NM Supreme Court Reinstates Legal Malpractice Claim After Firm Blows Statute

walterwhiteAfter another weekend of binge-watching Walter, Hank, Skyler and crew, I definitely have the Land of Enchantment on the brain.  How could I not after watching – no, strike that, after Devouring.  Like a Rabid, Foaming-At-The-Mouth Animal! Seasons 4-5 of ABQ-based Breaking Bad over an eye-searing three-day period (with little more than a sporadic water break).  An aside: do friends and family have interventions for Netflix addiction?  Just curious.  My friend wants to know (cough).   I also concede that I’m way way late to the party on this, but the stories are true: Br/Ba is an absolute TV masterpiece.  That’s why today’s featured case is geographically appealing to me.  Not only that, but its subject matter is interesting and its lessons, both cautionary and profound.

The Case and Facts:  Encinias v. Whitener Law Firm (Sept. 12, 2013)

http://www.nmcompcomm.us/nmcases/nmsc/slips/SC33,874.pdf

Plaintiff high school student was injured in 2004 when he was badly beaten by a group of students on property adjacent to the school.  Plaintiff hired defendant law firm (Firm) in 2006 to file a personal injury suit against the defendant school district for failure to protect plaintiff and to properly respond to the attack.  The Firm failed to file suit before the two-year statute of limitations ran in October 2006.  Sometime in 2008, after plaintiff made several queries concerning the case’s status, the Firm informed plaintiff that it missed the filing deadline.  Plaintiff then sued for legal malpractice.

Disposition: The Supreme Court reversed lower court rulings for the Firm and reinstated the plaintiff’s claim.

Reasoning:

Legal Malpractice Claim

Plaintiff’s legal malpractice claim asserted that because of the Firm’s failure to timely file suit, plaintiff’s claims against the school district are forever lost.  To plead legal malpractice in New Mexico, the plaintiff must show: (1) the employment of the defendant attorney; (2) the defendant attorney’s neglect of a reasonable duty; and (3) the negligence resulted in and was the proximate cause of loss to the client.  The NM Supreme Court focused on element three: loss to the plaintiff/client.

A NM legal malpractice plaintiff must prove loss by showing by a preponderance of the evidence that he or she would have won the underlying claim but for the attorney’s negligence. Richardson v. Glass, 1992-NMSC-046, ¶ 10.  The Firm argued that since the plaintiff’s suit would be defeated by sovereign immunity doctrine, plaintiff would have lost even if his complaint was timely filed.

The Supreme Court rejected this argument and found a triable fact question as to whether the school district waived sovereign immunity under New Mexico’s premises liability principles reflected in its tort claims statute.  Section 41-4-6(A);  ¶¶ 8-9.  The Court focused on an assistant principal’s affidavit testimony that the location of the fight was a known “hot zone” for fighting students.  This genuine issue of fact regarding the school’s knowledge of a dangerous condition on or near the school, meant that plaintiff could prevail in the underlying case and defeated summary judgment.  ¶ 13.

The Misrepresentation claim

Plaintiff alleged the Firm misrepresented that (a) no work had been done on the case and (b) the limitations period expired.  The Firm didn’t tell plaintiff until Spring 2008 that the statute ran, when there was evidence the Firm knew this in July 2007.  ¶ 21.  The Court rejected the lower courts finding that despite the Firm’s withholding information, plaintiff still didn’t sustain actual damages.

NM law permits intentional tort plaintiffs to recover nominal and punitive damages and plaintiff pled punitive damages against the Firm in his misrepresentation count.  Pointing out that the Firm specifically (and erroneously) assured the Plaintiff in October 2006 that the statute of limitations had not run and that the Firm was actively working the case, it was reasonable for plaintiff to rely on the Firm’s representations.

The Court held that the Firm’s failure to disclose that no work had been done damaged plaintiff’s ability to pursue his case against the school district.  Id., ¶¶22-23.  The Court noted record evidence that the Firm’s withholding case information (that it wasn’t working on the case and later, that the statute expired) from plaintiff made it difficult for plaintiff to collect supporting evidence in the underlying case.  Id.  And since a NM intentional tort claim doesn’t require actual damages, plaintiff established a material question of fact on his misrepresentation claim against the Firm.

Lessons: Practitioners should be cognizant and hyper-vigilant as to filing deadlines.  An undercurrent of the Court’s ruling is that the Firm not only failed to timely file, they repeatedly failed to keep the plaintiff informed of the case status.

The case also shows that actual damages aren’t required in New Mexico to state a colorable misrepresentation claim and that if a plaintiff pleads nominal or punitive damages, his claim can survive summary judgment.

 

 

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PaulP

Litigation attorney at Fisher Kanaris, P.C. representing businesses and individuals in all types of commercial disputes.