• Second Guessing the Settlement: Legal Malpractice Claims Post-Settlement
  • November 8, 2017 | Author: Jeremy M. Colvin
  • Law Firm: McDonald Hopkins LLC - West Palm Beach Office
  • As with many important life decisions, such as selecting a college, buying a new car, purchasing a new home, accepting a job, etc., many people are left with lingering remorse after the decision has been made. For some litigants, settling a lawsuit is no different. Confronted with post-settlement dissatisfaction, some litigants, particularly in the context of personal injury, probate, and matrimonial cases, have opted to file malpractice claims against their attorneys under the theory that the attorneys deviated from the standard of care, which in turn, caused the litigant to settle the case for less than favorable terms. The gist of the legal malpractice claim is that had the attorney met the “standard of reasonable service expected of members of the Florida Bar in handling that kind of litigation,” the client would have recovered more money or would have settled under more advantageous terms. With post-settlement malpractice claims, liability could stem from a variety of case specific circumstances, including deficiencies in the attorney’s preparation, discovery, or investigation of the case leading to the settlement; or a negligent evaluation of the value of the case or claim.

    The recent case of Miller v. Finizio & Finizio, P.A., -- So. 3d --, 42 Fla. L. Weekly, 2017 WL 3616392 (Fla. 4th DCA August 23, 2017), illustrates that settlement of the claim or lawsuit does not preclude the litigant from later suing his or her attorney for legal malpractice. The underlying case in Miller was a divorce proceeding. Upon the advice of her attorneys, Mrs. Miller entered into a marital settlement agreement with her husband that addressed various financial considerations, division of assets, child custody, and child support issues. Among other things, the parties agreed to waive alimony. Nearly two years after the final judgment of dissolution of marriage had been entered by the trial court, Mrs. Miller filed a legal malpractice claim against her divorce attorneys generally claiming that “ as a result of the defendants’ violations of the standard of care, she was damaged in that she relied upon the defendants’ advice and signed a highly disadvantageous agreement, resulting in a final judgment with much less favorable terms than would have otherwise been the case.”

    In the legal malpractice case, the trial court granted the defendant attorneys’ motion for judgment on the pleadings because, among other things, Mrs. Miller had knowingly and voluntarily entered in the marital settlement agreement. On appeal, however, the court reversed and explained that the client’s voluntary acceptance of the settlement does not automatically cause the attorney to become “insulated from liability for failing to exercise ordinary skill and care in resolving settlement issues.” Stated differently, “[a] client’s agreement to settle a case does not, as a matter of law, negate ‘any alleged legal malpractice as a proximate cause of loss.’”

    Generally speaking, a cause of action for legal malpractice consists of three elements, to wit: (1) the employment of the attorney, (2) the attorney’s neglect of a reasonable duty, and (3) a showing that the attorney’s negligence was the proximate cause of the client’s loss. If the underlying lawsuit giving rise to the legal malpractice claim has settled, the litigant must demonstrate proximate causation by showing that “there is an amount of damages which he or she would have recovered but for the lawyer’s negligence.”

    Although carrying the burden of proximate causation may be challenging for the disgruntled former client, the courts have often permitted these post-settlement legal malpractice claims to survive dispositive motion practice. As a result, the post-settlement legal malpractice claims continue to be filed and prosecuted. Litigation attorneys, therefore, should (a) adhere to their ethical duty of carefully, diligently, zealously representing their clients from the inception of the engagement through the settlement, (b) identify specific legal and factual justifications for the settlement and the terms thereof, and (c) document communications with the client about the rationale of the settlement and its terms.a