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]

    Client hired Law Firm for patent matters.  Client sued Defendant for alleged patent infringement.  Law Firm allegedly engaged in misconduct during litigation.  Defendant moved for an award of attorney's fees against Client.  The judgment in Defendant's favor in the underlying patent infringement action became final on September 16, 2002, when the time for filing an appeal expired.  Thereafter Client and Defendant negotiated a settlement of the attorney's fees claim.  On October 10, 2002, Client and Defendant filed a stipulation to dismiss the action with prejudice.

    Client sued Law Firm for legal malpractice on October 5, 2004, which was less than 2 years after Law Firm filed the stipulation to dismiss the patent infringement action but more than 2 years after the underlying judgment became final.  The trial court granted Law Firm's motion for summary judgment, relying on Silvestrone v. Edell, 721 So.2d 1173 (Fla. 1998), to hold that the claim was time-barred because statute of limitations on Client's malpractice claim began to run when the judgment on the merits of the patent infringement action became final.

    The Second DCA reversed.  The court concluded that Silvestrone was controlling, but that the trial court applied it incorrectly.  In Silvestrone the litigation was concluded when the final judgment became final; here, however, because of the attorney's fee claim "the litigation was not concluded until the parties filed the stipulation to dismiss the underlying action with prejudice."  The court certified conflict with the Fourth DCA's decision in Integrated Broadcast Services, Inc. v. Mitchel, 931 So.2d 1073 (Fla. 4th DCA 2006).  TSE Industries, Inc. v. Larson & Larson, P.A., 987 So.2d 687 (Fla. 2d DCA 2008).  The Mitchel court had concluded that "the limitations period on a legal malpractice claim began to run on the underlying judgment when that judgment was final but did not begin to run with respect to a subsequent sanctions judgment until the sanctions judgment became final."

    The Florida Supreme Court exercised its conflict jurisdiction and a majority of the Court agreed with the "bifurcated approach" employed by the Fourth DCA in Mitchel.  Concurring and dissenting opinions were also filed.

    The Court begin its analysis by noting that "[t]he statute of limitations requires that a legal malpractice action on a litigation-related claim be brought within two years after the cause of action is or should have been discovered, § 95.11(4)(a), Fla. Stat. (2002), and in Silvestrone we drew the line of accrual at the time final judgment was final to 'provide certainty and reduce litigation over when the statute starts to run.'"  (Citation omitted.)  The Court explained that the Silvestrone rule "merely establishes a bright line for establishing when the client has suffered some loss as a consequence of the attorney's negligence.  It 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."  (Emphasis by Court.)

    The Court agreed with the Fourth DCA that "the finality of a determination regarding a claim for sanctions may occur independently of the finality of the underlying judgment."  The Court stated:  "The damage suffered by the client arising from the underlying judgment is discrete from any damage that might be suffered by the client arising from a sanctions claim that is not finally adjudicated in the underlying judgment. The discrete occurrence of damage -- marked by a separate final judgment or the equivalent -- gives rise to the discrete discovery of loss and the discrete accrual of separate causes of action for malpractice.  Here, the point of finality with respect to the sanctions claim was not reached until the settlement was entered while the sanctions litigation was pending.  Until then, it was possible that an appeal in the sanctions litigation would produce an outcome  favorable to [Client].  Only with the entry of the settlement agreement was the existence of any harm to [Client] arising from the sanctions claim determined with sufficient certainty to justify commencement of the limitations period."  (Footnote omitted.)

    Consequently, because the underlying litigation was concluded before the sanctions litigation was resolved, "redressable harm was established regarding the underlying litigation before there was redressable harm with respect to the sanctions.  The sanctions-based malpractice claim was 'hypothetical and [the related] damages [were] speculative until . . . an adverse outcome to the client' occurred in the litigation concerning the sanctions.  Silvestrone, 721 So. 2d at 1175."

    Justice Perry filed an opinion concurring in part and dissenting in part.

