Summary
holding that the "extra attorney fees" a party spent "rectifying [an attorney's] failure to appear" at a commission hearing formed the basis of a valid cause of action "regardless of whether the ultimate penalty imposed by the commission [was] reversed"
Summary of this case from Gerber Prods. Co. v. Mitchell Williams Selig Gates & Woodyard, PLLCOpinion
No. 88-386
Submitted March 15, 1989 —
Decided May 24, 1989.
Torts — Legal malpractice arising from criminal representation — Allegations which must be made by plaintiff.
O.Jur 3d Malpractice §§ 10, 14.
To state a cause of action for legal malpractice arising from criminal representation, a plaintiff must allege (1) an attorney-client relationship giving rise to a duty, (2) a breach of that duty, and (3) damages proximately caused by the breach.
CERTIFIED by the Court of Appeals for Montgomery County, No. CA 10413.
Appellees, Lynn B. Krahn and High Spirits, Inc. ("High Spirits"), brought a malpractice action against attorney Winfield E. Kinney III, and the law firm of Kinney Coughlin Co., L.P.A., appellants. Since the trial court found that the complaint failed to state a cause of action, the facts upon which our decision is based are those stated in the complaint.
Herschel J. Shaffer and/or Shaffer Amusement Company (collectively referred to as "Shaffer") installed, serviced and maintained a Dwarf's Den Machine (a gambling device) in the High Spirits Lounge, a bar owned by High Spirits and managed by Lynn Krahn. Subsequently, Krahn was charged with three gambling offenses (two first degree misdemeanors and one minor misdemeanor) as the result of payments to players who had accumulated "credits" on the Dwarf's Den Machine. Further, the Ohio Department of Liquor Control issued a violation notice to High Spirits and confiscated the machine.
Shaffer told Krahn that he would retain a lawyer to represent her and High Spirits. The appellant, Winfield E. Kinney III, was retained. Shortly thereafter, Shaffer withdrew his offer to pay for legal assistance. Krahn and High Spirits then retained Kinney on their own. Neither Krahn nor High Spirits knew that Kinney was also representing the Shaffer Amusement Company in its efforts to recover the seized Dwarf's Den Machine.
During pretrial negotiations between Kinney and the prosecutor, the prosecutor offered to dismiss Krahn's charges in return for her willingness to testify against Shaffer. Kinney did not communicate the offer to Krahn. In addition, and without Krahn's authorization, Kinney cancelled Krahn's request for a trial by jury.
The complaint incorporates a letter of January 22, 1985 from the prosecutor to Kinney. The letter states:
"Dear Winn:
"Enclosed is a copy of the Entry which was filed today as per our discussion in Judge LeCrone's office.
"As I indicated, if your client wishes the offer, please contact me. As I indicated, she will be required to provide me with a statement which I believe is truthful, and to answer any questions with respect to the company and owner which provides the gambling devices.
"If I believe that she is being truthful and her testimony is deemed to be valuable with respect to any charges filed against the supplier, I will dismiss her case, upon disposition of any subsequent aiding and abetting or conspiracy charges filed against the supplier.
"If, however, her statement does not appear to be truthful or has no reasonable value to the State of Ohio, we will continue to go forward with her case, but any statement which she has given will not be used against her in any manner, including rebuttal testimony.
"After you have discussed this matter with her, please contact me.
"Sincerely yours, (s) Terry L. Lewis Terry L. Lewis"
The parties do not dispute, and the record verifies, that the entry attached to the above letter rejoined Krahn to plead guilty to only one minor misdemeanor charge.
On the day of trial, Kinney recommended that Krahn withdraw her plea of not guilty and enter a plea of guilty to a charge which he described as a minor misdemeanor. Krahn accepted Kinney's advice. The remaining counts were dismissed. Krahn later discovered she had pled guilty to a first degree misdemeanor and not to a minor misdemeanor.
