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Appellate Division Reverses Trial Court’s Grant Of Summary Judgment To Law Firm In Legal Malpractice Action Based On Trial Court’s Failure To Allow Plaintiff To Prove A “Case Within A Case”

July 15, 2019

ROBERT B. SPAWN reports on a recent unpublished decision from the Superior Court of New Jersey, Appellate Division.

 

In a recent New Jersey legal malpractice case, a Plaintiff contended that a Law Firm and three individual attorneys employed by the Law Firm (collectively, “Defendants”) negligently failed to develop evidence and expert testimony concerning a brain injury he suffered as a result of a January 2011 slip and fall accident.

 

Indeed, Plaintiff was diagnosed with cognitive impairments as a result of the fall, which included, but were not limited to, difficulty with memory, a cerebral concussion, post-traumatic headaches, post-concussional syndrome, and depression.  Yet despite the fact that Defendants were in possession of Plaintiff’s medical records detailing these cognitive impairments, Defendants, when answering Interrogatories on behalf of Plaintiff in the underlying personal injury action, failed to mention any of the aforementioned diagnoses.  In fact, Defendants never mentioned any of these diagnoses at any point in time during their representation of Plaintiff (which lasted approximately four years), nor did they ever make attempts to develop any admissible evidence related to Plaintiff’s cognitive impairment or economic loss claims.  Moreover, despite the fact that Plaintiff identified witnesses to his fall, Defendants never made any attempt to locate or depose those witnesses.

 

Once the discovery end date in the underlying personal injury action passed, Defendants advised Plaintiff to accept a $15,000 settlement offer, and Plaintiff refused.  Defendants, in response, misrepresented to Plaintiff that they no longer represented him, but they did not make a motion to withdraw from the case.  Despite the misrepresentation, Defendants continued representing Plaintiff until Superseding Counsel substituted in.  Superseding Counsel filed a motion to extend discovery in order to properly develop Plaintiff’s proofs as to his cognitive impairments and economic losses, but the trial court denied the motion, and Plaintiff was forced to accept a $20,000 settlement offer.  In agreeing to this settlement, Plaintiff made sure to expressly reserve the right to sue Defendants (his former attorneys) for malpractice.

 

In the ensuing legal malpractice action, Plaintiff’s expert concluded that the actions and inactions of Defendants throughout the course of their representation of Plaintiff prevented Plaintiff from obtaining a fair and just verdict and/or settlement in the underlying personal injury action.  When analyzing Plaintiff’s expert’s opinion in the context of Defendants’ summary judgment motion, the trial court believed that the jury had to be able to compare the settlement amount that Plaintiff should have received to the settlement amount that Plaintiff actually received.  And, because Plaintiff’s expert did not opine as to the increased settlement value of Plaintiff’s claim attributable to Defendants’ malpractice, the trial court held that no jury could find in favor of Plaintiff based on the facts presented, and granted summary judgment to Defendants.

 

On appeal, Plaintiff argued that the trial court mistakenly required him to present expert testimony on the settlement value of his claim with and without Defendants’ malpractice.  In analyzing this argument, the Appellate Division first noted that, in New Jersey, it is well-settled that a legal malpractice case may proceed in any number of ways (at a plaintiff’s preference).  And, in legal malpractice actions, it is quite common for a plaintiff to proceed by way of proving a “case within a case,” that is, by presenting to the jury the proofs that would have been presented in the underlying case had no malpractice occurred. 

 

Regarding the instant action, the Appellate Division held that the lower court erred because, in mistakenly requiring Plaintiff to prove his case solely through expert testimony, the lower court entirely foreclosed Plaintiff the opportunity to present his proofs to a jury through a “case within a case.”  In other words, contrary to the trial court’s opinion, there was no need for Plaintiff’s expert to specifically opine as to the difference in settlement values with and without Defendants’ malpractice.  It was perfectly acceptable for Plaintiff’s expert to simply conclude that Defendants’ actions and inactions prevented Plaintiff from receiving a fair and just verdict and/or settlement, and Plaintiff could then proceed by submitting evidence concerning the value of his claim to a jury.

 

The Appellate Division then further defined the “case within a case” method of proving damages as “the difference between the settlement in the underlying personal injury action and the amount of money that would have been obtained by judgment in the absence of Defendants’ malpractice.”  Thus, in focusing only on Plaintiff’s expert’s failure to opine as to the difference in settlement values with and without Defendants’ malpractice, the trial court failed to realize that Plaintiff could have received a judgment in the underlying personal injury action (based on a jury verdict) that far exceeded any settlement amount with Defendants.  Accordingly, due to the trial court’s misunderstanding and disregard of the “case within a case” doctrine, the Appellate Division reversed the grant of summary judgment to Defendants and remanded the action to the lower court for trial.

 

Please contact Robert B. Spawn if you have any questions or need assistance in connection with this subject.