Hannah P. Sachs v. Downs Rachlin Martin PLLC and Caryn Waxman, Esq.
Hannah P. Sachs v. Downs Rachlin Martin PLLC and Caryn Waxman, Esq.
Opinion
¶ 1. After a bench trial, the trial court concluded that defendant-attorney's failure to adequately inform plaintiff Hannah Sachs of the risks of delay in filing a parentage action "negligently fell short of the standard of reasonably competent legal representation." Despite the court's conclusion that defendant breached her professional duty of care, the trial court determined that plaintiff failed to demonstrate direct causation or measurable damages as a result of defendant's negligent advice. On appeal, plaintiff challenges the court's legal conclusions and contends that the court's factual findings established both causation and damages. We agree, and so reverse.
¶ 2. Defendant's negligent advice occurred when plaintiff consulted her about filing parentage and child support actions in conjunction with plaintiff's pregnancy, which was the result of a brief relationship during the summer of 2010. When plaintiff informed the child's father of the pregnancy, he expressed his wish not to be involved with plaintiff and the child.
¶ 3. Three months before her daughter's birth, plaintiff visited the offices of Downs Rachlin Martin (DRM) and met with defendant. Plaintiff sought information regarding "establishing parentage, considerations of parental rights and responsibilities, and the determination of child support." Defendant advised against filing a paternity action immediately after the child's birth. Instead, she recommended waiting at least a year. According to defendant, delayed filing of a parentage action when the father had had no contact with the child could lessen any risk of the father seeking primary or joint physical and legal responsibility or a substantial amount of parent-child contact. Further, she advised, delay in filing would also limit his ability to use child custody as a negotiation tool to limit child support.
¶ 4. More significant in this case, defendant assured plaintiff that she would receive child support retroactive to the date of her child's birth. The court found defendant "did no specific research to support her opinion as to the retroactivity of child support," instead relying on her experience as a family law attorney. Based on defendant's advice, plaintiff was persuaded to wait a year from child's birth before she filed a legal claim. She also arranged to receive, as a loan, $500 per month from her mother and $500 per month from one of her mother's friends after the child was born, to help her support her daughter. Plaintiff expected to repay the loans from her mother and the friend once the child support obligation was determined.
¶ 5. Plaintiff's daughter was born on July 12, 2011.
¶ 6. In June 2012, following through on defendant's advice to wait one year, plaintiff again contacted defendant to commence parentage and child support proceedings against the father. Four months later, in October 2012, defendant filed a parentage action.
¶ 7. At a case manager's conference in January 2013, the father stipulated that plaintiff was the sole physical and legal guardian of their daughter. The father agreed to contact his daughter only at plaintiff's discretion. Plaintiff was represented at the case manager's conference by a colleague of defendant, an associate attorney at DRM.
¶ 8. Either on the same day of the case manager's conference or some date closely following the conference, the associate attorney also discussed child support with plaintiff. During this discussion, the associate informed plaintiff that any child support award would be retroactive to the date the parentage action was filed, not the date of birth. Plaintiff protested that she had received different advice from defendant. The associate later followed up with plaintiff and confirmed that defendant still believed that a child support award would be retroactive to birth. Defendant reiterated this belief in a March 15, 2013 email to plaintiff, where she indicated that she was waiting for the court to approve the parentage and parental rights stipulation and stated that the order should be "finalized before we make any issue of child support."
¶ 9. Subsequently, several phone conversations took place in March 2013 between plaintiff and the father, and they agreed to meet at a playground in April 2013. During the conversation, plaintiff said that she needed $2000 per month for childcare, and the father approved of the amount, but there was no discussion of retroactivity to the child's date of birth. Either in this conversation or in a later one, the father explained that if plaintiff maintained an amicable relationship with his family, plaintiff might even receive financial assistance above and beyond the assistance required for child support, but he warned that contentious litigation would turn his mother "into a mad dog."
