Home Minnesota Law Blog

Minnesota Legal Malpractice & Attorney Ethics Cases

Negligence of Lawyer in Legal Malpractice Action Arising Out of Mechanics Lien; Summary Dismissal Reversed

Ryan v. O'Neill, A14-1472, July 27, 2015, presents a legal malpractice claim arising out of an underlying legal malpractice action.  Plaintiff Ryan is a contractor that was hired by developer Farr to improve undeveloped "raw" land.  No pre-lien notice had been given by Ryan prior to performing substantial work.  Due to non-payment by Farr, Ryan terminated its work and hired the Meagher & Geer law firm to file a mechanics lien in order to recover the value of its unpaid services.

Meagher & Geer filed a blanket mechanics lien seeking more than $356,000 for services rendered to improve a number of lots, some of which had been sold by Farr before the lien was filed.  The mechanics lien  trial court granted Farr summary dismissal of the mechanics lien filed against the properties it had sold because the blanket amount Ryan claimed was a demand for more than "was justly due," in violation of the mechanics lien statute.  In response to Ryan's argument that it could not apportion the value of its work performed on each lot, the trial court held that Ryan could have filed one lien for the entire amount claimed and listed all involved properties, reserving decisions about apportionment of liens until a later date.

Ryan settled its remaining claims against Farr for $280,000.  The settlement agreement released the mechanics lien claims against Farr, but reserved Ryan's claims against its counsel Meagher & Geer.  Ryan then hired Defendant O'Neill to pursue a legal malpractice claim against Meagher & Geer.  The trial court in the legal malpractice case granted summary dismissal to Meagher & Geer, holding that O'Neill failed to comply with the Minn. Stat § 544.42 affidavit of expert disclosure. 

Ryan then filed the current action, seeking recovery for O'Neill's negligence in the underlying legal malpractice suit.  The trial court granted summary dismissal in favor of Defendant O'Neill, holding that Ryan could not have prevailed in the underlying malpractice claim because Meagher & Geer were not responsible for any loss Ryan had sustained in the mechanics lien matter.  The trial court found that Ryan's inability to apportion the value of its services was due to Ryan's decision as to when to file, not any conduct by Meagher & Geer.  The trial court specifically found that Ryan needed to have filed a pre-lien notice in order to have perfected the lien, thereby removing Meagher & Geer's conduct as the cause of Ryan's loss of its mechanics lien. 

In addition, the trial court noted that the fact that Ryan had obtained a settlement from Farr in the underlying mechanics lien matter did not preclude bringing a malpractice action against the former mechanics lien counsel.  The trial court stated that the reasonableness of the mechanics lien settlement would be a fact issue for the jury.  Had there been a meritorious mechanics lien claim, Ryan would have likely had a claim for recovery of the mechanics lien costs and attorneys' fees.

On appeal the Minnesota Court of Appeals reversed the trial court's grant of summary judgment.  After a detailed review of Minnesota's mechanics lien cases, the appellate court held that no pre-lien notice had been required.  As a consequence, Ryan had a valid mechanics lien when Meagher & Geer was retained; there were fact issues as to whether Meagher & Geer had caused Ryan to sustain damages in the underlying mechanics lien matter.  Given that the mechanics lien matter was meritorious, O'Neill's failure to comply with the expert witness disclosure statute in the legal malpractice suit against Meagher & Geer arguably gave rise to a meritorious legal malpractice claim against Defendant O'Neill.  In addition, the appellate court affirmed the trial court's reasoning which held that the settlement obtained in the mechanics lien matter did not preclude a malpractice claim against the mechanics lien attorney.  Since there were fact issues as to whether Ryan would have been able to maintain a mechanics lien against the non Farr owned properties and whether Ryan would have been able to obtain a better settlement in the mechanics lien matter, but for the conduct of Meagher & Geer, the trial court's dismissal was reversed and the case remanded.

On October 20, 2015, the Minnesota Supreme Court granted further review of this case. 

Negligence of Lawyer in a Real Estate Partition; Dismissal of Legal Malpractice Affirmed

Britton v. Hohman, A14-0912, December 29, 2014, former client Britton sued Defendant attorney, alleging negligence in the handling of an underlying real estate matter in which Britton had been sued for partition of real estate by a contract for deed vendee.  After trial court granted partition in favor of the vendee in the underlying matter, Britton appealed claiming that the contract vendee lacked standing to seek remedy of partition.  Britton lost appeal when appellate court held that appeal had not been filed in a timely manner.

