DTCI: Legal malpractice — the labyrinth of ‘a case-within-a-case’

You have missed the statute of limitations for filing a claim on behalf of a client and you are now faced with a legal malpractice claim. What do you do now? Is all lost? In the realm of legal malpractice defense, not necessarily. To prevail in a legal malpractice claim, plaintiffs must prove that they would have prevailed or would have at least obtained a better result but for the negligence of the defendant attorney. Legal malpractice cases are unique negligence actions where the parties must litigate a “case-within-a-case.” It is ironic that, within this framework, the malpractice lawyer who is defending an attorney-client often must argue against the merits of a cause of action or an issue that the attorney-client once advocated. This is in response to the plaintiff, who is required to present proof that the defendant attorneys’ conduct was the cause of the damages claimed. In essence, the malpractice lawyer steps into the shoes of the original defendant in the underlying claim and argues against the very position once advocated by the attorney-client in order to show that the plaintiff would have failed in the underlying action, regardless of the claimed negligence. Mallen and Smith, § 37:1. Introduction — The case-within-a-case. (Id.).

In this context, even when faced with a claimed “blown statute of limitations,” the malpractice claim may be resolved by a dispositive summary judgment: “Legal malpractice litigation is a land of second chances” that “frequently thrusts the parties, the judge and the jury into a virtual fantasy world of hypothetical questions of fact and law with assumed plaintiffs and defendants, facing theoretical claims of liability and using evidence that is not quite what it seems.” (Mallen and Smith, Legal Malpractice, § 37:1. Introduction — The case-within-a-case, 4 Legal Malpractice (2017 ed.)).

Indiana courts have acknowledged that the conceptual “trial-within-a-trial” requires the malpractice plaintiff to “prove a case-within-a-case” and show that “but for” the former attorney breaching the standard of care, as alleged, the malpractice plaintiff would have been in a better position. To prove causation and the extent of harm in a legal malpractice case, the former client must show that the outcome of the underlying litigation would have been more favorable but for the attorney’s negligence. This typically requires a trial-within-a-trial. Schultheis v. Franke, 658 N.E.2d 932, 940 (Ind. Ct. App. 1995) (“the client must prove a ‘case-within-a-case’ in the malpractice action”); Fricke v. Gray, 705 N.E.2d 1027, 1033 (Ind. Ct. App. 1999).

The Indiana Court of Appeals recently affirmed Indiana’s case-within-a-case analysis in Roumbos v. Vazanellis, 71 N.E.3d 64, 68 (Ind. Ct. App. 2017), order clarified on reh’g, 78 N.E.3d 1114 (Ind. Ct. App. 2017). In Roumbos, plaintiff Elizabeth Roumbos brought a legal malpractice action alleging that but for the law firm failing to file her negligence action against a hospital within the statute of limitations, she would have prevailed on her slip-and-fall claim. The law firm defendant argued that, even if it had filed Roubmos’ claim in a timely matter, she would not have prevailed. Therefore, her alleged damages could not have been proximately caused by the defendant law firm. Id.

In analyzing the defendant law firm’s summary judgment motion, the malpractice trial court judge stepped into the shoes of the underlying trial court judge in determining the legal viability of the plaintiff’s underlying claim. The Court of Appeals reversed the trial court’s order granting summary judgment due to evidentiary issues. But the court acknowledged that the case-within-a-case analysis and framework is appropriate for assessing legal malpractice claims, explaining that a plaintiff’s legal malpractice claim against an attorney requires the plaintiff, at trial, to “prove a case-within-a-case.” Roumbos, at 71 N.E.3d 68. Thus, for a plaintiff to prevail in a legal malpractice action, he or she must prove that but for the defendant attorneys’ alleged negligence, a better outcome would have resulted. Likewise, an attorney disputing a malpractice claim must show that, even had the attorney taken certain actions in the underlying case, the plaintiff would still not have prevailed.

• Marian C. Drenth is a partner with O’Neill McFadden & Willett LLP. Her practice includes professional liability defense. Michael E. O’Neill is the managing partner of O’Neill McFadden & Willett LLP. His practice includes professional liability defense. The opinions expressed are those of the authors.