost, but not a claim for fraud or breach of contract.
If a case could have been saved, then the attorney's error caused no harm. The attorney committing the error must make sure that there are no other remedies or forums available to the client. If a client's prior lawyer has not done so, and the client then retains an attorney to sue for legal malpractice, the subsequent lawyer must make sure that there are no other remedies or forums available to the client. If there are, and the subsequent lawyer files a malpractice case instead of pursuing the alternate remedy, he or she may be found to have either caused or contributed to the loss of the client's rights.PITFALL 4: Don't Assume That the Statute of Limitations Has Expired
If a client presents a case that is based upon the failure of the previous attorney to file a complaint before the statute of limitations expired, the second attorney should make sure that it has, in fact, expired. The statute of limitations may have been tolled by any one of numerous statutory and judicially-created mechanisms. If the subsequent attorney files a legal malpractice case, not realizing that the statute has not expired, he or she -- and not the previous attorney -- will have caused the harm. A future article will explore the specific pitfalls inherent in faulty evaluation of statutes of limitation.CONCLUSION: AVOIDING THE PITFALLS
A common mistake preceding the filing of many legal malpractice cases is the failure by plaintiff's attorney to make an immediate and complete investigation and evaluation of the underlying case. The error may be by the judge, not the lawyer. Malpractice may have occurred, but the plaintiff's rights may still be viable, or no harm resulted from the malpractice because the underlying case had no merit.©1996, John P. Blumberg