¶ 10. Negotiations between defendant and the father's attorney revealed that the father would not agree to pay $2000 per month as plaintiff anticipated. Moreover, even though the parties ultimately agreed on $1875 per month for child support dating from the child support order, the father's attorney disagreed that the father should owe any payment in arrears, either from the date of the parentage action or the child's birth.
¶ 11. Given the father's attorney's stance, defendant finally researched the law governing child support arrears to confirm her position. 1 At this point, defendant discovered that she had provided incorrect advice to plaintiff regarding retroactive child support. Instead, in a letter to plaintiff acknowledging her error, defendant explained that no definitive law authorized arrears back to a child's birth and the date of retroactivity was generally at the trial court's discretion. In practice, moreover, "courts use the date of filing as opposed to the date of birth." After receiving this letter, plaintiff told her mother's friend, "This is devastating news .... I can hardly see straight [sic] I'm so angry and upset."
¶ 12. Subsequently, in a letter to the father's attorney, defendant acknowledged that her research revealed that she had been mistaken about the date of retroactivity. In the same letter, defendant also wrote: "Without a doubt, had the rules on retroactivity of support been more clear, [plaintiff] would have filed a parentage action as soon as [her daughter] was born."
¶ 13. After further negotiations, the parties finally reached a stipulated child support agreement, which was approved as a child support order on June 28, 2013. The agreement required the father to pay $1875 monthly to plaintiff beginning on July 1, 2013 and one lump sum payment for arrears. The arrears went back only so far as the filing of parentage action-$1625 was for child support, and $250 was for medical care. The agreement considered the father's gift income from family members, although this income was unpredictable and unreliable. Two worksheets computing calculations based on the Vermont Child Support Guidelines were included in the agreement. The first worksheet considered the father's trust income in child support calculation. In that scenario, the guideline child support would be $1060 per month. The second worksheet considered trust income and gift income in its calculation. There, the guideline child support would be $1562 per month.
¶ 14. After using the lump sum of arrears to partially repay the loans made by her mother and her mother's friend, plaintiff still owes $15,000 on the loans they made to support plaintiff and her daughter and to pay plaintiff's legal fees.
¶ 15. Plaintiff filed legal malpractice and breach of contract claims against defendant in the Vermont Superior Court, Windsor Unit, Civil Division. Following a bench trial, the court concluded that "by failing to adequately give Plaintiff an explanation of the risk that, by following [defendant's] recommended strategy of delay, Plaintiff quite conceivably might be unable to establish retroactive child support, [defendant] negligently fell short of the standard of reasonably competent legal representation." However, the court determined that plaintiff failed to prove the negligent representation was a "cause-in-fact" of plaintiff's injury and that the evidence was "equivocal" as to whether plaintiff would have decided to file immediately had she been aware of the risk. It also found insufficient evidence for nonspeculative monetary damages.
¶ 16. On appeal, plaintiff claims that defendant provided negligent advice, that plaintiff relied on it to her detriment, and that she suffered nonspeculative damages. Defendant claims that even if she breached her duty of care, plaintiff has not shown any causal connection between the alleged negligence and her injury.
¶ 17. To establish legal malpractice, a plaintiff must prove that (1) the attorney owed a professional duty of care to the client; (2) the attorney breached the duty; (3) the attorney's act was a proximate cause of the client's injury; (4) and
that the client suffered damages as a result of the injury. See
Brown v. Kelly
,
I. Causation
¶ 18. The trial court concluded that plaintiff failed to prove causation because she did not demonstrate that she would have filed immediately if defendant had correctly informed her of the financial risk in delayed filing. We disagree. Based on factual findings made by the trial court, we conclude that plaintiff met her burden to prove that, but for defendant's negligent advice, she would not have delayed filing. 2
¶ 19. In Vermont, to demonstrate causation for a legal malpractice claim, a plaintiff must show that the attorney's "negligence was the proximate cause of the plaintiff's injury."
