Perry v. Scholar, U.S.D.C., District of Columbia, March 19, 2010.
Facts: From 1985-2005, Perry, an accountant, served as a paid plan administrator for a pension plan. At the same time, Scholar served as the plan’s attorney. In or about 2006, the plan filed suit against Perry, Scholar and other defendants for breach of fiduciary duty and other claims.
Subsequently, Perry filed a claim against Scholar alleging that he had been forced to spend over $150,000 defending himself in the litigation commenced by the plan due to Scholar’s legal malpractice.
Scholar moved to dismiss on the basis of a lack of privity.
Issue: Was Perry required to establish an attorney-client relationship to proceed with his claim against Scholar?
Ruling: No. The Court held that Perry’s claim sounded in "tortious involvement in litigation":
[T]he essential elements that must be established for this claim are: (1) the plaintiff must have incurred the fees in the course of prior litigation, (2) ordinarily that litigation must have occurred between the plaintiff and the third party who is not the defendant in the present action, and (3) the plaintiff must have become involved in the underlying litigation as a consequence of the defendant’s tortious act.
An attorney-client relationship is unnecessary. The Court noted, however, that "a plaintiff can have no claim against a defendant for wrongful involvement in litigation if the plaintiff is found liable for any portion of the underlying litigation."
Significantly, even though an attorney-client relationship is not required, plaintiff must establish that the attorney owed him a duty and that the breach of that duty was the proximate cause of his alleged damages.
Lesson: In DC, third parties may proceed against attorneys whose negligent conduct resulted in their involvement in litigation if they can establish a duty on the part of the attorney and damages resulting from a violation of that duty.
Tagged with: Columbia, District, District of Columbia, duties, duties to third-parties, Federal, parties, Privity, third