Florida - LEGAL MALPRACTICE
Dismissal of law firm’s counterclaim in legal malpractice case due to forum selection provision in retainer agreement reversed. [Added 1/12/22]
Client and Law Firm entered into a representation agreement. The agreement had a forum selection provision stating that “any matter arising from or in connection with this Agreement” would be adjudicated in Cook County, Illinois. Client sued Law Firm for legal malpractice, but filed suit in Hillsborough County, Florida. Law Firm filed a breach of contract counterclaim for unpaid legal fees. The trial court dismissed Law Firm’s counterclaim, indicating that due to the forum selection provision the counterclaim had to be brought in Illinois. Law Firm appealed.
The Second DCA reversed. The enforceability of the forum selection provision is a matter of contract law, not subject matter jurisdiction. That means a party can waive the ability to enforce the provision, which is what Client did by filing the malpractice action in Florida. The appeals court explained: “The question, then, is whether the tort claims [Client] brought in its Florida complaint – professional negligence and breach of fiduciary duty – arose out of the Services Agreement. Simply put, they did.” Consequently, the court concluded: “[W]hen [Client] filed its claims in Hillsborough County, it waived its right to have the inextricably related counterclaims litigated in Cook County under the forum selection provision. The circuit court erred when it ruled to the contrary and applied the forum selection provision as if it were jurisdictional.” Solomon Law Group, P.A. v. Dovenmuehle Mortgage, Inc., __ So.3d __ (Fla. 2d DCA, No. 2D21-360, 12/8/2021), 2021 WL 5814235.
Dismissal of malpractice action brought by alleged third-party beneficiary reversed due to factual issues regarding whether lawyer undertook particular duty. [Added 6/30/21]
Ellerson’s grandmother retained attorney Moriarty to assist with her estate planning. Moriarty drafted an amendment to the client’s trust providing that Ellerson would take ownership of a parcel of real property. No deed was prepared to transfer the property to the trust before the client died, so Ellerson did not get the property.
Ellerson sued claiming she was an intended third-party beneficiary of Moriarty’s attorney-client relationship with her grandmother. She alleged that Moriarty “never limited the scope of his duty to her grandmother to exclude advice or services to fund the trust” and that Moriarty “had conversations with Ellerson and her grandmother about drafting and recording deeds transferring the real property into the trust.”
Moriarty filed a motion to dismiss for lack of standing and because he had no duty under the allegations as a matter of law. The trial court dismissed the complaint, reasoning that “Moriarty's only obligation to Ellerson, a third-party beneficiary, was to draft a facially valid trust amendment that set forth Ellerson's grandmother's intent.” Ellerson appealed.
The Second DCA reversed. Ellerson was not in privity with Moriarty but had standing to bring the malpractice suit under the intended third-party beneficiary exception to the privity requirement. “Ellerson alleged that she was an intended third-party beneficiary of her grandmother’s trust and that her grandmother intended for the [property] to pass to Ellerson as set forth in the trust. Ellerson also alleged that due to Moriarty’s negligence in failing to draft and record a deed, the trust was not funded with that property and, therefore, that particular devise failed. This was sufficient to allege Ellerson’s standing.” The fact that this case involved a trust rather than a will was legally irrelevant to the court.
The court noted that “there are critical factual issues that could only be resolved upon the taking of evidence: whether Moriarty limited the scope of his retention such that he was not required to assist in funding the trust and whether he expressly agreed in conversations to draft and record a deed in order to effectuate Ellerson's grandmother's intent to pass the [property] to Ellerson as set forth in the trust amendment. Those factual issues are crucial to determining whether Moriarty owed a duty to Ellerson.”
Ellerson was not attempting to use extrinsic evidence to contradict her grandmother’s intent regarding the trust amendment, but instead was trying to show that her grandmother’s intent, as expressed in the amendment, “was frustrated. The use of extrinsic evidence in this manner is permissible.”
The court explained the import of its decision: “Permitting Ellerson’s suit to go forward here does not necessarily expand the scope of an attorney’s duty to intended third-party beneficiaries beyond the duties owed to the attorney’s client. It merely allows Ellerson the opportunity to prove whether or not Moriarty specifically undertook the duty to draft and record a deed for the [property] so as to effectuate Ellerson’s grandmother’s intent as set forth in the trust amendment.”
The court summarized: “We recognize that the trial court believed its decision rested on a purely legal issue: whether an attorney could be held liable to an intended third-party beneficiary for failure of a trust devise where the trust document was facially valid. But as explained herein, that issue can only be determined after consideration of whether Moriarty specifically undertook the additional duty to fund the trust which is dependent on factual evidence, something that Ellerson was precluded from presenting due to the dismissal of her complaint.” Ellerson v. Moriarty, __ So.3d __ (Fla. 2d DCA, No. 2D20-2653, 6/23/2021), 2021 WL 2557308.
Dismissal of legal malpractice case on statute of limitations grounds reversed. [Added 6/10/21]
Lawyer Rier represented client Vega in a criminal case. A decision was entered for the State. Rier then moved for a written opinion or for certification and a motion for rehearing en banc. The Third DCA denied all post-decision motions in an order dated March 24, 2017. Vega filed a writ of certiorari with the Florida Supreme Court, which was denied on October 2, 2017.
Vega sued Rier on April 3, 2018, alleging legal malpractice. The trial court dismissed the case based on the 2-year statute of limitations for legal malpractice actions. Vega appealed.
The Third DCA reversed. The court pointed out that “[t]he statute of limitations in a legal malpractice action begins to run from the rendition of the final order on appeal and ends two years later.” In this case, the legal malpractice action was filed by Vega on April 3, 2018, “which is well within the two-year range of the statute of limitations calculated from either this Court’s March 24, 2017 order or from the Supreme Court’s October 2, 2017 order. Therefore, the trial court erred in dismissing the malpractice action.” Vega v. Rier, __ So.3d __ (Fla. 3d DCA, No. 3D20-1859, 5/26/2021), 2021 WL 2125113.
Unanimous Supreme Court rules that insurer has standing to bring legal malpractice action against counsel it hired to represent insured, based on policy’s subrogation provision. [Added 6/4/21]
Insurer Arch hired Law Firm to defend a suit against its insured, Spear Safer. After the case settled, Insurer filed a legal malpractice suit against Law Firm. Law Firm moved for summary judgment on the ground that Insurer lacked standing to sue because Insurer and Law Firm were not in privity. The trial court granted the motion, noting in its order that the Statement of Client’s Rights included with the retention letter showed that the insured was in privity with Law Firm as the firm’s client. Insurer’s role was that of a third-party payor.
The Fourth DCA affirmed. Arch Ins. Co. v. Kubicki Draper, LLP, 266 So.3d 1210 (Fla. 4th DCA 2019). The court saw “nothing in the record” to indicate that Law Firm was in privity with Insurer or that Insurer was an intended third-party beneficiary of the relationship between the firm and the insured. Supreme Court cases have limited standing in a legal malpractice case to those who were in privity with the defendant law firm or persons who clearly were intended third-party beneficiaries of the attorney-client relationship. See Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So.2d 1378 (Fla. 1993); Angel, Cohen & Rogovin v. Oberon Investment, N.V., 512 So.2d 192 (Fla. 1987). The court summarized: “Based on the record before us, where nothing indicates that the law firm was in privity with the insurer, or that the insurer was an intended third-party beneficiary of the relationship between the law firm and the insured, we are unwilling to expand the field of privity exceptions to apply to this case. Thus, we affirm the circuit court’s conclusion that the insurer lacked standing to pursue a professional negligence claim against the law firm in the underlying action.” The court certified the following question to the Supreme Court as one of great public importance: “Whether an insurer has standing to maintain a malpractice action against counsel hired to represent the insured where the insurer has a duty to defend.”
The Supreme Court unanimously reversed the Fourth DCA. It rephrased the certified question as: “Whether an insurer has standing through its contractual subrogation provision to maintain a malpractice action against counsel hired to represent the insured where the insurer has a duty to defend.” Answering the question in the affirmative, the Court stated: “We agree with the circuit court and the Fourth District that [Law Firm] was in privity with the insured as the client rather than [Insurer]. However, [Insurer] also bases its standing argument, in part, on the subrogation provision in the insurance policy issued to [the insured]. We agree with [Insurer] and conclude that an insurer has standing to maintain a legal malpractice action against counsel hired to represent its insured where the insurer is contractually subrogated to the insured’s rights under the insurance policy.” (Footnote omitted.)
