Appellate Court of Illinois, First District
Discovery Rule: Legal malpractice action not timely filed despite plaintiff’s discovery rule claim that attorneys’ misrepresentation delayed discovery of injury because lay person knew or should have known that a worker’s compensation/occupational disease lump sum settlement was inadequate for eight-year disability.
Court of Appeals of Oregon
Issue Preclusion and Legal Malpractice: Summary judgment for attorney on issue preclusion grounds reversed on client’s individual claims where all of client’s allegations against attorney were not determined in underlying action; summary judgment for attorney affirmed as to client’s claims brought as former trustee on behalf of trust and beneficiaries, as only current trustee had standing to sue attorney.
Court of Appeals of Ohio, Fifth District
Statute of Limitations: Tolling agreement signed by law firm’s general counsel failed to toll statute of limitations for malpractice action against individual attorney where the attorney did not sign or authorize the signature of the tolling agreement, and the attorney was not a party to the tolling agreement.
Supreme Court of New York, Appellate Division, First Department
Continuing Representation: Dismissal of legal malpractice claim affirmed where statute of limitations expired and continuous representation doctrine held inapplicable because the defendant attorney’s work for the client continued only on other matters, but not the matter subject of the malpractice claim.
United States Court of Appeals, Second Circuit
Dismissal of In Forma Pauperis Appeals: Court of Appeals affirmed denial of prisoner’s motions for leave to file attorney malpractice suits in forma pauperis, under the Prison Litigation Reform Act of 1995, 28 U.S.C. § 1915(g), and its three-strikes provision, due to history of filing prior frivolous suits.
Missouri Court of Appeals, Eastern District, Division Three
Expert Opinion Requirement: Summary judgment affirmed in favor of attorney on legal malpractice claim where former client failed to produce expert testimony to support his claim of professional negligence or causally relate his alleged damages.
Appellate Court of Illinois, First District
Discovery Rule: Legal malpractice action not timely filed despite plaintiff’s discovery rule claim that attorneys’ misrepresentation delayed discovery of injury because lay person knew or should have known that a worker’s compensation/occupational disease lump sum settlement was inadequate for eight-year disability.
By: Christopher C. Storm
Brummel v. Grossman
2018 WL 1567744 (Ill. App. (1st) 03/29/2018)
Attorney defendants represented the decedent in a worker’s compensation matter against decedent’s employer arising from decedent’s taking ill from years of drinking the workplace’s contaminated water. The break room drinking water connected to the flush line of the boiler, allowing toxins into the drinking water, and causing the decedent to become so ill that he was forced to take a medical leave of absence. The decedent was earning over $100,000 per year in wages and various benefits at the time of his leave. Notwithstanding his being eligible for extended benefit account payments for 39 weeks, decedent’s employer terminated decedent’s benefits after only 11 weeks of payments, leaving decedent without enough money for medical treatment and expenses. Decedent’s employment terminated shortly thereafter without decedent ever having received payment of medical expenses or temporary total disability payments under the Worker’s Compensation or Worker’s Occupational Diseases Acts. The attorney defendants filed worker’s compensation and occupational diseases claims in 2006, and settled for a lump sum of $125,000 five years later on October 20, 2011, also without making any claim for temporary total disability to which decedent was entitled. In the course of settling the claim, plaintiff alleges the attorney defendants informed decedent that they had obtained for him as much money as possible, that trial was risky, and the plaintiff knew from coworkers that the company liked to grind claimants down through prolonged and costly litigation. Decedent brought a legal malpractice claim against the attorney defendants alleging insufficient settlement, on December 30, 2014, because they did not obtain for him temporary total disability benefits, and because they did not file a section 19(b-1) Worker’s Compensation Act petition on his behalf. He passed away while the malpractice claim was pending and his executor assumed the claim. Attorney defendants moved to dismiss on the basis that the plaintiff’s claim came more than two years after the worker’s compensation matter was settled and was therefore barred by the Illinois two-year statute of limitations for legal malpractice claims. The plaintiff claimed that attorney defendants’ misrepresentations tolled the limitations period, and was given an opportunity to file an amended complaint to allege more clearly the attorney’s misrepresentative statements. But the trial court dismissed plaintiff’s claim even after re-pleading, ruling that even a layperson could appreciate that the settlement agreement seemed insufficient given its small size compared to the amount of money that the decedent was making each year and his being out of work for eight years. The Appellate Court of Illinois, following de novo review, agreed. The Court held that the decedent’s injury accrued upon final approval of his worker’s compensation settlement, at which time (employing a double negative) the Court “[could] not say that the decedent did not know, or should not have known, that the settlement was inadequate.” Like the trial court, the Appellate Court reasoned that notwithstanding that the decedent had been out of work for eight years because of his workplace illness, the settlement agreement he signed