Krahn then obtained different counsel who, upon discovering Kinney's failure to relate the prosecutor's first offer, filed a motion to vacate the judgment. The motion was denied.
The court denied the motion without a hearing and Krahn did not appeal.
Meanwhile, Kinney failed to appear at a hearing before the Ohio Liquor Control Commission ("commission") to defend the violation notice against High Spirits. As a result, the commission entered a default order requiring High Spirits to forfeit $2,100 or have its license suspended for twenty-one days. High Spirits employed new counsel. Pursuant to the new counsel's actions, the commission issued an amended order in which the penalty was reduced from twenty-one to fourteen days, and the forfeiture alternative from $2,100 to $1,400.
This was the customary penalty for liquor permit holders charged with first-time gambling-related violations.
Krahn claims that, as a result of Kinney's conduct, she was convicted of a first degree misdemeanor, suffered the stigma of a criminal conviction involving moral turpitude, incurred damage to her good name and reputation, and suffered severe emotional distress. Krahn and High Spirits claim that, as a result of Kinney's conduct, they incurred extra legal fees and expenses. The complaint seeks compensatory and punitive damages.
The trial court granted summary judgment to the appellants and dismissed the complaint because (1) Krahn failed to set forth a claim upon which relief can be granted since she did not allege that her conviction had been vacated on the grounds of ineffective assistance of counsel (citing Weaver v. Carson, 62 Ohio App.2d 99, 16 O.O. 3d 225, 404 N.E.2d 1344), and (2) the denial of Krahn's motion to vacate the criminal judgment acted as res judicata to bar the determination of the issues raised in the attorney malpractice action.
The Court of Appeals for Montgomery County reversed the judgment of the trial court and found that the facts in the complaint were sufficient to state a claim. Finding its judgment to be in conflict with that of the Court of Appeals for Cuyahoga County in Weaver v. Carson, supra, the court certified the record to this court for review and final determination.
Jim Rimedio and Roger C. Stridsberg, for appellees.
Rendigs, Fry, Kiely Dennis, Michael E. Maundrell and Kerry L. Beringhaus, for appellants.
Two issues are presented. The first is whether the underlying criminal conviction must be reversed before a cause of action can be stated in a legal malpractice action arising from the representation of a criminal defendant. The second is whether the denial of Krahn's motion to vacate judgment operates as res judicata to bar a determination of the issues raised in this malpractice action. We answer both queries in the negative and affirm the judgment of the court of appeals.
I
In this case we consider an issue of first impression for this court, to wit: what are the elements required to state a cause of action for malpractice arising out of legal representation in criminal matters?
As a starting point, we note the requirements to establish a cause of action for legal malpractice relating to civil matters. These are: (1) an attorney-client relationship giving rise to a duty, (2) a breach of that duty, and (3) damages proximately caused by the breach. See McInnis v. Hyatt Legal Clinics (1984), 10 Ohio St.3d 112, 10 OBR 437, 461 N.E.2d 1295; Loveman v. Hamilton (1981), 66 Ohio St.2d 183, 20 O.O. 3d 194, 420 N.E.2d 1007; Harter v. Morris (1869), 18 Ohio St. 493.
Appellants claim that where the malpractice arises from criminal representation, at least one additional element should be required. They claim that relief should not be granted unless the plaintiff first obtains a reversal of his or her conviction on grounds of ineffective assistance of counsel. Weaver v. Carson (1979), 62 Ohio App.2d 99, 16 O.O. 3d 225, 404 N.E.2d 1344.
The court in Weaver held that, in addition to alleging the usual elements of a malpractice action, "where the claim is that lawyer malpractice caused a criminal conviction, the cause of action is not complete, nor is the statement of it complete, unless the plaintiff alleges two additional facts to establish damage. These are:
"(1) that his conviction has been reversed based on the ineffective assistance of his counsel; and either
"(2) that on the remand for a new trial his case was either dismissed on the merits or tried with a resulting acquittal; or
"(3) that his conviction, actually guilty or not, could not have been achieved but for the ineptitude of his counsel and was unassailable on re-trial due entirely to the same cause." Id. at 101, 16 O.O. 3d at 227, 404 N.E.2d at 1346.
