Donarumo, et al. v. Phillips, et al. (Lawyers Weekly No. 09-034-18)

COMMONWEALTH OF MASSACHUSETTS

 

SUFFOLK, ss                                                                                                                                    SUPERIOR COURT

            CIVIL ACTION

  1. 16-00023-C

 

 

 

                                                        ANDREW DONARUMO,

individually & d/b/a Drew Donarumo Plumbing & Heating,

Donarumo Plumbing & Heating,

& Drew’s Plumbing & Heating Inc.

Plaintiffs

 

v.

 

JEFFERY J. PHILLIPS, Esq.

& DANIEL TREGER, Esq.

Defendants

 

 

MEMORANDUM OF DECISION AND ORDER

ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

PURSUANT TO MASS. R. CIV. P. 56

 

 

Plaintiffs Andrew Donarumo (“Mr. Donarumo”), individually and d/b/a Drew Donarumo Plumbing & Heating, Donarumo Plumbing & Heating and Drew’s Plumbing & Heating Inc. (collectively, the “Plaintiffs”), bring this legal malpractice action against their former counsel, Jeffrey J. Phillips, Esq. (“Attorney Phillips”) and Daniel Treger, Esq. (“Attorney Treger”).  Plaintiffs allege that the Defendants were negligent and violated Mass. G.L. c. 93A during their representation of them in a civil action arising out of the sale of Plaintiffs’ plumbing business.  Presented for decision is the Defendants’ Motion for Summary Judgment Pursuant to Mass. R. Civ. P. 56.  Following a hearing and for the reasons which follow, the Defendants’ motion shall be DENIED.

 

FACTUAL BACKGROUND

The following facts are drawn from the summary judgment record and the statement of undisputed material facts filed jointly by the parties under Superior Court Rule 9A(b)(5).  The Court views this record in the light most favorable to the Plaintiffs, the non-moving party.

  1. The Furlong Litigation

On January 10, 2008, Michael G. Furlong, Esq., JoAnn Furlong and Drew’s Plumbing & Heating II, Inc. (the “Furlongs”) brought an action against the Plaintiffs in Superior Court, alleging that the Plaintiffs had engaged in unlawful and bad faith conduct in connection with the sale of their plumbing business to the Furlongs (the “Furlong litigation”).  More specifically, the Furlongs alleged that the Plaintiffs violated contractual and common law tort duties owed to them  when, immediately following the sale, the Plaintiffs opened up a new plumbing business that began competing against the company sold to the Furlongs.  The Furlongs asserted several causes of action against the Plaintiffs (including violations of Chapter 93A) which, if proven, would have allowed the Furlongs to recover multiple damages and attorneys’ fees.

On June 13, 2008, the Plaintiffs retained Attorneys Phillips and Treger (collectively, the “Defendants”) to defend them in the Furlong litigation.  To that end, Mr. Donarumo and Deirdre Donarumo (“Ms. Donarumo”), his spouse and the Trustee of the Donarumo Realty Trust, executed a Legal Services Agreement with the Defendants.  The Defendants thereafter represented the Plaintiffs in the Furlong litigation during the case’s discovery phase, through the trial, and up until September 19, 2013, at which time the Plaintiffs directed the Defendants to cease their post-trial work on Plaintiffs’ behalf.

 

 

  1. The Defendants’ Legal Advice

Throughout the course of the Furlong litigation, the Defendants consistently conveyed their view to the Plaintiffs that they had a very strong defense to the Furlongs’ claims and that Plaintiffs were likely to prevail at trial.  Indeed, Attorney Phillips regularly characterized the Furlongs’ claims as frivolous; and, even as trial approached, Phillips maintained in an internal memorandum that “[t]his is a case about a lawyer [Furlong] who made a terrible business choice,” who “refused to accept the results of his mistake,” and who now “blame[s] everyone but himself for the business failure.”  The Defendants additionally assured the Plaintiffs that, even if the Furlongs prevailed at trial, the financial liability risk was just $ 188,000 – the amount Mr. Donarumo earned while working in areas purportedly prohibited by the non-compete provisions of the purchase and sale agreement.  With respect to the Furlongs’ Chapter 93A claim, Attorney Phillips advised Mr. Donarumo that he did not see a “smoking gun” that would make such a claim a matter of concern, and further informed Mr. Donarumo that Chapter 93A claims were typically thrown out by the judge.

 

The Plaintiffs and the Furlongs engaged in intermittent settlement discussions as the litigation proceeded.  Relying on Attorney Phillips’ advice, the Plaintiffs offered the Furlongs $ 25,000 to settle the case during the first year of litigation, and raised their offer to $ 100,000 two to three years into the case.  At the same time, the Furlongs reduced their initial settlement demand of $ 1 million (the sale price of the plumbing business) to $ 925,000, a settlement amount Attorney Phillips characterized to the Plaintiffs as “absurd.”  Shortly prior to trial, the Furlongs reduced their demand to $ 700,000; but the highest settlement offer the Plaintiffs ever extended to the Furlongs during the five years they were represented by the Defendants was $ 188,000.  Attorney Phillips also notified the Furlongs’ counsel prior to trial that the Plaintiffs would reject a hypothetical mediator-suggested settlement of $ 600,000.

