Appeals from the Superior Court of the District of Columbia; (Hon. John H. Suda, Trial Judge)
Before Ferren and Schwelb, Associate Judges, and Mack, Senior Judge.
The opinion of the court was delivered by: Schwelb
SCHWELB, Associate Judge: A jury awarded plaintiffs Ladson A. Mills and Christina P. Mills $119,000 against Dale A. Cooter, Esq. and certain other attorneys associated with him (collectively Cooter) for professional negligence. The trial Judge denied Cooter's motion for judgment notwithstanding the verdict. On appeal, *fn1 Cooter contends that the Mills failed to establish, through expert testimony, either the applicable standard of care or a violation thereof, and that as a matter of law, the conduct in which he was shown to have engaged did not constitute legal malpractice. We agree, reverse, and direct the entry of judgment in Cooter's favor.
This controversy began with an agreement by the Mills to sell certain real estate to Edgar Weisman. Weisman ultimately defaulted, causing the Mills to lose $119,000. According to the Mills, Weisman, who allegedly had a prior history of fraudulent real estate transactions, swindled them, essentially by inflating the value of certain properties owned by him in order to make his financial capacity appear substantially greater than it was.
The Mills approached Cooter's law firm, then known as Cooter, Gell & Cooter, for counsel and representation. They discussed with Cooter the pros and cons of suing Weisman and a number of other potential defendants, including the settlement attorneys in the transaction, and two real estate professionals, namely Neil Degnan of Begg Realty, the listing broker, and Mary Jacobsen of Mount Vernon Realty. Ms. Jacobsen had worked with Weisman on several previous transactions and had represented him during the negotiations with Degnan.
Cooter was willing to bring suit against Weisman and the settlement attorneys, but declined to take any legal action against the brokers. Cooter maintained that there was no evidence that Degnan or Mrs. Jacobsen had made or participated in any fraudulent representations or engaged in any other wrongful conduct. It was also Cooter's view that Ms. Jacobsen represented only Weisman and could not simultaneously be an agent of the Mills, and that there was therefore no contractual or fiduciary relationship between the Mills and Ms. Jacobsen based on the facts presented. Moreover, Mrs. Mills was close to Degnan's family, and Mr. Mills testified that while he was willing to join Degnan as a defendant, his wife "would rather" not; Cooter testified that Mrs. Mills insisted that Degnan not be sued. *fn2
Cooter's unwillingness to sue Degnan (and his principal) and Ms. Jacobsen (and her principal) was communicated to the Mills early in the representation, and there is no doubt that the clients understood Cooter's position. Indeed, on November 3, 1983, Mr. Mills insisted in a letter that "I still contend that we have recourse against the realtors." The Mills did not attempt to secure other counsel, although they would have had ample time to do so before the statute of limitations expired.
In February 1984, in conformity with his previously announced intention, Cooter brought suit on behalf of the Mills against the settlement attorneys. Mills v. Slocum, et al., C.A. No. 2140-84 (Super. Ct. D.C.). Degnan and Ms. Jacobsen were not joined as defendants. In 1986, the action was settled against the settlement attorneys for $12,500. *fn3 The Mills agreed to the settlement. Weisman had declared bankruptcy, and no recovery was possible against him.
In 1988, disappointed with the results of the proceedings brought by Cooter on their behalf, the Mills brought the instant action against Cooter, alleging professional negligence and breach of fiduciary duty. The suit was predicated on Cooter's refusal to bring suit against the brokers for fraud, breach of contract, breach of fiduciary duty, and racketeering. In June 1992, following pretrial proceedings in which a part of the Mills' claim was dismissed as abandoned, *fn4 the case proceeded to jury trial, and the jury returned a verdict of $119,000 in favor of the Mills. The Judge denied Cooter's motion for judgment n.o.v. These appeals followed. *fn5
The basic question before us is whether the Mills presented sufficient evidence to permit an impartial jury to conclude that Cooter's failure to join the brokers as defendants in Mills v. Slocum constituted legal malpractice. *fn6 The Mills contend that both brokers owed them a fiduciary duty, *fn7 that they knew or should have known of Weisman's fraudulent acts, and that they wrongfully failed to disclose these facts to the Mills, thus participating in the fraud and contributing to the Mills' loss. Cooter claims, on the other hand, that Ms. Jacobsen was Weisman's agent, that she could not simultaneously act on the Mills' behalf, and that she owed the Mills no fiduciary duty. *fn8 He contends that he could not sue Degnan because Mrs. Mills had not authorized such a suit. Cooter also maintains that neither Degnan nor Ms. Jacobsen had made or participated in any fraudulent representation, that Mr. Mills, an experienced real estate entrepreneur, did not rely on any such representation, and that he (Cooter) therefore exercised reasonable professional judgment in declining to join either broker in the suit.
Both parties presented the testimony of legal experts in support of their respective contentions. The Mills' expert, Charles Acker, Esq., testified that, in his opinion, Cooter had deviated from accepted legal standards (which standards Acker did not, however, define) in failing to pursue relief against Degnan and Ms. Jacobsen. Cooter's legal expert, Professor Earl C. Dudley, testified that although a reasonable attorney in Cooter's position might properly have considered joining Ms. Jacobsen as a defendant, it was a reasonable exercise of professional judgment for Cooter to decline to join her. In Dudley's view, Cooter's decisions with regard to the representation of the Mills were fully consistent with applicable professional standards.
The testimony of the experts identifies the character of this controversy. This is not a case in which the attorneys are alleged to have forgotten to sue appropriate defendants, to have missed a statute of limitations, to have mislaid the file, or to have made some error or omission of that or similar character. Rather, the Mills contend that Cooter assessed the merits of the potential case against Degnan and Ms. Jacobsen incorrectly, that Cooter made an erroneous legal judgment in not joining the two brokers as defendants, and that the Mills were thus deprived of recourse against parties who were liable to them as a matter of law. We conclude that where, as here, Cooter's unwillingness to sue the brokers was communicated to the Mills early in the representation, well before the expiration of the statute of limitations, and where reasonable attorneys could differ with respect to the legal issues presented, the second-guessing after the fact of Cooter's professional judgment was not a sufficient foundation for a legal malpractice claim, and that the evidence was insufficient to ...