Apr 2 2018

Legal Malpractice Law Update March 29, 2018

  • Court of Appeals of Wisconsin

Standing: Third-party beneficiaries lacked standing to bring legal malpractice claim against attorney who handled administration of the decedent’s estate because the decedent’s intent was not thwarted by the attorney’s alleged malpractice.

  • Appellate Court of Illinois, First Judicial District, Sixth Division

Duty of Care: Attorneys could be sued by successor administrator when they were retained by original Estate Administrator to assist in the administration of decedent’s estate, as the attorneys owed a duty to the estate itself.

  • Supreme Court of Iowa

Relief-Required Rule: In order to prevail for an alleged sentencing error by his former criminal attorney, former criminal client is not required to prove his exoneration from the underlying conviction, as long as he shows he obtained relief from the sentencing error.

  • Court of Appeals of Texas, San Antonio

Statute of Limitations: Attorney’s legal malpractice claim accrued when the underlying criminal litigation “otherwise finally concluded” on the date of the mandate in her habeas corpus petition, rendering her claim timely.

  • Missouri Court of Appeals, Western District

Actual Innocence Requirement: A criminally-convicted plaintiff may obtain damages for a specifically contracted-for service which was not rendered by his defense counsel under a claim of breach of contract and need not demonstrate actual innocence.

  • Supreme Court of Nevada

Agency Within Attorney-Client Relationship: Condominium owners could not sue attorney for homeowners’ association under statute permitting suit against homeowners’ associations’ agents, based on statutory construction and the unique characteristics of the attorney-client relationship.

  • Court of Appeals of Wisconsin

Standing: Third-party beneficiaries lacked standing to bring legal malpractice claim against attorney who handled administration of the decedent’s estate because the decedent’s intent was not thwarted by the attorney’s alleged malpractice.

By: Jillian McGrath

David MacLeish et al. v. Boardman & Clark LLP, et al.

2018 WL 1358445 (Wis. App. 3/15/2018)

The appellants’ father died in 1984. The father’s will, drafted in 1967, provided that the remainder of his property be given to his wife, the appellants’ mother, to “use the income and so much of the principal as she may need for her care, comfort and support during her lifetime, meaning and intended hereby to give to [the mother], the life use of the income and so much of the principal as she may need,” and, at the death of the mother, the father directed that “the remainder of [his] estate in existence at that time be placed in trust until [his] youngest child shall have completed his college education through a Bachelor’s degree or indicated in writing to the trustee that he did not desire any further education, at which time said trust shall terminate and the remainder of [the father’s] estate shall be divided equally between [the father’s] four children.” The respondent law firm’s attorney handled the administration of the father’s estate. The respondent attorney advised the father’s wife, the appellants’ mother, to claim full use of a federal estate tax marital deduction for the father’s estate. At that time, there was no limit on the federal marital deduction. The mother followed the respondent attorney’s advice. The mother treated all of the assets of the estate as though they passed directly to her and she claimed a federal estate tax marital deduction for all those assets. The effect at the time was that the assets would be subject to taxation upon the mother’s death. The mother died in 2008. Her estate, which included those assets that passed from the father’s estate to the mother which were then remaining, incurred a federal estate tax of $261,343. The appellants, the remainder beneficiaries under the terms of the will and the sole beneficiaries of the mother’s estate, alleged that the federal estate tax on the mother’s estate was entirely avoidable if the respondent law firm created a bypass trust following the father’s death. The appellants alleged that the respondent law firm was negligent in: probating the father’s estate without setting up a trust, which was suggested by the language of the will; failing to administer the father’s estate in such a way that the personal exemption was exhausted; failing to administer the mother’s estate as if her interest in the assets she inherited from the father were limited to a life interest; and failing to remedy the situation once it was discovered that the assets of the father’s estate had grown in value to make the mother’s estate taxable. The circuit court granted summary judgment dismissing the appellants’ complaint. The court determined that the appellants had failed to show that they could proceed with their claims as third party beneficiaries of the will, because there was no evidence that the respondent attorney’s actions in administering the father’s estate thwarted the father’s testamentary intent. After the circuit court denied the appellants’ motion for reconsideration, the appellants appealed the trial court’s order dismissing their legal malpractice action against the respondents. The Court of Appeals of Wisconsin affirmed the circuit court’s decision. Usually, only an attorney’s clients may sue that attorney for malpractice. However, the Wisconsin Supreme Court has established that an attorney can be liable to a party named in a will if the attorney was negligent in drafting or supervising the execution of the will, but only if the attorney’s negligence “thwarted the decedent’s clear intent.” The respondents did not argue or cite any legal authority that a third-party beneficiary may also bring a legal malpractice action against an attorney who is negligent in the manner in which the attorney administered an estate, as opposed to the manner in which an attorney drafted a will. The Court of Appeals held that the father’s will did not create a trust and therefore the respondent attorney’s failure to read the will as creating a trust could not have thwarted any clear intent of the father. As the parties did not argue that the father’s will was ambiguous, the Court of Appeals examined the language contained in the father’s will. The Court of Appeals held that no language in the will manifested an intent by the father that a trustee be appointed, that the assets of the father’s estate be held by a trustee for the benefit of the mother, or that enforceable duties with respect to those assets be imposed upon a trustee, all of which were necessary to establish a trust. Instead, the father’s will gave the mother absolute power over disposition of the assets. The word “trust” appeared in the will, but only in connection with events postdating the mother’s passing. The Court of Appeals concluded that the father intended to give the mother a life estate with absolute power to dispose of the assets of the father’s estate, but subject to the future estate of the appellants. Therefore, as the appellants failed to point to evidence on summary judgment that the father’s intent was thwarted by the respondent attorney’s alleged negligence in administering the father’s estate, the Court of Appeals affirmed summary judgment in favor of the respondents.

