- Intentional Wrongdoer Can't Sue for Legal Malpractice
- October 14, 2009
- Law Firm: Hinshaw & Culbertson LLP - Chicago Office
Whiteheart v. Waller, 681 S.E.2d 419 (2009)
The North Carolina Court of Appeals affirmed the dismissal of a legal malpractice claim based on the doctrine of in pari delicto. Dismissal under the doctrine was appropriate, despite the lawyers’ misconduct, because the plaintiff was collaterally estopped from denying that he had committed intentional misconduct.
Plaintiff William Whiteheart sued his former law firm, Waller & Stewart, for malpractice. Whiteheart’s claim was based on multiple instances in which Waller & Stewart facilitated Whiteheart’s wrongdoing. For example, Waller & Stewart reviewed a per se defamatory letter that Whiteheart wrote about one of his business competitors. Waller & Stewart did not warn Whiteheart of potential liability for the letter, and he later distributed the letter. In a related matter, Waller & Stewart helped Whiteheart maintain a billboard well past the term of the billboard’s lease, even though the landlord rightfully sought removal of the billboard. Waller & Stewart even went so far as to obtain a temporary restraining order to prevent removal of the billboard, despite no apparent legal basis for maintaining the billboard on the property.
The landlord and the defamed business competitor successfully sued Whiteheart, obtaining a verdict of more than $700,000. Whiteheart then sued Waller & Stewart seeking damages that would cover this judgment. The trial court dismissed Whiteheart’s claim for failure to state a claim upon which relief could be granted. Whiteheart appealed.
The court of appeals affirmed based on the doctrine of in pari delicto. The doctrine prevents courts from redistributing losses among wrongdoers. The court held that this doctrine bars recovery in legal malpractice unless the client acts pursuant to legal advice so complex that assessing the illegality of the advice would not be possible. Whiteheart was barred from arguing that he was ignorant of any wrongdoing, the court held, because in the prior proceeding the court had found Whiteheart’s misconduct intentional.
Whiteheart, therefore, was collaterally estopped from arguing against the court’s application of in pari delicto. Because no North Carolina court had applied in pari delicto to a legal malpractice case, the court of appeals looked to other jurisdictions for guidance. The court noted that allowing malpractice recovery in such cases could encourage clients to commit illegal acts upon the advice of their lawyers, and that malpractice liability is not needed to deter such faulty legal advice because the threat of attorney discipline serves as an adequate deterrent.
Significance of Opinion
This case marks an area in which professional liability and civil liability do not overlap. Although an unethical lawyer will always be subject to discipline, the lawyer may be shielded from liability to unethical clients.