made it clear that he would only receive a sum total of 11 weeks of extended benefit account payments, no temporary total disability benefits, and a lump sum settlement that only compensated decedent in an amount equivalent to a tiny fraction of the weekly income he otherwise would have expected to earn during his remaining life expectancy. The Appellate Court rejected plaintiff’s argument that the attorney defendants’ assurances that he did not need to worry about receiving temporary total benefits during the pendency of the case because he would be compensated at the conclusion of his case tolled the statute of limitations because the settlement order stated that it included all claims, including unpaid disability. Similarly, the Appellate Court rejected plaintiff’s argument that attorney defendants’ assurances that he would receive additional compensation from a separate whistleblower lawsuit should toll the statute of limitations because informing plaintiff that he should rely on recovery of funds through a separate action should have informed plaintiff that he was agreeing to settle for “substantially less than what he should have received” in the worker’s compensation action. Further, the whistleblower settlement would only mitigate the damage that occurred from the insufficient worker’s compensation settlement. The Appellate Court also rejected equitable estoppel arguments that contended that the attorney defendants should be estopped from asserting the statute of limitations where decedent reasonably relied on their misrepresentations that the settlement was sufficient because the plaintiff could not satisfy the legal requirement of showing attorney defendants’ affirmative acts or representations were calculated to induce the delay of filing of a claim that was separate from the basis of the legal malpractice claim.
Court of Appeals of Oregon
Issue Preclusion and Legal Malpractice: Summary judgment for attorney on issue preclusion grounds reversed on client’s individual claims where all of client’s allegations against attorney were not determined in underlying action; summary judgment for attorney affirmed as to client’s claims brought as former trustee on behalf of trust and beneficiaries, as only current trustee had standing to sue attorney.
By: Jillian McGrath
Myron Dale Payne, individually, and as Trustee of the Payne Living Trust v. Lee D. Kersten
2018 WL 1835562 (Or.App. 04/18/2018)
The Plaintiff and his son had been business partners and, upon dissolution of their partnership, distributed their partnership assets, including certain real property. The Plaintiff filed suit against his son, both individually and as trustee of the Trust, alleging that certain property should have been distributed to him personally rather than transferred to the Family Trust. The Plaintiff’s son counterclaimed, alleging that the Plaintiff had breached his fiduciary duties to the Trust by failing to fund the Trust properly, keep adequate records and use the Trust assets properly. The trial court denied the Plaintiff’s claims against his son, declared the value of the Trust’s assets, and concluded that the partnership had been dissolved and wound up. As to the counterclaims, the court ruled that the Plaintiff failed to act impartially in taking inventory, managing and distributing the property of the Trust and failed to keep adequate records. The court removed the Plaintiff as trustee of the Trust, but otherwise denied the son’s counterclaim. The Plaintiff filed this action against his former attorney for legal malpractice and breach of fiduciary duty, based on legal advice that the defendant attorney gave the Plaintiff regarding personal matters and Trust matters. After the trial court issued a decision in the Plaintiff’s action against his son, the trial court allowed the defendant attorney to amend his answer in to add the defense of issue preclusion. The defendant attorney then moved for summary judgment, arguing that the outcome of the Plaintiff’s action against his son conclusively established that, regardless of any alleged negligence or breach of fiduciary duty on the defendant attorney’s part, the Plaintiff had not suffered any damages and therefore could not prevail against the defendant attorney as a matter of law. The defendant attorney also argued that the Plaintiff, who had been removed as trustee, lacked authority to pursue claims on behalf of the trust. The trial court granted the defendant attorney’s summary judgment motion. The Plaintiff appealed and argued, with respect to his claims brought individually, that the trial court erred in granting summary judgment based on issue preclusion. The defendant attorney argued that the court did not err, that the Plaintiff had not put forward any damages evidence, and that issue preclusion conclusively resolved the Plaintiff’s claim against the defendant attorney. The Appeals Court did not consider the question of the sufficiency of the Plaintiff’s proof on damages, as the defendant attorney did not address that issue in his motion or at the summary judgment hearing. Rather, with respect to the Plaintiff’s personal causes of action, the Appeals Court considered only the issue preclusion argument. In this action, the Plaintiff claimed that the defendant attorney was negligent in advising him about the division of property with his son. Although the Plaintiff’s complaint was not entirely clear, the Appeals Court held that it was apparent from the record and the parties’ arguments to the trial court that a mutual release issue was intertwined with the property distribution issues. If the defendant attorney negligently failed to obtain the agreed release or negligently advised the Plaintiff regarding the scope of the release, then the defendant attorney might be liable to the Plaintiff for that negligence. Based on the existing summary judgment record, the