    Justice Lewis dissented, stating that he was "in substantial agreement with the logical, reasonable analysis provided by" the Second DCA.  Among other points, his opinion expressed concern that the majority's holding would create a potential for a conflict of interest problem between attorney and client because, as stated by the Second DCA, "'forcing an aggrieved party to file a legal malpractice action before the underlying litigation is resolved would also create a conflict of interest that would undoubtedly require counsel to withdraw from representation in the underlying action.  This would place the aggrieved party in the untenable position of having to hire new counsel who was unfamiliar with the case to continue the litigation or pursue negotiations at the last hour.  This would also take away the opportunity for counsel to correct his or her mistakes in the underlying action.'"  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]

    The personal representative ("P.R.") of an estate hired Law Firm to represent her in her individual and representative capacities.  Probate proceedings were opened in Manatee County, where the decedent had resided.  Law Firm was based in Hillsborough County.  Disputes arose between P.R. and her stepsons, who were represented by their own counsel.  The parties reached a settlement.  The Internal Revenue Service subsequently determined that the estate owed additional taxes.  Lawyer, an attorney with Law Firm, contacted the stepsons' counsel regarding their paying a portion of the tax liability pursuant to the settlement agreement.  Lawyer provided the stepsons' counsel with a copy of the IRS worksheets, but before sending them the Lawyer "failed to redact confidential information from the sheets, thereby providing to the sons privileged information relating to the financial circumstances of [P.R.] and the estate."  After receiving this information the stepsons hired new counsel and brought an action against P.R. demanding additional funds from the estate.  P.R. paid them, then sued Law Firm and Lawyer for alleged breach of fiduciary and professional negligence.

    P.R. filed suit in Manatee County, but Law Firm was successful in having the trial conclude that Manatee County "was not the proper venue because the cause of action accrued in Hillsborough County.  P.R. appealed the order transferring the case to Hillsborough County.

    The Second DCA reversed.  Venue was proper where the last action that would render the defendant liable occurred.  In order to determine the answer to that question, the court stated that it "must resolve whether the delivery of the documents was the proximate cause of the damage to [P.R.] or whether some additional event or act must have occurred before [Law Firm and Lawyer] could be held liable for the tortious conduct."  The court decided that the mere delivery of the documents was not the proximate cause of P.R.'s damage.  "[W]e conclude that [P.R.] did not suffer redressable harm, thereby causing her legal malpractice claim to accrue, until the sons used the improperly disclosed information as the basis for their pleadings in the Manatee County probate proceeding.  Until those pleadings were filed, [P.R.] professional negligence claim was hypothetical and any damages were speculative.  As such, the final act or event that was necessary to render [Law Firm and Lawyer] liable for professional negligence occurred in Manatee County, and venue is proper there."  Rocco v. Glenn, Rasmussen, Fogarty & Hooker, P.A., __ So.3d ___, 34 Fla.L.Weekly D2136 (Fla. 2d DCA, No. 2D08-6215, 10/16/2009), 2009 WL 3320202.

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]

    Two defrauded "Investors" sued several defendants including Law Firm.  Investors had "invested" money with Lawyer, who was an employee of Law Firm.  (The "investments" arguably were disguised usurious loans.)  Law Firm moved for summary judgment, which was granted.  Investors appealed.

    Investors argued, inter alia, that there was a genuine issue of fact regarding Lawyer's "apparent agency" for Law Firm.  The Third DCA disagreed.  The "investment" agreement recited in part that Investors were "contracting with '[Law Firm]–[Lawyer]–Trustee, acting solely in his capacity as a Trustee for a client ('Client”).'  The agreement further stated that the 'Trustee acts on behalf of an international qualified borrower ('Client'), who is currently participating in an investment project.  [Lawyer] signed as 'Trustee.'"  Although Investors wired funds to Law Firm's trust account, Law Firm did not know of the fraudulent transaction and apparently did not keep the funds.  The appeals court pointed out that Investors did not specifically plead "apparent agency" in their complaint, although they did allege that Lawyer acted in the course and scope of his employment with Law Firm.  This, however, "was contradicted, not established, by the parties' submissions before the summary judgment hearing."  The court stated:  "[Law Firm]’s representations, if they rise to that, involved [Lawyer]’s authority to render legal advice to firm clients, not his authority to commit the firm as a party to loan agreements.  Further, any representations regarding the specific loan transactions were made by [Lawyer]e, not by the firm.  Finally, the appellants concede that [Lawyer] did not communicate directly with the appellants regarding the transactions until after the advances were made; [Lawyer]’s instructions and alleged promises were made through Tavares [who was not part of Law Firm] and others as intermediaries, with no authorization or ratification by [Law Firm]."  (Footnote omitted.)