The policy expressly granted subrogation rights to Insurer, providing in pertinent part: “To the extent of any payment under this Policy, we [Arch] shall be subrogated to all your [Spear Safer] rights of recovery therefor against any person, organization, or entity and you shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights.” The Supreme Court concluded that “[t]he language of the subrogation provision is clear – Arch is contractually subrogated to the rights of Spear Safer, which would include claims for legal malpractice against counsel retained to defend the insured. . . . Where an insurer has a duty to defend and counsel breaches the duty owed to the client insured, contractual subrogation permits the insurer, who – on behalf of the insured – pays the damage, to step into the shoes of its insured and pursue the same claim the insured could have pursued.” (Citations omitted.) As a result, Insurer had standing to sue Law Firm for malpractice based on the contractual subrogation provision.
The Court rejected the argument that the general public policy against assignment of legal malpractice claims applied. The concern underlying that policy is to prevent creating a market for legal malpractice claims, and that concern was not present here. “The insurer is not a ‘stranger’ to the attorney who is ‘bidding’ on a cause of action and ‘exploiting’ it. To the contrary, the insurer is trying to recover money it paid to its insured from the lawyer it hired. The lawyer is on notice of subrogation claims included in the policy, and Florida public policy does not support shielding the law firm from accountability for its professional malpractice. To the contrary, subrogation exists to hold premium rates down by allowing the insurers to recover indemnification payments from the tortfeasor who caused the injury.”
Due to its resolution of the case on the ground of contractual subrogation, the Court did not reach the third-party beneficiary argument. Arch Ins. Co. v. Kubicki Draper, LLP, __ So.3d __ (Fla., No. SC19-673, 6/3/2021), 2021 WL 2232083.
Summary judgment for defendants in legal malpractice case reversed because court erred in prohibiting plaintiff from deposing defendant lawyer and in entering judgment before completion of discovery. [Added 4/29/21]
Savannah Capital, on behalf of DeVille Corp., sued lawyer Pitisci and his law firm (“Appellees”) alleging legal malpractice and breach of fiduciary duty. The action was based on Appellees’ simultaneous representation of DeVille and its former president, Martino, in Martino’s personal Chapter 7 bankruptcy case.
Martino filed bankruptcy in November 2014 and listed DeVille as an unsecured creditor with a claim of over $1 million. Martino asserted the money was a loan, while Savannah views it as a debt. Pitisci “participated in” the bankruptcy in April 2015. In May 2015, after the deadline for filing creditor claims, Savannah filed its proof of claim as well as a complaint objecting to dischargeability of the debt (the “Nondischargeability Action”). Shortly thereafter Appellees filed a notice of appearance on behalf of Martino and DeVille. Appellees moved to dismiss the complaint on behalf of Martino and moved to dismiss DeVille from the Nondischargeability Action on jurisdictional grounds. The trial court dismissed Martino.
In May 2016, Martino moved for summary judgment, arguing that Savannah’s claim was a derivative of DeVille’s claim. The court granted the motion, finding Savannah lacked standing to bring a direct action.
Savannah then filed a derivative action on behalf of DeVille against Appellees alleging “that they represented both Martino and DeVille during Martino's Bankruptcy Case prior to May 2015 and that they should have filed a derivative action on behalf of DeVille to challenge the dischargeability of the $1,000,000 disputed debt.” Appellees moved for summary judgment, asserting that their representation of DeVille was limited to the jurisdictional motion that was filed after the deadline for filing proof of claims. Savannah sought to abate a ruling on summary judgment until after completion of discovery and attempted to schedule Pitisci’s deposition. Appellees’ motion for protective order was granted.
At the summary judgment hearing, Appellees argued that summary judgment should be granted for them “because Savannah failed to file a timely derivative claim on behalf of DeVille in the Nondischargeability Action and because they never represented Savannah. . . . Savannah countered that Appellees appeared on behalf of Martino and DeVille in the Nondischargeability Action in April 2015 and that there was a genuine issue of material fact as to the scope of their representation. Further, Savannah argued that it should be allowed to take Pitisci’s deposition to ascertain the scope of representation concerning Martino and DeVille.” The trial court granted summary judgment for Appellees. Savannah appealed.
The Second DCA reversed. “Pitisci appeared in the bankruptcy proceedings for at least one month before he filed his notice of appearance on behalf of Martino and DeVille. And Savannah was entitled to take Pitisci's deposition to inquire and ascertain the scope of his representation. As Appellees made no strong showing of good cause to completely deny Savannah the right to take Pitisci’s deposition, the trial court abused its discretion in granting the protective order.” Further, the court erred in granting summary judgment before discovery was completed. Savannah Capital, LLC v. Pitisci, Dowell & Marowitz, __ So.3d __ (Fla. 2d DCA, No. 2D19-4117, 3/26/2021), 2021 WL 1148900.
Federal court has concurrent but not exclusive jurisdiction over cause of action for legal malpractice allegedly committed during course of federal bankruptcy proceeding. [Added 4/6/21]
Law Firm represented Debtors in a federal bankruptcy proceeding. Law Firm allegedly committed legal malpractice during the course of the representation. Debtors sued Law Firm for malpractice in state court. Law Firm (“Petitioners”) filed a petition seeking a writ of prohibition to restrain the further exercise of jurisdiction by the state court, contending that the federal court had exclusive jurisdiction. Debtors (“Respondents”) argued that the state and federal courts had concurrent jurisdiction over the legal malpractice claim. The Third DCA agreed with Respondents and denied the petition, concluding that there was concurrent jurisdiction.
The governing statute is 28 U.S.C. section 1334, which provides in pertinent part: “(a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive jurisdiction of all cases under title 11. (b) Except as provided in subsection (e)(2), and notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11. . . .” (Emphasis by court.)
The Third DCA noted that “cases under title 11” as provided in subsection (a) refers to the bankruptcy petition itself. A legal malpractice case “is self-evidently not a bankruptcy petition, and thus this matter does not fall within the exclusive jurisdiction of the federal court.” Rather, the legal malpractice case filed by Respondents against Petitioners is “related to” the bankruptcy case and so, under subsection (b), state and federal courts have concurrent jurisdiction.
The appeals court stated: “[B]ecause we conclude that under the plain and unambiguous language of 28 U.S.C. section 1334, federal courts have ‘original, but not exclusive jurisdiction,’ and that the Eleventh Judicial Circuit court has concurrent jurisdiction over the pending action, we deny the petition for writ of prohibition.” Calderin v. Quartz Hill Mining, LLC, __ So.3d __ (Fla. 3d DCA, No. 3D20-1612, 3/10/2021), 2021 WL 899307.
Third party beneficiary suing for legal malpractice not bound by arbitration provision in retainer agreement because he did not sign it. [Added 3/1/21]
Real estate agent Jacocks worked for a broker. They claimed to be owed a commission from a sale. The broker retained a law firm to sue the seller for the commission. Jacocks did not sign the retainer agreement, but claimed to have paid half of the law firm’s fee. He also claimed to work closely with the lawyer on the case, and that the lawyer never discussed a conflict waiver or advised Jacocks that he represented only the broker. During the course of the representation, the broker terminated its relationship with Jacocks. The case settled, but Jacocks did not get any of the proceeds.
Jacocks sued the broker, and also the lawyer for legal malpractice. The defendants moved to compel arbitration pursuant to a clause in the retainer agreement. The trial court granted the motion. Jacocks appealed.
The Fourth DCA reversed. “As a general rule, a plaintiff cannot be bound by an arbitration clause in a contract he did not sign even if he is a third-party beneficiary of the contract.” An exception to this rule applies when the third party beneficiary sues to enforce a contract between other parties. That did not occur “because Jacocks is suing the defendants for negligence, not to enforce the retainer agreement. The fact that Jacocks relies on his status as an intended third-party beneficiary of the retainer agreement to establish that the defendants owed him a duty of care does not transform the basic nature of his claim from negligence to breach of contract.” Jacocks v. Capital Commercial Real Estate Group, Inc., __ So.3d __ (Fla. 4th DCA, No. 4D20-1512, 1/6/2021), 2021 WL 49876.
Remittitur from $4.5 million to $250,000 ordered because plaintiffs in legal malpractice case failed to carry burden of proving collectability. [Added 12/16/20]
Lawyer was retained by Father and Mother (the “Pollacks”) to pursue medical negligence claims for Mother and their infant Son. The potential defendants were Laura Danner, Gulf Coast Obstetrics, and Sarasota Memorial Hospital. Lawyer served the required notice of intent to initiate litigation on behalf of Son but failed to serve a notice on Mother’s behalf.