  • Appellate Court of Illinois, First Judicial District, Sixth Division

Duty of Care: Attorneys could be sued by successor administrator when they were retained by original Estate Administrator to assist in the administration of decedent’s estate, as the attorneys owed a duty to the estate itself.

By: Elizabeth S. Myers

Estate of Hudson by Caruso v. Tibble.

2018 WL 944339 (Ill. App. (1st) 2/16/2018)

Decedent died intestate in 2005 with two heirs, his wife and son. Decedent’s wife was appointed the administrator of his estate and she subsequently retained defendant attorneys as counsel on behalf of herself, the original Estate Administrator. The original Estate Administrator was a beneficiary to the estate and the son, among others, filed petitions to remove her as the administrator of the estate. The original Estate Administrator agreed to resign in July of 2007, and defendant attorneys continued to represent her in her capacity as a beneficiary until their withdrawal in July of 2008. The son and the estate filed a lawsuit against the defendant attorneys alleging legal malpractice and breach of fiduciary duty, arguing that the defendant attorneys mismanaged the estate and had a conflict of interest with the estate through their representation of the original Estate Administrator. In its Complaint, the estate alleged that defendant attorneys were retained to represent, administer, and probate the estate by original Estate Administrator, who was also a beneficiary of the estate. The estate further alleged that defendant attorneys owed a duty of care to the estate, and the attorneys breached that duty by failing to determine all estate assets and by agreeing to represent the estate on behalf of the original Estate Administrator as well as the original Estate Administrator individually. The attorneys filed a motion for summary judgment arguing that the estate’s claim should be dismissed because no attorney-client relationship existed as between the attorneys and the estate and therefore the attorneys did not owe a duty to the estate. In addition, the attorneys argued that their client was the original Estate Administrator, and they represented neither the estate nor the subsequent Estate Administrator. The court granted defendant’s motion for summary judgment. The Appellate Court of Illinois determined that the trial court erred because the attorneys owed the estate a duty of care when they were retained by the original Estate Administrator to assist in the administration of the decedent’s estate. The Appellate Court stated that Illinois law recognizes an attorney’s duty to an estate. In so concluding, the Appellate Court surmised that it is common sense that when an attorney is hired by an estate administrator for purposes of administrating the estate, that attorney owes a duty to the estate because the administrator acts to serve the estate. Further, the nature of the relationship between the administrator and the estate is so connected and the estate can only act through the administrator. As such, the Appellate Court determined that the attorneys owed a duty to the estate. The Appellate Court could not determine whether the defendant attorneys’ conduct breached the duty to the estate and thus determined that summary judgment was improper. Accordingly, the Appellate Court reversed the decision of the trial court and remanded for further proceedings.

