Summary
holding that in legal malpractice case, plaintiff must establish malpractice or violations of Professional Code or Rules by expert testimony
Summary of this case from Stiver v. ParkerOpinion
Docket No. 83712.
Decided July 7, 1986.
Tucker, Barbour Mack, P.C. (by Milton L. Mack, Jr.), for plaintiff.
Plunkett, Cooney, Rutt, Watters, Stanczyk Pedersen, P.C. (by Patrick M. Barrett and Christine D. Oldani), for defendant.
In this action for legal malpractice, plaintiffs, William R. Beattie and Linda K. Beattie, appeal by leave granted from a Wayne Circuit Court order affirming the district court's judgment of no cause of action based upon a directed verdict. Plaintiffs claim (1) that the district court erred when it granted a directed verdict to defendant and (2) that the district court erred when it prevented plaintiffs from eliciting expert testimony from defendant. We do not think the lower court erred in the ways suggested by plaintiffs and accordingly we affirm.
I
Plaintiffs' legal malpractice action against defendant, Stuart J. Firnschild, concerned the title to a house at 1242 Thirteenth Street in Wyandotte, Michigan.
Plaintiffs were married in 1969. Catherine Davis is plaintiff Linda Beattie's mother. The Beatties rented the house on Thirteenth Street from Mrs. Davis, who owned it, some ten months after they were married. They lived there five years and then discussed with Mrs. Davis the possibility of purchasing the house. After Mrs. Davis agreed to sell them the house in 1976, the Beatties and Mrs. Davis went to see defendant to have the necessary papers drawn.
Defendant agreed to handle the matter. He took the deed from Mrs. Davis and agreed to draw up a land contract. At the meeting, defendant did not advise plaintiffs of the cost of title insurance nor did he advise that a title search should be done. There was no discussion about an existing title policy or title commitment. Moreover, defendant represented all three parties.
A week later, the three returned to defendant's office to sign the papers. Defendant was not present but his secretary gave them the land contract, which the Beatties and Mrs. Davis signed. The plaintiffs paid a down payment to Mrs. Davis and began making the monthly payments on the land contract.
At some point the Beatties decided to build a house on Grosse Ile. Because they lacked funds for the down payment, they asked Mrs. Davis to move in with them. Plaintiffs informed Mrs. Davis that they could not afford to build the new house unless they had the entire equity in the Thirteenth Street house for a down payment. Mrs. Davis was receptive to the idea.
Plaintiffs and Mrs. Davis went again to see defendant in 1978, explaining that they wanted Mrs. Davis to deed the Thirteenth Street house to them so they could build a new house. Defendant, concerned about protecting Mrs. Davis, indicated that he would meet with them later to take care of a way to protect Mrs. Davis' $16,000 equity in the house.
Plaintiffs and Mrs. Davis met again with defendant. Defendant indicated that he and Mrs. Davis had talked and arrived at a way of protecting her. Mrs. Davis signed the warranty deed.
Sometime later, there was another meeting with defendant. Defendant indicated he had prepared a document to protect Mrs. Davis which would go into effect when they signed a purchase agreement for the new house. The plaintiffs signed an agreement with a construction company, applied for a mortgage, and signed the documents to protect Mrs. Davis.
It took about a year and a half to complete the new house. In the meantime, plaintiffs decided to sell the Thirteenth Street house. They got a written deed on the house and signed the purchase agreement. When the realtor ordered title work on the house, a problem was discovered. A quitclaim deed, which conveyed the property from Mrs. Davis to herself and her three daughters as joint tenants with rights of survivorship, signed by Mrs. Davis in January, 1971, was discovered. The quitclaim deed was witnessed by plaintiff William Beattie's father. William Beattie was also present at the signing, but he did not remember it. Plaintiff Linda Beattie was also present when the quitclaim deed was signed, but she apparently believed it was a will.
