Opinion
CV-19-761
10-05-2022
ROBERT S. YOUNG APPELLANT v. ROXANNE D. BLAKE; ROXANNE D. BLAKE, P.A.; GEORGE H. NIBLOCK; GEORGE H. NIBLOCK, LTD.; AND THE NIBLOCK FIRM, PLC APPELLEES
The Nixon Law Firm, by: David G. Nixon, for appellant. Wright, Lindsey & Jennings LLP, by: Scott A. Irby, Gary D. Marts, Jr., and Eric Berger, for appellees.
APPEAL FROM THE WASHINGTON COUNTY CIRCUIT COURT [NO. 72CV-16-1779] HONORABLE DOUG MARTIN, JUDGE.
The Nixon Law Firm, by: David G. Nixon, for appellant.
Wright, Lindsey & Jennings LLP, by: Scott A. Irby, Gary D. Marts, Jr., and Eric Berger, for appellees.
BART F. VIRDEN, Judge
Robert Young brings this appeal from the circuit court's judgment dismissing his legal malpractice claim against attorneys Roxanne Blake and George Niblock and their law firm (collectively, the Niblock Firm). Young claimed that the Niblock Firm was negligent in their representation of Young in a legal-malpractice action against Young's previous attorneys in a trust matter. The Niblock Firm cross-appeals, arguing that contributory negligence bars Young's claims. We affirm in part and reverse and remand in part on direct appeal and affirm on cross-appeal.
I. Facts
The well-worn metaphor regarding peeling the layers of an onion is particularly apropos when reviewing a legal-malpractice case. In this case, even more so as we are dealing with a malpractice case within a malpractice case within a trust and guardianship case. The case underlying the first malpractice claims involved a trust established by Young's mother, Helen Young. In 2004, Young filed a petition seeking a declaratory judgment that his mother was mentally incapacitated, that an amendment to the trust named him as the successor trustee, and that an amendment to the trust allegedly procured by his brothers, also beneficiaries of the trust, was invalid because of undue influence. The brothers counterclaimed, seeking to set aside certain amendments to the trust procured by Young and for an accounting. Young was alleged to have obtained money from the trust by undue influence. He was also alleged to have improperly received approximately $26,000 from his mother's social security benefits.
Following an October 2005 hearing in the trust case, attorney Lauren Adams was appointed as guardian of Helen Young. Adams was directed to perform an accounting and to report her recommendations to the trust court. The accounting was to cover the period from January 1, 2000, through December 31, 2003, and concerned expenditures from the trust and the use of social security benefits while Young was the designated payee for his mother's benefits. Adams filed her report under seal in February 2006.
In February 2007, Young's brothers filed a motion for judgment in the trust case seeking to recover their share of the misappropriated money from Young based on Adams's report. Young was proceeding pro se time and did not respond to the motion.
In July 2007, Young hired attorney Mark Broaddus of the Chicago law firm of Chuhak and Tecson (collectively, Broaddus) to represent him in the trust litigation. Broaddus did not seek admission pro hac vice until September 24, 2007. From the time they were hired, that was only pleading Broaddus filed in the case. On July 31, 2007, the trust court set a hearing on the brothers' motion for judgment for September 26, 2007.
The hearing on the motion for judgment was held as scheduled on September 26. Both Young and Broaddus were participating by telephone. After an oral request for a continuance was denied, neither Young nor Broaddus participated any further in the hearing. Adams was the only witness at the hearing, and testified without challenge or cross-examination. She testified about her report, information from the Social Security Administration, and the trust court's findings from 2005. Judgment was entered against Young in the approximate amount of $201,000, together with an award of approximately $65,000 in attorney's fees.
The judgment in the trust case was appealed to this court. On December 10, 2008, we affirmed the judgment in an unpublished opinion. Young v. Young, CA08-212, 2008 WL 5176763 (Ark. App. Dec. 10, 2008) (Young I).
Sometime prior to July 2008, Young hired Roxanne Blake, George Niblock, and the Niblock Firm to pursue a legal-malpractice claim against Broaddus. The Niblock Firm filed a complaint against Broaddus in the United States District Court for the Western District of Arkansas, on September 23, 2010, three days before the three-year anniversary of the trial in the trust case. However, due to failing to timely disclose expert witnesses according to the district court's scheduling order, the Niblock Firm filed a nonsuit and a dismissal was granted by order of the district court on March 7, 2012.
