Torts: “Loss of Chance”: Claim Limited to Medical Malpractice

It is well-established that a client in legal malpractice shall have no greater rights against their attorney than they had against the original defendant. That is, until the recent decision by the Supreme Court in Ewing v. Westport Insurance Corporation, 20-00339 (LA. 11/19/20), 2020 WL 6789490 where the Louisiana Supreme Court held that the “collectibility“ of the underlying judgment against the defendant is neither part of the plaintiff’s burden of proof nor the proper subject of an affirmative defense.

In Ewing, the defendant/attorney fax-filed a petition for damages but failed to forward the original petition within seven days as required by statute. As a result, the claim he sought to advance on behalf of Elaine Ewing prescribed. Ewing sued her attorney and his insurer.

Prior to trial, the tortfeasor testified that he would have filed for bankruptcy had an excess judgment been entered. On this basis, the defendants obtained a motion for summary judgment establishing that the underlying tortfeasor would have been unable to pay any amount above the $30,000 in available insurance coverage. Following trial, an award of $30,000 was entered in favor of the plaintiff and the plaintiff appealed.

The appellate court reversed citing to the decision in Rodriguez v. Traylor, 468 So.2d 1186, 1188 (La. 1985) which held that “the wealth or poverty of a party to a lawsuit is not a proper consideration in the determination of compensatory damages.“

The Supreme Court upheld the appellate opinion. In the analysis, Chief Justice Johnson on behalf of the majority also cited to the Rodriguez decision for the proposition that the wealth of the tortfeasor is not relevant to damages. The majority acknowledged that a majority of courts nationwide hold that the collectibility of a judgment is an essential element of a plaintiff’s legal malpractice case. It also observed “a growing trend” in other states to allow the defendant/attorney to plead collectability as an affirmative defense. Nevertheless, the Supreme Court in Ewing chose to follow neither position.

The defendants in Ewing did not argue that collectibility was part of the plaintiff’s burden. However, they did assert an affirmative defense on this basis. In rejecting this defense, the Ewing court found that nothing in statutory law of Louisiana limits damages based upon the collectibility of a judgment against a particular tortfeasor. In Ewing, it was established that the tortfeasor would have been immediately unable to pay an excess judgment. Nevertheless, the majority highlighted that a money judgment is valid for 10 years and may be revived for successive 10-year periods. As such, the court concluded that the money judgment has intrinsic value, regardless of immediate collectibility. To quote the majority, “impecunity is a snapshot in time.”

The concurring opinion by Justice Weimer reasons that there may be certain and rare cases where the underlying tortfeasor is truly judgment proof. In that circumstance, he writes that summary judgment in favor of the defendant may be appropriate but not under the record before the court.

Writing for the dissent, Justice Crain observed: “Thirty states have determined collectibility is relevant in a legal malpractice action. No state has reached a contrary conclusion, until now.” According to the majority, the absence of any statute making collectability a relevant consideration mandated the result under our civilian traditions. Justice Crain disagreed and argued that the majority opinion is inconsistent with the Code of Evidence articles which generally allow the admissibility of relevant evidence such as an inability to pay. La. L.C.E. art. 402. In support of his position, Justice Crain gave a hypothetical scenario involving an insolvent, uninsured driver who rear-ends a world-class professional athlete rendering him a paraplegic, resulting in damages and $50 million. About this hypothetical, he states:

“What did the plaintiff lose, or what harm did the lawyer cause the plaintiff, when the lawyer failed to preserve the claim against the insolvent, uninsured driver? The lawyer did not cause the paraplegia, nor did he caused a loss of $50 million, as that money was clearly uncollectible.“

To Justice Crain, the determinative question is the value of the lost judgment.

Insofar as the majority and concurring opinions highlight the absence of any statutes to support their conclusions, it would not be surprising for this issue to be considered by the legislature in coming years.

Collin is a Keogh Cox partner who litigates injury, commercial, and legal malpractice disputes. He lives in nearby Zachary, Louisiana with his wife Melissa and three all too active children. He is an outdoorsman, a tennis player, a cook, and a hobbyist writer.

This blog was written in partnership with Andrew "Drew" Blanchfield whose practice also includes professional liability defense.

Legal malpractice claims in Louisiana are governed by a peremption period that cannot be interrupted or suspended. La. R.S. 9:5605(A) provides that a legal malpractice claim must be brought one year from the date of the alleged malpractice, or within one year from the date the alleged malpractice should have been discovered. However, even when a claim is filed within one year of discovery, it must be filed within three years of the date of the alleged malpractice. If a party fails to assert a legal malpractice claim before the peremption period expires, the right to bring the claim is lost.

The Louisiana Supreme Court holds that “peremption commences to run in a legal malpractice case when a claimant knew or should have known of the existence of facts that would have enabled him to state a cause of action for legal malpractice.” In Crosby v. Waits, Emmett, Popp & Teich, LLC, the court recently examined the types of circumstances that should inform a plaintiff that an act of alleged malpractice occurred, which would trigger the peremptive period in which the plaintiff’s claim must be filed.

