Thursday, September 19, 2019
The Tennessee Supreme Court reinstated a legal malpractice claim
The Tennessee Supreme Court today reversed the trial court’s dismissal of a legal malpractice claim against a Davidson County attorney, holding that sworn statements the plaintiff made in her divorce settlement agreement did not directly contradict sworn statements she made in the malpractice lawsuit.
Beginning in 2006, Nashville attorney Jeffrey Levy represented Polly Spann Kershaw for a period of about seven months in her divorce. The divorce proceedings were heated, and by the time Ms. Kershaw hired Mr. Levy, the divorce court had already held her in contempt of court. The divorce court agreed to lift the contempt sanctions if Ms. Kershaw responded to the husband’s discovery requests by the trial court’s deadline.
After Mr. Levy sent Ms. Kershaw’s discovery answers to her husband’s attorney, he told the divorce court that they were mailed by the court’s deadline. That turned out to be untrue. As a result, the divorce court imposed harsh contempt sanctions on Ms. Kershaw, including striking all of Ms. Kershaw’s claims and defenses, and requiring Ms. Kershaw to pay her husband’s attorney fees.
Mr. Levy withdrew as Ms. Kershaw’s lawyer. Ms. Kershaw hired a new lawyer, filed a legal malpractice lawsuit against Mr. Levy in the Davidson County Circuit Court, and settled her divorce.
In the legal malpractice action, Ms. Kershaw claimed that Mr. Levy’s actions in the divorce had caused her to face the prospect of a trial with no claims and no defenses. She said that his malpractice so compromised her negotiating position that she was left with little choice but to agree to an unfavorable divorce settlement. She sought damages from Mr. Levy for his alleged legal malpractice.
Mr. Levy filed a motion to dismiss the legal malpractice lawsuit, based on what is known as “judicial estoppel.” Under judicial estoppel, if a party swears to a fact in one lawsuit, he is “estopped”—that is, not allowed—to swear to a contradictory fact in a second lawsuit. Mr. Levy argued that, in her divorce, Ms. Kershaw had acknowledged under oath that the settlement agreement was “fair and equitable,” so she was “estopped” from claiming in the legal malpractice action that the divorce settlement was unfavorable.
The trial court granted Mr. Levy’s motion and dismissed Ms. Kershaw’s legal malpractice claim, and the dismissal was affirmed by the Tennessee Court of Appeals. Ms. Kershaw appealed to the Tennessee Supreme Court.
The Supreme Court explained that judicial estoppel applies only to directly conflicting sworn statements about facts, such as “The stoplight was red” or “The stoplight was green.” It held that judicial estoppel did not apply in Ms. Kershaw’s case.
First, the Court said, Ms. Kershaw’s acknowledgment that her divorce settlement was “fair and equitable” was more of a legal conclusion than a statement of fact. Second, the statements were not directly contradictory. In the divorce, Ms. Kershaw acknowledged that the settlement “was ‘fair and equitable’ given the circumstances in which she found herself.” In the legal malpractice action, she blamed those circumstances on Mr. Levy, contending his actions “severely compromised her divorce negotiating position.” For those reasons, the Court held, judicial estoppel did not apply. Consequently, it reversed the dismissal of the legal malpractice lawsuit against Mr. Levy.