The Niblock Firm filed the reply brief for Young in July 2008 in Young I.
On March 4, 2013, the Niblock Firm refiled the legal-malpractice complaint against Broaddus in the Washington County Circuit Court. The state-court action was removed to federal court, where the Niblock Firm again failed to meet the expert-witness disclosure deadline. The district court, on motion of Broaddus, dismissed Young's complaint with prejudice. Young v. Broaddus, 2013 WL 5525659 (W.D. Ark. Oct. 3, 2013) (Young II). The Niblock Firm filed an appeal on Young's behalf, and the Eighth Circuit Court of Appeals affirmed. Young v. Broaddus, 555 Fed.Appx. 638 (8th Cir. 2014) (Young III).
On August 24, 2016, Young filed the present legal malpractice case against Blake, George Niblock, and the Niblock Firm. The complaint alleged that the Niblock Firm was negligent, and that but for that negligence, Young would have prevailed in the underlying legal malpractice case against Broaddus and obtained compensation. The complaint further asserted a claim for failure to properly supervise Blake, an associate with the Niblock Firm. The complaint sought unspecified compensatory damages.
The Niblock Firm answered, denying the material allegations and asserting that Young's own negligence caused his damages and that comparative fault barred recovery. Thus, the table was set for Young's lawsuit against the Niblock Firm. He would have to prove that, but for the negligence of the Niblock Firm, Young would have prevailed in his claim against Broaddus and, but for Broaddus's malpractice, Young would have prevailed in the trust case. A case-within-a-case-within-a case.
On February 8, 2018, the Niblock Firm filed a motion in limine seeking to exclude certain opinion testimony from attorney Timothy Dudley, Young's expert witness on the standard of care. The motion argued that Dudley's testimony was irrelevant because the testimony concerned acts or omissions by Broaddus that occurred outside the relevant statute of limitations. In response, Young argued that Dudley's testimony was relevant and proper to show that Broaddus was negligent both in preparing for trial and at the trial in the underlying case.
The circuit court granted the motion in limine in part and denied it in part. The court excluded Dudley's testimony concerning Broaddus's failure to call witnesses at trial, failure to seek a continuance in advance of trial, and failure to conduct discovery because those acts and omissions occurred more than three years prior to the Niblock Firm filing Young's complaint against Broaddus. The court allowed Dudley to testify as to the failure of Broaddus to continue their participation at trial. In other words, because the Niblock Firm did not file the first malpractice case until September 23, 2010, the circuit court ruled that no evidence, testimonial or documentary, would be admissible if it related to anything that occurred before September 26, 2007. This ruling and determination permeates essentially all of Young's points on appeal.
The issues related to the standard of care and negligence were tried to a jury in October 2018. At a pre-trial hearing, the Niblock Firm had announced that it was admitting negligence and it would not be contested. The jury found both Young and Broaddus negligent in the trust matter. The jury apportioned 75% of the fault to Broaddus and 25% to Young for the period in which he represented himself in the trust matter. The jury was not asked to address any claims of negligence between Young and the Niblock Firm.
By agreement of the parties, the issues of proximate cause and damages were tried before the court in February 2019. The court issued its findings of fact and conclusions of law based on the evidence in both phases of the trial on April 3, 2019. In those findings and conclusions, the court found that Young failed to prove that the result in the underlying trust case would have been different absent negligence on the part of Broaddus. The court also found that Young failed to prove that he was damaged by Broaddus's negligence. The court further found that the trust court would have accepted Adams's report and accounting even if she had been cross-examined by Broaddus and that such cross-examination would not have improved the outcome for Young. The court also found that Young's case against the Niblock Firm "had not been proven." The court dismissed Young's complaint, as amended, with prejudice by judgment also entered on April 3. This appeal and cross-appeal followed.
