Lawyer’s Lessons: Doing the Right Thing Pays Off…Eventually!
A recent summary decision by a Massachusetts Appeals Court tells a remarkable story of a good lawyer who made a mistake, immediately owned up to it, and worked “above and beyond” to make it right. Despite his good intentions, he ended up in years of nasty litigation brought on by his ungrateful client. Only after eight years of litigation and lots of sleepless nights did justice prevail, thanks to the lawyer’s courage to push back, the careful work of a trial judge and three appellate judges who got it right. Nonetheless, the case took a toll on the lawyer. He was recently quoted as saying, “It robbed me of eight years of my life.”
The lawyer’s tale is sad, but there are a few good lessons for all lawyers to be learned from his experience. First, know your client. Is he or she a “red flag” client, one who can’t be trusted or who doesn’t honor the fee agreement or who has had a string of prior lawyers. Second, practice “defensive” lawyering, as unfortunate as that seems. Confirm discussions in writing. Remain independent and be objective in dealing with your client. Be skeptical when your gut tells you to be. Third, always fess up if you make a mistake and advise your client to seek an independent lawyer. Fourth, do not have a client sign a release in your favor without, at a minimum, advising your client to seek independent advice and, in many cases, insisting that the client see another lawyer. Fifth, be very wary of doing business deals with clients and, if you do, follow the Rules of Professional Conduct, in particular, Rule 1.8(a) to a tee.
The story begins in 1997, when a real estate client went to a lawyer to tell him that he had signed a purchase and sale agreement to purchase a three family dwelling in Brighton. After the agreement was signed, the seller told the client that he had a better offer and that the client had to match it. The client pulled out of the deal and called his lawyer, who told the client he had a good claim and that he would charge him $200 an hour. The lawyer quickly figured out that the buyer was a straw and had flipped the property to another person almost immediately. After a ten day jury trial, the jury awarded the client $11,200 against the straw and $200,000 against the actual buyer for tortious interference. The judge then ruled that the buyer had violated chapter 93A and directed the lawyer to file his fee petition within 45 days.
Immediately after the judgment entered, the lawyer started a separate action to collect on the judgment. The 45 days came and went in the original case and no fee petition was filed. When the lawyer realized that he had missed the 45 day deadline, he filed the petition seeking $131,000 in fees. The defendant moved to strike the fee petition as untimely and the motion was allowed. The client had paid the lawyer $69,983.52.
As soon as he realized that he had missed the filing deadline, the lawyer told the client what had happened and told him that he would take whatever steps were necessary to reverse the court’s action. He also told the client that he should seek independent counsel and that, if the ruling was not reversed, the client would have to retain another lawyer. The lawyer acknowledged that he was responsible for the error and that, if it were not corrected, the client would have a malpractice claim against him. The lawyer performed herculean efforts to reinstate the fee petition, including taking an appeal to the Single Justice, but his efforts were not successful. He kept the client informed of his efforts.
In the meantime, the defendants in the original case filed a notice of appeal seeking to reverse the $200,000 plus judgment; the lawyer filed a cross-appeal seeking to reverse the dismissal of his fee petition. The client insisted that the lawyer handle the appeal. The lawyer was willing to do so but only if he and the client to resolve the outstanding issues, including the fact that the lawyer had missed the deadline for filing the fee petition. According to detailed findings at the trial court in the malpractice case, the lawyer “repeatedly advised [the client] orally and in writing” to seek independent advice. The record is not clear on whether the client did so but a lawyer on behalf of the client called the lawyer before any agreement was made. On June 25, 2002, the lawyer and client signed an agreement that provided as follows:
The lawyer agreed to continue to handle the case, including the collection action and the appeal.
The lawyer would waive the balance owed to him of approximately $67,000.
The lawyer would not bill the client for approximately $12,000 on three other projects.
The lawyer would not bill the client for work on the collection action.
The lawyer and the client agreed to split 50/50 any fees recovered from the defendants.
The client agreed to release any claims against the lawyer.
Eventually, the case on appeal was settled. The buyer paid more than $335,000, which netted the client $281,642.97. The attorney fee portion of the settlement was split between the client and the lawyer. The settlement, which occurred in March 2003, ended the original action and any fallout from the lawyer’s mistake (or so the lawyer thought).
For the next two years, the lawyer and the client continued their social relationship. In 2005, the lawyer, client and the lawyer’s associate agreed to do a real estate project together. The project quickly soured as did relations between the client, on the one hand, and the lawyer and his associate, on the other. Litigation ensued. The lawyer sided with his associate. The client was not happy and made what the court described as “directly threatening” remarks to the lawyer. The court found that the client said he “intended to ruin [the lawyer’s] life, his law practice and his license to practice law.”
According to the court’s findings, the client then “remembered the malpractice problem and decided to use what he well knew was an extremely unpleasant chapter in [the lawyer’s] professional life to his tactical advantage.” The client then sued the lawyer for malpractice claiming, among other things, that the lawyer never told him the real reason the court stuck the fee petition and that the lawyer had coerced the client into signing the settlement agreement. The lawyer filed a counterclaim.
After years of “nasty” litigation, the court ruled that the client brought the malpractice action not to recover money but to “harm” the lawyer, that the client had never suffered any loss and that the client’s actions in filing and prosecuting the case caused the lawyer financial loss and emotional distress, including harm to his reputation, insomnia, embarrassment and distraction. In all, the court awarded the lawyer $602,853.00 plus attorney’s fees and interest. On October 8, 2014, the Appeals Court affirmed the judgment, reducing it by only $50,000. The next step is a hearing on the lawyer’s chapter 93A fee petition for fees on his counterclaim against the client. Once the fee issue is decided, this sad tale will be over, twenty years after the client hired the lawyer and eight years after the client sued the lawyer for malpractice.
Lawyers are often and rightfully reluctant to sue clients for fear of a malpractice claim, even if the client’s claim is frivolous. But, this case demonstrates that lawyers are not powerless to respond to frivolous malpractice claims and contains good lessons for all lawyers.