Trial court granted dismissal of the malpractice action, holding that Britton could not show that a timely appeal would have been successful. The Court of appeals upheld the trial court's ruling that the vendee in the underlying contract for deed had sufficient interest in the real estate to seek partition.  Specifically, the appellate court held that even if Britton's former lawyer had appealed in a timely manner, the appeal would not have succeeded.  As a consequence, the Defendant lawyer's alleged negligence was not the cause of his former client's failure to prevail in the partition action. 

Negligence Preparing Power of Attorney; Affidavit of Expert Review; Summary Dismissal Reversed

Guzick v Kimball, et al, A14-0429, October 6, 2014, Defendant attorney had been sued for negligence in drafting a power of attorney form which was used by the attorney-in-fact to transfer the principal's bank accounts to himself.  After the principal died his estate sued the attorney-in-fact for conversion, obtaining a non-dischargeable judgment of $226,524.39 in his bankruptcy. The Plaintiff personal representative of the estate then sued the law firm that had drafted the power of attorney which had resulted in the fraudulent transfer of assets, seeking recovery for the value of the dissipated assets and the costs and attorney's fees expended in the litigation pursuing the attorney-in-fact. 

Trial court granted summary judgment to the Defendant attorney, finding that Plaintiff had not complied with Minn. Stat. § 544.42 affidavit of expert review. The appellate court reversed the trial court, discussing the elements necessary to establish a claim for legal malpractice. The appellate court specifically held that no expert testimony was required to establish the existence of the attorney-client relationship, but agreed that expert testimony is usually required to identify the acts constituting negligence by the attorney and that the acts caused the client to sustain damages.  The court of appeals held that the disclosures found in the Plaintiff's initial affidavit of expert review in conjunction with the expert witness interrogatory answers were sufficient to meet the statute's requirements.

The appellate court noted that the initial affidavit of review detailed a number of actions that breached the applicable standard of care, such as failure to supervise the secretary who prepared the POA, failure to speak with the principal prior to execution of the POA to determine his competency and understanding of the broad grant of powers reflected in the  POA, as a sufficiently detailed disclosure of the claims of negligence.  The causation of damages element was implied by the same disclosures that addressed the acts of negligence. 

Dismissal of Legal Malpractice Affirmed; Violation of Attorney Conduct Rules; Affidavit of Expert Review 

Kurdymova, et al v. Robinson, A13-1734, May 12, 2014, affirmed the trial court's dismissal of claims asserted against an attorney by husband and wife Plaintiffs who had executed conflict-of-interest waivers and paid a retainer. Both discharged the attorney Robinson, claiming he had pushed them to trial, jeopardized their case and did not adequately communicate with them. After a different attorney obtained dismissal of all charges, they had the charges expunged. They then sued Robinson for legal malpractice, violation of rules of professional conduct and defamation.

The trial court granted defendant attorney's motion to dismiss the malpractice claim due to Plaintiffs' failure to include any Minn. Stat. § 544.42 affidavit of expert review. The appellate court affirmed the trial court's holding that expert testimony was necessary to prove the Plaintiffs' malpractice claims that they sustained injury due to Robinson's failure to request an omnibus hearing and that his communication with them fell below the requisite standard. 

The Court of Appeals also upheld the lower court's ruling that Robinson's initial filing of his motion to dismiss constituted a demand for the affidavit of expert review, since the motion to dismiss put Plaintiffs on notice of their failure to comply with the statute more than 60 days before the dismissal motion was heard, as required by the statute. 

The appellate court affirmed the trial court's dismissal of the claim of professional misconduct, holding that a violation of the Minnesota Rules of Professional conduct does not give rise to a private cause of action. Dismissal of the defamation claim was affirmed since it was premised on the attorney's dissemination of information related to the expunged criminal charges. Expungement did not preclude making statements about the cases in court or by private persons; only the city and county attorneys, the attorney general and state agencies were subject to the terms of the expungement order.

Attorney Conflict of Interest; Disqualification of Legal Counsel 

State of Minnesota, et al v. 3M Company, A12-1856, April 30, 2014, reversed the Court of Appeals in part and remanded to the trial court several rulings that had disqualified the Covington & Burlington law firm from providing legal counsel to the State of Minnesota in environmental litigation commenced against the 3M due to its manufacture and disposal of perfluorochemicals (PFCs). Prior to representing the State in the environmental litigation, the Covington law firm had represented 3M in regulatory matters involving the health effects resulting from exposure to fluorochemicals (FCs).

The Covington law firm appealed the Court of Appeals' holding that the law firm lacked standing to assert any legally protected right to continue representing the State; the State of Minnesota appealed the rulings that a violation of Rule 1.9(a) of the Rules of Professional conduct mandated disqualification and was not subject to waiver by the former client.

