Wednesday, July 11, 2001
Lawyer Sued for Malpractice May Sue Co-Counsel for Indemnity, Court of Appeal Rules
By KENNETH OFGANG, Staff Writer/Appellate Courts
A lawyer sued for malpractice may bring a cross-complaint for indemnity against co-counsel who allegedly bears responsibility for the negligence, the First District Court of Appeal ruled yesterday.
Div. Two reinstated Sandra G. Musser’s cross-complaint against Douglas Provencher. Musser, a San Francisco family law attorney who has taken inactive status, claims that bad advice by Provencher—who practices bankruptcy law in Santa Rosa—caused her former client’s alleged losses.
The malpractice suit grew out of Musser’s representation of Pam Scott in divorce proceedings in 1992. Scott’s husband filed for bankruptcy prior to a scheduled hearing on spousal and child support and Musser retained Provencher for assistance with regard to the bankruptcy.
According to her cross-complaint, Musser proceeded with the support hearing solely on Provencher’s advice that doing so would not violate the automatic stay as long as the stay was lifted before a support order was entered. The advice was wrong, Musser contends, and resulted in the support award being overturned on appeal.
In addition, Musser pled, her client was forced to settle for reduced support rather than face possible sanctions for violation of the automatic stay.
Musser settled with Scott, and also settled a claim by her husband that Musser was liable for breach of the automatic stay. The settlements were for a total of $85,000—of which $10,000 was paid by Musser as a deductible and the rest by her carrier—plus a write-off of $20,000 in costs and attorney fees.
Musser, through counsel assigned by her malpractice carrier, cross-complained for those amounts plus $62,000 in defense costs. But San Francisco Superior Court Judge Vernon Smith ruled prior to trial that Musser could only sue for the $10,000 she paid personally, holding that a malpractice claim cannot be assigned to an insurer and that her settlement with Scott barred her from suing Provencher for the waived fees and costs.
Smith later granted a nonsuit on Musser’s claim for the $10,000, resulting in a defense judgment, which the appellate panel overturned yesterday.
Presiding Justice J. Anthony Kline, writing for Div. Two, distinguished cases holding that co-counsel may not sue each other because of the potential for conflict of interest or disclosure of attorney-client confidences.
“It would appear extremely unjust to bar Musser from seeking indemnity or contribution from Provencher when Musser was sued by Scott for damages allegedly attributable to Provencher’s tortious conduct, absent a real potential for conflict between Provencher’s duty to Scott and his duty to Musser during the course of their joint representation or of a real impact upon attorney-client confidentiality presented by Musser’s indemnity action,” the presiding justice wrote. “We are convinced that attorney-client confidentiality concerns are not affected here.”
Kline noted that Musser’s settlement with Scott included a waiver of attorney-client privilege for the specific purpose of enabling Musser to sue Provencher, and that Provencher’s counsel acknowledged at the taking of his deposition that there was such a waiver with respect to the work he had done regarding the automatic stay.
The jurist also concluded that the general rule barring assignments and subrogation of medical malpractice claims doesn’t apply “[i]n the unusual circumstances of this case” because the claim “is not truly one for malpractice” but rather one for indemnity.
Nor did Musser waive her right to sue Provencher for the fees she gave up by settling with Scott, Kline said. There was no express waiver, nor did the settlement constitute a retraxit under common law, the jurist concluded.
The case is Musser v. Provencher, A088934.
Copyright 2001, Metropolitan News Company