Estate ofFleming v. Nicholson
,
¶ 20. Generally, to establish cause-in-fact a plaintiff should rely on expert testimony; however, in cases "[w]here a professional's lack of care is so apparent that only common knowledge and experience are needed to comprehend it, expert testimony is not required to assist the trier of fact in finding the elements of negligence."
Estate of Fleming
,
¶ 21. The trial court made the following dispositive findings. First, the court found that, "based on consideration of [defendant's] advice, [plaintiff] decided that she would delay filing an action for parentage." Similarly, the court found that plaintiff signed a retainer agreement with defendant in the fall of 2011, and, again relying on defendant's advice, waited until 2012 before authorizing defendant to file the parentage action. Anticipating this year without child support payments, plaintiff made arrangements to support her daughter with loans from her mother and her mother's friend; according to the trial court, these loans were provided with the understanding that the money would be repaid once the child support obligation was determined. All of these findings established a clear causal link between the delayed filing and defendant's advice and, further, showed that plaintiff expected the child support to be retroactive because of defendant's advice.
¶ 22. In addition to the steps plaintiff took after relying on defendant's advice, defendant's own admission demonstrates that plaintiff would have filed earlier if she had been properly informed of the law. In a letter to the father's attorney, defendant acknowledged that "[w]ithout a doubt, had the rules on retroactivity of support been more clear, [plaintiff] would have filed a parentage action as soon as [her daughter] was born." Although defendant sent the letter during negotiations, the letter does not provide any reason to suggest that defendant's admission was merely a negotiating tactic. In the letter, defendant admitted her error and requested sympathy for plaintiff's financial burden, specifically mentioning the loans plaintiff accrued during the fifteen months prior to the parentage action. Defendant's understanding of the plaintiff's position on child support further supports the conclusion that plaintiff would not have delayed filing but for defendant's negligent advice.
¶ 23. Likewise, although child custody and parental rights concerned plaintiff, the court's findings demonstrate that she was equally concerned about monetary support. When defendant recommended delaying the parentage action, the court found that plaintiff specifically inquired about the implication that the delay would have on the child support determination. Plaintiff also testified that she was unable to financially support both herself and her child. That is why she sought assistance from her mother and her mother's friend until the father's child support arrangement was determined.
¶ 24. Finally, plaintiff's negative emotional reaction when she discovered defendant's incorrect advice was unequivocal. When defendant forwarded an email to plaintiff explaining the correct law regarding retroactivity, plaintiff found the news "devastating" and claimed, "I can hardly see straight [sic] I'm so angry and upset." In addition, plaintiff testified that she was "very upset" and "had some panic" when defendant's associate attorney told her that child support would be retroactive only to the date that plaintiff initiated action. Although not conclusive, coupled with the other findings described above, this evidence strongly supports plaintiff's claim that, but for defendant's negligent advice, plaintiff would not have delayed the parentage filing.
¶ 25. Our case law demonstrates that the court's factual findings easily establish, by a preponderance of the evidence, that defendant's negligent advice was the cause-in-fact of plaintiff's injury. For example, in
Estate of Fleming
, the plaintiff alleged damages resulting from the attorney's failure to disclose a subdivision violation found during a title search.
¶ 26. Defendant's arguments to the contrary are based on an alternative theory of causation and are not persuasive. She suggests that plaintiff would have delayed filing even if she had been given the correct advice. For example, defendant speculates that the father would have become belligerent if the parentage action had been filed immediately and claims that, because defendant's advice avoided the possibility of a contentious custody battle, plaintiff would have delayed filing. This argument is not supported by the findings, which indicate that, when plaintiff communicated her pregnancy to the father, he expressed his desire to avoid interactions with both plaintiff and their child. The only indication of contentious behavior was the father's tangential statement that litigation could turn his mother into a "mad dog"-a statement he made after the parentage action was filed and child custody had been settled. These findings show indifference, rather than bellicosity. Similarly, the trial court's conclusion that plaintiff's primary goal was custody of her child is not supported by the findings; at most, the findings demonstrate equal goals of custody and child support. Finally, defendant claims, and the court found, that her letter to the father's attorney reflected a negotiating strategy, "not an admission directly establishing that [defendant] would have deviated from her advice to delay litigation." This may have been defendant's hidden intent, but the language of the letter plainly states that plaintiff would have filed had she been given correct advice. And this conclusion is sufficiently supported by the other factual findings described above.
