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By: Elizabeth Lowery
Malpractice lawsuits against attorneys are often referred to as a “case within a case” because they must delve deep into the underlying lawsuit in order to determine whether an attorney’s representation fell below the standard of care, and if so, what damages, if any, resulted. There is a common misconception that an attorney is always insulated from a malpractice action if the client consents to a settlement. However, many jurisdictions, including California, permit a client to “settle and sue.”
Last month in Maselllis v. Law Office of Leslie F. Jenson, California’s Appellate Court upheld a lower court’s $300,000 judgment against a divorce attorney whose client, the Wife, consented to a $1.2 million settlement. In that case the value of marital estate, which included several businesses, was hotly contested. In addition, Wife was suspicious that Husband had been hiding assets. A few days before the trial, Wife’s attorney pressured Wife to accept an $800,000 settlement; when she refused, Attorney said “I’m done,” and left. Panicked and without counsel, Wife accepted Husband’s last minute $1.2 million offer. She then sued Attorney for malpractice.
During the 11-day malpractice trial, one report from Wife’s expert valued her half of the marital estate at $1.62 million, and another at $1.49 million. Wife prevailed and obtained a $300,000 judgment against Attorney. During the appeal, Attorney did not directly challenge the jury’s finding that her representation of Wife was negligent. Instead, Attorney argued that the standard of proof for “settle and sue” cases was, or should be, higher than the “preponderance of the evidence” burden of proof typical applied in attorney malpractice lawsuits, and that Wife hadn’t satisfied this higher standard. Wife’s counsel argued that Wife did not need to show that Husband was going to reach a settlement higher than $1.2 million; it was sufficient to show that it was “more likely than not” that she would have received a better result at trial. The Appellate Court confirmed that the lower burden of proof, i.e. the preponderance /”more likely than not” standard was correctly applied in the underlying trial, and that Wife had satisfied this burden. As a result, Wife’s victory was upheld.
The foregoing illustrates that attorney malpractice lawsuits present special challenges, especially in jurisdictions which allow a client to “settle and sue.” If you have any questions or would like more information, please contact Elizabeth Lowery at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.