The Minnesota Supreme court held that when a district court has disqualified an attorney from representing a client, the attorney has standing independent of the client to seek review of the disqualification order. The Supreme court also held that while a violation of Rule 1.9(a) usually mandates disqualification, this matter needed to be remanded to the trial court for its specific findings as to whether the information Covington had obtained from its representation of 3M was no longer confidential due to disclosure in a concurrent lawsuit commenced by 3M against Covington for breach of fiduciary duty and breach of contract, and whether 3M had waived its right to seek disqualification by its delay in moving for disqualification.

Minnesota Attorney Malpractice; Summary Judgment Reversed 

Schmidt v. Harlan, A13-0654, January 21, 2014, concerned a claim for legal malpractice asserted against the attorney Harlan due to his defense of Schmidt in a suit brought by Jorgenson alleging fraud, negligent misrepresentation and unjust enrichment. Harlan obtained a partial summary judgment, winning dismissal of the Jorgenson fraud claim.

When Schmidt filed for personal bankruptcy before dismissal of Jorgenson's fraud claim had become final, Jorgenson reasserted his fraud claim in the Schmidt bankruptcy matter as an adversary proceeding. Jorgenson's fraud claim was ultimately exempted from Schmidt's bankruptcy discharge, resulting in Schmidt's personal liability to Jorgenson for $168,000.

Schmidt then sued Harlan for malpractice, claiming that he had filed bankruptcy based on Harlan's advice that he could discharge Jorgenson's remaining claim for unjust enrichment in bankruptcy.  In Schmidt's malpractice suit against Harlan, his expert opined that Schmidt sustained damages due to Harlan's failure to determine that the partial summary judgment order would not be binding, and Harlan's failure to recommend delay of any bankruptcy pending finality of the fraud claim's dismissal.  The trial court granted summary judgment to Harlan, dismissing Schmidt's legal malpractice action.

The trial court found that Schmidt's claim to have relied on Harlan's advice to file bankruptcy was not credible.  In Schmidt's deposition he testified that Harlan had advised bankruptcy in October of 2007, although the partial summary judgment order was not issued until November of 2007. The trial court  found Schmidt's supplemental affidavit stating that he had been in error on the date to be a self-serving attempt to contradict his earlier damaging testimony.

The Minnesota Court of Appeals reversed the trial court, holding that Schmidt's claim to have received the negligent advice from Harlan was consistent with other evidence that Harlan had been in contact with Schmidt's bankruptcy attorney. The appellate court held that while Schmidt had been mistaken in his deposition about the date of Harlan's advice, such mistake did not negate Schmidt's claim that he had obtained the negligent legal advice from Harlan.  The appellate court found the affidavit to be explanatory as opposed to contradictory of the deposition testimony.

On appeal Harlan also claimed that even assuming he had given the alleged bankruptcy advice, Schmidt could not show that the bankruptcy filing had caused him any damages. The Court of Appeals disagreed.  It noted that had Jorgenson continued to trial on his unjust enrichment claim, it was likely that the Jorgenson fraud dismissal would have become final due to the improbability of obtaining any reconsideration of the fraud dismissal ruling and the difficulty of overturning any jury verdict that would have resulted from the trial on the unjust enrichment claim.

Defense of Suit for Legal Fees; Legal Malpractice Expert Affidavit Not Required; Summary Dismissal Reversed

Fredrickson & Byron v. Saliterman, A12-0906, December 24, 2012, presented a dispute about the attorney's fees owed to the law firm for legal services rendered on behalf of a corporation.  The trial court granted summary judgment in favor of the law firm, finding that its former client Saliterman, was personally liable for the legal fees due for services for a corporation for which Saliterman was president and sole shareholder.  Contrary to Saliterman's claim that he had signed the law firm's letter of engagement in his corporate capacity, Fredrickson & Byron asserted he was liable as a "comaker."   The trial court had also held that Saliterman had failed to comply with the expert affidavit requirements of Minn. Stat. § 544.42, and therefore dismissed Saliterman's breach-of-contract claim which alleged fee padding by Fredrickson & Byron.

The Minnesota Court of Appeals reversed the trial court's grant of summary judgment, holding that the capacity in which Saliterman had signed the law firm's engagement  letter was ambiguous, thereby creating a material issue of fact. The appellate court also held that the client's breach-of-contract claim against the law firm for excessive fees did not present a claim for legal malpractice to which the expert affidavit requirements of Minn. Stat. § 544.42 would apply.  Specifically, the court noted that claims for fee padding, excessive fees, breach of contract, did not present claims of legal malpractice that required an expert affidavit.


 

 

 


 MN malpractice attorney and auto accident lawyer website