Hofstra Law School: Lawyer Malpractice Class #3
Suggested Readings: Fortney & Johnson, Legal Malpractice Law. Ch. 2 pp. 15-33
Here’s a rhetorical question: How many ways are there to sue a lawyer?
There used to be only one: Breach of Contract. But as time marched on, tort law expanded the duties that lawyers were found to have to not only clients with whom the lawyer was in a privity relationship but to third parties who did not fit the classic definition of a client. So, negligence became yet another cause of action. Then there came the concept of breach of fiduciary and, lo and behold a third cause of action was born. Add to those the relatively recent innovation of statutory causes of action, such as Consumer Fraud and Deceptive Trade Practices, the Federal Debt Collection Practices Act, federal securities laws, and other statutes, both state and federal. Add still more Rules that expanded the standards by which lawyers’ conduct is governed and measured, such as the Rules of Professional Conduct.
The growth of lawyer liability law closely parallels the law of product liability. It started with breach of contract, grew into negligence, then strict product liability under §402A of the Restatement of Torts, a hybrid cause of action.Then there were state product liability laws that re-defined the common law.
So too legal malpractice. It has all the elements of contract and tort combined and now, we even have an entire Restatement dedicated to the Law Governing Lawyers. We also have court decisions and state statutes that expand and shrink those instances where lawyers are liable for their professional malpractice.
Let’s take them one at a time and try to decipher the elements of each.
1. Breach of Contract
a. Express Contract
It’s unusual to see many lawyers sued by their clients on the basis of breach of an express contract. Usually, the contract sued upon is the engagement agreement between the lawyer and client. But unless the lawyer has promised to do something specific or has promised to achieve a certain result, a breach of contract does not usually lie. Here’s an example of where a lawyer did promise to do something specific, did not and was sued for the damages incurred by the client:
Gunn v. Mahoney, 95 Misc.2d 943, 408 NYS2d 896 (1978)
What’s to be gained by suing for breach of contract?
1. Sometimes, there’s a longer statute of limitations in contract actions than in tort actions.
2. A contract action may be less expensive to litigate because no expert witness is generally required to prove breach of an express term of the contract. For example, if an attorney promises to form a corporation for a client and fails to do so, that’s a rather simple breach to prove.
3. Contract damages, however, may be more restricted than tort damages.
4. Some states may allow an award of interest on a judgment for contract damages.
5. Here are the elements of the contract cause of action:
a) a valid contract that can be legally enforceable (i.e., offer and acceptance);
b) plaintiff has performed his/her obligations under the contract (i.e, consideration, usually by way of payment of the attorney’s fee and/or cooperation with counsel, etc.);
c) the lawyer breaches an express promise made as part of the contract; and
d) actual damages suffered by the client.
Here’s a good analysis of the the cause of action for breach of contract against a lawyer for his malpractice in failing to perform a specific task:
Gorski v. Smith, 2002 PA Super 334, 812 A.2d 683 (2002)
And here, a less than contemporary view from another state:
Olyear v. Kerr, 217 Va. 88, 225 SE2d 398 (1976)
b. Implied Contract
Implied in every attorney client relationship is an attorney’s promise that his professional services will comply with applicable standards of care and the client’s acceptance of that implied term as part of the professional relationship. Some consider the implied contract theory as a bridge into the tort claim for negligence. Some states allow plaintiffs to sue for both the contract claim and the tort claim. Some states apply different statutes of limitations to these causes of action. Others hold that it is a duplicate cause of action and will dismiss either the contract or the tort cause of action where both claims are based on the same operative facts. Perhaps the breach of implied contract is more like the negligence claim because expert testimony will invariably be required to prove the applicable standard of care, how the attorney breached that standard of care and whether that breach was the proximate cause of any damages.
Celentano v. Grudberg, 76 Conn App. 119, 818 A.2d 841 (2003)
Hall v. Nichols, 400 SE 2d 901 (W.Va.1990)
2. Tort: Negligence
This cause of action is the most widely accepted and the one on which most legal malpractice claims are based. Essentially, the question we seek to address is "What did the lawyer do wrong?" There need not be any motive to do anything "wrong". It may have been just a mistake; even an innocent one. The trick is how do you define what a "mistake" is?
Here are the elements of the negligence cause of action:
a) an attorney-client (or foreseeable non-client) relationship that gives rise to a duty of care within the scope of the relationship;
b) the attorney’s failure to exercise ordinary skill and knowledge thus departing from the standard of reasonable care;
c) that the departure was the proximate cause of
d) actual damages suffered by the client (or non-client).
The essence of negligence is that the lawyer failed to comply with the applicable standard of care in the duties that he has to a client within the scope of the representation he furnishes to the client. The deviation from the standard in discharging the lawyer’s duty is negligence. Of course, whether that negligence caused any damage is quite another question. But for the time being, let’s try to understand what the lawyer’s standard of care is.
Assume that the lawyer has a duty to do something for the client. (What the specific duties are we will soon learn.) But for now, here are a few examples of how the lawyer’s standard of care is defined:
The Restatement of Law Governing Lawyers:
§ 52 The Standard of Care
(1)…a lawyer who owes a duty of care must exercise the competence and diligence normally exercised by lawyers in similar circumstances.
