Opinion
No. 35790-9-II.
February 26, 2008.
Appeal from a judgment of the Superior Court for Pierce County, No. 05-2-07403-1, Gary Tabor, J., entered December 15, 2006.
Affirmed by unpublished opinion per Van Deren, A.C.J., concurred in by Bridgewater and Penoyar, JJ.
Brian and Amy Halquist appeal the trial court's dismissal with prejudice of their complaint for damages and denial of their motion for reconsideration in their legal malpractice action against attorney Robert Freeby. They assert that the trial court erred in ruling as a matter of law that Freeby's failure to opt out of a class action settlement did not cause them damages. Finding no error, we affirm.
FACTS
The Halquists and Freeby were friends for several years. Freeby is a criminal defense attorney, licensed to practice in Washington since 1988. The Halquists own and operate Brian Halquist Productions, Inc., a corporation that promotes local events, such as concerts and boxing matches.
Brian and Amy are individually referred to by their first names for clarity. We mean no disrespect.
In November 2000, Brian, who had a degenerative hip condition, underwent total left hip replacement surgery. The implant device used by his surgeon was an inter-op shell manufactured by Sulzer Orthopedics, Inc. Shortly after Brian's surgery, Sulzer reported that its inter-op shells had a machine oil residue left on them during the manufacturing process that reduced the likelihood of the required bone growth around the implant. They announced a voluntary recall of the shells. After the recall, several state and federal lawsuits were filed against Sulzer. Brian saw a television advertisement about the claims against Sulzer and called the televised telephone number to receive information about the litigation.
Sulzer Orthopedics, Inc., Sulzer Medica Ltd., and Sulzer Ltd., are referred to herein as Sulzer. Sulzer is a major designer, manufacturer, and distributor of orthopedic implants for hips, knees, shoulders, and elbows.
These cases were consolidated and transferred to a single federal district court in Ohio that, in August 2001, certified a class and granted preliminary approval to a class settlement agreement.
The record shows that Freeby set up a meeting between Brian and a personal injury attorney on April 3, 2001, to discuss Brian's claim, but that Brian failed to attend the meeting. Halquist and Freeby then executed a contingent fee agreement on May 1, 2001, that employed Freeby "to exclusively represent, prosecute and commence any and all claims against any person(s) and/or entities" with regard to the Sulzer replacement hip. Clerk's Papers (CP) at 88.
Because Brian experienced persistent hip pain due to the graft failure resulting from the defective implant, he underwent another surgery. His defective implant was successfully replaced on May 10, 2001.
Freeby hired a forensics expert, ordered medical records, and obtained narrative reports from Brian's treating physician. The costs were paid by the Halquists. Brian maintained before the trial court that he believed Freeby was preparing an independent lawsuit against Sulzer and other parties. Freeby claimed that he was retained to represent the Halquists solely in the class-action.
Sulzer executed a class settlement agreement on March 13, 2002. Under the settlement agreement, class members, like Brian, who underwent revision surgery received a guaranteed payment of approximately $161,600 in damages and $46,000 in attorney fees. In return, class members had to release all claims against Sulzer and their surgeons. Any class member who did not exercise their opt-out right by the May 15, 2002, deadline was automatically bound by the settlement agreement. The settlement provided for additional relief to class action members who could show extraordinary injury or wage loss.
After class members submitted a claim form and supporting documentation, a claims administrator made the determination about whether relief under the Extraordinary Injury Fund (EIF) was warranted on a case-by-case basis.
Freeby claimed that a day or two after the May 15 deadline, Brian called him and seemed aware of the deadline, which Brian denied in the ensuing lawsuit. Freeby and the Halquists terminated their attorney-client relationship after the opt-out deadline passed and the Halquists' new counsel secured the class settlement for them. The Halquists received the guaranteed payment of approximately $207,000, but their EIF claim for lost wages was denied.
