Lawyers as litigants in 2014, Part 1

2014 saw lawyers as litigants in several appellate cases with far-reaching implications. Appellate courts continued to pay close attention to the causation element in malpractice cases, and the effectiveness of it as a basis for a defense. That trend is discussed in more detail below, the first in a two-part series surveying important appellate decisions from 2014 affecting lawyers. In the second part of the series, we explore other notable 2014 appellate opinions relevant to practicing lawyers, including the scope of the statute of limitations, the anti-SLAPP statute, and the attorney-client privilege.

While it may seem obvious that causation must be proven in every malpractice case, many malpractice plaintiffs rely heavily on the assertion of an alleged attorney mistake (plain or not), without a clear articulation of the purported result of the mistake, let alone a well-formulated evidentiary basis. Cases fitting that description are at risk of going nowhere, as the appellate courts demonstrated in several 2014 decisions, each of which underscored that a failure to marshal clear evidence of causation is a recipe for summary disposition.

Starting in May, with Namikas v. Miller, 225 Cal. App. 4th 1574, the appellate courts showed little patience with legal malpractice cases which could not strongly link alleged negligent conduct to ultimate damage. In Namikas, the court was asked to review a summary judgment ruling in favor of attorneys named in a so-called "settle and sue" malpractice case. As many appellate courts have recently observed, Namikas emphasized that the "elements of causation and damages" in a legal malpractice claim are "particularly closely linked," before holding that the attorneys' role in negotiating a stipulated settlement agreement in a divorce case did not cause damage.

The appellant in Namikas alleged that his attorneys failed both to suggest a forensic marital standard of living analysis before accepting a spousal support settlement and to properly calculate permanent benefits, which caused him to pay more in spousal support than he otherwise would have agreed to. In assessing a summary judgment ruling in favor of the attorneys, the Namikas court affirmed, finding there was no evidence that the appellants' former spouse would have accepted any less than she did. The evidence accepted by the court was to the contrary, in the form of an attorney declaration from the appellants' former spouse declaring that the former spouse would have accepted no amount less than she did.

Based on that evidence, the Namikas court reasoned that the burden shifted to the appellant to create a triable issue of fact, which he was, in the view of the court, unable to do. The court concluded that "any actual harm from respondents' conduct is only a subject of surmise, given the myriad of variable that affect settlements," particularly since there was no indication that the "settlement was excessive in light of all the variables and circumstances." In malpractice cases that arise after an underlying settlement, Namikas is the latest to demonstrate what an effective defense establishing a lack of causation can be.

Namikas was followed in June by Moua v. Pittullo, Howington, Barker, Abernathy LLP, 228 Cal. App. 4th 107 (published in July), which involved almost the reverse context from that presented in Namikas. Moua could be characterized as a "don't settle and sue" case, as the appellant claimed she did not accept a settlement offer in an underlying divorce case due to her attorneys' negligent counsel, resulting in her receiving nothing.

The appellant in Moua had retained the attorney defendants to advise her regarding a divorce. The primary issue was whether the marriage would be legally recognized, and the attorneys advised the appellant that if she did not settle, she had a 50 percent chance she would not be found a putative spouse, in which case she could receive nothing. The appellant rejected prior settlement offers, but when that unfavorable outcome was realized, she blamed her attorneys for not properly advising her regarding her risks.

The Moua court affirmed the trial court's granting of summary judgment in favor of the attorneys, concluding that no causal relationship existed between the attorneys' advice and the appellant's loss, particularly because the estimation of "[a] 50 percent chance is just that: you might win, you might lose. [The attorneys] did not encourage [appellant] to gamble on this 50/50 chance." The Moua court therefore determined that the cause of appellant's loss of settlement was her own choices, and not the advice provided by her attorneys. Like Namikas, Moua reinforced the importance of the causation element to a malpractice action and that an inability to produce evidence of damage as a proximate result of malpractice is a strong basis for summary disposition.

In Kasem v. Dion-Kindem, 230 Cal. App. 4th 1395, published in October, the court again re-affirmed the potency of the causation defense, this time in the context of alleged judicial error. Kasem arose out of an underlying alleged breach of a sublease related to a sewer back up, in which the primary issue was whether the sewage backup fell into the definition of "Hazardous Material" included within the sublease. The underlying court determined that it did not, after it had first refused to take judicial notice of statutes which so defined the sewage (and faulted the attorney for failing to produce relevant expert testimony).

The appellant sued for malpractice, but the attorney defendants obtained a dismissal on demurrer, contending that it was not their mistake which caused damage, but judicial error. The Kasem court agreed, holding not only that the underlying court had "erred in refusing to take judicial notice of the relevant statutes and their application to the facts and, instead, faulting [the attorney defendants] for failing to present expert testimony on the issue," but also much more broadly that there is no malpractice where a judge, not an attorney, makes the critical mistake. Though the Kasem court seemed to suggest that judicial error is a negation of the breach of the standard of care element, it also logically extends to the causation element to the extent that judicial error, in essence, supersedes alleged attorney error as the cause of damage.

The existence of causation must be evaluated in every legal malpractice case that comes through the door, but in light of recent decisions, perhaps more closely than ever. As has been the trend, the appellate courts in recent years have continually shown a willingness to carefully evaluate the nexus between alleged attorney mistakes, and their consequences. When no link can be clearly substantiated, the appellate courts have also been rightly receptive to upholding summary dismissals of those claims.