by Christopher J. Graham and Joseph P. Kelly

Kenco Enterprises Northwest, LLC v. Wiese, et al, Case No. 67351-3-I (Wn. App. Jan. 7, 2013)

Legal malpractice claim not assignable, directly or indirectly, to an adversary in a proceeding from which that legal malpractice is alleged to have arisen. This litigation arose out of an alleged breach under a real estate purchase and sale agreement and resulted in a $3 million judgment against counter-defendant who then assigned all its interest, including legal malpractice claims it might have against its attorneys to counter-plaintiff. Legal malpractice claim was not assignable because under Washington law “assignments between adversaries could give rise to potential conflicts of interest and could harm the legal profession by making lawyers reluctant to represent potentially judgment-proof clients.”

by Christopher J. Graham and Joseph P. Kelly

Osborne v. Keeney, Case Nos. 2010-SC-000397-DG, 2010-SC-000430-DG (Ky. Dec 20, 2012)

Kentucky Supreme Court reversed and remanded legal malpractice case because trial court failed to instruct the jury on the suit-within-a-suit standard which requires trial court to instruct the jury as if it were trying the underlying tort case before instructing the same jury on the legal malpractice claim. Plaintiff’s legal malpractice case was based on her attorney’s failure to file suit against a pilot that crashed his plane into her house. Court also held that punitive damages are recoverable from attorney for legal malpractice, but plaintiff can’t recover as damages the “lost” punitive damages that may have been recovered in “suit-within-a-suit.”

by Christopher J. Graham and Joseph P. Kelly

Encyclopedia Britannica, Inc. v. Dickstein Shapiro, LLP, Case No. 10-0454 (JDB) (D. D.C. Nov. 26, 2012)

Judicial estoppel didn’t preclude defendant law firm from making an argument that contradicts statements made during the firm’s representation of plaintiff in patent infringement suit. Law firm took position in malpractice suit that patents weren’t infringed. But one of the firm’s attorneys had earlier stated in an affidavit that “some of the claims are unquestionably infringed.” Court noted it would be improper to apply judicial estoppel to a non-party, like the attorney who made the initial statement. Even so, the court stated that it would be improper to apply judicial estoppel to statements “made in its prior capacity as the now-opposing party’s lawyer or representative.” Doing so could potentially limit the “full and vigorous representation” of legal clients because lawyers would have to choose between the client’s interest and preventing a future malpractice suit.

by Christopher J. Graham and Joseph P. Kelly

Scanlan v. Marshall Eisenberg, et al, Case No. 09 C 5026 (N.D. Ill Nov. 15, 2012)

Trust beneficiary sued law firm and lawyers for legal malpractice and breach of fiduciary duty. Defendants allegedly represented both the plaintiff beneficiary and the trustee; and caused the Trust to purchase stock and make loans for the benefits of others. Defendants unsuccessfully argued plaintiff didn’t allege an attorney-client relationship. While there was no express representation of plaintiff by defendants, plaintiff alleged an implied-in-fact contract through allegations regarding plaintiff’s interactions with defendants over the years, including numerous examples where defendants advised plaintiff on legal matters. Defendants also unsuccessfully argued the fiduciary duty count was duplicative of the legal malpractice count but the court allowed the fiduciary duty count to proceed because it was based on different conduct than alleged in the legal malpractice count.

by Christopher J. Graham and Joseph P. Kelly

Schmidt v. Coogan, 287 P.3d 681 (Wash. App. Oct. 30, 2012)

Defendant attorney granted new trial on damages in legal malpractice case. The legal malpractice plaintiff was injured in a slip and fall at a grocery store. Defendant attorney failed to file plaintiff’s suit against the grocery store within the statute of limitations. The attorney was found liable at trial and damages were awarded. Defendant attorney was granted a new trial on damages only because plaintiff failed to prove collectability. Plaintiff’s damages needed to be limited to what she could recover from the grocery store if defendant attorney timely filed suit. “Courts consider collectability of the underlying judgment to prevent the plaintiff from receiving a windfall because it would be inequitable for the plaintiff to be able to obtain a greater judgment against the attorney than the judgment that the plaintiff could have collected from the third party.”