We reject the appellants' claim. Our holding is consistent with the resolution of the issue by other jurisdictions, most of which require the same elements of proof for all legal malpractice actions, whether arising from criminal or from civil representation. See, e.g., Jepson v. Stubbs (Mo. 1977), 555 S.W.2d 307, 313-314; Mylar v. Wilkinson (Ala. 1983), 435 So.2d 1237; Bowman v. Doherty (1984), 235 Kan. 870, 686 P.2d 112; McCord v. Bailey (C.A.D.C. 1980), 636 F.2d 606; Snyder v. Baumecker (D.N.J. 1989), Civil No. 88-3822 (CSF) (applying New Jersey law).
At least one court has required a plaintiff to allege his innocence in addition to the ordinary elements of a malpractice claim. Carmel v. Lunney (1987), 70 N.Y. 2d 169, 518 N.Y. Supp. 2d 605, 511 N.E.2d 1126.
The inequity of requiring a plaintiff to obtain a reversal of his or her conviction before bringing a malpractice action is apparent from the facts in the present case. Krahn's claim is based in part on Kinney's alleged failure to communicate the prosecutor's offer. Consequently, Krahn was forced into the situation of having to plead to a more serious charge or risk a still greater conviction and sentence. Krahn may have made a valid plea on the day of trial, but she would have been better served had she accepted the earlier bargain. As aptly stated by the court of appeals, the injury in such a situation "is not a bungled opportunity for vindication, but a lost opportunity to minimize her criminal record."
The issue of whether Krahn suffered compensable damages as a result of her conviction is premature. Her unrefuted allegation that she has suffered damages is enough to withstand an attack on the sufficiency of her complaint.
The situation is like that in a civil action where the attorney fails to disclose a settlement offer. Such failure may expose the attorney to a claim of legal malpractice. Lysick v. Walcom (1968), 258 Cal.App.2d 136, 65 Cal.Rptr. 406. See, also, Smiley v. Manchester Ins. Indemn. Co. (1978), 71 Ill.2d 306, 375 N.E.2d 118, where the attorney failed to effect a settlement on a client's behalf.
Therefore, we hold that a plaintiff need not allege a reversal of his or her conviction in order to state a cause of action for legal malpractice arising from representation in a criminal proceeding. To plead a cause of action for attorney malpractice arising from criminal representation, a plaintiff must allege (1) an attorney-client relationship giving rise to a duty, (2) a breach of that duty, and (3) damages proximately caused by the breach. Krahn's complaint sets forth facts supporting each of these elements and, therefore, states a claim.
We also find that High Spirits has stated a cause of action. High Spirits incurred extra attorney fees in rectifying Kinney's failure to appear at the original commission hearing. The injury is not the penalty ultimately imposed by the commission, but the expenses involved in rectifying Kinney's failure. High Spirits states a cause of action regardless of whether the ultimate penalty imposed by the commission is reversed.
Having enunciated the elements of a claim sounding in malpractice and arising from criminal representation, we note that in most cases the failure to secure a reversal of the underlying criminal conviction may bear upon and even destroy the plaintiff's ability to establish the element of proximate cause. In other words, we do not relieve a malpractice plaintiff from the obligation to show that the injury was caused by the defendant's negligence. But the analysis should be made in accordance with the tort law relating to proximate cause. The analysis should focus on the facts of the particular case. We reject the suggestion that a proximate cause analysis can be eliminated and replaced by a rule of thumb based on whether the malpractice plaintiff has succeeded in overturning the underlying criminal conviction.
For example, Krahn's failure to set aside her conviction does resolve the issue of proximate cause against her with respect to her claim that she was misadvised as to the seriousness of the charge to which she entered a plea. Such would follow from an application of the doctrine of collateral estoppel, which is discussed infra.