    The court concluded:  "[Lawyer]’s fraud was also a fraud upon [Law Firm], and it resulted in his permanent disbarment from The Florida Bar.  Unfortunately, citizens of other countries may be familiar with transactions in their own countries in which lawyers and law firms wear multiple hats as principals, brokers or intermediaries, and legal advisors in business transactions, but our system draws clear distinctions among these roles and clear boundaries between the legal representation of a lender and a borrower.  Had the appellants retained a Florida lawyer to give them independent advice before making these loans, the facially-obvious usury and questionable 'trusteeship' proposed by [Lawyer] on behalf of the borrowing entity surely would have caused legal eyebrows to rise and the investors to flee."  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]

    Lawyer, an attorney with Law Firm represented, Client in attempting to negotiate a business transaction.  In 1999 Lawyer sent a letter to the Other Party "outlining the 'major terms' of the 'agreement reached.'  However, a number of significant terms remained in dispute, and the letter acknowledged an understanding that a different attorney would finalize a formal agreement to be signed by the parties.  The record reflects that by early 2000, in an effort to execute a final contract, [Client] and [Other Party] hired transactional attorneys:  [Client] hired Jerald August, and [Other Party] hired Morris DeFeo.  From January through March 2000, these transactional attorneys exchanged six different proposed drafts, however their clients were unable to agree on a final written contract."  Other Party paid Client some money.  Not long thereafter, negotiations broke down.  Other Party asked for his money back.  Client did not return the money.  Ultimately the dispute between the parties went to federal court, where Client was ordered to return the money.  The court found that the parties contemplated, but never reached, a final written agreement.

    Client then sued Law Firm for malpractice, alleging "transactional negligence as to [Law Firm], arguing that [Lawyer], who represented [Client] during its initial negotiations with [Other Party], was negligent when he failed to obtain a signature from [Other Party] after a binding agreement was reached, and for advising [Client] that a binding agreement had been reached."  The trial court granted Law Firm's motion for summary judgment, and Client appealed.

    The Third DCA affirmed.  "[A]ll of the parties involved understood that the negotiations between [Client] and [Other Party] were just that -- negotiations, until the finalized documents were executed and signed.  However, these negotiations broke down, and the parties failed to enter into a binding agreement. Thus, there was no meeting of the minds."  The court further noted that collateral estoppel precluded re-litigation of the decision made in the federal courts regarding a lack of meeting of the minds, and then added:  "Even if we were to find that collateral estoppel does not bar re-litigation of the central issues involved in [Client]’s claims, we agree with the Miami-Dade Circuit Court’s finding that [Client]’s transactional negligence claim against [Law Firm] cannot stand, as [Law Firm] cannot be held liable for failing to obtain a signature on a contract that simply did not exist.  The overwhelming undisputed evidence demonstrates that the parties never formed a binding agreement.  Hence, [Law Firm] could not have committed transactional negligence for failing to obtain [Other Party]’s signature on a preliminary document."  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 Insurance Company hired Lawyer and his law firm (collectively, "Lawyer") to represent one of its insureds, Davis, who had been in an auto accident.  Lawyer allegedly negligently responded to a demand letter from the counsel representing Oliveri, the person who claimed to have been injured by the insured.  After settling the suit filed by Oliveri against Davis, Hartford filed suit in federal court against Lawyer seeking damages for legal malpractice, equitable subrogation, legal malpractice as third-party beneficiary, and breach of contract as third-party beneficiary.  Lawyer moved to dismiss for lack of standing and lack of subject matter jurisdiction, alleging that it did not have an attorney-client relationship with Hartford and that it did not have privity of contract with Hartford.