by Christopher J. Graham and Joseph P. Kelly

Joseph Delgreco & Company, Inc. v. DLA Piper, Case No. 10 Civ 6422 (PAE) (S.D. N.Y. Oct. 1, 2012)

Court granted defendant law firm’s motion for summary judgment against plaintiffs because they didn’t offer expert testimony to establish a prima facie case of legal malpractice. Plaintiff’s expert testified regarding only two of plaintiff’s 13 malpractice claims. The court stated that “[t]he only circumstances in which expert opinion evidence is unnecessary are those in which “a jury could reasonably conclude, on the basis of their own ordinary experience, that defendant’s conduct was so negligent as to fall below any standard of care.” [citation omitted]; and, “[u]nless [1] a juror’s ordinary experience provides sufficient basis to assess the adequacy of the professional service, or [2] the attorney’s conduct falls below any standard of due care, expert testimony is necessary to establish that the attorney acted negligently.” [citation omitted]. Plaintiffs’ claims required expert testimony so defendants’ motion for summary judgment regarding the 11 claims lacking expert testimony was granted. The court also granted defendants’ summary judgment on the two claims involving expert testimony for lack of proximate cause because the expert testimony wasn’t about proximate cause and the evidence didn’t otherwise establish proximate cause.

by Christopher J. Graham and Joseph P. Kelly

Sacksteder v. Senney, C.A. No. 24993 (Court of Appeals of Ohio, Second District, Sept. 28, 2012)

Appeals court overturned dismissal of legal malpractice complaint. The court found that plaintiff alleged sufficient facts to withstand a motion to dismiss by applying a “plausibility” test to the allegations in the complaint to determine whether plaintiffs alleged a “plausible” legal malpractice claim. Plaintiffs didn’t need to prove their case at the pleadings stage.

by Christopher J. Graham and Joseph P. Kelly

Ruff v. Reising, Ethington, Barnes, Kisselle, P.C., Case No. 11-CV-11110 (E.D. Mi. Sept. 27, 2012)

Defendant law firm’s summary judgment motion granted based on statute of limitations. “Under Michigan law, a legal malpractice claim must be brought within two years of the date the attorney ceases to serve the client or within six months of when the client discovered or should have discovered the claim, whichever is later” and “[a] claim for professional malpractice accrues ‘at the time [the professional] discontinues serving the plaintiff in a professional or pseudoprofessional capacity as to the matters out of which the claim for malpractice arose.” Here, plaintiff sued firm on November 10, 2010. The last substantive services provided by the firm were in April 2008—more than two years before suit was filed and, thus, plaintiff’s claim was time-barred. Defendant’s letter on November 10, 2008 confirming the end of the attorney-client relationship with plaintiff didn’t toll the statute of limitations when the last substantive services were provided in April 2008.

by Christopher J. Graham and Joseph P. Kelly

Elmo v. Callahan, 2012 WL 3669010 (D. N.H Aug. 24, 2012)

District court granted summary judgment to defendant attorney in transactional legal malpractice claim because plaintiffs failed to prove proximate cause. Defendant attorney represented both buyer and sellers of a business. Attorney stood to make over $200,000 if the sale went through, while sellers received cash, subordinated debt, and other equity from buyer. The sale went through but buyer went under soon after. Plaintiffs – the sellers that received subordinated debt and equity in buyer – sued for legal malpractice. Plaintiffs failed to prove proximate cause because they “presented no evidence as to why [the purchasing company] collapsed, let alone any evidence that [the purchasing company’s] collapse or the reasons for it should have been foreseeable to [the attorney].”

by Christopher J. Graham and Joseph P. Kelly

Croucier v. Chavos, 207 Cal. App. 4th 1138, 144 Cal. Rptr. 3rd 180 (Cal. App. July 18, 2012)

Plaintiffs suffered “actual injury” triggering legal malpractice one-year statute of limitations when they knew defendant attorney didn’t competently pursue enforcement of a judgment, rather than when the plaintiffs found evidence that the judgment was collectible. Defendant attorney had obtained a default judgment in favor of plaintiffs, but then left his firm and there was no substitution of attorney for a year and a half. Statute of limitations began running when plaintiffs’ new attorney substituted in the case and immediately began collection proceedings – not two months later when post-judgment proceedings indicated that the judgment was collectible.