¶ 27. More importantly, the alternate theory of causation advanced by defendant and apparently adopted by the trial court is not the standard for determining causation-in-fact. See
Knott
,
II. Damages
¶ 28. In addition to concluding that plaintiff did not establish causation, the trial court determined that plaintiff failed to demonstrate any nonspeculative monetary damages. Plaintiff argues that the court erred in this conclusion and claims on appeal that she is entitled to the attorney's fees she expended in pursuing this malpractice claim. We conclude plaintiff proved measurable damages caused by defendant's negligent advice and, as a result, we remand for the court to calculate the amount of damages. We decline to award attorney's fees.
A. Direct Damages
¶ 29. In a legal malpractice action, all damages proximately caused by an attorney's negligence constitute the measure of damages.
4
Bloomer v. Gibson
,
¶ 30. Here, because Vermont law requires that some child support be paid by the noncustodial parent, see 15 V.S.A. § 656(b), plaintiff would have been guaranteed some measure of child support from the date of the parentage action. Thus, as a direct result of defendant's negligent advice to delay filing, plaintiff did not receive fifteen months of child support, from July 2011 to October 2012, nor could she retroactively recover the child support. After applying the appropriate legal standard, it is plain that plaintiff is entitled to damages for the fifteen months without child support.
¶ 31. Despite this clear causal link between defendant's negligence and the damages suffered, the trial court relied on two faulty assumptions when it found that the alleged damages were speculative. First, the court stated that plaintiff submitted no evidence to support an award of $1875 per month from the date of her child's birth;
that is, the evidence did not establish that the monthly payment for the first fifteen months would have been the same child support amount that the father and plaintiff stipulated to after negotiations between their attorneys. Instead, the court noted that the father submitted two financial affidavits that resulted in two different child support calculations under Vermont's child support guidelines. One of the affidavits considered the father's family gift income, while the other did not. Either with the gift income or without the income, the father's child support obligation calculated from the affidavits would have been less than $1875 per month. Because these amounts were lower than the stipulated amount and because the father could have contested the inclusion of gift income, the court concluded that the father's income could not be determined in the absence of the stipulation and that, as a result, any award was speculative.
¶ 32. We are not persuaded by this analysis because it ignores the causal link between negligence and damages. The potential of a lesser or different amount than the $1875 monthly payment does not mean that the damages did not occur or that they were speculative. R. Mallen,
supra
, § 21:7 (noting whether damages are speculative "focuses on the fact of damages, rather than the amount"). Nor was plaintiff required to prove that the child support payments for the first fifteen months would have been equal to $1875 per month. All that is required is that the damages be caused by the attorney's negligent conduct.
Gibson
,
¶ 33. Similarly, the trial court's second assumption is flawed. The trial court determined that the damages were speculative because-summed up over the entire length of the child support obligation-the $1875 monthly payment effectively made up for the fifteen months of missing child support. In making this argument, the court again relied on the two hypothetical child support awards calculated from the father's financial affidavits. In comparison to those amounts, the court concluded that, based on the $1875 monthly payment, plaintiff would receive more total child support over the length of the child support obligation than she would have received based on either amount calculated from the father's financial affidavits, even if the child support payments would have begun at the child's birth.
¶ 34. Like the trial court's other analysis, this claim errs because it focuses on the subsequent stipulation, not on the harm directly caused by defendant.
