Summary
In Nguyen v. Cascade Law Group, P.L.L.C., 154 Wash.App. 1013, 2010 WL 165094 (2010), the court affirmed the trial judge's reduction of damages against the defendant attorney by an amount the plaintiff obtained in settlement from the defendant in the underlying litigation.
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No. 62954-9-I.
January 19, 2010.
Appeal from a judgment of the Superior Court for King County, No. 07-2-04479-5, Susan J. Craighead, J., entered January 28, 2009.
Affirmed by unpublished opinion per Dwyer, A.C.J., concurred in by Ellington and Appelwick, JJ.
Tuyen Nguyen and Mai Van appeal the attorney fee award in their successful legal malpractice action against their former attorney Lisa Moore. The Nguyens contend that the trial court erred by declining to award additional attorney fees after the jury found they were entitled only to partial repayment of the fees they paid Moore and other counsel. The Nguyens also contend that the court misapprehended the collateral source rule in deducting from the jury's award settlement funds they had received from the original defendant in the action in which Moore represented them. Because fees in this setting could be awarded only as damages for malpractice, rather than as costs, the court correctly denied fees that were not awarded by the jury. In addition, the collateral source rule has no application here because the settlement payment compensated a different injury. Accordingly, we affirm.
The plaintiffs Nguyen and Van are husband and wife. Consistent with their briefing and the parties' agreed report of proceedings, we refer to them collectively as the Nguyens.
FACTS
The Nguyens agreed to purchase a new home being constructed by builder Amrik Singh. The purchase and sale agreement provided for attorney fees to the prevailing party in the event of litigation.
As closing neared, a home inspector found construction defects, uncompleted work, and other problems. Singh reassured the Nguyens that he would correct all problems, either before closing or immediately afterward. Relying on his promise, the Nguyens closed the sale.
Singh thereafter performed some additional work but failed to remedy all of the noted problems. The Nguyens retained the Cascade Law Group to represent them in a suit against Singh. When the attorney assigned to their case determined that a trial was likely, he suggested the Nguyens also retain attorney Lisa Moore, who was experienced in such litigation. The Nguyens hired Moore with a separate retainer agreement. In anticipation of trial, Moore drafted an amended complaint alleging theories of breach of contract and misrepresentation.
Singh offered to settle the case but the Nguyens and their counsel disagreed as to the sufficiency of the offer. The case did not settle by the discovery cutoff date. At that time the Nguyens' counsel had not retained an expert to testify regarding the cost of completing the unfinished work, repairing the defects, or otherwise establishing damages.
As the scheduled trial date neared, Moore retained an expert engineer who provided a cost estimate for repairs still needed. She also located other potential expert witnesses to assist in establishing damages. After the trial date was set over for mediation and further discovery, Moore disclosed the experts to Singh's counsel for the first time. Singh's counsel immediately moved to exclude testimony from all late-disclosed witnesses.
The Nguyens then retained attorney Richard Moore who counseled them regarding their action against Singh and the possibility of a suit against Lisa Moore and the Cascade Law Group. Before the court ruled on Singh's motion to exclude the Nguyens' expert testimony, the Nguyens settled their case with Singh for $25,000. They then obtained new counsel and sued Cascade Law Group and Lisa Moore for professional negligence for failing to retain and timely disclose necessary expert witnesses, and for failing to allege a theory of promissory estoppel in the suit against Singh. Richard Moore became an expert witness for the Nguyens.
Richard Moore is apparently no relation to the defendant Lisa Moore.
Before trial in the malpractice action, the Nguyens settled with Cascade Law Group for $65,000. Trial proceeded against Lisa Moore. Through their pleadings, trial briefs, and motions in limine, the Nguyens argued that the court should limit evidence about the settlements by Singh and Cascade Law Group to the fact that there had been a settlement. They further argued that the court should instruct the jury that the settlement amounts would be deducted from any awards the jury might make. The trial court instructed the jury consistently with the Nguyens' request.
At the conclusion of the trial, the jury found Moore negligent. The jury further found, through special verdict answers, that the Nguyens would have prevailed at trial against Singh had Moore timely retained and disclosed necessary expert witnesses and alleged the legal theory of promissory estoppel. The jury awarded the Nguyens $90,900 to repair the home's defects, but only awarded them $40,721.51 of the $47,086.51 they had paid Moore, and rejected the Nguyens' claim for additional fees and expenses they had paid to Richard Moore.