The plaintiff in Crosby owned 75% of a company and was in the process of buying out the minority stakeholder. The company was involved in litigation at the time. Initially, the minority stakeholder maintained all of the recovery and risk related to the suit. In April 2016, an attorney advised the plaintiff to accept an offer to split the recovery and risk in the suit 50/50 as part of the sale. The plaintiff then accepted the 50/50 offer. The litigation concluded after the sale, in February 2018, and resulted in an adverse judgment for which the plaintiff was responsible pursuant to the 50/50 agreement.

The plaintiff filed suit on February 12, 2019, within one year of the verdict in the underlying litigation, and claimed that its attorney committed malpractice when he advised that plaintiff accept the offer to split the recovery and risk in the suit. Specifically, it was alleged the attorney failed to examine the nature of the litigation or discover that the seller’s employees were aware the suit bore serious risk. The plaintiff’s representative testified that he did not keep track of the litigation and therefore could not have known the attorney engaged in the alleged malpractice until the jury rendered its verdict in the underlying suit.

However, the minority stakeholder testified that he knew the 50/50 offer was a bad deal for the plaintiff. Another employee testified he thought the risk of loss in the underlying suit was apparent to everyone involved. The court agreed. Based upon the evidence presented, “it should have been obvious to all concerned that the 50/50 option was favorable” to the minority stakeholder, who was adverse to the plaintiff’s interest.

The court held that the plaintiff should have known its attorney may have committed an act of malpractice when he advised it to accept the 50/50 split before the underlying litigation concluded. Accordingly, suit was not filed within one year of when the plaintiff should have known the alleged act of malpractice occurred. The plaintiff’s claims that it lacked such knowledge could not stand up to conflicting evidence. Thus, the claim was peremepted, and the plaintiff’s suit was dismissed.

Case References:

Crosby v. Waits, Emmett, Popp & Teich, LLC, 2022-0395 (La. App. 4 Cir. 11/21/22), 352 So. 3d 145.

Jenkins v. Starns, 2011-1170, p. 15 (La. 1/24/12), 85 So.3d 612, 621.

For more than a century, the debate has raged over whether Mrs. O'Leary and her famous cow truly started The Great Chicago Fire of 1871. Were the tragic events of that conflagration to happen today, someone would ask Mrs. O'Leary to produce the "RFID" chip in her bovine. (You know they would). They would contend that this key evidence could show the whereabouts and movement of the cow at the time the fire began. When she could not produce it, they would claim not only that she started the fire that destroyed a swath of Chicago, but that she also destroyed the evidence of her guilt. They would cry "spoliation."

"Spoliation" is the legal term for the improper destruction or alteration of evidence to prevent its use in litigation. It is also an ugly word and its presence in litigation can lead to ugly results. While this doctrine has existed in some form or the other for hundreds of years, understanding the concept may prove to be even more important now in a time when reams of documents can be stored on a "zip drive" smaller than a stick of gum and information can be maintained in a multiplicity of ways previously unthinkable.

To prove spoliation, a litigant must demonstrate that their adversary in litigation: (1) knew of a lawsuit or had a reasonable expectation that a lawsuit would follow; (2) failed to produce relevant evidence without an explanation; and, (3) participated in intentional conduct to alter, secret, or destroy the evidence. It is important to note that a defendant is not responsible under the doctrine of spoliation when the defendant’s failure to produce evidence is adequately explained.

A party who discovers that evidence has been spoliated has options. They may ask the court to enter an adverse presumption. If allowed, a court may instruct the jury that the missing or altered evidence would have been unfavorable to the party who destroyed it. Depending upon the nature and relevancy of the evidence, the court may have grounds to strike claims or defenses relevant to the evidence.

Another option is to file a formal claim against the party who spoliated the evidence. This type of claim alleges that the alleged “spoliator” impaired a party's ability to win or defend a law suit. In Louisiana, all five appellate circuit courts have recognized the tort of spoliation.

The issues surrounding spoliation have been magnified by technology. Meaningful information can now be found on almost anything: "smart refrigerators"; product sensors; a car's "black box" that may reveal the speed at the time of impact; SMS information on a phone, computer, or tablet; and on and on. Consider further the increasing scope of surveillance video recorded at businesses, schools, hospitals, and even homes, which is complicated by the fact that many systems automatically "write over" prior video in a matter of days, weeks, or months.

In short, it’s a good time for everyone to understand the doctrine of spoliation. The chance that some party will loudly proclaim that your spoliation of evidence adversely affected their case continues to increase. Being aware of the potential spoliation issues that may arise when a suit has been filed, or is expected to be filed, may save your case. It may also save you the time, money, and distraction involved in defending a claim that you have spoliated key evidence.