trial court in the action against the Plaintiff’s son did not address any advice or discussions between the Plaintiff and the defendant attorney on the release; it addressed only the release itself. Issue preclusion did not apply because the record did not conclusively establish that the findings and conclusions in the action against the Plaintiff’s son foreclosed any possibility of damages in this action. As to question of whether, as former trustee, he had standing to pursue causes of action on behalf of the Trust and its beneficiaries, the Plaintiff claimed that, as trustee when the alleged negligence occurred, he had standing. The Appeals Court disagreed, noting that Oregon law permits only a current trustee to sue on behalf of a trust and its beneficiaries. For a trust and its beneficiaries to seek legal redress from an attorney who represented a former trustee, the current trustee must sue the former trustee, who in turn is permitted to sue the attorney who represented the former trustee. In upholding summary judgment to the defendant attorney on this second issue, the Appeals Court also noted that the Plaintiff had conceded at the summary judgment hearing that he lacked standing to pursue claims on behalf of the Trust and its beneficiaries. To the extent that the Plaintiff was pursuing claims on his own behalf, individually, those claims were unaffected by the trial court’s ruling that he could not pursue claims on behalf of the Trust and its beneficiaries.
Court of Appeals of Ohio, Fifth District
Statute of Limitations: Tolling agreement signed by law firm’s general counsel failed to toll statute of limitations for malpractice action against individual attorney where the attorney did not sign or authorize the signature of the tolling agreement, and the attorney was not a party to the tolling agreement.
By: Avana Anderson
Seniah Corp. v. Buckingham, Doolittle & Burroughs, LLP
2018 WL 1219584 (Ohio App. 5th Dist. 03/05/2018)
A corporation alleged that its former attorney committed legal malpractice with respect to two separate matters, a bankruptcy action and a foreclosure action, on November 23, 2010, and August 15, 2011, respectively. Before filing suit, the corporation contacted its former attorney by letter to advise him of its potential claim for malpractice. The former attorney gave the letter to his firm’s General Counsel, and the corporation and the firm’s General Counsel met on September 21, 2012, to discuss the malpractice allegations and a potential resolution. At this meeting, the firm’s General Counsel did not indicate whether she represented the firm and/or the corporation’s former attorney. The firm’s General Counsel drafted a Tolling Agreement to preserve the status quo with respect to time-related defenses, as the corporation was concerned about the approaching statute of limitations date. The firm and the corporation entered into this agreement on October 3, 2012; however, the attorney who was accused of engaging in the malpractice neither participated in the drafting, nor did he sign the agreement. On February 19, 2013, after an unsuccessful mediation, the corporation filed a complaint for malpractice against its former attorney in his individual capacity. The attorney filed a motion to dismiss the claim based on the expired statute of limitations date, which began to run when the corporation should have discovered the alleged malpractice, and the corporation filed an opposition to the attorney’s motion to dismiss based on the Tolling Agreement. The Trial Court issued a judgment granting the motion to dismiss, finding that the complaint was filed after the one-year statute of limitations and that the Tolling Agreement did not toll the running of the statute of limitations as it was not signed by the attorney. The corporation filed a motion for relief from judgment, which the Trial Court denied. On appeal, the Court of Appeals reversed the lower court’s decision granting the attorney’s motion to dismiss, holding that the Trial Court had improperly considered material outside the four corners of the complaint. On remand, the attorney filed a summary judgment motion alleging the corporation’s claim was time-barred, and the corporation failed to respond, resulting in judgment for the attorney. The Trial Court denied the corporation’s motion for relief from judgment, finding that the corporation did not show a “likelihood of success on the merits.” The corporation appealed the decision and the Court of Appeals reversed the decision of the Trial Court regarding its denial of the corporation’s motion for relief from judgment, holding that the Trial Court had incorrectly considered the quantum of proof on the malpractice claim when the only issue before it was the statute of limitations issue. The attorney then filed another motion for summary judgment with the Trial Court on November 18, 2016 and the Trial Court granted the motion. The corporation appealed again and this time the Court of Appeals affirmed. First, the Court held that the language of the tolling agreement did not contemplate the attorney, who although a shareholder in law firm did not fall within the group of “heirs, successors, assigns, shareholders, members, officers, directors, agents, or insurers” described in the tolling agreement. Second, the attorney did not grant the law firm’s general counsel authority to sign the tolling agreement on his behalf and did not hold her out to the public as possessing sufficient authority to bind him to tolling agreement. Third, the corporation did not have a basis for a good-faith belief that law firm’s general counsel possessed apparent agency authority to bind the attorney to tolling agreement. Fourth, the attorney did not ratify tolling agreement. Finally, the attorney was not equitably estopped from arguing the applicability of the one-year statute of limitations period.
