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Holly Labair and Robert Labair v. Steve Carey

December 27, 2012

HOLLY LABAIR AND ROBERT LABAIR, INDIVIDUALLY AND ON BEHALF OF DAWSON R. LABAIR, DECEASED MINOR CHILD, PLAINTIFFS AND APPELLANTS,
v.
STEVE CAREY, ESQ., AND CAREY LAW FIRM, AND JANE DOES 1-4, DEFENDANTS AND APPELLEES.



APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-10-254 Honorable John W. Larson, Presiding Judge

The opinion of the court was delivered by: Justice Patricia O. Cotter

Oral Argument: October 22, 2012

Submitted: October 23, 2012

Decided: December 27, 2012

Filed:

Clerk

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Holly and Robert Labair (the Labairs) appeal from an order and judgment of the Montana Fourth Judicial District Court, Missoula County, granting summary judgment to Steve Carey and Carey Law Firm (collectively "Carey") and dismissing the Labairs' claims of legal malpractice. We reverse and remand.

ISSUES

¶2 The Labairs raised the following issue on appeal: whether a plaintiff alleging legal malpractice based on a missed statute of limitations in a medical malpractice case must present expert legal testimony establishing the likelihood of success of the underlying medical malpractice claims in order to establish a prima facie case and avoid summary judgment.

¶3 In advance of oral argument, the parties were asked to be prepared to discuss two additional issues: (1) whether this Court's extant legal malpractice jurisprudence is consistent with the clarifications to the causation analysis adopted in Busta v. Columbus Hosp., 276 Mont. 342, 916 P.2d 122 (1996); and (2) whether proof of the "suit within a suit" is an appropriate burden to be placed on the plaintiff in a legal malpractice action.

FACTUAL AND PROCEDURAL BACKGROUND

¶4 On October 3, 2003, the Labairs lost their newborn baby, Dawson Labair, after an early delivery by C-section on October 2, 2003. In January 2004, the Labairs spoke with Carey about a potential medical malpractice lawsuit against their Missoula obstetrician, Dr. Thomas Baumgartner. On January 27, 2004, they signed a retainer agreement with Carey. The retainer agreement provided that Carey would pursue their potential medical malpractice claim. Carey associated Helena attorney Curt Drake (Drake) as co-counsel to assist in obtaining medical records.

¶5 After agreeing to represent the Labairs, Carey and Drake collected medical records and consulted with experts in an effort to secure the necessary evidence and testimony to prove the medical malpractice claims. Carey hired Dr. Robert Carpenter to review the medical records and provide his expert opinion. Dr. Carpenter opined in his report that Dr. Baumgartner's actions "fell below the standard of care for a prudent practitioner of obstetrics in 2003." Dr. Carpenter further stated that "deficits in care proximately caused the ultimate outcome in this baby."

¶6 In April 2005, Carey and the Labairs met with treating specialist Dr. Lynn Montgomery. Dr. Montgomery indicated that he believed Dr. Baumgartner had committed malpractice, but he was unwilling to testify as an expert witness in the case because he practiced in the same community as Dr. Baumgartner. Carey also consulted with Dr. Marc Collin, Dr. Robert Roth, and Dr. David Neal Jackson. According to Carey, these three potential medical expert witnesses could not provide favorable opinions.

¶7 On September 14, 2006, Carey filed a complaint against Dr. Baumgartner and Community Medical Center, Inc. alleging negligence and negligent infliction of emotional distress. The complaint alleged that Dr. Baumgartner breached his duty of care to the Labairs by failing to perform an ultrasound for fetal evaluation in September 2003. The complaint further alleged that Dr. Baumgartner's actions directly and proximately caused damages to the Labairs and their newborn son.

¶8 Carey failed to file an application with the Montana Medical Legal Panel (MMLP) before filing a complaint with the District Court, as required under §§ 27-6-301 and -701, MCA. Further, he failed to file an MMLP application within the three-year statute of limitations applicable to medical malpractice claims. Section 27-2-205, MCA. Carey later admitted that an error was made when calculating the applicable statute of limitations. Unaware that Carey had missed the statute of limitations, the Labairs sent a letter to Carey on April 18, 2007, more than six months after the three-year statute of limitations had expired. In this letter, the Labairs stated that they believed Carey did not intend to pursue their claims so they were going to take their case elsewhere. When the District Court later dismissed the Labairs' medical malpractice case without prejudice on November 16, 2007, Carey was still the attorney of record. On May 19, 2008, the District Court dismissed with prejudice the Labairs' medical malpractice claims as time-barred by the statute of limitations.

¶9 On March 3, 2010, the Labairs filed a complaint for legal malpractice against Carey and Drake alleging negligence, negligence per se, negligent and intentional infliction of emotional distress, breach of contract, punitive damages, tortious breach of statutory duty, fraud, constructive fraud, and breach of fiduciary duties. The Labairs' new counsel also filed an untimely MMLP application in an attempt to build evidence of the viability of the underlying medical malpractice claims. The MMLP heard the claims and issued a decision. The District Court did not rule on the Labairs' motion to allow evidence of the MMLP's findings to be introduced at trial.