New York Pattern Jury Instructions 2:152 Malpractice-Attorney:
An attorney who undertakes to represent a client impliedly represents that (he,she) possesses a reasonable degree of skill, that (he,she) is familiar with the rules regulating practice in actions of the type which (he,she) undertakes to bring or defend and with such principles of law in relation to such actions as are well settled in the practice of law, and that (he,she) will exercise reasonable care. Reasonable care means that degree of skill commonly used by an ordinary member of the legal profession. [Emphasis added].
But what if the lawyer being sued is not just an "ordinary" member of the legal profession? What if he or she is extraordinary? What if he’s a specialist in his field? What if he’s rated as a "SuperLawyer" or "Best Lawyer". That’s no ordinary lawyer. What standard applies to such a star in his field?
Here’s one court’s view on a case involving the specialized area of Workers Compensation law:
"…a lawyer holding himself or herself out as a specialist in an area of law must exercise the knowledge and skill ordinarily possessed by other specialists in the same area of the law." Celucci v. Bronstein, 277 N.J.Super. 506, 522 (App. Div. 1994).
Here’s what one of the most popular treatises in the field has to say:
Whether an attorney is a "specialist" may determine not only the standard of care by which the attorney’s conduct is to be judged, but also the manner in which liability is to be established. For example, an attorney whose skill and conduct are questioned may find that his or his conduct is to be judged by comparison to the skills of a renowned specialist in the same field…
The recognition of a speciality is simply an acknowledgment of the need for special skill and knowledge that is not part of the ordinary attorney’s equipment. It is not unfair to require that an attorney, who practices in a specialty, to exercise the skills and posses the knowledge requied to competently represent a client.
Mallen & Smith, Legal Malpractice, 2008, ed. §20:4, p.1282.
And, especially in these days of aggressive advertising by lawyers, the claim of specialization is all the more important in holding lawyers accountable who claim that they are specialists. One California court held:
One who holds himself out as a legal specialist performs in similar circumstances to other specialists but not to general practitioners of the law. We thus conclude that a lwyer holding himself out to the public and to the profession as specializing in an area of the law must exercise the skill, prudence and diligence exercised by other specialists of ordinary skill and capacity specializing in the same field. Wright v. Williams, 47 Cal App. 3d 802, 809-810, 121 Cal Rprtr. 194,199 (2d Dist. 1975).
3. Breach of Fiduciary Duty
There’s a famous Norman Rockwell painting of 3 young boys building a dog house for their new pup. Above the door, they’ve painted the pet’s name: FIDO. Why did they give him that name? What does it mean? To those boys, FIDO is the embodiment of their greatest and most trusted friend and companion who would always be there to guide and help them. Is there any wonder what the derivation of the name "FIDO" is?
The Fiduciary Duty, as it applies to lawyers and the attorney-client relationship has been characterized as a "mega duty" with 4 inherent component-duties:
1. the duty to avoid conflicts of interest;
2. the duty to protect a client’s confidential information;
3. the duty to communicate with the client;
4. the duty of competence.
The fiduciary duty is unique because it expresses the very essence of the lawyer’s creed: to put the client’s interests ahead of the lawyer’s. Even if it harms the lawyer in some way. It embodies the importance of loyalty to the client, of serving his interests faithfully, diligently and competently and in never permitting the interests of one client to clash with the interests of others. The client is the "master"; the lawyer the "servant". Thus the oft stated wisdom that a servant cannot serve two masters at the same time.
Here’s the view of the Restatement of the Law Governing Lawyers:
§ 16 A Lawyer’s Duties to a Client–In General
…[A] lawyer must, in matters within the scope of the representation:
(3) comply with obligations concerning the client’s confidences and property, avoid impermissible conflicting interests, deal honestly with the client, and not employ advantages arising from the client-lawyer relationship in a manner adverse to the client;…
§ 49. Breach of Fiduciary Duty–Generally
…[A] lawyer is civilly liable to a client if the lawyer breaches a fiduciary duty to the client set forth in §16 (3)…
Justice Cardozo’s much quoted words on the nature of the fiduciary conveys the essence of the duty. A fiduciary,
"is held to somehting stricter than the morals of the market place. Not honest alone, but the punctilio of an honor the more sensitive, is then the standard of behavior."
Meinhard v. Salmon, 249 NY 458 (1928).
With such a high moral, ethical and legal standard applied to lawyers, it’s no wonder that the proliferation of legal malpractice suits invoke the fiduciary duty more and more as one of the theories of liability. Has it been over-used and stretched beyond its intended use? Professor Charles Wolfram has something interesting to say about that.
See, "Wolfram, A Cautionary Tale: Fiduciary Breach as Legal Malpractice", 34 Hofstra L. Rev. 689 (2006).
Fiorentino v. Rapoport, 693 A. 2d 208 (Pa.Super. 1997)
Santulli v. Englert, Reilly & McHugh, P.C. 586 NE 2d 104 (NY, 1992) (legislatively overruled by NY CPLR 214 (6).
Estate of Re v. Kornstein, Veisz & Wexler, 958 F. Supp. 907 (SDNY 1997) (Sotomayor, J.)
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Tagged with: breach of fiduciary duty, causes of action, CLE & Law School Course, Express Contract, Implied Contract, negligence, Theories of Liability
Posted in: CLE & Law School Course