In May 2008 Lawyer filed suit naming Father, Mother, and Son as plaintiffs. A few months later, without his clients’ consent, Lawyer stipulated to abate the entire action to determine whether Son’s injury was subject to the exclusive remedy provided by Florida’s Birth-Related Neurological Injury Compensation Plan (NICA). While the NICA matter was pending, Lawyer withdrew as counsel for plaintiffs. The NICA matter was resolved in 2001, but by then the statute of limitations for claims by the Pollacks had expired.
The Pollacks sued Lawyer for legal malpractice. The jury assigned liability in the amount of 30% to Danner, 60% to Gulf Coast, and 10% to Sarasota Memorial. The jury found that $4.5 million would have been collectable against Gulf Coast and judgment was entered.
Lawyer appealed, arguing that “the jury’s finding of $4,500,000 against Gulf Coast must be remitted to $250,000, the amount of their insurance coverage, because the Pollocks failed to put on any evidence that they could have collected any money from those defendants individually.” Agreeing, the Second DCA reversed and remanded for a remittitur to $250,000.
A legal malpractice plaintiff must prove that a favorable result would have been achieved in the underlying litigation but for the defendant lawyer’s negligence and must also prove that the judgment would have been collectable. But “[t]he only evidence of collectability that the Pollocks presented at trial was the existence of Gulf Coast’s insurance policy with a shared $250,000 limit per claim. There was no other evidence regarding financial status, solvency, interest in property or other assets, income, or profits. The Pollocks offered testimony from their expert that such a medical practice with four doctors and three midwives must be worth more than $250,000 and that the members of the practice should have the ability to pay any judgment in excess of the insurance policy limit. However, such speculation cannot justify a finding of collectability.”
The appeals court also specifically rejected the Pollacks request that it “adopt decisions from other jurisdictions which shift the burden of collectability to the legal malpractice defendants.” Although Florida courts have shifted that burden in cases where the defendant lawyer’s negligence made it impossible for the plaintiff to prove collectability, in this case plaintiffs made no such contention. Morgan & Morgan, P.A. v. Pollock, __ So.3d __ (Fla. 2d DCA, No. 2D19-11, 11/6/2020), 2020 WL 6533107.
Second DCA reverses summary judgment entered for lawyer in legal malpractice action arising out of mediated settlement agreement in family law case. [Added 12/1/20]
Client and former husband (“Watts”) and his former wife (“Wife”) entered a prenuptial agreement before their marriage in Massachusetts in 2000. The durational alimony provision of this agreement provided that alimony would terminate upon the earlier of Watts’s death, Wife’s death, or expiration of the alimony period. The alimony provision (like the rest of the agreement) could be modified only by a written instrument executed by both parties.
In 2012 Watts and Wife began divorce proceedings in Florida. Watts was represented by lawyer Goetz. The parties entered into a mediated settlement agreement (“MSA”). The MSA contained a durational alimony provision similar to that in the prenuptial agreement, with a key difference: the MSA “does not allow for the modification of alimony upon written agreement of the parties but instead contains a waiver of the parties' rights to modify the alimony obligation as to duration and amount, except in two specific circumstances, neither of which include the former wife's entering a supportive relationship.”
The MSA was incorporated into the final judgment dissolving the marriage. About a year later, Wife moved in with her boyfriend. Watts looked into the matter and was advised by a new lawyer that the MSA could not be modified to terminate alimony in the event of Wife’s cohabitation (referred to as entering a supportive relationship).
Watts then sued Goetz for alleged legal malpractice by not including a supportive relationship clause in the MSA. Goetz moved for summary judgment on two grounds. First, “as a matter of law, she could not have committed legal malpractice for failing to include a supportive relationship clause in the MSA because Mr. Watts was bound by the nonmodifiable prenuptial agreement, which expressly provided that alimony was only terminable on the event of Mr. Watts' death, the former wife's death, or the former wife's remarriage.” Second, “Watts' complaint was barred by the two-year statute of limitations for legal malpractice claims under section 95.11(4)(a), Florida Statutes (2014), because it was filed more than two years after he signed the MSA that did not include a supportive relationship clause.”
The trial court granted summary judgment for Goetz. Watts appealed. The Second DCA reversed.
The parties mediated the MSA, so they “were free to craft their own resolution on their terms.” The MSA clearly was intended to modify the prenuptial agreement, as the language of the MSA showed. The trial court erred in focusing on the parties supposed inability to modify the prenuptial agreement because it was not challenged in the divorce case. In doing this, “the trial court disregarded the clear intent of the parties as expressed in the MSA.” The Second DCA also rejected alternative theory of “impossibility” advanced on appeal. Summary judgment on the ground of “impossibility” was error.
The trial court also erred in finding Watts’s malpractice action was barred by the statute of limitations. Geotz argued that the statute began to run on the day Watts signed the MSA that did not include a supportive relationship clause. She argued that Watts knew of should have known of the injury at that time “because under the basic principles of contract law, a party is presumed to know and understand what they signed.” Regarding cases cited by Goetz for this principle, however, the court stated: “We are not persuaded that these cases have application in the context of a legal malpractice action where a client retains an attorney for the purpose of protecting their legal rights in the negotiation of contractual terms, and we can find no case applying this principle to preclude a legal malpractice claim.”
Under Florida law, a legal malpractice action can lie where the lawyer negligently advises a client to enter a settlement agreement or errs in drafting the agreement. A client’s agreement to settle does not extinguish the lawyer’s duty to competently advise the client. Further, a client cannot be comparatively negligent by relying on a lawyer’s erroneous advice. Watts hired Goetz to properly advise him regarding renegotiation of the prenuptial agreement in the context of the MSA. Watts “cannot be faulted for relying upon the advice of his attorney at the time of entering into the MSA.”
In the view of the appeals court, Watts suffered redressable harm, and so the statute of limitations did not begin to run, “until the former wife began a supportive relationship and Mr. Watts sustained a loss – that loss being the continued obligation to pay durational alimony while the former wife was maintaining a supportive relationship.” It was error to grant summary judgment based on limitations. Watts v. Goetz, __ So.3d __ (Fla. 2d DCA, No. 2D19-1002, 10/21/2020), 2020 WL 6153418.
Fourth DCA quashes order denying motion to abate legal malpractice action until underlying litigation is resolved. [Added 9/27/19]
The Simpson law firm represented former client Mariano and his company, Patriot National, in the sale of stock shares to hedge fund investors. The investors later sued Mariano and Patriot in a New York federal court. The Kasowitz law firm represented Patriot for a short time in the New York case, which is pending.
In 2017 Mariano sued both law firms alleging legal malpractice. Marino claims that Kasowitz negligently drafted affirmative defenses in the New York case and failed to advise him of Simpson’s alleged malpractice. The firms moved to stay or abate the malpractice litigation on the ground that the claims were premature because the underlying litigation had not concluded. The trial court denied the motions.
Kasowitz petitioned the Fourth DCA for a writ of certiorari. The appellate court granted the petition and quashed the order denying to motion to stay or abate. “Mariano’s claims against Kasowitz should have been abated because the outcome of the underlying litigation will determine whether Mariano incurred any damages as a proximate result of Kasowitz’s alleged instances of malpractice. More specifically, the outcome of the New York litigation will determine whether Mariano incurred damages as a result of Kasowitz’s alleged malpractice in drafting the affirmative defenses, and the outcome of the malpractice claims against Simpson will determine whether he incurred damages as a result of Kasowitz’s alleged malpractice in failing to advise him that he had viable claims.” Kasowitz Benson Torres LLP v. Mariano, __ So.3d __ (Fla. 4th DCA, No. 4D19-1209, 9/18/2019), 2019 WL 4458818.
Even though defendant’s answer to legal malpractice complaint was struck as sanction, it was error to grant summary judgment for plaintiff because damages were not liquidated. [Added 8/7/19]
Former Client sued Lawyer for legal malpractice. When Lawyer failed to respond to discovery requests, Former Client obtained an order to compel. Lawyer did not respond to discovery within the court-ordered deadline. The court struck Lawyer’s answer. Eventually Former Client moved for sanctions and sought entry of summary judgment. Lawyer moved to strike Former Client’s affidavit in support of the summary judgment motion, arguing that damages were unliquidated. The Court granted Former Client’s motion for summary judgment. Lawyer appealed.
