Years ago, I tried a fascinating legal malpractice case in which my client was accused of failing to sue the proper parties in a diving accident case that resulted in catastrophic quadriplegic injuries. The accident occurred in a local community that had a man-made pond. Plaintiff was attending a party on the shores of the pond. After drinking quite a bit, he decided to run and dive into the pond, not bothering to check on the safety of doing so.
As a result of his injury, he retained my client, who seemingly sued everyone in sight—the sponsors of the parties, the property owners, the hired life-guard and the person who designed the pond. He even sued the DJ! My client litigated the case for several years and settled with a couple of minor players. But on the eve of trial, the plaintiff for some reason lost confidence, fired my client and retained another lawyer. The second lawyer took the case to trial and settled during trial for a significant sum—essentially the limits of insurance of the remaining defendants.
However, the second lawyer then sued my client alleging that he failed to sue governmental entities that were responsible for approving the design of the pond. The theory was that had my client sued these entities, the plaintiff could have recovered much more from deep government pockets.
The legal malpractice case that resulted was essentially two trials. One trial dealt with my client’s decision-making or lack of decision-making in not suing governmental entities. The second trial dealt with the diving accident. The parties put on over 30 witnesses from eyewitnesses to pool experts to human factors experts to toxicologist. The jury was asked to decide whether the lawyer met the standard of care and whether plaintiff would have won the underlying case against the governmental entities. The jury rendered a defense verdict, but after I interviewed the jury, I learned how lucky we got. The jury had a low opinion of my client. They thought he failed to even consider the possibility of suing the government. Nevertheless, the jury felt compelled to decide in favor of the defense because they did not believe the underlying case had merit. In short, they believed the plaintiff was drunk at the time of the accident and that but for his intoxication, he would not have attempted the risky dive.
This case taught a great lesson in the importance of the “case within the case.” It is not enough to prove the lawyer failed to meet the standard of care. Plaintiff must prove that but for that breach, plaintiff would have prevailed in the underlying case. Traditionally anyway, if the plaintiff cannot prove the “case within the case,” then the plaintiff cannot prevail in the legal malpractice case, no matter how bad the lawyer’s conduct.
The purpose of this article is to examine the “case within the case” concept and to discuss a trend we have seen recently to erode the requirements to prove the underlying case. More and more, courts are allowing expert testimony to assist the jury to determine whether but for the attorney’s alleged negligence, the plaintiff would have obtained a better result. In other words, courts are not requiring plaintiffs to put on the underlying case. They are letting plaintiffs put on experts to say the case was winnable and that it had a certain settlement value.
The erosion on the “case within the case” requirement is decidedly pro-plaintiff because it is always possible to find an expert to say a case would have been won or that it had a certain value. In defending legal malpractice cases, one should be aware of the trend to erode the “case within the case” and to be ready to advocate for the “case within the case” format.
PROVING THE CASE-WITHIN-THE-CASE
The plaintiff in a legal malpractice action must establish: (1) the existence of an attorney-client relationship which imposes a duty on the attorney to exercise the degree of skill, care and knowledge commonly exercised by members of the legal profession; (2) breach of that duty; (3) that such negligence was a proximate cause of resulting injury; and (4) the fact and extent of injury. Phillips v. Clancy, 733 P.2d 300, 303 (Ariz. Ct. App. 1986); Thomas v. Lusk, 27 Cal. App 4th 1709, 1716 (1994).
The causation element requires proof that the plaintiff would not have suffered harm or would have obtained a better result absent the alleged negligence of the attorney. Hummer v. Pulley, Watson, King & Lischer, P.A., 577 S.E.2d 918, 923 (N.C. Ct. App. 203); Fishman v. Brooks, 487 N.E.2d 1377, 1380 (Mass. 1986); Niehoff v. Shankman & Assocs. Legal Ctr., P.A., 763 A.2d 121, 124 (Me. 2000).
In a legal malpractice case involving litigation, the traditional and accepted method in which causation is established is through the presentation of the “case-within-the-case,” otherwise known as the “trial-within-the-trial.” See RONALD E. MALLEN & JEFFREY M. SMITH, Legal Malpractice § 35:12 (2010 ed.) (“This is the accepted and traditional means of resolving the issues involved in the underlying proceeding in a legal malpractice action.”) and cases cited therein; Piscitelli v. Fridenberg, 87 Cal. App. 4th 953, 973 (2001); Aquino v. Kuczinski, Vila & Assoc., P.C., 39 A.D.3d 216, 219 (N.Y. App. Div. 2007); Garcia v. Kozlov, Seaton, Romanini & Brooks P.C., 845 A.2d 602, 611-12 (N.J. 2004) (recognizing the suit-within-the-suit format “is regularly employed in most jurisdictions.”).