The Halquists then sued Freeby for legal malpractice. Brian asserted that he had specifically directed Freeby to opt out of the class settlement and, as a result of Freeby's failure to do so, the Halquists received an inadequate damage recovery. The Halquists sought damages for: (1) "pain, inconvenience, emotional and mental distress, disability, and other general damages";
(2) "medical bills, lost wages, lost earning capacity, and other special damages"; and (3) the loss of consortium, society, and services suffered by [Amy and their two children]." CP at 6. Freeby filed a jury demand and moved for summary judgment.
Freeby acknowledged that issues of fact existed about whether he failed to opt out of the class settlement for Brian and, therefore, for purposes of the trial court's consideration of his summary judgment motion only, he stipulated that the trial court could consider it undisputed that he breached this duty. Instead, Freeby argued:
That a reasonably prudent lawyer in Washington would have in any event advised [Brian] to not opt-out, and to remain within the class, and that in fact only 16 individuals in the nation out of a class of approximately 30,000 situated similarly to [him] opted out, and that [the Halquists] cannot establish beyond speculation that [they] would have recovered more money if [Brian] had opted out of the class; in short, that any arguable professional negligence was as a matter of law not the cause of any harm to [the Halquists].
CP at 18.
The trial court granted Freeby's motion for summary judgment and dismissed the Halquist's complaint with prejudice. The Halquist's subsequent motion for reconsideration was also denied.
The Halquists appeal.
ANALYSIS
The Halquists frame the issue on appeal as one of proximate cause and contend that the trial court's order granting summary judgment was erroneous because "cause in fact must be determined by a jury." Br. of Appellant at 1. Freeby responds that the issue is whether the Halquists "would have received more than the $207,000 [they] in fact obtained." Br. of Resp't at 1. Freeby asserts that the Halquists' claim of economic loss was based only on "speculation and conjecture" and, therefore, the trial court did not err in granting summary judgment. Br. of Resp't at 20.
I. Standard of Review
We review a summary judgment order de novo and engage in the same inquiry as the trial court. Beal Bank, SSB v. Sarich, 161 Wn.2d 544, 547, 167 P.3d 555 (2007). Summary judgment is proper if, viewing the facts and reasonable inferences most favorably to the non-moving party, no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. CR 56(c); VersusLaw, Inc. v. Stoel Rives, LLP, 127 Wn. App. 309, 319-20, 111 P.3d 866 (2005). "A material fact is one upon which the outcome of the litigation depends." Kim v. O'Sullivan, 133 Wn. App. 557, 559, 137 P.3d 61 (2006). "When material issues of fact exist, they may not be resolved by the trial court and summary judgment is inappropriate." Halvorsen v. Ferguson, 46 Wn. App. 708, 712, 735 P.2d 675 (1986).
The defendant moving for summary judgment may meet the initial burden by pointing out the absence of evidence to support the nonmoving plaintiff's case. Young v. Key Pharm., Inc., 112 Wn.2d 216, 225 n. 1, 770 P.2d 182 (1989).
If, at this point, the plaintiff "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial", then the trial court should grant the motion. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548, (1986); see also T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630-32 (9th Cir. 1987). In Celotex, the United States Supreme Court explained this result: "In such a situation, there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.' 477 U.S. at 322-23 [(quoting Fed.R.Civ.P. 56(c))].
Young, 112 Wn.2d at 225.
II. Legal Malpractice Elements
The elements of a legal malpractice claim in Washington require the Halquists to show: "(1) employment of the attorney (giving rise to the duty), (2) failure by the attorney to exercise ordinary skill and knowledge (breach of the duty), (3) proximate cause (causation), and (4) resulting loss to the client (damages)." Kommavongsa v. Haskell, 149 Wn.2d 288, 300 n. 4, 67 P.3d 1068 (2003) (footnote omitted). See also Hizey v. Carpenter, 119 Wn.2d 251, 260-61, 830 P.2d 646 (1992).
"A plaintiff in a malpractice suit is required to prove that, but for the attorney's negligence, she probably would have prevailed on the underlying claim." Schmidt v. Coogan, ___ Wn.2d ___, 173 P.3d 273, 274 (2007). Causation in legal malpractice actions is normally a matter for the trier of fact and not a matter of law. Daugert v. Pappas, 104 Wn.2d 254, 257, 704 P.2d 600 (1985). But the determination may be made as a matter of law. Young, 112 Wn.2d at 225; Daugert, 104 Wn.2d at 257.