The Fourth DCA affirmed as to liability, but reversed as to damages. Both parties had demanded a jury trial in their pleading. “And although the court struck [Lawyer’s] answer, his demand for a jury trial remained viable. . . . As a result, because the damages were not liquidated, it was improper to enter judgment based on the amount set forth in [Former Client’s] damages affidavit.” Yanofsky v. Isaacs, __ So.3d __ (Fla. 4th DCA, No. 4D18-2963, 7/31/2019), 2019 WL _______.
Court erred in dismissing legal malpractice suit on statute of limitations grounds, where accrual date of claim was outside four corners of complaint. [Added 6/26/19]
Plaintiffs sued Defendants alleging legal malpractice. Defendants moved to dismiss, arguing that the claim was barred by the statute of limitations. Defendants attached a document to their motion showing the date on which Plaintiffs’ malpractice claim accrued (the date their appeal of the underlying action was dismissed). Plaintiffs appealed the dismissal.
The Fifth DCA reversed. “While the statute of limitations may be raised as an affirmative defense in a motion to dismiss for failure to state a claim, it is successfully raised ‘only where its violation appears on the face of the complaint or its exhibits.’” (Citations omitted.) The date the malpractice cause of action accrued “was not included on the complaint or its attachments, nor was it incorporated by reference.” Consequently, “[b]ecause nothing within the four corners of the complaint conclusively showed that the statute of limitations had run on [Plaintiffs’] malpractice claim, it was error to grant the motion to dismiss on those grounds.” Enlow v. E.C. Scott Wright, P.A., __ So.3d __ (Fla. 5th DCA, No. 5D18-105, 6/14/2019), 2019 WL 2477963.
Question of insurer’s standing to bring malpractice claim against counsel hired to represent insured is certified to Florida Supreme Court. [Added 3/22/19]
In January 2019, the Fourth DCA ruled that an insurance company did not have standing to bring a legal malpractice action against a law firm that it had it hired to defend one of the company’s insureds. Arch Ins. Co. v. Kubicki Draper, LLP, __ So.3d __ (Fla. 4th DCA, No. 4D17-2889, 1/23/2019), 2019 WL 318466.
The insurer subsequently filed a motion asking the Fourth DCA to certify 2 questions of great public importance to the Florida Supreme Court. The appellate court restated the questions into the following single question and certified it to the Supreme Court: “Whether an insurer has standing to maintain a malpractice action against counsel hired to represent the insured where the insurer has a duty to defend.” Arch Ins. Co. v. Kubicki Draper, LLP, __ So.3d __ (Fla. 4th DCA, No. 4D17-2889, 3/20/2019) (certification), 2019 WL 1272584.
Court erred in dismissing litigation malpractice claim where court incorrectly believed underlying consent judgment was on appeal. [Added 3/4/19]
Lawyer represented Clients in defending a mortgage foreclosure case. Clients entered into a consent judgment foreclosing their interest in the real property. Clients later sued Lawyer for legal malpractice, alleging that they entered into the consent judgment based on Lawyer’s “negligent advice and negligent representation.” Lawyer “incorrectly represented to the trial court” that the consent judgment was on appeal. Ruling that the malpractice claim was not ripe for litigation because of the supposed pending appeal, the trial court dismissed the legal malpractice case with prejudice.
Clients appealed. The Fifth DCA reversed. The 2-year statute of limitations for litigation malpractice claims begins to run when the “final judgment becomes final,” which is “either upon the expiration of the time for filing an appeal or postjudgment motions, or, if an appeal is taken, upon the appeal being affirmed and either the expiration of the time for filing motions for rehearing or a denial of the motions for rehearing.” Silvestrone v. Edell, 721 So.2d 1173, 1175–76 (Fla. 1998).
Clients did not appeal the consent judgment. They did file a motion to vacate, which was denied. They moved for rehearing, which was also denied. Their appeal of that order was dismissed. An appeal of a post-judgment non-final order relating to the foreclosure sale was still pending at the time the legal malpractice case was dismissed. As there were not appeals pending that attacked the consent final judgment, the trial court erred in dismissing the malpractice claim as not ripe.
Clients “met the bright-line requirement of Silvestrone because they established 'some loss' as a result of the negligence alleged in their complaint – that loss being a foreclosure judgment against them in which they lost rights to the subject property. Because the consent final judgment was never the subject of a motion for rehearing or a direct appeal, the judgment was final and their claim for malpractice was ripe.” Otero v. Arcia, __ So.3d __ (Fla. 5th DCA, No. 5D17-3043, 2/22/2019), 2019 WL 846911.
Insurance company does not have standing to bring legal malpractice case against law firm it hired to defend its insured. [Added 2/12/19]
Insurer hired Law Firm to defend a suit against its insured. After that case was settled, Insurer filed a legal malpractice suit against Law Firm for alleged professional negligence. Law Firm moved for summary judgment on the ground that Insurer lacked standing to sue because Insurer and Law Firm were not in privity with each other. The trial court granted the motion. The court’s order noted that the Statement of Client’s Rights included with the retention letter demonstrated that the insured was in privity with Law Firm as the firm’s client. Insurer’s role was that of a third-party payor. Further, the trial court distinguished 2 federal cases, stating that it would “not adopt new expansive precedent that is based on ‘guesses’ and ‘forced predictions’ when the Florida Supreme Court to date has so severely limited exceptions in this area of the law.” Insurer appealed.
The Fourth DCA affirmed. It saw “nothing in the record” to indicate that Law Firm was in privity with Insurer or that Insurer was an intended third-party beneficiary of the relationship between the firm and the insured. Florida Supreme Court cases have limited standing in a legal malpractice case to those who were in privity with the defendant law firm or persons who clearly were intended third-party beneficiaries of the attorney-client relationship. See Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So.2d 1378 (Fla. 1993); Angel, Cohen & Rogovin v. Oberon Investment, N.V., 512 So.2d 192 (Fla. 1987).
Insurer argued that “public policy and common sense” supported allowing insurers who hired defense counsel for their insureds to pursue legal malpractice claims in order to prevent those lawyers from being “shielded from liability for their malpractice.” The appeals court concluded, however, that it was “bound to follow the law as it exists, not as the insurer argues it ought to be.”
The court summarized: “Based on the record before us, where nothing indicates that the law firm was in privity with the insurer, or that the insurer was an intended third-party beneficiary of the relationship between the law firm and the insured, we are unwilling to expand the field of privity exceptions to apply to this case. Thus, we affirm the circuit court’s conclusion that the insurer lacked standing to pursue a professional negligence claim against the law firm in the underlying action.”
(In a footnote, the appeals court distinguished a recent case dealing with third-party beneficiary allegations, E.P. v. Hogreve, 2018 WL 6715555 (Fla. 5th DCA, Dec. 21, 2018).) Arch Ins. Co. v. Kubicki Draper, LLP, __ So.3d __ (Fla. 4th DCA, No. 4D17-2889, 1/23/2019), 2019 WL 318466.
In legal malpractice case, adoptive parents sufficiently alleged they were intended third-party beneficiaries of legal services agreement between adoption agency and defendant lawyer. [Added 1/11/19]
Adoptive Parents engaged the services of Adoption Agency in seeking to adopt a minor child (“M.P.”). The Agency apparently had a legal services agreement with Lawyer in connection with the placement and adoption of M.P. Because the biological mother had falsely represented that she was unmarried, the adoption was interrupted so that the father’s parental rights could be terminated. That litigation took 4 years, during which Adoptive Parents eventually hired other counsel to conclude the termination of the father’s parental rights.
Adoptive Parents sued Lawyer alleging that he committed legal malpractice in negligently handling the termination proceedings. Lawyer moved to dismiss the second amended complaint on the ground that Adoptive Parents were not in privity with him. The trial court agreed and dismissed the malpractice claim with prejudice. Adoptive Parents appealed.
The Fifth DCA reversed and reinstated the malpractice claim. The appeals court noted that the test for establishment of an attorney-client relationship in the absence of a formal agreement “is a subjective one and hinges upon the client’s belief that he is consulting a lawyer in that capacity and his manifested intention is to seek professional legal advice. However, this subjective belief must . . . be a reasonable one.” (Citations omitted.) The court concluded that Adoptive Parents had “alleged sufficient facts to demonstrate their reasonable belief that they were consulting with [Lawyer] to obtain legal advice.” Among other things, the court pointed out that Adoptive Parents alleged that they had communicated to Lawyer seeking legal advice on the termination proceedings, that Lawyer’s responses to them repeatedly referred to himself and Adoptive Parents as “we” and “us” and to “our case,” that Lawyer gave them legal advice and strategy regarding the status of the legal proceedings, that Lawyer asked them whether they wanted to appeal any adverse ruling in the termination proceedings, and that Lawyer billed them directly for his services and referred to them as his “clients” in those billings.
