Wednesday, August 6, 2008

Malpractice Verdict Overturned

In a legal malpractice case predicated on the theory that the client would have done better at a trial than in settlement, the Ohio Supreme Court held that:

...the client must prove both a) that he would have prevailed if the case had gone to trial, and b) that  the outcome of the trial would have been better than the outcome provided by the settlement.  The Court’s 6-1 decision was authored by Justice Maureen O’Connor.

The case involved an appeal by the Cleveland law firm of Goodman Weiss Miller LLP (GWM) of  a 2005 jury verdict that awarded $2.4 million in legal malpractice damages to a group of the firm’s former clients including Environmental Network Corp (ENC). The malpractice award was based on the jury’s finding that negligent representation by GWM had placed the plaintiffs in a position where they were forced to accept a settlement in which they recovered a lower amount of damages from the defendants than they would have recovered in a court judgment if GWM had competently tried the case to its completion.

GWM appealed the trial court’s judgment to the 8th District Court of Appeals. Among other alleged errors, the law firm argued that the trial court gave the jury faulty instructions regarding the plaintiffs’ burden of proof. GWM also alleged that the trial judge should have granted a post-verdict motion to set aside the jury verdict or order a new trial because the plaintiffs had not presented sufficient evidence to establish: a) that negligent representation by GWM was the proximate cause of the plaintiffs’ claimed losses; or b) that the plaintiffs would have recovered  a higher amount of damages from the defendants if the case had been tried to judgment. The 8th District affirmed the jury award in favor of the plaintiffs.  The Supreme Court agreed to review the court of appeals’ ruling.

In today’s decision, the Court reversed the 8th District and remanded the case to the trial court with a directive that it set aside the jury verdict and enter judgment in favor of GWM.

The above summary of the holding from the court's web page notes that the dissenting justice concludes that:

...the majority’s syllabus “goes too far  (in) requiring proof of a case within a case whenever a plaintiff agrees to a settlement and then alleges attorney malpractice in the underlying case. I believe it is possible for legal malpractice to be so egregious that proof of a case within a case would be unnecessary. This case, in which the attorneys steadfastly refused to continue with trial despite their clients’ sincere desire to continue, may be such a case.”

Even if a ‘case within the case’ requirement should apply here, Justice Pfeifer added, “(G)iven the procedural posture of this case, the appellees ... need establish only that there was sufficient evidence to defeat a motion for judgment notwithstanding the verdict. I dissent because I believe that the evidence in this case, when weighed most strongly in favor of ENC, is sufficient to defeat a motion for judgment notwithstanding the verdict.”

One justice concurred only in the majority's result. (Mike Frisch)

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