Opinion
C.A. No. 08C-12-258 FSS.
Submitted: March 14, 2011.
Decided: July 29, 2011.
Upon Defendants Richard Forsten's and Buchanan Ingersoll Rooney PC's Motion for Summary Judgment — DENIED; Upon Plaintiff's Motion to Supplement its Expert's Report — GRANTED.
MEMORANDUM OPINION AND ORDER
Defendant is a lawyer. His former client, a developer, alleges it received negligent legal advice about a title defect and the number of parking spaces it had to provide a neighbor. Defendant allegedly told Plaintiff it could file a corrective deed after closing, because a title defect he had negligently created years earlier was "small enough that no one will ever pick it up." That advice proved wrong: the buyer's attorney discovered the defect and postponed closing. And later, the neighbor sued, in part, over its parking rights. A different law firm defended the suit, and Plaintiff eventually settled. Plaintiff sued here in 2008.
I.
Plaintiff 999 LLC was formed to develop Carriage House Row. James A. Horty Jr, Peter Horty, James A. Horty, III, and Caroline Dickerson owned half of Plaintiff through 999 Trust. The other half was held by members of the Corrado family. Plaintiff retained Defendant Richard Forsten, Esquire, a Delaware attorney, to handle legal issues. At the time, Forsten worked for Defendant Buchanan Ingersoll Rooney, PC. Plaintiff retained Vandemark Lynch, Inc., an engineering firm, to complete surveys and help prepare legal documents.A.
The first pending matter is Defendants' motion for summary judgment. Initially, Defendants addressed six potential causes of action it gleaned from Plaintiff's complaint and its expert's report. At oral argument, those claims were reduced to two: the Sliver Claim and the Parking Advice Claim.
The Sliver Claim has its genesis in the 1990s when Forsten was helping the Hortys develop an earlier project, Bancroft Place. Horty, Jr. asked Forsten to prepare a deed conveying two roads to the Upper and Lower Road Maintenance Corporation (ULRMC). Forsten prepared the deed, but it was recorded without one of the two property descriptions. The missing property description left a sliver of property with the seller, the Krapf family. Later, the deficient deed was used to transfer the property for Carriage House Row.
As Carriage House Row progressed, the parties met in November 2005, to discuss the first settlement, then scheduled for January 2006. During that discussion Forsten told Plaintiff that the ULRMC deed failed to transfer the sliver. More significantly, Forsten advised Plaintiff that it could wait until after the settlement to file the corrective deed because the sliver was so tiny and title so complex that no one would discover it (Sliver Advice).
The Sliver Advice proved wrong. The title defect was discovered. Settlement was postponed. Douglas Hershman, Esquire, the buyer's attorney, testified by affidavit that buyer postponed, in part, because Plaintiff "was not the owner [of] a sliver of property which was located beneath the wall at the southeasterly edge of the Condominium Development property." Hershman also testified he postponed closing because of discrepancies with the condominium declaration plan and the surveys.
The title defect was cured by March 2006, after Forsten learned a local bank had power of attorney to sign a corrective deed. Plaintiff's problems, however, continued until May 2006, when the surveys and declaration plan were finally fixed. In total, Plaintiff claims it suffered $2.6M in lost and delayed condo fees and sales between January and May 2006.
B.
The Parking Advice Claim has its genesis in work Forsten did for Plaintiff in 2005, during a running dispute with the Bancroft Mills Homeowners' Association (BMHA) over parking rights. According to Plaintiff's expert, "[f]irst Mr. Forsten advised the Hortys that BMHA's parking was restricted to 55 places; later, after reviewing the relevant easement language on record, Mr. Forsten advised that the BMHA also had additional general parking rights on the Mill Property and was not restricted to only 55 parking places." Plaintiff alleges Forsten's advice led it to take a hard line on parking, erecting "no parking" signs and warning the BMHA it would tow cars.In April 2006, the BMHA sued Plaintiff on six grounds, including availability of parking spaces. According to BMHA council member Timothy Holly, the BMHA sued, in part, because of Plaintiff's tactics. Simply put, Plaintiff claims Defendants' Parking Advice got Plaintiff into costly trouble with the neighbors.
Forsten played no part in the BMHA litigation after it began. Plaintiff was represented Morris Nichols Arsht Tunnell (MNAT). According to the record, MNAT neither refuted Forsten's conclusion nor encouraged Plaintiff to settle the parking claim. On the contrary, Horty III testified that Plaintiff and MNAT went forward after reviewing all of the individual deeds to the condominium units. Eventually the BMHA suit settled. Plaintiff alleges the Parking Advice caused the suit and cost Plaintiff $190,000 in legal bills and $10,000 in property it ultimately ceded to the BMHA.
C.