That is, the plaintiff must present evidence that should have been offered at the trial of the underlying malpractice case that he or she would have prevailed in the underlying action absent the attorney’s alleged negligence. Id.; see also Whitley v. Chamouris, 574 S.E.2d 251, 252-53 (Va. 2003); Bebo Constr. Co. v. Mattox & O’Brien, P.C., 990 P.2d 78, 83 (Colo. 1999); Lewandowski v. Cont’l Cas. Co., 276 N.W.2d 284, 287 (Wis. 1979) (“The requirements of causation dictated that the merits of the malpractice action depend upon the merits of the original claim.”).
The plaintiff must present virtually the same evidence that would have been presented in the underlying action, and the defendant attorney is entitled to present evidence and assert defenses that would have been present in the underlying action. Whitley, 574 S.E.2d at 252-53; Arciniega v. Bank of San Bernardino, 52 Cal. App. 4th 213, 230 (1997). The Arciniega court observed that the “misperforming lawyer is deemed to constitute the same ‘target,’ legally speaking, as the original offending defendant. Because of the legal malpractice, the original target is out of range; thus, the misperforming attorney must stand in and submit to being the target instead of the former target which the attorney negligently permitted to escape. This is the essence of the case-within-a-case doctrine.” 52 Cal. App. 4th at 231.
Indeed, the jury or fact finder in the malpractice action then determines the outcome of the underlying case and from that determination reaches a malpractice verdict. Hummer, 577 S.E.2d at 923; see Phillips, 733 P.2d at 307 (“Therefore, on remand, in the ‘case within the case,’ the jury should be instructed on the applicable Social Security law and regulations and be asked if, based on the facts present, but for the alleged negligence, Phillips would have been entitled to disability benefits.”).
The case-within-the-case employs an objective standard against which the impact of a lawyer’s negligence in the underlying action is judged. Phillips, 733 P.2d at 303. It provides the objective mechanism for resolving the underlying case, as the malpractice jury must decide the underlying case as an independent fact finder, as opposed to determining what a particular judge or fact finder would have done. Id. It avoids speculation of what the particular fact finder in the underlying case would have done. Thomas v. Bethea, 718 A.2d 1187, 1197 (Md. 1998) (citations omitted).
The role of the malpractice jury and the case-within-the-case has been best explained as follows:
[E]ven when the alleged negligence concerns the conduct of a jury trial, the ‘causation’ issue [i.e. the-case-within-the-case] does not call for reconstruction of the probably behavior of the actual jury in that trial. It does not call for bringing the jurors into court and subjecting them to examination and cross-examination to determine what they would have done if the case had been tried differently, nor does it call for expert testimony about the characteristics or the apparent attitudes of those jurors. Although the issue is stated to be the probably outcome of the first case, the second jury is permitted to decide this by substituting its own judgment for that of the fact finder in the earlier case. Once it is accepted that this is what the malpractice jury does, there is no reason why the jury (or a court when sitting without a jury) should not do the same even when the earlier fact finder was a judge, an administrative hearing officer, an arbitrator, a court-martial, or any tribunal deciding on factual grounds.
Chocktoot v. Smith, 571 P.2d 1255, 1258 (Or. 1977).
Appling a subjective standard to the causation element in a legal malpractice case would open the door to speculation as to what a particular judge or jury would have found in the underlying case, and therefore, require the fact finder in the underlying matter to testify and answer the question of whether but for the attorney’s alleged negligence, the result would have been different. This would mean that a judge, jurors, arbitrators and the like, would be called to testify and give their subjective opinion as to the effect of the attorney’s alleged negligence in the underlying case. Courts have specifically held that expert opinion testimony “cannot be couched in legal conclusions that simply opine ‘how juries should decide cases.’” Webb v. Omni Block, Inc., 166 P.3d 140, 144 (Ariz. Ct. App. 2007); cf. Shields v. Campbell, 559 P.2d 1275, 1280 (Or. 1977) (opinions on the ultimate issue are admissible within the discretion of the trial judge).
In Piscitelli, the court held, in part, that the trial court improperly shifted the jury’s responsibility to decide the issue by permitting the plaintiff’s expert to testify that the fact finders in the underlying matter would have granted the plaintiff relief had the matter been presented. 87 Cal. App. 4th at 974. The court reasoned “[t]o entrust that ultimate determination to an expert, i.e. to allow the expert to reach the ultimate question of whether [plaintiff’s] underlying arbitration would have been successful, invades the jury’s function.” Id.