Unable to reach resolution, the parties completed discovery and the Plaintiffs eventually moved for summary judgment.  The Court (Fabricant, J.) denied the Plaintiffs’ motion on December 6, 2010, ruling that the Furlongs had advanced several viable claims against the Plaintiffs.  These included causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud in the inducement, and violation of Chapter 93A.  Attorney Phillips forwarded the Court’s summary judgment decision to the Plaintiffs, with a covering instruction to read it carefully and contact him to discuss.

The matter proceeded to a bench trial in April and May of 2012.  Attorney Treger served as the Plaintiffs’ lead trial counsel, assisted by another lawyer in his firm.  Attorney Phillips attended trial, but did not play an active role in the proceedings.  Instead, Attorney Phillips counseled Plaintiffs after each day of trial, and provided a running analysis of each witness’s testimony.  Throughout the trial, Attorney Phillips continued to report to his clients that all was going well and, at one point, assured Mr. Donarumo that he “had nothing to worry about.”

 

On May 24, 2013, the Court (Roach, J.) issued its Memorandum and Order of Findings and Rulings, finding in favor of the Furlongs.  Most critically, the Court did not credit Mr. Donarumo’s testimony, concluding that he “was prepared to say whatever he needed to say to induce the Furlongs to make the purchase, including statements which he knew or should have known were not true.”  The Court specifically found that Mr. Donarumo had made misrepresentations related to his post-sale plans and regarding a non-plumber’s ability to run the business.  The Court cited “overwhelming” evidence that Mr. Donarumo had breached the parties’ sales contract by actively competing with the Furlongs in the private plumbing business, and observed that the methods by which Mr. Donarumo had compromised the good will of the plumbing business he had sold to the Furlongs were “legion on the trial record.”  The Court thus ruled in favor of the Furlongs on their breach of contract, implied covenant of good faith and fair dealing, and fraud in the inducement claims.  The Court additionally found that the Plaintiffs’ conduct violated Chapter 93A and, as such, Plaintiffs were adjudged liable to the Furlongs for double damages and attorneys’ fees.  The Court did not calculate Plaintiffs’ precise economic liability at that time, but instead declared that further proceedings would be held to assess damages.

For a few months following the Court’s decision, the Defendants continued to represent Plaintiffs on post-trial work.  Plaintiffs also retained Attorney Anil Madan (“Attorney Madan”) to work on a post-trial motion for them.  On June 27, 2013, Attorney Phillips advised the Plaintiffs that the Furlongs had advanced an unsolicited settlement demand of $ 3 million.  Attorney Phillips referred to this offer as “interesting,” and stated that it was “based on an almost best case scenario.”  The Plaintiffs expressed an interest in extending a counteroffer.

On September 19, 2013, the Plaintiffs, through Attorney Madan, advised Attorney Phillips that they would potentially be filing a malpractice action against him.  Attorney Madan also conveyed to Phillips that there was “no expectation that you will do any more work on the [Furlong litigation].”  Shortly thereafter, the Plaintiffs, represented by Attorney Madan, settled the Furlong litigation for $ 1.6 million.

  1. The Defendants’ Billing for Legal Services

 

At the outset of his firm’s engagement in June of 2008, Attorney Phillips estimated to the Plaintiffs that the total legal fees and expenses through a trial in the Furlong litigation would range from $ 200,000 to $ 300,000.  By December of 2009, however, and still several years before trial, the Plaintiffs’ legal bills had surpassed that amount.

On several occasions, Ms. Donarumo expressed concerns about the ballooning size of the Plaintiffs’ legal bills, and periodically raised specific objections to certain charges.  Plaintiffs, however, never asserted that they thought the Defendants were overbilling them during the course of the litigation, and Attorney Phillips repeatedly denied that the Donarumos had ever been overcharged.

 

The record reflects that Ms. Donarumo called the Defendants numerous times concerning their legal bills, and Attorney Phillips explained on each occasion that the time recorded and charged by the firm’s lawyers had been necessary.  Ms. Donarumo also registered complaints in writing.  Specifically, Ms. Donarumo sent Attorney Phillips a letter on January 27, 2010, after the Defendants’ invoices had exceeded the initial outside estimate of $ 300,000.  In that letter, Ms. Donarumo stated that she and her husband were “very concerned that this litigation is going over the estimated dollar amount,” and noted that Attorney Phillips “had implied that once the discovery phase came to a conclusion, that we would see a significant reduction in these monthly bills[;] but unfortunately they still seem pretty consistent.”  Ms. Donarumo went on to raise specific objections to certain portions of the most recent invoice, including that one time-keeper had billed 22.3 hours in a single day.  Ms. Donarumo tempered her concerns, however, by acknowledging that she was “very confident you are doing a superb job for us.”  Attorney Phillips thereupon made certain corrections to the bill, and additionally informed the Plaintiffs that he was providing them with a $ 10,000 “courtesy credit.”  That said, however, Attorney Phillips defended his firm’s time-charges as reasonable and appropriate: “All of the time entered by all of the attorneys is necessary….  This is a time consuming case requiring substantial research and writings.”  Attorney Phillips also maintained that he had originally attempted to give the Plaintiffs a “ballpark” estimate as to cost, but that the estimate had simply turned out to be wrong.  The Plaintiffs paid the December, 2009 invoice and, over the course of the ensuing year, received monthly legal bills that sometimes totaled $ 40,000 to $ 60,000.  Ms. Donarumo characterized these amounts as “crazy.”