¶10 On July 29, 2011, the Labairs filed a motion for partial summary judgment on the issue of Carey and Drake's liability for legal malpractice. The Labairs contended that they were entitled to judgment as a matter of law because Carey admitted to missing the statute of limitations. The Labairs offered the opinion of their legal expert, Michael Alterowitz, who opined that missing the statute of limitations caused damages to the Labairs by causing the loss of their medical malpractice claims. Carey responded by arguing that the Labairs' claims must fail for lack of necessary expert testimony on causation and damages, both in the underlying medical malpractice case and the current legal malpractice action.

¶11 On August 19, 2011, Carey filed a motion for summary judgment. Carey admitted in his brief that his failure to file the MMLP application before the statute of limitations had run constituted a breach of the standard of care. However, he argued that his breach did not cause any injuries or damages to the Labairs. To support this view, Carey offered the affidavit of Douglas Buxbaum, an attorney with experience in handling professional and medical negligence cases. Mr. Buxbaum opined that Carey's failure to file the case properly prior to the expiration of the statute of limitations did not prejudice the Labairs because the underlying medical malpractice claims could not be established. Specifically, Buxbaum asserted that Carey was unable to develop the necessary expert testimony to prove the underlying medical malpractice claims.

¶12 The Labairs reached a settlement agreement with Drake on September 2, 2011. The District Court approved the settlement agreement on September 12, 2011, and filed it under seal. All of the Labairs' claims against Drake were dismissed with prejudice.

¶13 On October 3, 2011, the District Court held a hearing on the pending motions for summary judgment and each side was afforded the opportunity to argue their position. On November 21, 2011, the District Court entered its order denying the Labairs' motion for partial summary judgment and granting summary judgment in favor of Carey. The District Court concluded that the Labairs failed to establish a prima facie case of legal malpractice because they failed to provide admissible expert evidence on medical causation and damages. The District Court also determined that Carey sufficiently established through the affidavit of Buxbaum that the underlying medical malpractice case would have failed because Carey was unable to develop the testimony required to succeed on the claim. The District Court agreed with Carey that his conduct of failing to file the application with the MMLP did not cause the Labairs any injury or damages because the Labairs failed to carry their burden of showing that the underlying medical malpractice claims would have succeeded but for the error. Finding no genuine issues of material fact, the District Court entered summary judgment for Carey.

¶14 On November 30, 2011, the District Court entered its final judgment dismissing the Labairs' complaint with prejudice. The Labairs appeal the District Court's entry of summary judgment in favor of Carey and the subsequent dismissal of their legal malpractice claims. The appeal was heard on oral argument before this Court on October 22, 2012.

STANDARD OF REVIEW

¶15 We review a district court's ruling on a motion for summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as did the district court. Estate of Willson

v. Addison, 2011 MT 179, ¶ 11, 361 Mont. 269, 258 P.3d 410. Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." M. R. Civ. P. 56(c)(3).

DISCUSSION

¶16 Did the District Court err in granting Carey's motion for summary judgment?

¶17 The Labairs assert claims of legal malpractice against Carey. Attorney malpractice is a type of professional negligence. Merzlak v. Purcell, 252 Mont. 527, 529, 830 P.2d 1278, 1279 (1992). To recover in a professional negligence action, "the plaintiff must prove that the professional owed him a duty, and that the professional failed to live up to that duty, thus causing damages to the plaintiff." Merzlak, 252 Mont. at 529, 830 P.2d at 1279; Lorash v. Epstein, 236 Mont. 21, 24, 767 P.2d 1335, 1337 (1989) (quoting Carlson v. Morton, 229 Mont. 234, 238, 745 P.2d 1133, 1136 (1987)). Though stated in a slightly different way, these elements coincide with the four requisite elements of a common negligence action: (1) duty; (2) breach; (3) causation; and (4) damages. See Dubiel v. Mont. DOT, 2012 MT 35, ¶ 12, 364 Mont. 175, 272 P.3d 66.

¶18 Only two of the four elements of a legal malpractice claim are at issue in this appeal. Carey has admitted to owing a duty of care to the Labairs. As Carey signed a retainer agreement with the Labairs and agreed to pursue their medical malpractice claims, an attorney-client relationship clearly existed between the parties. Carey further admits to breaching the standard of care by failing to file an application for review with the MMLP before the expiration of the applicable statute of limitations. Section 27-6-701, MCA, provides that "[n]o malpractice claim may be filed in any court against a health care provider before an application is made to the panel and its decision is rendered." Pursuant to § 27-2-205, MCA, medical malpractice actions must be commenced within three years after the date of injury.*fn1 It is undisputed that Carey failed to file an application before the MMLP within three years of Dawson's death, and that this failure in turn subjected the medical malpractice case to dismissal.

¶19 The parties contest, however, whether Carey's breach of the standard of care was the cause of any injuries or damages to the Labairs.

A. Causation Analysis in Legal Malpractice Actions

¶20 In recent years, we have consistently set forth the elements of a legal malpractice claim as follows: (1) the attorney owed the plaintiff a duty of care; (2) the attorney breached this duty by failure to use reasonable care and skill; (3) the plaintiff suffered an injury; and (4) the attorney's conduct was the proximate cause of the injury. See e.g. Spencer v. Beck, 2010 MT 256, ¶ 13, 358 Mont. 295, 245 P.3d 21; Richards v. Knuchel, 2005 MT 133, ¶ 14, 327 Mont. 249, 115 P.3d ...


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