In a malpractice claim, a defendant may move for summary judgment on the ground that a plaintiff has failed to present evidence supporting a prima facie case of malpractice. Berger v. Sonneland, 144 Wn.2d 91, 111, 26 P.3d 257 (2001); Young, 112 Wn.2d at 228. "[The] moving party bears the initial burden of showing the absence of an issue of material fact . . . then the inquiry shifts to the nonmoving party." Young, 112 Wn.2d at 225.
III. Proximate Cause and Damages
Freeby argues that the Halquists "cannot establish beyond speculation that [they] would have recovered more money if [Brian] had opted out of the class," therefore, Freeby's stipulation to a breach of his duty "was as a matter of law, not the cause of any harm to [the Halquists]." CP at 18.
Here, for summary judgment purposes, Freeby admitted the first two elements of duty and breach. Thus, to establish a legal malpractice claim against Freeby based on his failure to opt out of the class settlement, the Halquists had to demonstrate that, had they proceeded with the foreclosed litigation, the result would have been more favorable than the $207,000 class settlement they received. Geer v. Tonnon, 137 Wn. App. 838, 844-45, 155 P.3d 163 (2007). Freeby based his summary judgment motion on an initial showing of the absence of evidence to support the Halquists' damages and proximate cause claims, therefore, the Halquists were required to offer prima facie evidence to support each of these essential elements of their claim. See Young, 112 Wn.2d at 225.
Freeby provided supporting expert testimony that the Halquists' lacked any evidence "beyond speculation" of causation and damages. CP at 18. He offered the declarations of two personal injury attorneys who had handled similar cases or who had handled class members' claims in the class action against Sulzer. Although the Halquists moved to strike these declarations, claiming that the attorneys were not experts, they did not controvert the declarations or offer their own expert declarations.
John Barlow represented ten claimants in the class action against Sulzer. He advised all of these claimants to accept the settlement even though two sought additional compensation under the EIF, as did the Halquists. He pointed out the extreme uncertainty of recovery if a claimant opted out of the class based on Sultzer's "precarious financial condition" and opined that "a reasonably prudent and careful lawyer in the State of Washington representing Sulzer claimants would and should have advised the clients not to opt out of the class action." CP at 35-36.
Richard Levandowski, an experienced plaintiffs' attorney with wide experience representing persons in cases involving hip implant surgeries, stated that the Halquist's settlement was entirely commensurate with the settlement value of hip implant cases in relevant local jurisdictions in superior court jury actions. Levandowski asserted that a claimant could expect a larger settlement only if there were problems with the second surgery or if a "significant sustainable wage loss" could be shown. CP at 58. He pointed out that an important factor in a claimant's decision about whether to opt out of a settlement is that a "significantly less amount of attorney time (and therefore attorney fees)" is involved in a settlement. CP at 59.
The Halquists acknowledge Freeby's experts' affidavits, but argue that "expert testimony is unnecessary to understand that [the Halquists] incurred costs and recovered nothing as a result of Freeby's negligent representation." Br. of Appellant at 15. And they point to the "costs incurred by Freeby that were unrelated to the class action" and Freeby's failure to advise them of the opt-out deadline as "evidence sufficient to demonstrate" their claim. Reply Br. of Appellant at 4.
Exhibits 8 and 9 of the Halquist's reply to the motion for summary judgment list costs of less than $2,000. But the Halquists do not explain (1) whether these costs were included in the $46,000 class action attorney fee recovery, (2) whether the costs related to records and documents used by the successor counsel to prove their class claim, (3) why the costs should not have been incurred, or (4) how the record of these costs supports their claim. Thus, their claim that they incurred costs and recovered nothing is unsupported by the record.