II. Issues on Appeal
In his notice of appeal, Young designated a partial record on appeal. As required, his notice of appeal listed thirty-one separate points he intended to rely on. Those points can be grouped as follows: (1) the circuit court made several evidentiary errors because the court misapplied the law; (2) the court denied Young the opportunity for a full retrial of the underlying trust case; (3) the court erred in applying the law of proximate cause; (4) the court erred in granting the Niblock Firm's motion for directed verdict on Young's negligent supervision claim; and (5) certain of the court's findings and conclusions of law were clearly erroneous. Because we agree with the arguments summed up in points 1 and 2, we reverse and remand for a new trial on proximate causation and damages. We specifically hold that the circuit court erred and that the excluded evidence regarding the underlying trust case is not barred by the court's statute-of-limitations finding. We affirm the circuit court's ruling directing a verdict in favor of the Niblock Firm on Young's negligent supervision claim.
On cross-appeal, the Niblock Firm argues that common law contributory negligence applies to bar Young's claim because he was seeking only economic damages that did not fall within the ambit of the comparative-fault statute. As set out below, we affirm the lower court on this point.
III. Standard of Review
Our standard of review on appeal from a bench trial is whether the circuit court's findings were clearly erroneous or clearly against the preponderance of the evidence. James v. Mounts, 2022 Ark.App. 158, 644 S.W.3d 425. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court, having considered all the evidence, is left with a firm conviction that an error has been committed. Id.
Circuit courts have broad discretion and a court's ruling on the admissibility of evidence will not be reversed absent an abuse of that discretion. Elaine Petroleum Distrib., Inc. v. Snyder, 2022 Ark.App. 59, 640 S.W.3d 704. Neither will we reverse a circuit court's ruling on evidentiary matters absent a showing of prejudice. Id.
The question of the correct application and interpretation of an Arkansas statute is a question of law, which this court decides de novo. See Rose v. Harbor E., Inc., 2013 Ark. 496, 430 S.W.3d 773.
IV. Discussion
Typically, a legal malpractice claim involves a case within the case, because the legal malpractice plaintiff must establish how the attorney's negligence in the underlying litigation proximately caused the legal malpractice plaintiff's damages. See Mack v. Sutter, 366 Ark. 1, 5, 233 S.W.3d 140, 144 (2006); S. Farm Bureau Cas. Ins. Co. v. Daggett, 354 Ark. 112, 122, 118 S.W.3d 525, 530 (2003). As stated earlier, this appeal presents an additional level to this typical format, as the attorneys Young hired to prosecute the original malpractice case allegedly committed malpractice themselves. This legal malpractice claim therefore implicates a case (the underlying trust case) within a case (the trust malpractice matter) within a case (the legal malpractice matter that is now before us). See Howard v. Adams, 2009 Ark.App. 621, 332 S.W.3d 24 (Howard I); Smith v. McLaughlin, 769 S.E.2d 7 (Va. 2015); Dennis v. Northcutt, 923 So.2d 275 (Ala. 2005); 4 Ronald E. Mallen, Legal Malpractice § 37:1 (Westlaw Jan. 2022 ed.). The plaintiff must then show that the defendant attorney was negligent, that the prior attorney also was negligent, and finally that a better result would have been obtained in both underlying actions. See Dennis, supra; Mallen, Legal Malpractice § 37:1.
To prevail on a claim for legal malpractice, "a plaintiff must prove that the attorney's conduct fell below the generally accepted standard of practice and that this conduct proximately caused the plaintiff damages." Daggett, 354 Ark. at 122, 118 S.W.3d at 530. As explained more fully below, proximate cause and damages are the issues before us now. A jury found Broaddus to be negligent and the Niblock Firm admitted its negligence. Regarding proximate cause, the plaintiff must show that, but for the attorney's alleged negligence, "the result in the underlying action would have been different." Id. The parties in this case agreed for the circuit court to determine proximate cause and damages.
Young argues that the circuit court erred in making several of its evidentiary rulings because the court misapplied the law. We agree and reverse and remand Young's malpractice claim for further proceedings.
In its ruling limiting the testimony of Timothy Dudley, the circuit court relied on the three-year statute of limitations and prohibited Dudley from testifying as to events that occurred more than three years before the Niblock Firm filed Young's complaint against Mark Broaddus and Chuhak and Tecson. This was error because the relevant limitations period was the three-year period applicable to Young's claim against the Niblock Firm, not that against Broaddus.