Other courts have specifically rejected the use of expert testimony regarding the outcome of the underlying case, or what the result would have been when employing the case-within-the-case method. (This is distinguishable from expert testimony which may be necessary to establish the causal link between the alleged negligence and the alleged harm, i.e. expert testimony so as to what the attorney should have done. See Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 35:20; see, e.g. Alexander v. Tutur & Assoc., Inc., 146 S.W.3d 113, 118 (Tex. 2004).) In Whitley, the court held that expert testimony on the issue on causation was unnecessary, and would have been improper because it would have required either a prediction of what some other fact finder would have concluded or an evaluation of the legal merits of the underlying claims. 574 S.E.2d at 253. The court explained that no witness can predict the decision of a jury and an evaluation of the underlying claims would constitute an improper legal opinion. Id.
In Cook v. Continental Casualty Co., 509 N.W.2d 100, 105 (Wis. Ct. App. 1993), the court held that expert testimony regarding what the original jury would have done was irrelevant. The court acknowledged that all the issues touching upon plaintiff’s underlying personal injury action would be submitted to the malpractice jury as matters of first impression. Id. Therefore, because the second jury was not being asked to decide what the original jury would have done, expert testimony on the behavior of that particular jury or any other jury was irrelevant. Id.
Plaintiffs in legal malpractice actions often attempt to present expert testimony regarding what the result should have been and the amount of damages in order to avoid the expense and effort in proving the underlying claim through the case-within-the-case method. Indeed, the plaintiff not only has the burden of proving negligence on the part of the attorney, but has the burden to show that he or she would have obtained a better result had the underlying case been properly tried, necessitating the plaintiff to essentially put two cases – the malpractice case and the underlying case. Utilizing the case-within-the-case methodology, as seen above, courts have refused to admit or require this type of expert testimony. See also Tarleton v. Arnstein & Lehr, 719 So. 2d 325, 330 (Fla. Dist. Ct. App. 1998) (what a reasonable judge should have done in the underlying matter was not a matter for expert testimony); Worsham v. Nix, 145 P.3d 1055, 1066-67 (Okla. 2006) (expert testimony cannot sidestep or bypass plaintiff’s burden of proof to show better outcome in underlying action and cannot be a substitute for necessary factual evidence).
Utilizing the case-within-the-case allows for an objective and uniform standard, and avoids a whole host of other concerns that arise with the subjective standard. If a judge were to testify, there may be the appearance of impropriety created as the judge would, in effect, be testifying for one of the litigants in the malpractice case. Phillips, 733 P.2d at 305; see also Helmbrecht v. St. Paul Ins. Co., 362 N.W.2d 118, 125 (Wis. 1985) (citation omitted). The jury would undoubtedly attach undue weight to the judge’s testimony, so that such testimony would be prejudicial. Helmbrecht, 362 N.W.2d at 125. From a practical standpoint, allowing this kind of testimony would interfere with and disrupt the work of the judiciary. Phillips, 733 P.2d at 305. Moreover, if a subjective standard were implemented, the plaintiff would encounter serious problems if the original fact finder is unavailable or if the fact finder’s testimony is excluded as prejudicial. Helmbrecht, 362 N.W.2d at 125. Furthermore, if the original fact finder was a jury, this would place an undue burden on plaintiff to bring forth all the jurors to testify. Id. at 126.
CRITICISMS OF AND ALTERNATIVES TO THE CASE-WITHIN-THE-CASE APPROACH
Despite the accepted and recognized use of the case-within-the-case as the objective standard, courts have criticized the approach, and have attempted to develop alternatives for proving causation in a legal malpractice case, such as allowing expert testimony on the outcome of the underlying case. See, e.g., Shields, 559 P.2d at 1280; Liberman v. Emp’r Ins. Of Wausau, 419 A.2d 417, 427 (N.J. 1980); Colucci v. Rosen, Goldbert, Slavet, Levenson & Wekstein, P.C., 515 N.E.2d 891, 896 (Mass. 1987).