The jury also apportioned 60 percent of the fault to Moore and the remaining 40 percent to Cascade Law Group.
After trial, the Nguyens filed a motion for an award of additional attorney fees of $212,170.91 based on the real estate purchase and sale agreement. They also requested, contrary to their previous position throughout the litigation, that the court not deduct the $25,000 settlement amount that Singh paid from the damages award for the home defects. The trial court denied both requests.
The Nguyens appeal.
ANALYSIS
The Nguyens first contend that the court erred by failing to grant their motion for additional attorney fees under the purchase and sale agreement. Moore responds with several forceful alternative arguments as to why we should reject this claim. We need address only one to affirm the trial court.
In arguing for additional fees, the Nguyens ignore the critical distinction between fees that are recoverable as costs and fees that are recoverable as damages. See Jacob's Meadow Owners Ass'n v. Plateau 44 II, LLC, 139 Wn. App. 743, 757-62, 162 P.3d 1153 (2007). Lisa Moore was not a party to the purchase and sale agreement so as to render her liable for fees as costs under the contract. The Nguyens could therefore obtain an award for attorney fees only as damages for Moore's malpractice. Matson v. Weidenkopf, 101 Wn. App. 472, 484, 3 P.3d 805 (2000) (measure of damages for legal malpractice is the loss actually sustained as a proximate result of the attorney's conduct); Kelly v. Foster, 62 Wn. App. 150, 155, 813 P.2d 598 (1991) (attorney fees cannot be recovered as part of the cost of litigation in an ordinary legal malpractice action). Because Moore asserted her right to a jury trial, only the jury could determine an award to the Nguyens for fees here. Jacob's Meadow, 139 Wn. App. at 761-62 (reversing an award of fees as damages when determined by the court rather than the jury).
But nowhere in any of the Nguyens' briefs, motions in limine, proposed instructions, or proposed verdict forms did they ever advance a theory that they had a right to recover attorney fees from Moore as damages flowing from Singh's breach of the purchase and sale agreement. The jury clearly made no such finding and the Nguyens have assigned no error to the instructions the court gave or the findings the jury made. Therefore, even assuming that the Nguyens' theory of entitlement to additional fees could have legal merit, we must affirm the trial court's denial of the Nguyens' motion because such an award would have invaded the province of the jury. Jacob's Meadow, 139 Wn. App. at 761-62.
Perhaps to address this problem, the Nguyens cite to a portion of the agreed record of proceedings and claim that, near the end of trial, the trial judge indicated that if the jury found the Nguyens would have prevailed against Singh the judge would later award fees that the Nguyens would have recovered against Singh. But the portion of the agreed record the Nguyens cite actually summarizes the parties' factual claims that are not agreed. Moore denies the trial judge ever made such a statement. The Nguyens have not provided the actual record of those proceedings to resolve the dispute. Accordingly, we must reject their factual claim as unsupported because it is the Nguyens' duty to provide an adequate record for review. See Favors v. Matzke, 53 Wn. App. 789, 794, 770 P.2d 686 (1989) (RAP 9.2 requires the party seeking review to provide an appeal record containing all evidence necessary and relevant to the issues on appeal).
The Nguyens next fault the trial court for deducting the $25,000 they received from Singh from their damages award against Moore. Acknowledging that their litigation posture was wholly inconsistent with this position until after trial, they nonetheless rely on the collateral source rule. The collateral source rule precludes a defendant from offsetting the plaintiff's damages with evidence of payments received by the plaintiff from a source independent of the defendant, for the same injury caused by the defendant. Ciminski v. SCI Corp., 90 Wn.2d 802, 804, 585 P.2d 1182 (1978).
The collateral source rule has no application in this setting. Singh's payment did not compensate the Nguyens for Moore's malpractice; it resolved their claim against Singh for his breach of contract and misrepresentation. The payment therefore was not for the same injury as that caused by Moore. Because the measure of damages in a malpractice action is the loss actually sustained as a result of the malpractice, the trial court properly deducted Singh's payment to the Nguyens, as their loss due to Moore's negligence was decreased by that amount. Matson, 101 Wn. App. at 484. Affirmed.
As with the Nguyens' claim regarding attorney fees, Moore provides additional alternative responses to the Nguyens' contention in this regard, which we need not address here.
WE CONCUR: