Legal Malpractice Action Connected with Wrongful Foreclosure on East Baton Rouge Parish Property

An attorney owes a fiduciary duty to his client. This means that, in keeping with the special relationship of trust between them, the attorney must put his client’s interests ahead of his own and avoid harm to his client to the best of his ability. At its most basic level, the duty requires the attorney to avoid errors that other attorneys would reasonably avoid in the same situation. If an attorney fails to uphold this duty, his client may have an action for legal malpractice. Under Louisiana law, to establish a case for legal malpractice, a plaintiff must prove the following three elements: (1) that an attorney-client relationship existed; (2) that the attorney was guilty of negligence in his handling of the client’s case; and (3) that the attorney’s misconduct caused the client loss, damage, or injury.

Proving that an attorney-client relationship exists typically requires demonstrating that the client had engaged the attorney to represent him in some matter. This is often accomplished with a copy of the attorney’s engagement letter, but this is not required. Nor is the exchange of a retainer or other payment necessary to prove the relationship. Proving an attorney’s negligence requires establishing the standard of care for the legal services in question and demonstrating how the attorney’s conduct deviated from this standard. Usually, this requires the input of an expert witness who can review the attorney’s work and offer an option as to how it fell short of generally accepted practices. Finally, the client must be able to point to some tangible and quantifiable negative consequence of the attorney’s negligence. If a plaintiff is unable to prove any one of these elements, his claim will be defeated. Additionally, even if a plaintiff can prove negligence, he can have no greater recovery against the attorney than would have been available in the underlying claim. Costello v. Hardy. This limitation served as the basis of the appeal in the case of Wharton v. Bell.

In February of 2006, Kirk Wharton hired an attorney (hereafter referred to as “the attorney”)after the mortgage-holder on Wharton’s house in East Baton Rouge Parish filed a petition to foreclose on the property. The property was eventually sold by judicial sale to Mortgage Electronic Registration Service (MERS) on September 20, 2006, over Wharton’s objection. Due to a faulty assignment of the morgtage note and other irregularities in the transaction by MERS, Wharton, represented by the attorney, successfully had the sale set aside by the court in the foreclosure proceeding and settled with MERS. Yet, shortly thereafter, Wharton obtained other counsel and filed a malpractice action against the attorney, alleging that “had [the attorney] acted in a reasonably prudent and diligent manner and in accord with professional legal standards,” the judicial sale could have been avoided altogether. Wharton’s former attorney’s malpractice insurance carrier, Continental Casualty Company, filed a motion for summary judgment, contending that because of Wharton’s settlement and dismissal of his claims in the original foreclosure proceeding, he had suffered no damages and was therefore barred from pursuing the malpractice claim. After a hearing, the trial court granted Continental’s motion and dismissed all of Wharton’s claims. Wharton appealed.

The First Circuit reviewed the trial court’s conclusion that Wharton was unable to point to any damages given that the judicial sale was cancelled. Wharton countered that the sale cancellation was merely “mitigation of damages” and that the trial court erred in granting the summary judgment as a genuine issue of material fact remained as to the amount of damages he suffered. The court concluded,

“Wharton has produced at least some evidence of damage that he suffered because of the wrongful judicial sale which was not part of the settlement with MERS. Further, no fault has been allocated to any party, and no damages have been assessed to anyone. Wharton has produced factual support to create a genuine issue of material fact as to what, if any, damages were suffered due to the actions of [the attorney] and his law firm.”

For these reasons, the court concluded that the trial court erred in granting Continental’s motion for summary judgment. It reversed the trial court’s decision and remanded the case for further proceedings. While this does not mean that Mr. Wharton’s claims of legal malpractice were proven at this point in the litigation, it does mean that he raised enough issues of contention that his claims of improper representation were not dismissed in whole at this point. A trial on the merits of all the claims will occur later, upon which point it will be decided if his attorney committed legal malpractice.

The Wharton case serves to remind plaintiffs to choose their counsel carefully. Although the legal malpractice action exists to help a client who has been damaged by his attorney’s negligence recoup his losses, it is far better to retain competent counsel in the first place.