Recall that this is a case-within-a-case-within-a case. Smith, supra; Dennis, supra. As such, Dudley's testimony was admissible not only to show that the Niblock Firm was negligent in its handling of the malpractice claim against Broaddus, but also as part of proving that both the case against Broaddus and the underlying trust case would have been different but for the negligence of the Niblock Firm. Dennis, supra. All of the proffered testimony from Dudley as to the standard of care and what should have been done in those few months prior to the September 2007 trust hearing would have been admissible and been before the court. Because the Niblock Firm admitted professional negligence, we can only interpret the circuit court's finding that Young's case against the Niblock Firm "had not been proven" to mean that Young had not proven either proximate causation or damages, or both.
One of Young's arguments was that the Niblock Firm should have filed the malpractice case against Broaddus much sooner than it did and that the Niblock Firm is now using its own failures and omissions to shield it from liability. The Niblock Firm does not address this dual use of the evidence; instead, it sought a blanket ruling that any acts or omissions occurring prior to the date of the September 2007 trust hearing were inadmissible for all purposes.
Even though we are reversing and remanding for further proceedings, we must still address Young's argument concerning the circuit court's grant of a directed verdict on his claim of negligent supervision against George Niblick. That claim is not affected by the circuit court's ruling on the statute of limitations. The court granted a directed verdict on the ground that the claim for negligent supervision was a legal-malpractice claim that required expert testimony and Young failed to offer such proof. Young argues that the claim is one of ordinary negligence for which no expert testimony is required.
Although Arkansas courts have not specifically addressed the issue, other courts have required expert testimony to establish a negligent supervision claim against a supervising attorney. McLister v. Epstein & Lawrence, P.C., 934 P.2d 844 (Colo.App. 1996). There, the court affirmed a summary judgment on a malpractice claim against a law firm partner based on the partner's alleged negligent supervision of an associate. The court held that the plaintiff's failure to present expert testimony on the issue of a lawyer's duty of supervision of associates was a valid basis for summary judgment. The court rejected the argument that a lawyer's alleged failure to supervise was so "clear and palpable" that expert testimony was not required as to the standard of care for supervising attorneys. 934 P.2d at 847-48. The court stated that the jury was required to evaluate the partner's supervision in comparison with the standard applicable generally to supervising attorneys and that expert testimony was necessary to allow the jury to determine whether the partner's conduct deviated from that standard. Id.
In the absence of such expert testimony, a directed verdict in favor of the defendant is proper. Howard v. Adams, 2012 Ark.App. 562, at 10, 424 S.W.3d 337, 345 (Howard II). The only exception is where the trial court determines that expert testimony is not necessary because the case falls within the common-knowledge exception. Barnes v. Everett, 351 Ark. 479, 95 S.W.3d 740 (2003); Howard II, supra. Here, the court ruled that this was a case requiring expert testimony. Young has not shown that the circuit court erred on this claim.
That brings us to the Niblock Firm's cross-appeal where it argues that Young's claims are barred by Young's contributory negligence. According to the Niblock Firm, our comparative fault statute, Ark. Code Ann. § 16-64-122 (Repl. 2005), does not apply because Young is seeking damages for claims that do not fall within the ambit of section 16-64-122(a). See Little Rock Elec. Contractors, Inc. v. Okonite Co., 294 Ark. 399, 744 S.W.2d 381 (1988). In other words, the economic loss doctrine applies because Young is only seeking economic damages for legal malpractice, and not damages for personal injuries, wrongful death, or property damage; contributory negligence still applies and bars Young's claims. In response, Young argues that contributory negligence no longer survives as an affirmative defense and that the Niblock Firm did not properly raise the defense.
The Niblock Firm first brought the issue to the circuit court's attention in a motion for summary judgment. The court denied the motion by order filed just a few days prior to the bench trial in this case. It was again raised as part of the Niblock Firm's motion for directed verdict when Young rested in the damages phase of the bench trial. The circuit court denied the motion.
We affirm on this point because it is an open question in Arkansas whether the economic loss doctrine even applies in negligence cases. See Bayer CropScience LP v. Schafer, 2011 Ark. 518, at 15, 385 S.W.3d 822, 832-33. Any such change in the law should come from the supreme court in the first instance.
Affirmed in part and reversed and remanded in part on direct appeal; affirmed on cross-appeal.
Klappenbach and Whiteaker, JJ., agree.