Gibson
,
¶ 35. Although we conclude that plaintiff is legally entitled to those damages caused by defendant's negligent advice, we remand for the court to calculate the damages. See
Vincent v.DeVries
,
B. Attorney's Fees
¶ 36. In addition to damages, plaintiff seeks attorney's fees she spent pursuing her malpractice action against defendant. We conclude that the American Rule prevails in this case, and, therefore, each party bears its own attorney's fees.
¶ 37. In
Southwick v. City of Rutland
, we stated that "[w]hen addressing a question of attorney's fees, Vermont adheres to what is called the American Rule: parties must bear their own [attorney's] fees absent a statutory or contractual exception."
¶ 38. In this case, plaintiff appears to raise two different theories for recovering the fees spent in prosecuting her malpractice claim against defendant: direct damages and consequential damages. 5 Because plaintiff did not incur the fees while prosecuting her rights or interests against a third party, neither theory justifies a departure from the American Rule.
¶ 39. Under the direct damage theory of attorney's fees, damages may be recoverable if the client hires another lawyer to correct the consequence of the former
lawyer's negligence. R. Mallen,
supra
, § 21:12; see
Britly Corp.
,
¶ 40. We have never expressly categorized attorney's fees as recoverable direct damages. In
Gibson
, while considering whether the fees paid to the negligent attorney could be awarded as direct damages, we distinguished between two categories of attorney's fees: those incurred "to correct the adverse consequences of [the attorney's] malpractice," which "might be recoverable because they were caused by the wrongful act or omission," and those fees incurred when the attorney took some action that provided plaintiff with some value.
¶ 41. Plaintiff seizes on the first category of attorney's fees described in Gibson and argues that she undertook this suit and subsequent appeal solely to correct the adverse consequences of defendant's malpractice. Id. ¶ 27. But plaintiff's argument ignores a key factual distinction: Gibson involved the fees paid to the malpracticing attorney, not the subsequent attorney, as in this case.
¶ 42. In articulating
Gibson
categories, moreover, we relied on
Ramp v. St. Paul Fire & Marine Insurance Co.
, a Louisiana Supreme Court case stating that "attorney's fees incurred by the plaintiffs in eliminating or in mitigating the damage caused them by the negligence of the defendants are their total damage."
¶ 43. Plainly, the factual circumstances in
Ramp
are not analogous to this case.
Ramp
did not involve a suit to recover fees paid to litigate the malpractice; instead, the fees recovered were those used to prosecute the clients' succession rights against third parties. Thus,
Ramp
stands for the principle that attorney's fees incurred to mitigate the damage caused by negligence may be recoverable if the malpractice causes the client to pursue his or her rights against a third party.
Id.
at 246 ; see also
Bourne v. Lajoie
,
¶ 44. Plaintiff's claim that the fees paid to litigate this case should be recoverable
under a theory of consequential damages fails for the same reason. "Consequential damages are compensation for those additional injuries that are a proximate result of the attorney's negligence or otherwise wrongful conduct, which do not flow directly from or concern the objective of the retention." R. Mallen,
supra
, § 21:1; see also
Britly Corp.
,
¶ 45. In the context of consequential damages, however, "[t]he prevailing rule is that a plaintiff cannot recover attorneys' fees incurred in prosecuting the malpractice action" unless the plaintiff demonstrates some sort of bad faith on the part of the negligent attorney. R. Mallen,
supra
, § 21:24;
Banker v. Nighswander, Martin & Mitchell
,
Reversed and remanded for calculation of damages .
¶ 46. CARROLL, J., dissenting.
I agree with the majority that the trial court did not use the correct legal standard for causation. However, the court applied a standard more deferential to plaintiff and the factual findings made by the trial court support the conclusion that plaintiff failed to prove by a preponderance of the evidence that she would have filed her parentage complaint sooner if she had been given accurate advice concerning child support. For this reason, I respectfully dissent.
¶ 47. Plaintiff was required to prove that defendant's negligence was the proximate cause of her injuries.
Brown v. Kelly
,
¶ 48. The majority highlights that plaintiff relied on defendant's advice in making decisions about her case.