Plaintiff William Beattie was unsuccessful in getting his wife's sisters to sign the deed and the Thirteenth Street house was never sold. Plaintiffs moved into the Grosse Ile house by borrowing money from other relatives and the builder. Mrs. Davis never moved in with plaintiffs. Plaintiffs eventually sold the Grosse Ile house in 1982 for $150,000, earning roughly $32,000 on the house.
On June 4, 1980, plaintiffs filed their legal malpractice claim against defendant in Wayne Circuit Court. In November, 1982, the case was removed to the 27th District Court. The district court directed a verdict for defendant in February, 1984, and plaintiffs appealed to the Wayne Circuit Court, which affirmed the directed verdict. This Court granted plaintiffs' application for leave to appeal on June 17, 1985.
II
Plaintiffs claim the district court erred when it granted the directed verdict in favor of defendant on the basis that plaintiffs had failed to supply expert testimony. We review the grant of defendant's motion for directed verdict by asking whether plaintiffs' proofs, viewed in a light most favorable to plaintiffs, are sufficient on each element of the claim to justify submitting it to the jury. Association Research Development Corp v CNA Financial Corp, 123 Mich. App. 162, 169; 333 N.W.2d 206 (1983), lv den 419 Mich. 881 (1984). In an action against an attorney for negligence or breach of an implied contract, the plaintiff has the burden of proving four elements: (1) the existence of the attorney-client relationship; (2) the acts which are alleged to have constituted the negligence; (3) that the negligence was the proximate cause of the injury; and (4) the fact and extent of the injury alleged. Basic Food Industries, Inc v Grant, 107 Mich. App. 685, 690; 310 N.W.2d 26 (1981), lv den 413 Mich. 913 (1982).
An attorney is obligated to use reasonable skill, care, discretion and judgment in representing a client, assuming the position of highest trust and confidence. Lipton v Boesky, 110 Mich. App. 589, 594; 313 N.W.2d 163 (1981). The Code of Professional Responsibility is a standard of practice for attorneys which expresses in general terms the standards of professional conduct expected of lawyers in their relationships with the public, the legal system, and the legal profession. Lipton, supra, p 597. There is a rebuttable presumption that violations of the Code of Professional Responsibility constitute actionable malpractice. Sawabini v Desenberg, 143 Mich. App. 373, 385; 372 N.W.2d 559 (1985).
This Court discussed a plaintiff's obligation to offer expert testimony in a legal malpractice action in Joos v Auto-Owners Ins Co, 94 Mich. App. 419, 422; 288 N.W.2d 443 (1979), lv den 408 Mich. 946 (1980). The Court noted:
The issue presented, as to whether a plaintiff in a legal malpractice action must offer expert testimony as to the standard of care to which an attorney will be held and as to a violation of that standard, has not been addressed previously by any published Michigan authority. As a general principle, an attorney must bring to bear the skill, learning, and ability of the average practitioner of law when conducting legal business for a client. He or she must exercise ordinary care or diligence in the prosecution of the client's interests. Babbitt v Bumpus, 73 Mich. 331; 41 N.W. 417; 16 Am St Rep 585 (1889), 7 Am Jur 2d, Attorneys at Law, § 168, pp 146-147.
In our attempt to resolve the issue before us, we have been guided somewhat by Michigan case law authority in the area of medical malpractice. The commonly held rule in medical malpractice cases is that expert testimony is a prerequisite to a plaintiff-patient's right to recover from either a physician or a hospital. Bivens v Detroit Osteopathic Hospital, 77 Mich. App. 478, 488; 258 N.W.2d 527 (1977), rev'd on other grounds 403 Mich. 820 (1978). However, this is not an absolute principle of law devoid of exceptions.
Thus, it held:
Although proof of purported negligence arising from pretrial or trial strategy may or may not require expert testimony, plaintiffs' allegation that defendant breached the applicable standard of care when he failed to inform Avery of the offers by Joos to settle prior to trial and their allegation that he refused to settle on the second day of trial when he received authority to do so does not. We do not hesitate to hold that under the allegations of facts before us, an attorney has, as a matter of law, a duty to disclose and discuss with his or her client good faith offers to settle. It is well within the ordinary knowledge and experience of a layman jury to recognize that, under facts such as those alleged in the instant case, the failure of an attorney to disclose such information is a breach of the professional standard of care. [Footnote omitted. 94 Mich. App. 424.]