The Halquists also based their argument resisting summary judgment on their corporate business records showing "loss of gross revenue to the business during the period of disability" and argued that "genuine issues of material fact exist with relationship to the loss of income precluding summary judgment." CP at 219-20. But the class action claims administrator denied Brian's EIF claim after consideration of those same records. And, other than his own declaration relying on the business records, Brian offered no evidence of future lost wages.
On appeal, the Halquists again point to Brian's declaration, explaining that he "eventually lost the contract to [his] competitors resulting in an estimated loss of gross revenues of approximately $100,000 per year." CP at 226. But the record shows no evidence supporting Brian's lost wages, he only refers to the corporation's gross revenues. And to defeat summary judgment, the Halquists had to create an issue of fact, supported by more than speculation, that they would have received more money from Sulzer if he had opted out of the class.
In Halvorsen, Division One of this court upheld summary judgment dismissal of a legal malpractice action because the plaintiff failed, as a matter of law, to show proximate cause. As the court stated in Halvorsen:
A nonmoving party attempting to resist a summary judgment may not rely on speculation, argumentative assertions that unresolved factual matter remain, or in having its affidavits considered at their face value, for upon the submission by the moving party of adequate affidavits, the nonmoving party must set forth specific facts that sufficiently rebut the moving party's contentions and disclose that a genuine issue as to a material fact exists.
More recently, Division One of this court, on similar facts, concluded that a speculative theory of more favorable results will not preclude summary judgment in a legal malpractice claim. In Griswold v. Kilpatrick, a plaintiff settled a medical malpractice claim but then sued her attorney, asserting that "the settlement figure would have been higher but for the attorney's delay in initiating settlement negotiations." 107 Wn. App. 757, 758, 27 P.3d 246 (2001). The trial court granted the attorney's motion for summary judgment and the plaintiff appealed. Griswold, 107 Wn. App. at 760.
In Griswold, as here, duty and breach were admitted and the only issue on appeal was "whether the record contains sufficient evidence to support a finding that the delay proximately caused damage to the" plaintiff. 107 Wn. App. at 760. The plaintiff offered an expert who testified based on his general experience, that the case would have settled for a greater amount absent the attorney's breach of his duty of care. Griswold, 107 Wn. App. at 761. Division One affirmed the summary judgment, holding that such evidence was "speculative and conclusory" and was "insufficient to create an issue of material fact." Griswold, 107 Wn. App. at 762.
The Halquists' claim suffers from an even greater deficiency than the claims in Halvorsen and Griswold. The Halquists offered no expert testimony or any evidence that, had they been permitted to opt out of the class settlement and pursue an independent tort action, the result would have been more favorable than the $207,000 they received from the class action settlement. They asserted that they suffered significant wage loss, but they admitted that Brian's EIF claims were denied because he did not prove that his lost wages exceeded $20,000. And the record shows only Brian's speculative estimate in support of his asserted future lost wages.
The Halquists state that the absence of supporting data from the sixteen plaintiffs who opted out of the Sulzer settlement was due to a binding confidentiality agreement imposed as part of the opt-out process. But this explanation makes it clear that their assertion that a suit against Sulzer would have resulted in a greater recovery is supported only by speculation and conjecture. And mere speculation and conjecture cannot raise a genuine issue of material fact. See Griswold, 107 Wn. App. at 758, 761; see also Halvorsen, 46 Wn. App. at 721.
The Halquists failed to make a showing sufficient to establish the existence of material fact on proximate cause or damages, elements essential to their claim and on which they would bear the burden of proof at trial. See Young, 112 Wn.2d at 225. Thus, the trial court did not err in granting Freeby judgment as a matter of law and dismissing the Halquist's claims with prejudice.
The Halquists also appeal the trial court's denial of their motion for reconsideration. The Halquists offer no argument in support of their contention, therefore, we decline to address it. See RAP 10.3(a)(6); Howell v. Spokane Inland Empire Blood Bank, 117 Wn.2d 619, 624, 818 P.2d 1056 (1991) (assignment of error unsupported by legal argument will not be considered on appeal).
We affirm the trial court's dismissal of the Halquist's complaint and its denial of their subsequent motion for reconsideration.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
BRIDGEWATER, J., PENOYAR, J., concur.