Ch. 2 Overview of Theories of Liability “legal malpractice” as umbrella term

1. Ch. 2 Overview of Theories of Liability“legal malpractice” as umbrella term Tort: negligence; misrepresentation; intentional torts (fraud, etc.); breach of fiduciary duty (also sounds in equity) Contract: express or implied

2. NegligencePlaintiff’s burden • Duty: • to clients (limited duties to prospective clients, intended beneficiaries & a few nonclients) • Breach of Duty: reasonable care, ordinarily prudent lawyer • Proof of breach: requires expert witness • Debatable use of rule violations (Compare Rstmt §52; ABA & Okla. RPC Preamble ¶20)

3. Negligence: Plaintiff’s burden • Causation/harm • Cause in fact • “case within a case” • Damages in underlying case provable with reasonable certainty and would have been recoverable/collectable • Proximate harm (not too remote) • Damages • Compensatory (public policy to “make whole”; eggshell plaintiff) • Punitives (“exemplary”) • Provable with reasonable certainty (not speculative)

4. Negligence • Plaintiff: burden of pleading and proof (preponderance of evidence) • Defenses: • Challenge plaintiff’s failure to satisfy elements of tort • Challenge plaintiff’s evidence on damages • Contributory negligence (defeats liability) or comparative fault (reduces amount of liability)

5. Breach of Contract Burden: preponderance of evidence • Voluntary undertaking (typically express; sometimes implied) (e.g., promise of cure, specific outcome, style of representation) • Breach: did not perform as promised; strict liability w/o regard to standard of care • Damages: based on P’s defeated expectation interest

6. Fiduciary Duties (in law + equity)19th Century Origins; fluid & growing “’uberrima fides’ requires most abundant good faith” requiring absolute & perfect candor, openness & honesty, & the absence of any concealment or deception” Rstmt § 49 cmt. b. : Safeguard client confidences & property; Highest level of honesty & fair dealing; Avoid impermissible conflicts (with interest of other clients, former clients, law firm, lawyer’s personal or business interests); Adequately inform client of all relevant information; Follow client’s lawful directions

7. Breach of Fiduciary duty (tort & agency & equity) Breach: Disloyalty; wide range of potential proofs from common law & equity; may not need expert witness Plaintiff’s burden of production: existence of client/lawyer relationship; apparent unfairness or breach of loyalty, honesty > where business transaction w/ lawyer, constructive fraud doctrine presumes fraud & shifts burden of nonpersuasion to lawyer Defendant lawyer: rebut presumption & bear burden of non-persuasion (prove utmost fairness, actions above reproach)

8. Breach of Fiduciary Duty: Remedies & Miscellaneous Strategic Issues Damages: actual compensatory + punitives Equitable relief: injunctive; action for accounting; impose constructive trust or equitable lien; fee forfeiture/disgorgement & other claims for restitution Defense strategies: try to strike fiduciary claims as baseless gloss on ordinary negligence; plaintiff’s comparative negligence

9. Proof of RPC Rule violation? Restatement of Law Governing Lawyers (Third) (A.L.I. 2000)§52(2)[at 32] • [while] does not give rise to implied c/a . . (c) may be considered as aid in understanding & applying the standard [of care] to the extent that (i) rule/stat. designed for protection of persons in claimant’s position (ii) content & construction relevant to claim

10. Proof of RPC Rule Violation as Evidence of Breach?Compare ABA & Okla. Scope ¶ 20 See hand-out for detailed red-lined comparison ABA (as amended 2003 – so called E2k) “itself” Last sentence: “Nevertheless, since the Rules do establish standards of conduct by lawyers, a lawyer’s violation of a Rule may be evidence of breach of the applicable standard.” Unique Okla. RPC Scope “Violation of a Rule should not itself give rise to cause of action nor should it create presumption that a legal duty has been breached. . . . The Rules . . . are not designed to be a basis for civil liability.. . .[last sentence provides instead] Accordingly, nothing in the Rules should be deemed to augment any substantive legal duty of lawyers or the extra-disciplinary consequences of violating such a duty.

11. Ch. 3 NegligenceElements • Duty • Breach • Causation • Damages

12. NegligencePlaintiff’s burden • Duty: • to clients (limited duties to prospective clients, intended beneficiaries & a few nonclients) • Breach of Duty: reasonable care, ordinarily prudent lawyer • Proof of breach: requires expert witness • Debatable use of rule violations (Compare Rstmt §52; ABA & Okla. RPC Preamble ¶20)

13. Negligence: Plaintiff’s burden • Causation/harm • Cause in fact • “case within a case” • Damages in underlying case provable with reasonable certainty and would have been recoverable/collectable • Proximate harm (not too remote) • Damages • Compensatory (public policy to “make whole”; eggshell plaintiff) • Punitives (“exemplary”) • Provable with reasonable certainty (not speculative)

14. A. Duty to Exercise Care1. To Whom is a Duty Owed? CLIENTS Rstmt §14 Cl/L relationship “arises when” • a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and EITHER • the lawyer manifests to the person consent to do so; OR • the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services;

15. Duty to Putative ClientsExamples: Informational Burden on L Tropp v. Lumer(N.Y.S.2d 2005) (text at p. 37) P testified L “would keep an eye” on other L to whom p.i. matter referred. Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980) P testified that went to L for legal advice; relied on advice that they “did not have a case”

16. b. Prospective Clients: Limited duties Rstmt §15(1) • not subsequently use or disclose confidential information learned in consultation … • protect property in L’s custody • use reasonable care to extent L provides legal services

17. PRACTICAL SKILL LESSONS ON INITIAL CONSULTATION? Problem 3-1 & Beyond Structure the interview Avoid unnecessary disclosures of confidential information Documents & keepsakes Evaluate whether to accept proffered undertaking Accepting representation (retainer ltr, whether limited scope) Declining representation

18. 2. Scope of Representation: key variable, disputed fact question Rstmt §19 Agreements Limiting Client or Lawyer Duties • Subject to other requirements [in Rstmt]…,a client & a L may agree to limit a duty that a L would o/w owe to the C if: • the client is adequately informed and consents; and • the terms of the limitation are reasonable in the circumstances See also RPC 1.2(c) and cmts. 6, 7

19. Negligence in Limited Scope Representation? Lerner v. Laufer819 A.2d 471 (N.J. App. Dvsn 2003) (lengthy retainer ltr explicitly limited to reviewing mediated Property Settlement Agreement; aff’d trial ct grant of summary judgment dismissing malpractice case) Flatow v. Ingalls, No. 49A02-0910-CV-994 (Ind. Ct. App., 8/16/10)(as matter of law, no breach of duty for doing nothing more than specific tasks identified in retainer letter; citing RPC 1.2(c))