II
As an alternative argument, the appellants contend that appellee Krahn's malpractice suit is barred by the doctrine of res judicata. The malpractice suit was conclusively adjudicated, appellants maintain, when the trial court denied Krahn's motion to vacate judgment in the criminal proceeding. We do not agree.
Res judicata encompasses two concepts: "estoppel by judgment" and "collateral estoppel." Whitehead v. General Tel. Co. (1969), 20 Ohio St.2d 108, 49 O.O. 2d 435, 254 N.E.2d 10.
Estoppel by judgment prevents a party from litigating a cause of action after a prior court has rendered a final judgment on the merits of that cause as to that party. See Norwood v. McDonald (1943), 142 Ohio St. 299, 27 O.O. 240, 52 N.E.2d 67, paragraph one of the syllabus, approved and followed in Whitehead, supra, at paragraph one of the syllabus. However, the doctrine does not apply "where the causes of action are not the same, even though each action relates to the same subject matter." Norwood, supra, paragraph two of the syllabus, approved and followed in Whitehead, supra, at paragraph two of the syllabus.
An action to vacate a criminal judgment based on ineffective assistance of counsel is not the same as a cause of action for legal malpractice. A claim of ineffective assistance of counsel is based on constitutional guarantees and seeks reversal of a criminal conviction. Legal malpractice is a common-law action, grounded in tort, which seeks monetary damages. The proof of either of these two causes of action does not necessarily establish the other.
Collateral estoppel precludes the relitigation of an issue that has been "actually and necessarily litigated and determined in a prior action." Goodson v. McDonough Power Equipment, Inc. (1983), 2 Ohio St.3d 193, 195, 2 OBR 732, 734, 443 N.E.2d 978, 981, citing Whitehead, supra. Whether a conviction resulted from a defense attorney's incompetence is an issue which can be raised and determined in a prior criminal action where a claim of "ineffective assistance of counsel" has been made. Thus, collateral estoppel can preclude further litigation on the issue. See McCord v. Bailey, supra; Vavolizza v. Krieger (1974), 33 N.Y.2d 351, 352 N.Y. Supp. 2d 919, 308 N.E.2d 439; Lamore v. Laughlin (C.A.D.C. 1947), 159 F.2d 463.
Ineffective assistance of counsel requires proof that (1) counsel's representation fell below an objective standard of reasonableness, and (2) there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. Strickland v. Washington (1984), 466 U.S. 668. Though not identical, these elements are similar to the elements in an attorney malpractice action. An attorney malpractice action requires, inter alia, proof that (1) counsel failed to exercise due care, and (2) counsel's failure proximately caused plaintiff's injury.
However, the facts prevent the invocation of collateral estoppel as a bar to Krahn's cause of action in this case. In denying Krahn's motion to vacate her criminal conviction, the trial court found that Krahn failed to show that her guilty plea was not knowingly, voluntarily and intelligently entered. The resolution of that issue does not determine the issue upon which Krahn's malpractice action is grounded. Krahn's claim of malpractice is based in part upon counsel's failure (due to conflict of interest) to transmit the previous offer of a plea bargain. The decision to plead guilty, as Krahn ultimately did, is not inconsistent with her assertion that she would have accepted the previous (and more advantageous) plea bargain had she known of that opportunity. Thus, the issues presented in the malpractice action were not "actually and necessarily litigated and determined" in the denial of her motion to vacate the criminal judgment against her. See Goodson, supra.
There is confusion in the record concerning the plea entered by Krahn to the charge of which she was convicted. In some places the record indicates a plea of guilty and in others a plea of no contest.
For these reasons, the trial court erred in granting summary judgment for the appellants. We affirm the judgment of the court of appeals and remand the cause to the trial court for further proceedings.
Judgment affirmed.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS, WRIGHT and RESNICK, JJ., concur.