  • Supreme Court of Iowa

Relief-Required Rule: In order to prevail for an alleged sentencing error by his former criminal attorney, former criminal client is not required to prove his exoneration from the underlying conviction, as long as he shows he obtained relief from the sentencing error.

By: Jacqueline A. Welch

Kraklio v. Simmons

2018 WL 1357475 (Iowa 3/16/18)

Plaintiff in November 2002 was charged with three counts of first-degree fraudulent practice in suspected welfare fraud. As a result of a plea bargain negotiated by plaintiff’s first attorney, he agreed to plead guilty to the three counts and pay restitution, and the state would recommend probation. The court accepted the guilty plea, and on April 17, 2003, he was sentenced to concurrent terms of no more than ten years, suspended sentences, and five years of probation on each count to run consecutively. Plaintiff filed a pro se notice of appeal on May 16, 2003, after a probation officer informed him he would not be supervised during the appeal. A second attorney then represented plaintiff. This attorney (later named as defendant in the malpractice action) informed him that the probation officer was not required to suspend supervision because an appeal bond was not posted. Plaintiff, however, declined to post an appeal bond. The second attorney also advised plaintiff he had the right to begin his supervised probation while the appeal was pending, but plaintiff chose not to do so. In connection with his representation, the second attorney argued that the first attorney was ineffective in failing to argue that some or all of the charges were time-barred. On appeal, the court concluded that the first attorney had breached an essential duty by not pursuing a statute of limitations defense. The court found the record inadequate to determine prejudice on two of the counts, and preserved claims for post-conviction proceedings. On the third count, the court said there was no prejudice, and rejected the ineffective assistance of counsel claim. The court then affirmed the convictions on April 25, 2005. Plaintiff’s supervised probation began in August 2005. He refused to sign a restitution plan to comply with the sentencing order. In December 2005, the probation officer filed a report on the probation violation, and stated he “resumed” supervision of the case in August 2005, after the appeal was denied. The second attorney represented plaintiff on this probation violation. In February 2006, plaintiff signed a restitution plan and agreed to pay $12,000 annually until he paid $139,488 in restitution. The second attorney then filed a post-conviction relief action in May 2006. Plaintiff paid him nearly $10,000 for preparing, filing and litigating the action. In January 2008, plaintiff’s probation officer filed another report of probation violation because he failed to comply with the restitution plan. On April 3, 2008, the court granted the motion for summary judgment filed by the second attorney, and ordered plaintiff’s convictions on two counts vacated as barred by the statute of limitations, which also avoided over $80,000 in restitution. The Iowa Department of Corrections, however, delayed plaintiff’s release from prison pending an investigation into whether he was a sexually violent predator based on a 1978 conviction for lascivious acts with a child. Plaintiff sued his second attorney for malpractice in 2014, alleging that he “took no steps” to see that he was discharged from probation. Plaintiff claimed that although he was not supervised until August 2005, he actually began probation immediately after his original sentencing in 2003 while his case was on appeal, and thus his probation should have been discharged on April 17, 2008. If the second attorney had argued that his probation was discharged, plaintiff would have avoided almost a year of incarceration for violation of a probation condition. On April 23, 2016, the second attorney filed a motion for summary judgment, including the argument that plaintiff must first gain relief through proceedings in the criminal case or post-conviction that set aside the criminal conviction before he can pursue a malpractice claim against his criminal defense attorney, known as the exoneration or relief-required rule. The court allowed the second attorney’s motion for summary judgment, because plaintiff never achieved relief from his underlying conviction. The Supreme Court of Iowa reversed, and found that at the probation revocation proceedings, the court ruled that probation had expired, and thus plaintiff had in fact obtained relief before filing his malpractice action. The court relied on a Kansas case that when a malpractice claim arises from an illegal sentence, the malpractice plaintiff is not required to prove he was actually innocent of the crimes, but instead must “obtain post-sentencing relief from the unlawful sentence.” On appeal to the Supreme Court of Iowa, the second-attorney argued that plaintiff could not satisfy the additional element in a legal malpractice case against a criminal defense attorney that plaintiff must achieve relief from a conviction before advancing a legal malpractice action against his former attorney. Plaintiff however argued that such a requirement is inapplicable because he should be allowed to sue his attorney for failure to ensure he was released from probation on April 17, 2008, and he should not be required to show relief from the underlying conviction, but only the part of the criminal record at issue, i.e., his probation. In agreeing with plaintiff and the court of appeals, the Supreme Court concluded that other cases requiring a showing of relief from the underlying conviction are distinguishable because the malpractice in those cases led to an invalid conviction, whereas here, the claim was that the attorney missed the opportunity to end the probation period sooner, and did not blame the attorney for the underlying conviction. The Court relied on the Restatement (Third) of the Law Governing Lawyers, section 53 approach that plaintiff must show relief from the duration of his supervised probation, not the underlying conviction. The Court found that here, the court hearing the revocation challenge ruled that the probation actually ended while plaintiff was incarcerated on the probation violation. The Court held that a criminal defendant suing his defense lawyer over a sentencing error must obtain post-judgment relief on the sentencing issue, but need not prove relief from the underlying conviction. As a result, the Court affirmed the court of appeals, and remanded the case to the trial court.