Supreme Court of New York, Appellate Division, First Department
Continuing Representation: Dismissal of legal malpractice claim affirmed where statute of limitations expired and continuous representation doctrine held inapplicable because the defendant attorney’s work for the client continued only on other matters, but not the matter subject of the malpractice claim.
By: Michael H. Hayden
Davis v. Cohen & Gresser, LLP
2018 WL 1747958 (N.Y.A.D. 1st Dept.04/12/2018)
Plaintiff brought a legal malpractice claim against the defendant attorney alleging that he failed to name two important parties in an action brought on behalf of a decedent. The Supreme Court of New York granted a motion to dismiss the legal malpractice action on the ground that New York’s three-year statute of limitations had expired and the claim was, therefore, untimely. Plaintiff appealed, arguing that the continuous representation doctrine tolled the statute of limitations for a malpractice claim against the defendant attorney. The defendant attorney was initially retained by the decedent to defend him in one lawsuit (“the first action”) and to pursue RICO claims in a separate Federal Court action, which was filed in 2009. The decedent passed away on March 9, 2011. Following the decedent’s death, the defendant attorney was separately retained to represent the decedent’s son as a third-party defendant in the first action, to defend the decedent’s estate in two separate actions and to represent the estate in connection with a potential criminal investigation. However, the defendant attorney did not represent the decedent’s estate in the first action and the retainer agreements executed with the defendant attorney after the decedent’s death were explicitly limited to representing the estate in other litigation and not the first action. The defendant attorney also never entered an appearance on the estate’s behalf while other law firms were substituted as counsel in the first action, made a motion to substitute the estate as plaintiff, appeared on behalf of the estate and ultimately settled with the parties in May 2014. The Supreme Court of New York, Appellate Division, First Department held that the latest date on which a malpractice claim could have accrued was March 9, 2011, the date of the decedent’s death, which severed the attorney-client relationship between the decedent and the defendant attorney. The legal malpractice action was commenced on August 12, 2014, more than three years after the statute of limitations started running. The Appellate Division rejected the plaintiff’s continuous representation argument, noting the continuous representation doctrine “tolls the Statute of Limitations only where the continuing representation pertains specifically to the matter in which the attorney committed the alleged malpractice.” The Appellate Division found that the defendant attorney’s representations after the decedent’s death did not pertain specifically to the matter in which the defendant attorney allegedly committed malpractice and, therefore, affirmed the dismissal entered by the trial court.
United States Court of Appeals, Second Circuit
Dismissal of In Forma Pauperis Appeals: Court of Appeals affirmed denial of prisoner’s motions for leave to file attorney malpractice suits in forma pauperis, under the Prison Litigation Reform Act of 1995, 28 U.S.C. § 1915(g), and its three-strikes provision, due to history of filing prior frivolous suits.