Further, the Fifth DCA concluded that Adoptive Parents sufficiently alleged that they were intended third-party beneficiaries of the legal services agreement between Lawyer and the Agency. “The primary purpose of Appellee’s professional relationship with the Agency was to secure M.P.’s adoptive placement into Appellants’ family – i.e., a direct benefit for M.P and Appellants. In adoptions the intended beneficiary of a parental rights termination proceeding is the child to be adopted, and the adoptive parents intend to benefit the child through adoption. However, that does not mean that the child is the only intended beneficiary. In this case, [Adoptive Parents] sufficiently alleged that they were also the intended beneficiaries of the contract because the parties’ post-contract actions established [Lawyer]’s intent to benefit [Adoptive Parents] and M.P. in successfully terminating the biological father’s biological rights to allow [Adoptive Parents] to adopt M.P.” E.P. v. Hogreve, __ So.3d __ (Fla. 5th DCA, No. 5D17-3171, 11/21/2018), 2018 WL 6715555.
Malpractice suit against lawyer who served as personal representative to estate was properly dismissed based on court’s order of discharge pursuant to F.S. 733.901(2). [Added 12/4/18]
Lawyer was a successor personal representative for a decedent’s estate. He was sued for malpractice and other causes by the decedent’s son. Two years before the suit, however, the probate court had approved the final accounting and distributions and discharged Lawyer as personal representative. In the malpractice case, Lawyer moved for summary judgment based on the res judicata effect of the discharge in the probate case and on F.S. 733.901(2), which provides that discharge of the personal representative “shall release the personal representative and shall bar any action against the personal representative, as such or individually, and the surety.” There are exceptions to the statutory bar for fraud and intentional misrepresentation, but the record in the case failed to support those exceptions.
The First DCA affirmed, stating: “The trial court correctly determined that the lawsuit filed two years after closure of the probate case was barred as res judicata and by section 733.901(2).” Sims v. Barnard, __ So.3d __ (Fla. 1st DCA, No. 1D17-4545, 11/6/2018), 2018 WL 5796936.
Court properly dismissed legal malpractice complaint filed by plaintiffs who were, at most, “incidental beneficiaries” of defendants’ services. [Added 11/7/18]
Plaintiffs sued 3 lawyers and 2 law firms alleging that the Defendants were negligent in providing legal services relating to estate and marriage documents prepared or reviewed for Plaintiffs’ mother and stepfather. The trial court dismissed Plaintiffs’ first amended complaint. Plaintiffs appealed.
The Third DCA affirmed. Under Florida law, a lawyer’s liability for professional negligence ordinarily is limited to clients with whom the lawyer is in privity of contract. An exception to this privity requirement is when the plaintiff is the intended third-party beneficiary of the lawyer’s services. Someone is an intended beneficiary only if the both parties to the contract clearly express, or the contract itself expresses, an intent to primarily and directly benefit that person or a class to which that person belongs. The appeals court concluded that the Defendants “did not clearly express an intent to primarily and directly benefit the [Plaintiffs] when they represented the [Plaintiffs’] mother and stepfather. At best, the [Plaintiffs] were incidental beneficiaries, which is insufficient.” Neiburg v. Sulzberger, __ So.3d __ (Fla. 3d DCA, No. 3D16-1905, 10/31/2018), 2018 WL 5623938.
Court did not err in rejecting former client’s claim that law firm had “continuing duty” that tolled fraud statute of repose. [Added 8/15/18]
Client met with accountants and investment advisers regarding participation in a tax shelter strategy (“Strategy”). Law Firm provided an opinion letter to Client in 2002 regarding Client’s participation in the Strategy. The IRS subsequently audited Client and concluded the Strategy was an abusive tax shelter.
In 2016 Client and others sued Law Firm and others alleging conspiracy to commit fraud. Law Firm moved to dismiss based on the fraud statute of repose. Law Firm asserted that it had no contact with Client after late 2002. The trial court granted the motion to dismiss.
The plaintiffs appealed, contending that Law Firm “had an ongoing fiduciary relationship” with Client that required Law Firm to “1) correct the knowingly false misrepresentations contained in the opinion letter; and 2) inform them of material information pertaining to the Strategy. [Plaintiffs] allege that by remaining silent, the law firm committed fraud by omission.”
The Fourth DCA affirmed, rejecting the continuing relationship theory. “The statute of repose runs from the date of a discrete act on the part of the defendant without regard to when the cause of action accrued. . . . Nevertheless, the plaintiffs theorize a law firm is burdened with a presumably never-ending duty to make corrective disclosures. Under that theory, the statute of repose would never expire. Such an interpretation subverts the statute’s very purpose.” Garofalo v. Proskauer Rose LLP, __ So.3d __ (Fla. 4th DCA, No. 4D17-2398, 8/1/2018), 2018 WL 3654826.
In legal malpractice case, Fourth DCA holds that arbitration clause in attorney-client retainer agreement is unenforceable because it did not comply with Rule 4-1.5(i). [Added 7/10/18]
A former client (“Plaintiff”) sued a lawyer and her law firm (“Defendants”) for alleged legal malpractice. Defendants moved to dismiss based on an arbitration clause in the attorney-client retention agreement. The arbitration clause provided in part: “Any controversy, dispute or claim arising out of or relating to our fees, charges, performance of legal services, obligations reflected in this letter, or other aspects of our representation shall be resolved through binding arbitration in Broward County, Florida, in accordance with the Fee Arbitration Rule (Chapter 14) of the Rules Regulating the Florida Bar, and judgment on the award may be entered in any court having jurisdiction thereof.” It did not advise the client to seek independent counsel regarding entering the agreement.
Plaintiff responded to the motion to dismiss with two primary arguments. First, she contended that the arbitration clause was ambiguous because it referred to any dispute over the “performance of legal services” but then referred to arbitration in accordance with the Fee Arbitration Rule in the Rules Regulating The Florida Bar. Second, Plaintiff argued that the arbitration clause was unenforceable because it failed to comply with the requirements of Rule 4-1.5(i), which “prohibits lawyers from making an agreement with a client for mandatory arbitration of fee disputes without advising the client in writing that the client should consider obtaining independent legal advice.”
The trial court dismissed the case, ruling that the parties had agreed to arbitrate. Plaintiff appealed. The Fourth DCA reversed, addressing Plaintiff’s second argument and finding it dispositive.
Arbitration clauses in attorney-client agreements must comply with the Rules Regulating The Florida Bar and may be unenforceable if they do not. (Citations omitted.) The retainer agreement containing the arbitration clause violated Rule 4-1.5(i) because it “prospectively provided for mandatory arbitration of fee disputes without giving the plaintiff the required written notice that she ‘should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions.’ Thus, because the arbitration clause does not comply with Florida Bar Rule 4-1.5(i), we hold that it is unenforceable on its face.”
The court rejected Defendants’ argument that Rule 4-1.5(i) did not apply because the case involved a claim other than a fee dispute. The clause could be read as applying to disputes other than fee disputes, but “this does not alter the fact that the arbitration clause clearly violated the rule by prospectively providing for mandatory arbitration of fee disputes without giving the required warning language.”
The court concluded: “[T]he contract here at issue is different than the garden variety commercial contract. Lawyers owe ethical obligations and duties to their clients that exceed what the common law requires of arm’s length contracting parties. We therefore hold that the arbitration clause in the retainer agreement was unenforceable on its face for violating Florida Bar Rule 4-1.5(i).” Owens v. Corrigan, __ So.3d __ (Fla. 4th DCA, No. 4D17-2740, 6/27/2018), 2018 WL 3198555.
Statute of limitations for legal malpractice in domestic case began to run upon issuance of amended final judgment, despite fact that the issues relating to malpractice claim had been resolved earlier in case. [Added 1/8/18]
Lawyer represented Wife in a dissolution of marriage case. The trial court issued a final judgment on January 24, 2011. Wife appealed, and the Fourth DCA affirmed in part and reversed in part. The trial court ultimately entered an amended final judgment on August 13, 2013. Wife appealed that judgment, but voluntarily dismissed her appeal on October 4, 2013.
