Friday, November 16, 2001
LACBA, Law Firms Seek Reversal of Malpractice Ruling
By a MetNews Staff Writer
The Los Angeles legal establishment has begun lining up against a controversial Sept. 28 Court of Appeal decision that critics say could send legal liability insurance premiums soaring.
The Los Angeles County Bar Association’s trustees on Wednesday voted unanimously to seek reversal of the Second District’s ruling in Viner v. Sweet, and several prominent firms have signed on to requests to seek Supreme Court review and to author amicus briefs seeking to overturn the Second District opinion.
In that case, Div. Seven held that the traditional “case-within-a-case” approach to establishing causation in legal malpractice claims does not apply when the alleged malpractice came in a transactional matter instead of litigation.
“Case-within-a-case” refers to the court’s duty to try both the issue of the lawyer’s alleged negligence that the plaintiff claims resulted in an unfavorable verdict or forced an unfavorable settlement, and the merits of the underlying claim, to show that the plaintiff would have obtained a better result at trial if not for the malpractice.
Justice Earl Johnson Jr. wrote that such an approach makes no sense for alleged malpractice in transactional settings, since proving what would have happened if the lawyer had insisted on putting in or leaving out a contract term is a “highly speculative venture.”
Instead, causation is established by expert testimony or other evidence, the justice said.
The case was reported in the Oct. 1 MetNews and in the Slip Opinion Supplement at 01 S.O.S. 4822.
Attorney Eric Webber of Irell & Manella, chair of LACBA’s Commercial Law and Bankruptcy Section, said the ruling holds that “there need be no proof of damages” for the plaintiff to prevail and “leaves us open to being scapegoats for clients who are disappointed after the fact.”
The view of the opinion in the legal community “is universally deep distress,” Webber said.
Both Webber’s section and the Business and Corporations Section, as well as the LACBA trustees, urged the board to seek rehearing or Supreme Court review.
LACBA President Roland Coleman of Wilson, Elser, Moskowitz, Edelman & Dicker said the State Bar’s office of General Counsel also was seeking review. A State Bar spokesman said yesterday that the Board of Governors’ legal committee has sent the Supreme Court a letter asking for review but not taking a position on reversal.
The Century City firm of Alschuler, Grossman, Stein & Kahan is also seeking review on LACBA’s behalf. Gibson, Dunn & Crutcher, Sheppard Mullin Richter & Hampton and Morgan Lewis & Bockius have offered to assist.
The Viner plaintiffs were Michael Viner and his wife, actress Deborah Raffin.
They sued Washington, D.C. attorney Charles A. Sweet and his firm, Williams & Connolly, for negligence in handling their contract negotiations with Dove Audio, Inc., a firm that they founded in 1984 and that has since been renamed NewStar Media.
The transaction at issue involved the plaintiffs’ 1997 stock sale and their resignation from the company. They said their lawyers were negligent in failing to secure their rights to solicit Dove authors for non-audio-book projects, for not objecting to a non-competition clause, for not insisting that they be given production credit for work begun during their regime, and a host of other alleged lapses.
A Los Angeles Superior Court jury awarded them more than $13 million in damages against their former lawyers. Judge David Workman denied the defendants’ motions for a new trial and judgment notwithstanding the verdict, rejecting the argument that he should have instructed the jury on “but for” causation.
The Court of Appeal affirmed on that issue, but reduced the damages award on other grounds in an unpublished portion of the opinion.
Copyright 2001, Metropolitan News Company