    The U.S. District Court for the Middle District of Florida denied Lawyer's motion to dismiss.  The court concluded that the facts showed that Hartford and Lawyer were in privity of contract.  Even assuming that Lawyer was factually correct in asserting that it represented only the insured and not Hartford, however, the court ruled in favor of Hartford.  The court stated that "[n]either the Florida Supreme Court nor the state's appellate courts have expressly addressed whether an insurer can bring a legal malpractice or breach of contract claim against an attorney hired to represent its insured," but noted that "[t]he majority of jurisdictions to decide the issue, however, have concluded that the insurer is in privity of contract with the attorney hired to represent insured individuals or is a third-party beneficiary of the relationship between the attorney and the insured."

    The court pointed to policy reasons supporting allowing an insurer to bring a legal malpractice claim against a lawyer it hired to represent its insured.  Such a lawyer is in a fiduciary relationship to both insured and insurer.  Because the insurer has the financial exposure that can arise from the lawyer's malpractice, the insured has no real incentive to pursue a malpractice action. 

    "Further supporting the conclusion that the Florida courts would recognize an insurer's legal malpractice claim against the attorney it retains to represent its insured is the Florida Court of Appeals' interpretation of the Florida Bar rules as allowing the same attorney to ethically represent, at the same time, both the insured and insurer.  See Progressive Express Ins. Co. v. Scoma, 975 So.2d 461, 466 (Fla.Ct.App.2007) (citing Rule 4-1.7(e) of the Rules Regulating the Florida Bar and concluding that ‘the same attorney may often ethically represent both the insured and the insurer’ provided their interests are not adverse.)"  The court also observed that "Florida courts have recognized an exception to the strict privity requirement for legal malpractice claims in other contexts, such as in the area of will drafting," citing Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So.2d 1378 (Fla. 1993).  Additionally, "the Florida Supreme Court's decision in Fremont Indemnity Co. v. Carey, Dwyer, Eckhart, Mason & Spring, P.A., 796 So.2d 504 (Fla.2001), leads this Court to believe that the Florida courts would recognize an insurer's legal malpractice claim against the attorney retained to represent its insured."

    The court concluded:  "Therefore, this Court 'guesses' that the Florida Supreme Court would embrace the majority view and recognize an attorney-client relationship between an insurer and the lawyer or law firm it retained to represent an insured or find that the insurer is an intended third-party beneficiary of the relationship between the attorney or law firm and the insured.  Accordingly, this Court concludes that Hartford has standing to pursue its legal malpractice and breach of contract claims against Defendants.  Similarly, the Court concludes that a duty of care ran from [Lawyer] to Hartford and therefore Hartford does not fail to state a claim upon which relief may be granted, as Defendants argue."

    (Because of its conclusion regarding the malpractice claim, the court found it unnecessary to rule on the equitable subrogation claim.)  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).

Statute of limitations on litigation malpractice claim does not begin to run until postjudgment attorney's fees motions are resolved, per Second DCA.  [Added 2/8/08]  --  TSE Industries, Inc. v. Larson & Larson, P.A., 987 So.2d 687 (Fla. 2d DCA 2008), review granted by Larson & Larson, P.A. v. TSE Industries, Inc., 2008 WL 1931423 (Fla. Apr 24, 2008).

Trial court incorrectly applied statute of limitations in dismissing legal malpractice suit.  [Added 9/28/07]  --  Reeves v. Barrett, 964 So.2d 869 (Fla. 1st DCA 2007).

Florida 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).

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).

Trial court erred in dismissing legal malpractice claim for alleged fraud on the court in underlying representation.   [Added 3/21/06]  --  Cherubino v. Fenstersheib and Fox, P.A., 925 So.2d 1066 (Fla. 4th DCA 2006).

Extrinsic evidence of testator's intent may be admissible in legal malpractice case brought by personal representative of testator's estate.  [Added 3/3/06]  --  Gallo v. Brady, 925 So.2d 363 (Fla. 4th 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 a new 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. 1^st DCA 2003).