Thursday, May 04, 2017

New Proximate Cause Standards in Legal Malpractice Case

By Mike Northrup

Last month, the Texas Supreme Court upheld a summary judgment in a legal malpractice case on the grounds of lack of evidence of causation of harm to the plaintiff.  In doing so, the court employed a new paradigm that may be a game-changer for many legal malpractice defendants.

In Rogers v. Zanetti, No. 15-0557 (Apr. 28, 2017), the court adopted what it described as the “hypothetical alternative,” stating that this test requires a comparison between the actual results from the underlying litigation and the hypothetical results assuming that the defendant lawyer had not acted negligently.  In the context of a no-evidence motion for summary judgment on the element of causation, the hypothetical alternative requires proof of what the outcome would have been in the underlying case but for the lawyer’s negligence.  On its face, the test sounds like a reasonable formulation of the element of proximate cause.  However, in practice, the test sets a high bar for a legal malpractice plaintiff.  Short of producing a crystal ball, legal malpractice plaintiffs may be hard-pressed to produce evidence that won’t be treated as conclusory or speculative and amount to no legally sufficient evidence to defeat a motion for summary judgment.

The court’s discussion of the evidence in Rogers illustrates the high bar for causation evidence.  In Rogers, one of the negligence allegations was that the defense attorney had failed to designate a damages expert to rebut the plaintiff’s valuation expert in the underlying trial, which allowed the jury to simply accept the plaintiff’s expert’s damage numbers.  In the legal malpractice case, in response to the defense attorney’s no-evidence motion for summary judgment, the plaintiff and former client presented 4 expert witnesses in hopes of demonstrating a fact issue on causation.

One of the experts was a valuation expert who offered a competing damages valuation to the one offered in the underling case.  The supreme court agreed that this testimony was part of what might be required as proof, but the testimony alone did not show that the verdict of the underlying suit would have been any different if such testimony had been provided.  Thus, the testimony did not raise a fact issue.

Another expert was a litigation expert who testified that the lawyers involved in the underlying case felt that the lack of alternative damages information was a significant contributing factor in the result.  The court rejected this testimony as well because it was just relaying the opinions of others and was not evidence that the verdict would have been different under the hypothetical alternative.

A third expert was the plaintiffs’ trial attorney from the underlying case, who testified that he “knew” the lack of evidence affected the verdict because he talked to one juror who told him that the jurors had discussed the fact that there was no competing evidence so they accepted the only evidence they had.  The court also rejected this testimony because it didn’t show that jurors would actually have awarded less if they had heard competing damages testimony.  It showed only that they would have considered it.

Finally, the legal malpractice plaintiff presented testimony from one of the defense lawyers from the underlying trial.  He opined that the amount the jury had awarded had no support in the evidence.  The supreme court also rejected this testimony because the underlying verdict had been appealed, challenged, and found to have support in the evidence.  Thus the expert’s opinion was based upon facts that varied from the actual, undisputed facts and had to be disregarded.  

One issue that Rogers doesn’t answer is whether the “hypothetical alternative” analysis is limited to legal malpractice cases in which the plaintiff argues that the underlying result would not have been as bad if the defendant attorney had not committed the negligent act, or whether this analysis also has application to cases in which the argument is that the underlying bad result would not have happened at all if the defendant attorney had not committed the negligent act.  The court’s opinion seems to recognize a distinction between these scenarios, but possibly only to address the defense lawyers arguments that there must be a showing of an ultimate victory, as part of the but-for proximate cause analysis.  One thing is clear, however, the court requires expert evidence that the worsened result was more likely than not caused by defendant attorney’s alleged negligence.  Presenting competent evidence of the hypothetical alternative will be a challenge for most legal malpractice plaintiffs.


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