Allegedly as a result of post-judgment litigation, Wife filed bankruptcy. Wife also sued Lawyer for legal malpractice in July 2014. Lawyer moved to dismiss, asserting that the statute of limitations had run. Lawyer’s motion for summary judgment was granted. The court ruled that the limitation period began to run 30 days after entry of the initial final judgment and that, consequently, Wife’s suit was untimely. The court disregarded the appeal of that initial final judgment “because the issues on appeal did not concern the matters upon which [Wife’s] legal malpractice claim was based.” Wife appealed the summary judgment.
The Fourth DCA affirmed. Discussing leading cases, the court’s opinion analyzed the issue of when the statute of limitations on a legal malpractice claim begins to run. The court concluded that the limitations period began to when Wife’s second appeal was voluntarily dismissed in October 2014, which “is the date upon which the final judgment was truly final.” As a result, Wife’s malpractice suit was timely filed. The court explained: “Contrary to the trial court’s conclusion, nothing in the supreme court opinions suggests that a judgment may be final for purposes of the running of the statute of limitations for a malpractice action as to some issues but not others. To parse an appeal to determine whether an issue relating to the later claim of malpractice was raised in the brief would invite the very case by case determination of the accrual date for a legal malpractice that the supreme court rejected in Silvestrone [v. Edell, 721 So.2d 1173 (Fla. 1998).] It could also result in the disruption of the attorney-client relationship during an appeal, which problem the bright-line rule of Silvestrone cured. See Larson [&Larson, P.A. v. TSE Industries, Inc., 22 So.3d 36 (Fla. 2009)]. Forest v. Batts, 228 So.3d 156 (Fla. 4th DCA 2017).
Bankruptcy trustee may sue debtor’s lawyer for legal malpractice, per Second DCA. [Added 12/31/17]
Hutchins shot and killed someone. Hutchins was convicted of manslaughter. The deceased’s estate brought a wrongful death suit against Hutchins, who was represented by Mandelbaum. At trial Mandelbaum presented no evidence about Hutchins’ net worth and did move for directed verdict on the punitive damages claim based on Hutchins’ inability to pay. The jury returned a large verdict against Hutchins, including $500,000 in punitive damages. Hutchins filed for bankruptcy and his debt based on the wrongful death judgment was discharged.
The bankruptcy trustee, Herendeen, filed a legal malpractice suit against Mandelbaum alleging that he failed to properly defend his client against the punitive damages claim. Mandelbaum’s motion for summary judgment was granted. Trustee Herendeen appealed.
The Second DCA reversed and remanded for trial. The appeals court concluded that Hutchins’ bankruptcy discharge did not bar the trustee’s malpractice suit against Mandelbaum. Hutchins’ potential claim against his lawyer became the property of the bankruptcy estate. “The trustee and professionals acting for the estate are entitled to compensation. See 11 U.S.C. § 330. Ms. Herendeen, as trustee of the bankruptcy estate, stands in the shoes of Mr. Hutchins as to claims existing on the date of filing. She is entitled to pursue such claims so as to maximize the assets of the bankruptcy estate. To achieve that goal, Ms. Herendeen can pursue any claim that Mr. Hutchins could have pursued prior to filing bankruptcy.”
The court also rejected Mandelbaum’s argument that public policy regarding recovery of punitive damages from a non-party precluded the trustee from bringing the malpractice claim against him. “Mandelbaum ignores the fact that the lawyers’ alleged malpractice exposed Mr. Hutchins to punitive damages. The parties have directed us to no Florida statutory or case law on point. We are chary to conclude that Florida public policy insulates the lawyers from the consequences of the misconduct alleged by Ms. Herendeen.” Although Florida law does not permit indemnification for punitive damages, the trustee was not seeking indemnification. Rather, she alleged that Mandelbaum “failed to properly defend the suit” and thereby exposed Hutchins to the punitive damages award. Herendeen v. Mandelbaum, __ So.3d __ (Fla. 2d DCA, No. 2D15-4300, 10/25/2017), 2017 WL 4798155.
Fourth DCA rejects argument that former client could not prove redressable harm in malpractice suit arising from family law case because marital settlement agreement is always subject to modification. [Added 9/4/17]
Former Client was represented by Law Firm in a divorce case. The case was resolved through a marital settlement agreement, which was incorporated in the court’s final judgment of dissolution of marriage. Former Client subsequently sued Law Firm for legal malpractice, alleging that she was damaged “in that she relied on [Law Firm’s’ advice and signed a highly disadvantageous [marital settlement] agreement.” Law Firm moved for judgment on the pleadings, arguing that Former Client: (1) could not bring the malpractice action because she voluntarily entered into the marital settlement agreement; and (2) could not prove redressable harm because “the marital settlement agreement is always subject to modification in the family court based on changed circumstances.” The trial court granted the motion for Law Firm.
The Fourth DCA reversed. Law Firm’s first argument in support of its motion has not been accepted by Florida courts. Former Client’s acceptance of the marital settlement agreement does not bar her malpractice claim as a matter of law. “A client’s agreement to settle a case does not, as a matter of law, negate ‘any alleged legal malpractice as a proximate cause of loss.’ . . . Instead, ‘[t]his is a matter of proof for trial.’” (Citations omitted.)
The court also rejected Law Firm’s argument that that Former Client could not show redressable harm because the marital settlement agreement is always subject to modification in family court as being inconsistent with the bright-line rule on accrual of legal malpractice claims established in Silvestrone v. Edell, 721 So.2d 1173 (Fla. 1998). “[U]nder the bright-line rule of Silverstrone, the plaintiff’s legal malpractice claim has accrued because the underlying dissolution litigation has been concluded by final judgment. The dissolution judgment is final within the meaning of Silverstrone because the time for filing an appeal or postjudgment motions has expired. The defendants’ argument to the contrary is unworkable in practice and would create uncertainty as to when legal malpractice claims accrue in the family law context.” Miller v. Finizio & Finizio, P.A., __ So.3d __ (Fla. 4th DCA, Nos. 4D15-4649, 4D16-831, 8/23/2017), 2017 WL 3616392.
Summary judgment for lawyer in malpractice case affirmed where court properly declined to apply equitable estoppel as bar to lawyer’s statute of limitations defense. [Added 7/18/17]
Lawyer represented Riverwood Nursing Center. Lawyer allegedly failed to timely request a hearing on an administrative complaint, resulting in a default order revoking Riverwood’s nursing license. Riverwood sued Lawyer for legal malpractice. Lawyer moved for summary judgment based on the running of the statute of limitations and the inapplicability of the doctrine of equitable estoppel to the limitations defense. The trial court granted Lawyer’s summary judgment motion, finding that “the undisputed facts did not support the elements of equitable estoppel because the pre-suit settlement negotiations did not toll the statute of limitations and [Riverwood president] Hagan’s deposition testimony and affidavit ‘do not present any factual evidence that [Lawyer or his insurer] acted fraudulently or made any misrepresentation of a material fact.’”
Riverwood appealed. The First DCA affirmed.
At all relevant times, Riverwood was represented by counsel. Lawyer’s insurer informed Riverwood prior to expiration of the statute of limitations on April 14, 2013, that Lawyer would not offer more than $100,00) to settle the claim, which was not acceptable to Riverwood. Riverwood’s president “repeatedly attested that he never wanted to sue [Lawyer], he always thought the statute of limitations stops running once a claim is filed, and [Lawyer] did not inform him about the two-year statute of limitations and that Riverwood had to file a lawsuit on or before April 14, 2013.” The appellate court concluded that “no genuine issue of material fact existed as to whether [Lawyer] should be equitably estopped from relying on the statute of limitations defense given that there was no evidence of fraud, misrepresentation, or other affirmative deception by” Lawyer or his insurer. Riverwood Nursing Center, LLC v. Gilroy, __ So.3d __ (Fla. 1st DCA, No. 1D16-2556, 6/6/2017), 2017 WL 2438333.
Court erred in granting summary judgment for defendant lawyer and law firm in legal malpractice suit. [Added 5/12/17]
Plaintiff retained Defendants (a lawyer and his law firm) to pursue a false arrest claim against Plaintiff’s former girlfriend (Salgado) and a police department detective (Fuentes). The suit was not filed. Plaintiff later sued Defendants for legal malpractice, asserting that they were negligent in not filing suit before the statute of limitations expired. Defendants answered and asserted, as an affirmative defense, that there was probable cause to arrest Plaintiff and thus he would not be able to bring a false arrest claim. The trial court granted Defendants’ motion for summary judgment.