There are several criticisms of the case-within-the-case approach. In some situations, the case-within-the-case does not represent an accurate or complete reconstruction of the original lawsuit. Garcia, 845 A.2d at 612 (citing Developments in the Law – Lawyers’ Responsibilities and Lawyers’ Response, 107 Harv. L. Rev. 1557, 1568-69 (1994) (discussing complications of reconstructing original lawsuit); Polly A. Lord, Comment, Loss of Chance in Legal Malpractice, 61 Wash. L. Rev. 1479, 1482 (1986) (same)); Thomas, 78 A.2d at 1197. There is an artificiality to putting on the underlying case in the context of the malpractice case. Thomas, 718 A.2d at 1197
Moreover, given the passage of time, the evidence may not be of the same quality as that which would have been offered in the underlying case, and the parties may not have the same access to evidence. Garcia, 845 A.2d at 612 (citing Paul Gary Kerkorian, Comment, Negligent Spoliation of Evidence; Skirting the “Suit Within a Suit” Requirement of Legal Malpractice Actions, 41 Hastings L.J. 1077 (1990)); Thomas, 1718 A.2d at 1197. Indeed, because the original defendant is not a party to the malpractice suite, the plaintiff may not have the benefit of discovery against that defendant to collect evidence in support of the underlying claim. Thomas, 718 A.2d at 1197.
The case-within-the-case method has been criticized for being unfair to plaintiffs who must litigate the underlying claim against the lawyer who originally prepared it. The lawyer has superior knowledge of the strength and weaknesses of the case, including knowledge obtained from the client’s own confidences. Garcia, 845 A.2d at 612 (citing John Leubsdorf, Legal Malpractice and Professional Responsibility, 48 Rutgers L. Rev. 101, 148 (1995)); Thomas, 718 A.2d at 1197.
It has also been criticized as unfair to the plaintiff who, under the case-within-the case format, has to prove to a “virtual certainty” that the plaintiff would have prevailed in the underlying action. Vahila v. Hall, 674 N.E. 2d 1164, 1169 (Ohio 1977) (quoting Note, The Standard of Proof of Causation in Legal Malpractice Cases, 63 Cornell L. Rev. 666, 670-71 (1978)). Regardless of how outrageous or morally reprehensible the attorney’s actions were, if there is “minimal doubt” as to the outcome of the underlying action, the plaintiff would not prevail in the malpractice claim, thereby protecting attorneys from liability. Id.
Furthermore, the case-within-the-case ignores settlement opportunities, and instead focuses on whether the client would have won the underlying case. Id. Ultimately the cost and complexity, as well as the risk, of having to present the case-within-the-case may discourage plaintiffs to pursue claims of legal malpractice. Id.
Recognizing these problems with the case-within-the-case approach, the Vihila court held that the plaintiffs were not required to establish that they would have been successful in the underlying civil, criminal, and administrative matters giving rise to the malpractice action. Id. at 1171. The court reasoned that the plaintiffs arguably sustained damage regardless of the fact that they may have been unable to prove success in the underlying case. Id. at 1169. In that case, the plaintiffs alleged that the attorneys failed to properly disclose all matters and legal consequences regarding various plea bargains and settlements; that the pleas and settlements were obtained under duress and coercion; and that the attorneys failed to secure viable defenses on behalf of the plaintiffs. Id. The court refused to adopt the case-within-the-case format as “a rule of thumb” in order for the plaintiff to prove damage or loss. Id. at 1168.
Likewise, in Lieberman the court held that it was within the discretion of the trial judge as to the manner in which the plaintiff proves his claim for damages, which may include the case-within-the-case approach, any reasonable modification thereof, or even the use of expert testimony as to what as a matter of reasonable probability would have occurred in the underlying case. 419 A.2d at 427. The court pointed out the difficulties with the case-within-the-case method as in that case, there was a “reversal of roles.” Id. at 426. The client was the plaintiff in the malpractice case but was a defendant in the original suit. The court reasoned that to require the client to proceed in the malpractice action “with direct proofs, as though he were the erstwhile claimant, would be awkward and impracticable.” Id.
Unquestionably, the “case-within-the-case” approach favors the defense in the legal malpractice case. As far as we are concerned, it is much better to permit the jury to analyze both the liability and damage claims of the plaintiff rather than to be spoon-fed by an expert. We advocate for this framework whenever possible. However, one should anticipate resistance from sophisticated plaintiffs’ counsel. We anticipate that plaintiff’s counsel will increasingly oppose this framework and will attempt to convince courts that it is unfair and impractical.
Thus, in representing an attorney in legal malpractice cases arising out of litigation, it is vitally important to analyze the underlying case and to determine how it can be presented practically in the legal malpractice action. The arguments the plaintiff may present against using the framework must be considered and anticipated. The key is to convince the court that in your situation, the “case within the case” is the proper framework.
It is vital to conduct this analysis in the early stages of legal malpractice case. It is wise to file a motion advocating utilization of the “case-within-the-case” framework as soon as possible so that no party is prejudiced and so that appropriate discovery may be conducted regarding the underlying case. As I learned years ago, the best defense to a legal malpractice case may have nothing to do with your client and everything to do with the merits of the case your client decided to take.
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