  • Court of Appeals of Texas, San Antonio

Statute of Limitations: Attorney’s legal malpractice claim accrued when the underlying criminal litigation “otherwise finally concluded” on the date of the mandate in her habeas corpus petition, rendering her claim timely.

By: Rebecca A.G. Robertson

Skelton v. Gray

2018 WL 1308591 (Tex. App.-San Antonio 3/14/2018)

An attorney was represented by criminal defense counsel in a criminal proceeding brought against her for forgery of the will of a client when the original will was damaged and Attorney cut and pasted the signatures from a damaged copy of the client’s will to a clean unsigned copy printed off her computer and submitted the will in a probate proceeding. Attorney was convicted of forgery in the criminal proceeding. In a separate civil jury trial contesting the validity of the will between her client’s relatives, the jury found that Attorney did not act with the intent to defraud or harm another when she physically altered the will, that the will was an executed valid will and that the will submitted to probate was an accurate copy of her client’s will. Attorney appealed her criminal conviction and the conviction was affirmed. Attorney filed a petition for habeas corpus after the civil jury decision. Attorney’s writ of habeas corpus was granted based on ineffective assistance of counsel in her criminal trial. Attorney filed suit for legal malpractice within two years of the grant of her habeas corpus petition. Defense counsel moved to dismiss the legal malpractice claim based on the statute of limitations, arguing that the statute of limitations began to run when the Court of Criminal Appeals issued its mandate denying Attorney’s petition, which was more than two years prior to her filing her legal malpractice claim. Attorney argued that the underlying litigation was not finally concluded and the malpractice claim did not accrue until the Court of Appeals of Texas issued its mandate in the habeas corpus proceeding or even later, when the State dismissed the charges against her. The trial court dismissed the Attorney’s legal malpractice claim on the ground that it was barred by the two year statute of limitation for legal malpractice claims. The Court of Appeals of Texas reversed the decision of the trial court and held that only a final order in a habeas corpus proceeding marks the conclusion of the litigation from which it flows. A legal malpractice claim accrues when the client sustains a legal injury, or on cases governed by the discovery rule, when the client discovers, or should have discovered through the exercise of reasonable care and diligence, the facts establishing the elements of the claim. In Texas, when an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on the malpractice claim against the attorney is tolled until all appeals on the underlying claim are exhausted. Due to the unique nature of a legal malpractice claim arising out of criminal proceedings, limitations must run from the event that exonerates the former criminal defense client or otherwise vacates that client’s conviction, therefore the statute of limitations on Attorney’s legal malpractice claim was tolled until the completion of the habeas corpus proceedings which overturned her conviction.

  • Missouri Court of Appeals, Western District

Actual Innocence Requirement: A criminally-convicted plaintiff may obtain damages for a specifically contracted-for service which was not rendered by his defense counsel under a claim of breach of contract and need not demonstrate actual innocence.

By: Christopher S. Storm

Fuller et al. v. Partee et al.