Ante
, ¶ 21. I wholeheartedly agree. But the advice consisted of more than counseling about child support. The court relied on defendant's testimony in reaching the conclusion that plaintiff was motivated against litigating the issues for fear it would cause a rift between her and the child's paternal grandparents who were in a position to help support the child financially. The court's findings support a conclusion that plaintiff was not only concerned about child support, but was equally, if not more, concerned about custody and controlling the child's contact with her father. The court reasoned that "[defendant's] advice to plaintiff with respect to the timing of litigation was entirely appropriate to her client's primary objectives of retaining as much control as possible over potentially volatile issues in determining parental rights and responsibilities." At the trial, both plaintiff and defendant testified to plaintiff's motivations in delaying her parentage filing. Their testimony was inconsistent. However, on this pivotal issue, the trial court was in the best position to make a credibility determination, which, by inference, resulted in the court giving more weight to defendant's testimony in reaching its conclusions. See
Benson v. Hodgdon
,
¶ 49. Looking beyond the trial court's specific factual findings, there is additional evidence in the record that supports a conclusion that plaintiff was motivated by more than the timing of child support when she made the decision to delay filing her parentage case. When defendant informed plaintiff that there were important strategic advantages in remaining out of court for at least a year and that threats to contest custody are sometimes made as negotiating ploys to limit child support, plaintiff felt that this was a "terrifying prospect." Plaintiff also testified that a delay in filing would allow her to "enjoy the time with [her] daughter and bond with her and have that time together without contentious litigation at the forefront of it all." She described this as a "win/win" situation. The record supports a conclusion that plaintiff failed to demonstrate that "but for" the erroneous advice concerning child support she would have filed her parentage complaint sooner.
¶ 50. The majority concludes that the court's findings "lead inescapably" to the conclusion that plaintiff established causation by a preponderance of the evidence.
Ante
, ¶ 18 n.2. It cites
Collins v. Thomas
for the proposition that causation "may be decided as a matter of law where the proof is so clear that reasonable minds cannot draw different conclusions or where all reasonable minds would construe the facts and circumstances one way."
¶ 51. In contrast, the trial court here was required to reach a conclusion by weighing the findings-findings with which neither the majority nor the parties take issue. But the majority construes the facts and circumstances differently than the trial court and effectively assigns more weight to plaintiff's testimony in coming to its decision. Granted, our review in this case is de novo, but we must still uphold the trial court's conclusions that address mixed questions of law and fact so long as the court applied the correct legal standard and the conclusions are supported by the findings. Cf.
Mahoney v. Tara, LLC
,
¶ 52. In summary, the trial court's findings and the record as a whole support the conclusion that plaintiff failed to demonstrate that "but for" defendant's negligence she would have filed her parentage complaint sooner. The trial court's application of a standard more deferential to plaintiff does not change, but supports, this result.
¶ 53. I am hereby authorized to state that Judge Harris joins this dissent.
Defendant originally billed plaintiff for this research; however, in response to complaints from plaintiff's mother's friend-who was funding plaintiff's legal fees along with the monthly $500 loan-defendant removed the fee for research from the bill.
To be clear, we do not hold that the trial court's factual findings were clearly erroneous. See
Adams v. Adams
,
In the specialized field of legal malpractice, this Court has "emphasized that an element of proximate cause in lawyer malpractice actions is 'cause-in-fact.' "
Roberts v. Chimileski
,
We note that the plaintiff seeks purely monetary damages as part of a tort action and that "[p]urely economic losses may be recoverable in professional services cases because the parties have a special relationship, which creates a duty of care independent of contract obligations."
EBWS, LLC v. Britly Corp.
,
We have previously noted the distinction between direct and consequential damages in the context of contract law. See, e.g.,
Britly Corp.
,
Reference
- Full Case Name
- Hannah P. SACHS v. DOWNS RACHLIN MARTIN PLLC and Caryn Waxman, Esq.
- Cited By
- 13 cases
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- Published