The Sixth District holds that summary judgment was warranted when the client’s liability theories were speculative and not supported by proof of damages.
Sherry Dang retained Alan Smith and his firm who obtained a judgment against Robert Probst. A judgment lien was recorded against Probst’s joint tenancy property but was extinguished after Probst died; his wife filed an affidavit of death of joint tenant; and received a decree in bankruptcy absolving her of any personal liability for the Dang judgment. Smith operated under the mistaken assumption that the judgment lien survived Probst’s death and attempted to foreclose on his interest. He learned in that process that Probst’s wife owned the property free and clear and advised Dang to not pursue further collection efforts against the property.
Dang filed a verified complaint for legal malpractice and other causes of action which contained the false statement that no lien was ever recorded. Smith filed a motion for summary judgment demonstrating that a lien was filed, and that their advice that the judgment could not be satisfied by the Probst property after Probst died was accurate. In opposition Dang asserted that although the theory plead in her complaint could not be maintained, the moving papers demonstrated that Smith had not taken proper steps to preserve the lien in the event of Robert’s death. Furthermore Dang asserted that other theories supported her claims. Smith objected to Dang’s attempt to create an entirely new case. The court granted summary judgment on the basis that Smith had disproved the theory pled, and that the complaint was the measure of materiality on the motion for summary judgment.
The Court of Appeal held that Dang was not entitled to contradict her complaint, but could expand on her allegations. In her opposition Dang sought to substitute the word “perfect” for “record.” The Court found there were sufficient facts in the complaint to permit this expansion of her theory of the case.
However, the Court held that Dang failed to present any facts to substantiate this expanded theory of the case, because as a matter of law the lien would have been lost on Robert Probst’s untimely death due to the nature of a joint tenancy interest.
While the joint tenancy could have been severed by Dang’s sale of the property under a writ of execution prior to Probst’s death, the record supported the conclusion that this would have been so risky, difficult, and expensive as to be speculative due to statutory limitations on executing on joint tenancy real property. Thus Dang’s assertion that Smith’s failure to advise her of the vulnerability of her judgment lien or steps to secure it could not form the basis of a malpractice action.
Dang asserted that she sold other property so that she could finance purchase of the Probst property while Smith was erroneously trying to foreclose upon it. However, she failed to provide evidence of damage as a result.
Dang claimed the Smith was negligent in provided inconsistent advice about suing a prior attorney who was involved the sales transaction that ultimately led to the judgment against Probst. The court found that this theory was not premised on anything that could be found in the complaint, but was entirely new. As a procedural matter, Dang could not defeat summary judgment on a matter not framed by the pleadings.
In addition, the court found that Dang could not amend the pleading to allege this new theory. Written advice from Smith’s firm was that she seek the advice of a legal malpractice attorney to investigate such a claim. In addition, Smith advised Dang that the attorney was a valuable witness for her, and Dang did not show that advice was mistaken or negligent. In addition, it was speculative that a claim against such an attorney would have been viable given the underlying business transaction with parties who appeared to be headed toward bankruptcy. She could not show how she would have fared better if the sales transaction were handled differently, an element of a transactional malpractice claim.
Another theory asserted by Dang, that Smith failed to advise her that no sales contract was ever formed with Probst and his partner due to the failure of a condition precedent, was also not viable. This theory related conflicts of interest by the prior attorney and Smith had advised Dang to seek the opinion of a legal malpractice attorney concerning her claims against him. Furthermore, Dang failed to show how the advice would have led to a more favorable result for her.
The court noted errors by all of Dang’s attorneys: the attorneys in the original transaction, her attempts to collect from the buyers, and the legal malpractice action. However, in the final analysis Dang’s losses were caused by the sale of a distressed business to insolvent buyers.
Comment: Attorneys often seek to assist clients in the context of difficult circumstances that cannot be ameliorated by the legal system. By requiring legal malpractice clients prove the elements of duty, breach, causation and damages, attorneys can avoid being the scapegoat for poor client decisions.