2018 WL 1158907 (Mo. App. W.D. 3/6/2018)

A convicted felon and his sister (collectively “plaintiffs”) brought suit against the defendant attorneys, an active criminal defense attorney (“active attorney”) and his retired former law partner (the “retired attorney”), alleging breach of contract, breach of fiduciary duty, and legal malpractice, flowing from the active attorney's allegedly negligent failure to obtain oral argument on the plaintiff's motion for post-conviction relief. The plaintiffs alleged that the attorneys ceased communicating with them after receiving payment of a retainer fee, and failed to follow up with the court, as they had contracted to do, to obtain and make oral argument on the plaintiff's post-conviction motion. The plaintiffs appealed the attorneys' successful motion to dismiss. Deciding an issue of first impression, the Missouri Court of Appeals held that a criminal defendant can obtain damages for a specifically contracted-for service which was not rendered by his defense counsel under a claim for breach of contract. The Court of Appeals considered and declined to impose the actual innocence requirement upon breach of contract claims. The Court of Appeals reasoned that the focus of a breach of contract claim, which is solely the recovery of money paid to retain counsel for services not rendered, is distinguishable from the focus in a negligence claim, which is on the unfavorable outcome of a criminal trial. The Court of Appeals held that policy reasons supporting the actual innocence requirement, such as disallowing a criminal to profit from his crime, or shift blame for guilt, or undermine justice, are not at issue where a convict solely seeks recovery for services which were not provided under a contractual breach. The Court of Appeals emphasized that the case at bar was an “unusual case” where the plaintiff had a contract clearly listing the legal services which the defendant active attorney promised to provide; that there was no dispute that the scope of those services included obtaining oral argument; and that the service was not provided, without the client's consent. Accordingly, the Court of Appeals found that the trial court erred in dismissing the plaintiffs breach of contract claim. The dismissal of claims against the retired attorney were affirmed because there was insufficient evidence of partnership between the two attorneys at the time of the alleged negligence. The Court of Appeals treated the underlying motion as a motion to dismiss and credited an affidavit submitted by the retired attorney that he had not practiced in fifteen years; that letterhead did not identify the attorneys as partners, though the firm did business under both lawyers' names; and that the engagement agreement did not mention the retired attorney. Finally, the Court of Appeals affirmed the dismissal of the plaintiffs breach of fiduciary duty and legal malpractice claims because they could not show actual innocence of the underlying crime charged. The Court of Appeals described both of those claims as essentially malpractice claims, no matter how titled, and reasoned that precedent within and outside of Missouri extended the actual innocence requirement to legal malpractice claims brought against post-conviction counsel.

  • Supreme Court of Nevada

Agency Within Attorney-Client Relationship: Condominium owners could not sue attorney for homeowners’ association under statute permitting suit against homeowners’ associations’ agents, based on statutory construction and the unique characteristics of the attorney-client relationship.

By: Avana A. Anderson

Dezzani v. Kern & Associates, LTD.

2018 WL 1103507 (Nev. 3/1/2018)

An attorney representing a homeowners’ association represented the association in connection with an issue involving the owners of a condominium unit, whose deck encroached into the common space. The owners were part of the homeowners’ association and the attorney advised the association regarding the deck encroachment issue. Due to the encroachment, a violation order was sent to the owners. Communications took place between the attorney, on behalf of the association, and the owners. At one point, the owners suggested that the homeowners’ association retain a new attorney. The violation order was ultimately upheld at a subsequent board hearing. The owners then filed a complaint against the attorney, based on statute NRS 116.31183, alleging they had been retaliated against due to their act of recommending that the association retain a new attorney. The subject statute allows a condominium owner to bring an action for attorneys’ fees, compensatory damages and costs when an “agent” of a homeowners’ association takes retaliatory action because the condominium owner either complains in good faith about violations of NRS 116 or the governing documents of the association, recommends the selection or replacement of the attorney representing the homeowners’ association, or requests to review association records in good faith. The trial court dismissed the action and the Court of Appeals affirmed. The Supreme Court of Nevada assessed the term “agent” as used in NRS 116 and determined that the attorney was not an “agent” of the association under the statute, noting that “[w]hether an attorney is liable under an agency theory hinges on whether the attorney is acting solely as an agent for the client, i.e., as a debt collector, or whether the attorney is providing legal services to a client.” Due to the unique characteristics of the attorney-client relationship, the professional standards and the imposed ethical obligations, the attorney-client relationship is not the same as the agent-principal relationship. The Supreme Court of Nevada affirmed the Court of Appeals decision affirming the Second Judicial District Court’s decision to grant the attorney’s motion to dismiss on the claim of retaliation under NRS 116.31183 because the attorney acting on behalf of a homeowners’ association is not considered an “agent” of the association.

Back to Newsletters