Here, plaintiffs urge that expert testimony is only required where the malpractice claim is not covered by any specific provision in the Disciplinary Rules. In the plaintiffs' view, the Disciplinary Rules and the Code of Professional Responsibility have the effect of statutes and whether they have been violated is a question of law. They assert that the court need not take expert testimony to explain a violation of a statute.
This reasoning is flawed. This Court has rejected the argument that a violation of the Code of Professional Responsibility is negligence per se, in favor of the proposition that a code violation is rebuttable evidence of malpractice. See Lipton, supra, pp 595-598. In our view, plaintiffs' allegation that the Disciplinary Rules have been violated, rather than an allegation that the common-law standard of care has been breached, does not relieve them of the obligation to present expert testimony, unless the violation was so obvious that such testimony was not required.
Plaintiffs claim that defendant violated DR 5-105 of the Code of Professional Responsibility, which prohibits lawyers from representing multiple clients with conflicting interests. Other states have required expert testimony in legal malpractice actions where the lawyer has been similarly accused. See 14 ALR4th 170, § 7, p 188.
Expert testimony in this case was required to establish that defendant violated DR 5-105. Defendant was representing members of this family in a simple real estate transaction. It is not obviously apparent that defendant violated the Code of Professional Responsibility. This is especially true if defendant happened to believe his independent judgment would not be adversely affected by representing these multiple clients. See DR 5-105(A).
Joos, supra, is distinguishable. In Joos, the defendant did not inform his clients of settlement offers. Here, the Disciplinary Rule is fairly vague. See 14 ALR4th 170, § 7, supra. The trial court did not err by concluding that expert testimony was required to establish a prima facie case of malpractice under the facts presented.
III
Next we consider whether the district court erred when it prevented plaintiff from eliciting expert testimony from defendant in this legal malpractice action. We find no error.
In circuit court, plaintiffs filed a witness list which listed only themselves as witnesses. Defendant was presumably listed on his list. When the case was remanded to district court, the court signed a pretrial order which ordered the parties to exchange lists of witnesses to be called at trial, and ordered that no witness could be called unless listed except on leave granted upon a showing of good cause. At trial, the district court precluded plaintiffs from calling defendant as their expert witness.
A plaintiff in a malpractice case may elicit required expert testimony from the defendant. Wallace v Garden City Hospital, 111 Mich. App. 212, 216; 314 N.W.2d 557 (1981), rev'd on other grounds 417 Mich. 907 (1983); Rice v Jaskolski, 412 Mich. 206, 212; 313 N.W.2d 893 (1981). It is, however, within the trial court's discretion to admit or exclude such testimony, and the exercise of discretion will not be disturbed absent a clear abuse of that discretion. Wood v Posthuma, 108 Mich. App. 226, 230; 310 N.W.2d 341 (1981), lv den 413 Mich. 923 (1982).
We find no abuse in the trial court's determination that plaintiffs could not call defendant as an expert witness. See Wood, supra; Davis v Lhim, 124 Mich. App. 291, 309; 335 N.W.2d 481 (1983), remanded for reconsideration in light of Ross v Consumers Power Co (On Rehearing), 420 Mich. 567; 363 N.W.2d 641 (1985), see 422 Mich. 875; 366 N.W.2d 7 (1985). Defendant was entitled to some notice that he was to be called as an expert to testify against himself and establish a standard of care. The adverse party statute did not relieve plaintiffs of the obligation to list witnesses. Detroit v Porath, 271 Mich. 42, 75; 260 N.W. 114 (1935). We perceive no absolute right on plaintiffs' part to call defendant as an expert witness.
Affirmed.