The other pending matter is Plaintiff's motion to supplement its expert's report. Plaintiff hired Alan W. Behringer, Esquire, a Delaware real estate attorney, as its expert. He interviewed the Hortys and reviewed documents related to the case. He issued his report on October 15, 2010, before the parties were deposed.
According to Behringer, "the standard of care to be exercised by a Delaware attorney representing someone acquiring real estate includes . . . an examination of the title to determine its quality and communication with the client for the purpose of explaining and discussing any title defects. . . ." Behringer opined that a failure to perform up to those standards of care . . . would constitute legal malpractice." Most of Behringer's report discusses an alleged conflict of interest Forsten had and a failed title search. Behringer did not discuss the Sliver Advice but he "reserve[d] the right to modify, amend an d/or supplement my opinion if additional information is available to me."
Shortly after discovery closed, Defendants moved for summary judgment, arguing Behringer did not discuss the Sliver Claim, and, therefore, summary judgment was appropriate. In its response, Plaintiff attached an affidavit from Behringer, which Plaintiff called a "placeholder" until it moved to supplement the report. On August 2, 2010, Plaintiff moved to supplement Behringer's report.
II.
"[T]o sustain a claim of professional negligence against a Delaware attorney, plaintiff must establish the applicable standard of care through the presentation of expert testimony, a breach of that standard of care, and a causal link between the breach and the injury." No expert is needed, however, when the attorney's "mistake is so apparent that a layman, exercising his common sense, is perfectly competent to determine whether there was negligence."
Middlebrook v. Ayres, 2004 WL 1284207 at *5 (Del. Super. Ct. June 9, 2004) (ABLEMAN, J) citing Giordano v. Heiman, 768 A.2d 469 (Del. 2001) (TABLE).
III. A.
Plaintiff bears the burden to show good cause why the court should permit it to supplement its expert report nine months after the report's deadline. To find good cause, the court will generally look at the moving party's diligence, whether the need was foreseeable, and the amount of unfairness a refusal would cause the movant. The court is also concerned with the risk of prejudice to the non-movant and the potential for trial delay.
Lundeen v. Pricewaterhousecoopers, LLC, 919 A.2d 561 (Del. 2007) (TABLE).
Coleman v. Pricewaterhousecoopers, LLC, 902 A.2d 1102 (Del. 2006).
Id.
Both sides blame the other for the need to supplement Behringer's report. Plaintiff contends Behringer's report addressed the Sliver Claim in context of the deficient deed he recorded in 1997. It was not until Defendants split Plaintiff's case into six separate causes of action that the need to supplement arose. Defendants counter that this is "a situation where the plaintiff apparently only recognized the fundamental deficiency of one of its legal malpractice claims after the close of discovery and reviewing [] Defendants' opening brief. . . ." Further, Plaintiff produced "a woefully deficient expert report before taking any depositions, then made no attempt to amend or supplement that report when it finally began taking depositions." Finally, if granted, Defendants will need to move the court to let their expert respond.
If Plaintiff's attorneys were deficient, as Defendant contends, it would be unfairly prejudicial to Plaintiff to deny the motion to supplement. Plaintiff's Sliver Claim cannot survive without an expert. To attorneys, the Sliver Claim may be obvious, but a layman could not determine if it was negligence without an expert first establishing the standard of care. Although Plaintiff's motion comes after the deadline, Plaintiffs moved quickly to supplement Behringer's report. And, although not dispositive, Behringer reserved the right to modify his report if new facts came to light. Since the report was filed, the Hortys and Forsten have been deposed. Finally, and most importantly here, there is no trial scheduled. So allowing Behringer to supplement his report will not cause a significant delay. Allowing Plaintiffs to respond to the depositions is appropriate. Of course, Defendants will have leave to marshal their reports.
B.
Summary judgment will be granted when no genuine dispute of material fact remains and the movant is entitled to judgment. The movant bears the initial burden of showing no genuine dispute of material fact exists. If met, the burden shifts to the non-movant to present evidence a genuine dispute exists. The evidence is viewed in a light most favorable to the non-movant.
Dale v. Town of Elsmere, 702 A.2d 1219, 1221 (Del. 1997).
Moore v. Sizemore, 405 A.2d 679, 680-1 (Del. 1979).
Id.
Merrill v. Crothall-American Inc., 606 A.2d 96, 99 (Del. 1992).
1. Parties' Contentions
Defendants contend they are entitled to summary judgment because the Sliver Claim was time-barred when Plaintiff sued in December 2008. Alternatively, Defendants contend Forsten was not solely responsible for Plaintiff's damages because the surveys and blueprints were not corrected until three months after the title defect was corrected. Likewise, Defendants contend Plaintiff cannot show Forsten's allegedly negligent Parking Advice caused the BMHA suit because that suit was about more than just the parking advice. Moreover, Forsten did not cause any damages because Plaintiff "never took a contrary position in the subsequent litigation." In other words, MNAT relieved Forsten of responsibility when it took over the litigation and did not refute the Parking Advice. Hence, the Parking Advice cannot be held negligent.Plaintiff contends the Sliver Claim is timely because it was tolled until January 2006 when settlement was postponed, or April 2008 when Forsten allegedly confessed to purposefully removing the missing property description. As to causation, Plaintiff argues there can be more than one proximate cause and Forsten's liability is a question for the jury. Finally, Plaintiff does not squarely address Defendants' argument that its other counsel "never took a contrary position in the subsequent litigation[,]" on the Parking Advice, which relieves Forsten of liability.