The Third DCA reversed the summary judgment. Although probable cause is a defense to a false arrest claim, the arresting officer must conduct a reasonable investigation to determine if there was probable cause to make the arrest. “Our review of the record, taken in a light most favorable to [Plaintiff] as the non-moving party, demonstrates that there remain disputed issues of material fact regarding whether, prior to arresting [Plaintiff], Detective Fuentes conducted a reasonable investigation (and whether a reasonable investigation would have established probable cause to arrest [Plaintiff]). Because these issues of material fact remained in dispute, the trial court erred in its determination that [Plaintiff] could not have prevailed on a claim of false arrest against Salgado or against Fuentes.” Rivero v. Howard, __ So.3d __ (Fla. 3d DCA, No. 3D16-1579, 5/10/2017), 2017 WL 1908375.
Florida state court lacked subject matter jurisdiction over legal malpractice case whose resolution would have required court to decide federal law issues related to patent’s scope, validity, or infringement. [Added 3/23/17]
Law Firm represented Client in seeking a patent for Client’s fastening shade system for playground structures. Client later learned that the patent allegedly was inadequate to protect the product from patent infringement. Rather than pursuing patent infringement claims, Client sued Law Firm and one of its lawyers for legal malpractice. Law Firm moved to dismiss. The trial court dismissed the suit without prejudice based on lack of subject matter jurisdiction. Client appealed.
The Second DCA affirmed. In order to decide the legal malpractice claim, the state court necessarily would have to first decide issues relating to the patent’s scope, validity or infringement. These questions, however, are “quintessential” federal patent law issues. “[F]or the trial court to find that [Law Firm and lawyer] committed legal malpractice, [Client] must show, first, that the patent was invalid or that its scope was not sufficiently broad to protect [Client] from its allegedly infringing competitors. Resolution of a federal patent question, in the first instance, is necessary for [Client]’s legal malpractice case to survive.”
The appeals court distinguished a U.S. Supreme Court case relied on by Client, Gunn v. Minton, 133 S.Ct. 1059 (2013). Gunn involved the question of whether a legal malpractice claim belonged in federal court, which was not at issue in this case. Further, the malpractice case in Gunn was filed after an unsuccessful federal patent infringement suit had been resolved. Solar Dynamics, Inc. v. Buchanan Ingersoll & Rooney, P.C., __ So.3d __ (Fla. 2d DCA, No. 2D15-5728, 2/8/2017), 2017 WL 519314.
Applying bright-line rule regarding accrual of legal malpractice cause of action, Fourth DCA concludes that statute of limitations may run on some claims in litigation but not on others that remain unresolved. [Added 3/1/17]
A bank loaned money to a corporation (RSB), with the loan guaranteed by RSB’s 2 co-owners (the Mizrahis). The FDIC took over the bank and called the loan. The Mizrahis hired lawyer Berlowitz and his law firm (the Berlowitz Defendants) in connection with litigation with the FDIC. A month later RSB sued the FDIC. The FDIC filed a counterclaim against RSB and a crossclaim against the Mizrahis to foreclose the mortgage. At some point Berlowitz “allegedly realized that he had erred in suing the FDIC in the first place.” The Berlowitz was replaced as counsel by another lawyer and his firm (the Lithman Defendants). The Lithman Defendants did little on the case, resulting in entry of a default judgment of foreclosure against RSB. The appeal was dismissed for lack of prosecution by the Lithman Defendants. The property was sold and the underlying suit was administratively closed. No deficiency judgments were entered against RSB or the Mazrahis.
RSB and the Mazrahis filed a 2-count legal malpractice suit against the Berlowitz Defendants and the Lithman Defendants. (The count against the Berlowitz Defendants was dismissed for improper venue.) The Lithman Defendants moved to dismiss the count against them, arguing that “the malpractice action was premature because the underlying suit was still pending.
The trial court granted the motion to dismiss. The administrative closing of the case did not affect the parties’ rights because it can be easily reopened. Several matters in the case remained pending. The plaintiffs appealed.
The Fourth DCA affirmed in part and reversed in part. A cause of action for litigation legal malpractice accrues when the final judgment becomes final. Silvestrone v. Edell, 721 So. 2d 1173 (Fla. 1998). This bright-line rule applies when a client has suffered “some loss” due to the lawyer’s negligence, but “does not require that there be a determination of the full extent of all losses suffered by the client due to the lawyer’s negligence.” Larson & Larson, P.A. v. TSE Indus., Inc., 22 So. 3d 36, 42 (Fla. 2009) (emphasis by court).
The trial court erred in ruling that RSB’s malpractice claim was premature. RSB’s claim accrued when the appeal of the default foreclosure judgment became final. Accordingly, “even though collateral issues have not been resolved in the underlying litigation, a foreclosure judgment adverse to RSB has reached the point of finality, so RSB’s legal malpractice claim has accrued with respect to the foreclosure judgment.”
The court affirmed regarding the Mazrahis’ claim, because “no adverse final judgment has been entered against the Mazrahis individually.” Thus, their malpractice claims were premature. R.S.B. Ventures, Inc. v. Berlowitz, __ So.3d __ (Fla. 4th DCA, No. 4D15-372, 1/25/2017), 2017 WL 362583.
Court erred in dismissing tort claims against law firm on basis of economic loss rule. [Added 8/5/15] -- Bornstein v. Marcus, __ So.3d __ (Fla. 4th DCA, No. 4D13-4098, 7/22/2015), 2015 WL 4461117.
Per Fourth DCA, trial court erred in holding that, as matter of law, lawyer representing ward’s court-appointed emergency temporary guardian owed ward no duty under third-party beneficiary theory. [Added 7/12/15] -- Saadeh v. Connors, __ So.3d __ (Fla. 4th DCA, No. 4D13-4831, 6/24/2015), 2015 WL 3875682.
Lawyer need not research a particular issue in order to successfully defend a legal malpractice case on ground of judgmental immunity. [Added 6/19/15] -- Air Turbine Technology, Inc. v. Quarles & Brady, LLC, __ So.3d __ (Fla. 4th DCA, No. 4D14-110, 6/3/2015), 2015 WL 3480236.
Court erred by granting summary judgment for legal malpractice defendant on ground that plaintiff could not prove that alleged conflict caused plaintiff’s damages. [Added 4/25/15] -- Pitcher v. Zappitell, __ So.3d __ (Fla. 4th DCA, No. 4D14-91, 4/1/2015), 2015 WL 1448612.
Legal malpractice action should be stayed or abated while underlying litigation on which it is based is still pending. [Added 4/19/15] -- Armour v. Hass, __ So.3d __ (Fla. 4th DCA, No. 4D14-4375, 4/8/2015).
Successor personal representative may bring legal malpractice action against lawyer hired by prior personal representative. [Added 5/16/14] -- Bookman v. Davidson, __ So.3d __, 39 Fla.L.Weekly D932 (Fla. 1st DCA, No. 1D13-3086, 5/5/2014), 2014 WL 1772707.
Court erred in dismissing legal malpractice claim of non-claim who claimed to be intended third-party beneficiary of law firm’s services. [Added 2/18/14] -- Dingle v. Dillinger, __ So.3d __ (Fla. 5th DCA, No. 5D13-1725, 2/7/2014), 2014 WL 470679.
Statute of limitations in legal malpractice case began to run when dismissal of underlying case became final, not when agreement to settle case was signed. [Added 1/16/14] -- Arrowood Indemnity Co. v. Conroy, Simberg, Ganon, Krevans, Abel, Lurvey, Morrow & Schefer, P.A., __ So.3d __, 39 Fla.L.Weekly D128 (Fla. 4th DCA, No. 4D12-3251, 1/8/2014), 2014 WL 51692.
Fourth DCA questions whether nominal damages are recoverable in legal malpractice claim. [Added 12/31/13] -- Bluth v. Blake, 128 So.3d 242 (Fla. 4th DCA 12/11/2013).
Court was not required to admit evidence of any rule of professional conduct claimed to have been violated by legal malpractice defendant. [Added 7/16/13] -- Greenwald v. Eisinger, Brown, Lewis & Frankel, P.A., 118 So.3d 867 (Fla. 3d DCA 7/10/2013).
Court erred in granting new trial in a suit against lawyer after ruling that breach of fiduciary duty cannot be waived. [Added 3/26/13] -- Band v. Libby, 113So.3d 113 (Fla. 2d DCA 5/22/2013) (on rehearing).
Law firm failed to properly raise lack of standing in moving for summary judgment on legal malpractice claim. [Added 2/13/13] -- Alexopoulos v. Gordon Hargrove & James, P.A., 109 So.3d 248 (Fla. 4th DCA 2/6/2013).
Third DCA affirms summary judgment for defendant lawyers in malpractice case because “no one could have anticipated” the decision of the trial court on remand. [Added 10/23/12] -- Hanson v. Fowler, White, Burnett, P.A., 117 So.3d 1127 (Fla. 3d DCA 2012).
Summary judgment inappropriate in legal malpractice case where plaintiffs alleged they were intended beneficiaries of negligently implemented estate plan. [Added 2/12/12] -- Hodge v. Cichon, 78 So.3d 719 (Fla. 5th DCA 2012).
Legal malpractice claim fails on summary judgment because plaintiff dropped suit against party responsible for damages and thus suffered no redressable harm from lawyer's work. [Added 12/3/11] -- KJB Village Property, LLC v. Craig M. Dorne, P.A., 77 So.3d 727 (Fla. 3d DCA 2011).
Enforcement of representation agreement clause requiring arbitration of legal malpractice claims is not against public policy, per Second DCA. [Added 6/20/11] -- Johnson, Pope, Bokor, Ruppel & Burns, LLP v. Forier, 67 So.3d 315 (Fla. 2d DCA 2011).
Law firm may be liable in legal malpractice action for harm to former client occurring after firm withdrew from representation. [Added 4/17/11] -- Golden Gate Homes, LC v. Levey, 59 So.3d 275 (Fla. 3d DCA 2011).
Court erred in denying motion to compel arbitration in legal malpractice case. [Added 3/30/11] -- Mintz & Fraade, P.C. v. Beta Drywall Acquisition, LLC, 59 So.3d 1173 (Fla. 4th DCA 2011).
Court erred in vacating order staying legal malpractice case while underlying case was still pending. [Added 12/9/10] -- Colodny, Fass & Talenfeld, P.A. v. Bal Bay Realty, Ltd., 48 So.3d 1030 (Fla. 3d DCA 2010).
In legal malpractice case venue not proper in county where negligent acts allegedly occurred because resulting damages did not occur there. [Added 11/27/10] -- Moscowitz v. Oldham, 48 So.3d 136 (Fla. 5th DCA 2010).
Failure to allege ultimate facts relating to duty and breach leads to dismissal of legal malpractice complaint. [Added 10/28/10] -- K.R. Exchange Services, Inc. v. Fuerst, Humphrey, Ittleman, PL, 48 So.3d 889 (Fla. 3d 2010).
Third DCA affirms summary judgment for defendant law firm in legal malpractice action. [Added 3/29/2010] -- KT Holdings USA, Inc. v. Akerman, Senterfitt & Eidson, 34 So.3d 61 (Fla. 3d DCA 2010).
Florida Supreme Court decides when statute of limitations on legal malpractice claim begins to run where sanctions order becomes final after underlying judgment did. [Added 11/11/09] -- Larson & Larson, P.A. v. TSE Industries, 22 So.3d 36 (Fla. 2009).
Venue of legal malpractice case based on disclosure of confidential information is proper not where disclosure took place but where resulting damage occurred. [Added 10/21/09] -- Rocco v. Glenn, Rasmussen, Fogarty & Hooker, P.A., 32 So.3d 111 (Fla. 2d DCA 2009).
Law firm not responsible for losses caused by one of its lawyers who acted outside scope of employment and defrauded "investors." [Added 10/9/09] -- Saralegui v. Sacher, Zelman, Van Sant, Paul, Beily, Hartman & Waldman, P.A., 19 So.3d 1048 (Fla. 3d DCA 2009).
Law firm did not commit transactional malpractice by failing to obtain signature on contract where there was no meeting of the minds. [Added 9/8/09] -- Natural Answers, Inc. v. Carlton Fields, P.A., 20 So.3d 884 (Fla. 3d DCA 2009).
Middle District of Florida federal court concludes that insurer may bring legal malpractice action against lawyer it hired to defend its insured. [Added 7/6/09] -- Hartford Ins. Co. of the Midwest v. Koeppel, 629 F.Supp.2d 1293 (M.D.Fla. 2009).
New York law firm subject to suit in Florida for legal malpractice based on legal work performed mostly in New York. [Added 3/31/09] -- Beta Drywall Acquisition, LLC v. Mintz & Fraade, P.C., 9 So.3d 651 (Fla. 4th DCA 2009).
Legal malpractice case seeking recovery of fees paid fails because client's mother, not client, had paid lawyers' fees. [Added 10/31/08] -- Maxakoulis v. Kotler, 995 So.2d 1024 (Fla. 4th DCA 2008).
Failure of law firm's former client to appeal adverse judgment does not necessarily preclude its ability to maintain legal malpractice action against firm [Added 5/13/08] -- Technical Packaging, Inc. v. Hanchett, 992 So.2d 309 (Fla. 2d DCA 2008).
Supreme Court reaffirms general rule that legal malpractice claims NOT assignable. [Added 7/6/07] -- Law Office of David J. Stern, P.A. v. Security National Servicing Corp., 969 So.2d 962 (Fla. 2007).
Lawyer who breaches client confidentiality AFTER attorney-client relationship ended may be liable to client for malpractice, but former client must allege what confidence was breached. [Added 6/25/07] -- Elkind v. Bennett, 958 So.2d 1088 (Fla. 4th DCA 2007).
Trial court erred in calculating limitation period for legal malpractice claim from date of case's final judgment rather than from date of subsequent sanctions order. [Added 7/25/06] -- Integrated Broadcast Services, Inc. v. Mitchel, 931 So.2d 1073 (Fla. 4th DCA 2006). (NOTE: The Florida Supreme Court agreed with this decision in Larson & Larson, P.A. v. TSE Industries, 22 So.3d 36 (Fla. 2009).)
Petition for writ of prohibition granted because trial court lacked subject matter jurisdiction to try legal malpractice case against union-retained lawyer. [Added 6/15/06] -- Florida Education Ass'n v. Wojcicki, 930 So.2d 812 (Fla. 3d DCA 2006).
Settlement agreement provision requiring party to pursue legal malpractice against against its former lawyer for benefit of adverse party void as tantamount to assignment of claim. [Added 5/16/06] -- Michael E. Greene, P.A. v. Leasing Associates, Inc., 935 So.2d 21 (Fla. 4th DCA 2006).
Section 57.105 fees awarded against indigents who sued their former lawyer for malpractice before statute of limitations on underlying claim had run. [Added 5/16/06] -- Morales v. Marques, 931 So.2d 169 (Fla. 5th DCA 2006).
Fourth DCA expands exception to general rule that legal malpractice claims are not assignable. [12/2/05] -- Security National Servicing Corp. v. Law Office of David J. Stern, P.A., 916 So.2d 934 (Fla. 4th DCA 2005).
Plaintiff in legal malpractice claim against criminal defense lawyer must show "exoneration" of underlying crime. [Added 6/20/05] -- Cira v. Dillinger, 903 So.2d 367 (Fla. 2d DCA 2005).
Fourth DCA does not take opportunity to rule on question of expert testimony concerning "the law" in legal malpractice case. [Added 2/23/05] -- Robinson v. Kates, 895 So.2d 1156 (Fla. 4th DCA 2005). NOTE: For a detailed look at the use of expert testimony in lawyer disciplinary matters, see an article by Tim Chinaris titled "Even Judges Don't Know Everything: A Call for a Presumption of Admissibility for Expert Witness Testimony in Lawyer Disciplinary Proceedings," 36 St. Mary's Law Journal 825 (2005).
Corporation's law firm owed duties to entity rather than individual shareholders; additionally, individuals waived all conflicts. [Added 2/7/05] -- Rudolf v. Gray, Harris & Robinson, P.A., 901 So.2d 148 (Fla. 5th DCA 2005).
Lawyer's inquiry to client about possible preparation of document did not create legal duty to prepare document; summary judgment in malpractice case affirmed. [Added 9/1/04] -- Lane v. Cold, 882 So.2d 436 (Fla. 1st DCA 2004).
Defendant insured's assignment to plaintiff of proceeds of insured's malpractice action against his lawyer in exchange for non-execution of excess judgment is void as tantamount to assignment of malpractice claim. [Added 12/10/03] -- Weiss v. Leatherberry, 863 So.2d 368 (Fla. 1st DCA 2003).
Impact rule does not preclude recovery of noneconomic damages in certain very specific circumstances of legal malpractice action against criminal defense lawyer, per Florida Supreme Court. [Added 6/30/03] -- Rowell v. Holt, 850 So.2d 474 (Fla. 2003).