By: Jacqueline A. Welch
Akassy v. Hardy
887 F.3d 91 (2d Cir. 04/04/2018)
In 2017, a New York State prisoner convicted in 2011 of, inter alia, first-degree rape, and sentenced to 20 years’ imprisonment, filed pro se actions alleging misfeasance and ineffective assistance by the attorneys who had represented him in his criminal case before trial, during trial, and on appeal. In each of the three separate actions, he sought leave to proceed in forma pauperis. The United States District Court for the Southern District of New York analyzed his past in forma pauperis filings, and concluded that he had accumulated multiple instances of filing frivolous cases, pursuant to the Prison Litigation Reform Act of 1995, 28 U.S.C. § 1915(g). That statute, sometimes referred to as the “three-strikes rule” provides that: “[i]n no event shall a prisoner bring a civil action or appeal a judgment in a civil action … if the prisoner has, on 3 or more prior occasions, while incarcerated … brought an action or appeal in a court of the United States that was dismissed on the grounds that it is frivolous, malicious, or fails to state a claim upon which relief may be granted, unless the prison is under imminent danger of serious physical injury” (emphasis added). The prisoner argued before the United States District Court for the Southern District of New York that none of the prior dismissals of actions (including four against media organizations that covered his criminal proceedings and allegedly defamed him) should be characterized as “strikes” within the meaning of § 1915(g), and he indicated he had been assaulted by prison guards and other inmates, and his life was in danger. Following dismissal of his legal malpractice actions he then moved for in forma pauperis status to pursue appeals to challenge the District Court’s dismissals of the three cases against his former attorneys. Before the Second Circuit, the prisoner contended that none of the dismissals for his 2014 actions should have been counted under the three-strikes rule; and, that the Second Circuit’s dismissals of his four appeals challenging those statute-of-limitations dismissals of his 2014 actions should not be counted as more than a single strike because they were “consolidated.” He also claimed that his life was in danger. In rejecting these arguments, the Second Circuit analyzed the prior dismissals and concluded that they constituted strikes because they were based on failures to state claims on which relief could be granted. The Court concluded that, prior to his 2017 filings against his former attorneys, he had incurred more than three strikes within the scope of § 1915(g). The Court also rejected his claim regarding imminent danger because he lacked the required nexus between the alleged danger and the legal claims asserted. The Court denied the prisoner’s motions for in forma pauperis status, and dismissed the appeals for lacking an arguable basis in law or fact.
Missouri Court of Appeals, Eastern District, Division Three
Expert Opinion Requirement: Summary judgment affirmed in favor of attorney on legal malpractice claim where former client failed to produce expert testimony to support his claim of professional negligence or causally relate his alleged damages.
By: Rebecca Robertson
Duncan v. Dempsey
2018 WL 1915801 (Mo. App. E.D. 04/14/2018)
A client sued his former attorney for legal malpractice arising out of the lawyer’s representation of the client in a business transaction to redeem his financial interest in a company following the client’s entering into an agreement to sell his share of the company to his former business partner in exchange for a promissory note. Before the close of discovery in the legal malpractice proceedings, the lawyer moved for summary judgment on the basis that the client had failed to designate an expert to opine as to the standard of care or to establish that the client’s alleged damages were causally related to the alleged negligence. The client, who was pro se at the time, filed a response to the lawyer’s statement of uncontroverted facts, denying several of the facts and arguing that the lawyer’s proposed facts were supported by inadmissible hearsay. The client further argued that he should be granted time to conduct additional discovery concerning the facts at issue. The client did not file his own statement of facts or any legal memorandum of law opposing summary judgment, and did not offer any expert opinions. The trial court granted summary judgment on the grounds that the client failed to elicit the expert testimony required to support his claim for legal malpractice and failed to produce evidence concerning the causation element of his claim. The Missouri Court of Appeals reviewed the entry of summary judgment de novo. The Court began its analysis by reviewing the elements a plaintiff must prove in a legal malpractice action: (1) the existence of an attorney-client relationship; (2) negligence by the attorney; (3) proximate causation of damages; and (4) damages. In order to establish negligence, an expert witness who is a member of the same profession as the defendant is generally required to prove that the defendant’s conduct fell below the standard of care of the profession under the circumstances. In a professional negligence claim for legal malpractice, an expert witness is also required to establish that the attorney’s negligence was the proximate cause of the plaintiff’s damages “except in a clear and palpable case.” The lawyer having established a prima facie right to summary judgment because he demonstrated that the client could not carry his burden of proof as to negligence and causation without an expert, the burden shifted to the client to establish the existence of a genuine issue of material fact in order to defeat summary judgment by offering opinions from an expert witness demonstrating that the lawyer’s conduct constituted negligence and that the negligence was the proximate cause of the client’s damages. Where the client failed to offer any expert opinions, the Court affirmed the trial court’s decision granting summary judgment