2. Statue of Limitations
The three-year statute of limitations on professional negligence claims is triggered when the cause of action accrues. "[A] cause of action accrues upon the commission of the act or omission giving rise to the cause of action." The limitations period is tolled, however, when the injury is inherently unknowable and the plaintiff is blamelessly ignorant of the injury.The Sliver Claim did not accrue until 2006 when settlement was postponed and damages, "an essential element of a legal malpractice case," occurred. At that point, the Sliver Advice became actionable, and the three-year limitations period on the Sliver Claim began to run. Until then, Plaintiff had no reason to doubt the Sliver Advice, and even if it were negligent, the Sliver Advice was harmless. Defendants assume, incorrectly, the Sliver Claim accrued in 2005 when the Sliver Advice was given. Plaintiff's claim is not like a title defect, a stock conversion, or an accounting error, for example, where the negligent act and injury happen simultaneously. The Sliver Claim accrued in 2006, and, therefore, when Plaintiff sued in 2008, the claim was timely.
Proctor v. Sullivan and Schmid, 788 A.2d 132 (Del. 2001) (TABLE).
See e.g., N. Del. Aquatic Facilities, Inc., 2007 WL 4576347.
See e.g., Mastellone v. Argo Oil Corp., 82 A.2d 132 (Del. 2001) (TABLE).
See e.g., Isaacson, Stopler Co., 330 A.2d 130.
3. Causation
The Sliver Claim really concerns Defendants' joint and several liability with Vandemark Lynch and the architects. The title problem may not be solely responsible for Plaintiff's alleged damages, but "Delaware's common law has traditionally recognized that there may be more than one proximate cause of an injury." When there are "multiple defendants, the liability of a particular defendant is not dependent upon a showing that the defendant's conduct was the exclusive cause of the plaintiff's injuries."
Money v. Manville Corp. Asbestos Disease Comp. Trust Fund, 596 A.2d 1372, 1375 (Del. 1991) citing Culver v. Bennett, 588 A.2d 1094, 1097 (Del. 1991).
Money, 596 A.2d at 1375.
Even though the surveys and blueprints were not corrected until May 2006, the buyer's attorney, Hershman, testified that settlement was postponed, in part, because of the title defect. The jury may conclude that the surveys and blueprints primaril y, even overwhelmingly, caused Plaintiff's alleged damages. In fact, Plaintiff has sued the architect for its defective design and it settled with Vandemark Lynch, but that does not prevent Plaintiff from seeking damages caused by the postponed settlement. Hershman's affidavit is evidence that settlement on one unit was postponed several days because of the title defect.
Defendants present a stronger defense that Forsten's advice was not the proximate cause of the BMHA's suit. There were several reasons that BMHA sued Plaintiff. Plaintiff asserts, incorrectly, that "[t]he affidavit of Eugenia DiSabatino, a board member of the BMHA at the time the BMHA lawsuit was filed, completely nullifies this defense." In fact, DiSabatino was merely a resident of Bancroft Mills when the BMHA sued. She was not a board member until years later, after the suit settled. Nevertheless, BMHA's president at the time of the suit, testified that parking was one of the reasons the BMHA sued Plaintiff.
Moreover, as Defendants put it, "despite alleging that Forsten's advice regarding the parking rights was wrong, plaintiff never took a contrary position in the subsequent litigation." Horty III testified that, before proceeding, Plaintiff and Morris Nichols reviewed all of the individual deeds to the condominium units. At that point, if not earlier, Forsten's liability for Plaintiff's legal bills was eclipsed. The same reasoning applies to the property Plaintiff ceded as part of the settlement, with the additional reason that Plaintiff wants Forsten to pay for property it never had rights to.
If, as it appears Defendants are relying on the fact that MNAT, not Forsten or an attorney of his choosing, defended the BMHA suit, that will not do. Defendant must present expert opinion that the Parking Advice was not negligent, or, if it were it was not a proximate cause of Plaintiff's damages. Of course, Plaintiff must first show more than that it got sued after it followed Forsten's advice, and later settled. As of now, more is necessary.
IV.
For the foregoing reasons, Plaintiff's motion to supplement its expert report GRANTED. Defendants also have leave to supplement their expert's report accordingly. Defendants' motion for summary judgment is DENIED.
IT IS SO ORDERED.