No. 91-357
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
JOE R. MERZLAK and JANENE L. MERZLAK,
Plaintiffs and Appellants,
-vs-
JAMES E. PURCELL and HENNINGSON E. PURCELL,
a Montana professional services corporation,
Defendants, Respondents and Cross-Appellants.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Douglas Harkin, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Robert B. Gould, Seattle, Washington
James M. Driscoll, Seattle, Washington
For Respondent:
R. D. Corette and William M. O'Leary; Corette,
Pohlman, Allen, Black E. Carlson, Butte, Montana
Submitted on Briefs: December 5, 1991
Decided: February 13, 1992
. .
Clerk
Justice Fred J. Weber delivered the Opinion of the Court.
Appellants Joe R. Merzlak and Janene L. Merzlak (Merzlaks)
brought an action for legal malpractice against their attorney
James E. Purcell and his law firm Henningsen & Purcell, P.C.
(Purcell). The Fourth Judicial District Court, Missoula County,
found Purcell negligently represented the Merzlaks, ordered the
return of $12,398.20 in attorney's fees together with interest, and
denied punitive damages. Merzlaks appeal the amount of the
judgment. Purcell cross-appeals. We reverse and remand.
We find the following issues dispositive:
1. Did the Merzlaks satisfy all elements necessary to prove
legal malpractice against Purcell?
2. Did the court improperly award the Merzlaks $12,398.20 in
attorney's fees plus interest?
On November 12, 1982, the Merzlaks, passengers in a vehicle
driven by Kerry Hansen, were injured in a head-on collision. The
accident occurred on an icy bridge, on Interstate 90, west of
Superior, Montana. Joe Merzlak, Janene Merzlak, Kerry Hansen, and
Kerry's wife, Ruth Hansen were traveling from Butte to Spokane when
a semi-tractor truck and trailer owned by Livestock Transport
Company of Washington (Livestock) struck the vehicle. The
Livestock vehicle, traveling east on Interstate 90, veered into
Hansen's westbound lane to avoid a vehicle disabled in the
eastbound lane. The impact killed Kerry Hansen, and injured the
Merzlaks and Ruth Hansen. Purcell represented the Merzlaks in
their settlement negotiations with Livestock's insurer. This
2
representation underlies the Merzlaks' malpractice claim against
Purcell. Purcell settled the Merzlaks' claims with Livestock's
insurer for $50,000. Merzlaks claim this settlement amount was
undervalued.
The District Court found Purcell negligently represented the
Merzlaks by failing to obtain informed consent for settlement,
settling without current medical information, and simultaneously
representing the Merzlaks, Ruth Hansen and the estate of Kerry
Hansen.
I
Did the Merzlaks satisfy all elements necessary to prove legal
malpractice against Purcell?
Attorney malpractice is professional negligence. In order to
recover in a professional negligence action, "the plaintiff must
prove that the professional owed him a duty, and that the
professional failed to live up to that duty, thus causing damages
to the plaintiff." Lorash v. Epstein (1989), 236 Mont. 21, 24, 767
P.2d 1335, 1337, quoting Carlson v. Morton (1987), 229 Mont. 234,
238, 745 P.2d 1133, 1136.
The proper measure of damage in an attorney malpractice action
is the difference between the amount that would have been recovered
by the client except for the attorney's negligence. 'I. . . [A]
claim of malpractice must be supported not only by a showing of
malpractice by . . . [the attorney], but by a showing that 'but
for' their negligence, [the client] . . . would have recovered
additional amounts .. .'I Weaver v. Law Firm of Graybill (1990),
3
246 Mont. 175, 179, 803 P.2d 1089, 1092.
Purcell contends that the Merzlaks did not prove Purcell's
conduct caused them damage. A s later discussed, the District Court
agreed with that contention. Failure to prove damages is fatal to
an attorney malpractice action. Kinniburgh v. Garrity (1990), 244
Mont. 350, 355, 798 P.2d 102, 105.
In its Memorandum, Findings of Fact and Conclusions of Law,
the District Court properly concluded that in order to establish a
cause of action for legal malpractice, there must be a showing that
the attorney owed his client a duty of care, that there was a
breach of this duty by a failure to use reasonable care and skill,
and that the breach was the proximate cause of the client's injury
and resulted in damages. The key Finding of Fact with regard to
damages is the following partial statement from Finding of Fact 37
by the District Court:
37. . . . Insufficient evidence was presented to
enable this Court to be convinced that a settlement value
could be placed on this case had Purcell not handled the
case as he did. . . .
The District Court reached the following key conclusion on the
issue of damages:
The issue of damages is a troubling aspect of this case.
As noted in Findings of Fact #37, the testimony regarding
the settlement value of the Plaintiffs' claims was very
speculative and does not afford a sufficient basis for an
award of damages.
We have carefully reviewed the evidence and conclude that the
District Court was correct in its finding that insufficient
evidence was presented to establish a settlement value different
from the value negotiated by Purcell. We further agree with the
4
conclusion of the District Court that the testimony regarding the
settlement value of the plaintiffs' claims was speculative and did
not afford a sufficient basis for an award of damages. As in
Kinniburqh, we conclude that the failure to prove damages is fatal
to the attorney malpractice action. We hold that the Merzlaks
failed to prove legal malpractice against Purcell because of their
failure to prove damages.
I1
Did the court improperly award the Merzlaks $12,398,20 in
attorney's fees plus interest?
The District Court concluded that Purcell breached his duty of
reasonable care in representing the Merzlaks. Accordingly it
ordered a return of the attorney's fee paid by the Merzlaks to
Purcell in the amount of $12,298.20, together with interest.
wh le Purcell may have breached his duty of care, that is
insufficient to justify an award of damages. Lorash , Kinnibursh
and Weaver. Failure to prove damages is fatal to the action.
Thus, we hold that the District Court improperly awarded the
Merzlaks $12,398.20 in attorney's fees, plus interest.
We remand for the entry of a judgment in accordance with this
opinion.
We Concur:
-.
/
5
Justice Terry N. Trieweiler did not participate.
6
February 13, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
ROBERT B. GOULD
Attorney at Law
Suite 320, Fourth & Blanchard
2121 Fourth Avenue
Seattle, WA 98212
JAMES M. DRISCOLL
Attorney at Law
Pioneer Bldg., Suite 607
600 First Avenue
Seattle. WA 98104
R. D. Corette
William M. O’Leary
CORETTE, POHLMAN, ALLEN, BLACK & CARLSON
P.O. Box 509
Butte, MT 59703
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BY: 3.
Deputy