Friday, October 20, 2017

Bad Advice Established Malpractice

An attorney's erroneous advice that a client could receive retroactive child support if she waited to establish the father's paternity formed the basis of a legal malpractice action.

The attorney had persisted in the bad advice even after an associate expressed the contrary view to the client. 

The Vermont Supreme Court reversed a trial court and concluded that the plaintiff established both causation and damages from the advice. 

After negotiations over support with the father broke down

Given the father’s attorney’s stance, defendant finally researched the law governing child support arrears to confirm her position. At this point, defendant discovered that she had provided incorrect advice to plaintiff regarding retroactive child support. Instead, in a letter to plaintiff acknowledging her error, defendant explained that no definitive law authorized arrears back to a child’s birth and the date of retroactivity was generally at the trial court’s discretion. In practice, moreover, “courts use the date of filing as opposed to the date of birth.” After receiving this letter, plaintiff told her mother’s friend, “This is devastating news . . . . I can hardly see straight [sic] I’m so angry and upset.”

Subsequently, in a letter to the father’s attorney, defendant acknowledged that her research revealed that she had been mistaken about the date of retroactivity. In the same letter, defendant also wrote: “Without a doubt, had the rules on retroactivity of support been more clear, [plaintiff] would have filed a parentage action as soon as [her daughter] was born.”

When the client sued 

the [lower] court determined that plaintiff failed to prove the negligent representation was a “cause-in-fact” of plaintiff’s injury and that the evidence was“equivocal” as to whether plaintiff would have decided to file immediately had she been aware of the risk. It also found insufficient evidence for nonspeculative monetary damages.

The court on causation

Our case law demonstrates that the court’s factual findings easily establish, by a preponderance of the evidence, that defendant’s negligent advice was the cause-in-fact of plaintiff’s injury...

Defendant’s arguments to the contrary are based on an alternative theory of causation and are not persuasive. She suggests that plaintiff would have delayed filing even if she had been given the correct advice. For example, defendant speculates that the father would have become belligerent if the parentage action had been filed immediately and claims that, because defendant’s advice avoided the possibility of a contentious custody battle, plaintiff would have delayed filing. This argument is not supported by the findings, which indicate that, when plaintiff communicated her pregnancy to the father, he expressed his desire to avoid interactions with both plaintiff and their child. The only indication of contentious behavior was the father’s tangential statement that litigation could turn his mother into a “mad dog”—a statement he made after the parentage action was filed and child custody had been settled. These findings show indifference, rather than bellicosity. Similarly, the trial court’s conclusion that plaintiff’s primary goal was custody of her child is not supported by the findings; at most, the findings demonstrate equal goals of custody and child support. Finally, defendant claims, and the court found, that her letter to the father’s attorney reflected a negotiating strategy, “not an admission directly establishing that [defendant] would have deviated from her advice to delay litigation.” This may have been defendant’s hidden intent, but the language of the letter plainly states that plaintiff would have filed had she been given correct advice. And this conclusion is sufficiently supported by the other factual findings described above.

And damages

Despite this clear causal link between defendant’s negligence and the damages suffered, the trial court relied on two faulty assumptions when it found that the alleged damages were speculative. First, the court stated that plaintiff submitted no evidence to support an award of $1875 per month from the date of her child’s birth; that is, the evidence did not establish that the monthly payment for the first fifteen months would have been the same child support amount that the father and plaintiff stipulated to after negotiations between their attorneys. Instead, the court noted that the father submitted two financial affidavits that resulted in two different child support calculations under Vermont’s child support guidelines. One of the affidavits considered the father’s family gift income, while the other did not. Either with the gift income or without the income, the father’s child support obligation calculated from the affidavits would have been less than $1875 per month. Because these amounts were lower than the stipulated amount and because the father could have contested the inclusion of gift income, the court concluded that the father’s income could not be determined in the absence of the stipulation and that, as a result, any award was speculative.

Similarly, the trial court’s second assumption is flawed. The trial court determined that the damages were speculative because—summed up over the entire length of the child support obligation—the $1875 monthly payment effectively made up for the fifteen months of missing child support. In making this argument, the court again relied on the two hypothetical child support awards calculated from the father’s financial affidavits. In comparison to those amounts, the court concluded that, based on the $1875 monthly payment, plaintiff would receive more total child support over the length of the child support obligation than she would have received based on either amount calculated from the father’s financial affidavits, even if the child support payments would have begun at the child’s birth.

The court remanded for a calculation of damages.

We note that the court has several options for computing damages, including the stipulated child support order of $1875 per month, the two other child support orders based on the father’s financial affidavits (either with or without his family gift income), or the loan amount accrued from her mother and her mother’s friend. Of course, whatever total the trial court arrives at, it must be supported by the evidence and it must make defendant whole for the period she did not receive child support payments.

But rejected an award of legal fees

Here, no bad faith exists and plaintiff did not pursue this action against a third party, so we decline to award attorney’s fees.

Justice Carroll dissented

the trial court’s findings and the record as a whole support the conclusion that plaintiff failed to demonstrate that “but for” defendant’s negligence, she would have filed her parentage complaint sooner. The trial court’s application of a standard more deferential to plaintiff does not change, but supports, this result.

(Mike Frisch)

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