In February of 2011, shortly after the Court’s summary judgment decision, Ms. Donarumo emailed Attorney Phillips with renewed concerns about his firm’s legal fees.  Ms. Donarumo inquired as to whether Attorney Phillips would be able to guarantee the amount they would owe in fees should the matter proceed through trial.  She further noted, “[Q]uite frankly if we had known that [the Defendants’ fees and costs would exceed the original estimates], we could have offered to settle that two years ago, and perhaps we would be done with it.”  Once again, however, Ms. Donarumo allowed that she and her husband were “very confident you are doing a great job for us….”  Attorney Phillips replied to this email, suggesting that the parties meet to discuss a “further game plan regarding [Plaintiffs’] concerns.”  He also noted that while the Plaintiffs “continue to talk about the possibility of settlement early on in the case,” presumably in reference to the Plaintiffs’ statement that they would have settled the suit two years earlier had they known that the legal fees and expenses would surpass the $ 300,000 estimate, “[the Furlongs] have always been looking for high six figures and in my most recent telephone conversation with [opposing counsel], he mentioned the sum of $ 700,000.”

 

A month later, in March of 2011, Ms. Donarumo raised further fee-related concerns via email, this time about the Defendants’ February, 2011 bill.  Ms. Donarumo requested that Attorney Phillips review the invoice, “considering [that the amount charged] would put my kids though college for a year…,” and pointed out specific issues with particular amounts billed.  The record reflects no further discussion between the parties on the subject of legal fees.

Notwithstanding their recurring expressions of concern regarding the cost of the Furlong litigation, the Plaintiffs cumulatively paid the Defendants between $ 610,000 and $ 620,000 in legal fees and expenses.  Withal, at his deposition in July of 2017, Attorney Phillips testified that the Plaintiffs still owed his firm an additional $ 47,000 in unpaid legal bills.

  1. The Present Action

On January 5, 2016, the Plaintiffs initiated the present action, alleging that the Defendants were negligent and had violated Chapter 93A during the course of their representation of them in the Furlong litigation.  The Defendants have now moved for summary judgment on all counts of the Complaint.

DISCUSSION

Plaintiffs’ malpractice claims in this case rest on two theories of negligence: (1) the Defendants’ alleged overbilling throughout the Furlong litigation; and (2) the Defendants’ alleged misrepresentations regarding the weakness of the Furlongs’ claims, and the Plaintiffs’ substantial likelihood of prevailing on them.  The Defendants’ summary judgment motion argues that Plaintiffs’ malpractice claims are barred by applicable statutes of limitation, and that these claims otherwise fail as a matter of law because Plaintiffs cannot establish that the Defendants failed to exercise reasonable care in a manner that caused the Donarumos harm.  These arguments are addressed in turn.

 

  1. Statute of Limitations

The Defendants first assert that the Plaintiffs’ claims are time-barred by applicable statutes of limitation.  The Defendants rest this argument on the contention that Plaintiffs had actual knowledge by at least 2010 of the Defendants’ alleged overbilling and misrepresentations in the Furlong litigation.  For the reasons which follow, the Court does not agree and finds that the Plaintiffs’ claims are timely.

  1. Negligence Claims

The parties do not dispute that the Plaintiffs’ negligence claims are subject to the three-year statute of limitations of G.L. c. 260, § 4. What the parties do dispute is when the Plaintiffs’ claims in this case accrued for purposes of starting the running of the limitations clock.  At issue is the interplay between the common law “discovery rule” and the “continuing representation doctrine,” which together govern the accrual of legal malpractice claims when applying G.L. c. 260, § 4.

 

Under the so-called discovery rule, “[t]he statute of limitations applicable to a legal malpractice claim begins to run when a client ‘knows or reasonably should know that he or she has sustained appreciable harm as a result of the lawyer’s conduct.’”  Lyons v. Nutt, 436 Mass. 244, 247 (2002) (quoting Williams v. Ely, 423 Mass. 467, 473 (1996)).  An exception to the discovery rule, however, is carved out by the “continuing representation” doctrine, which “‘tolls the statute of limitations in legal malpractice actions where the attorney in question continues to represent the plaintiff’s interests in the matter in question.’”  Parr v. Rosenthal, 475 Mass. 368, 379 (2016) (quoting Murphy v. Smith, 411 Mass. 133, 137 (1991)).  The evident purpose of the doctrine is to “‘recognize[] that a person seeking professional assistance has a right to repose confidence in the professional’s ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered.’”  Parr, 475 Mass. at 380 (quoting Murphy, 411 Mass. at 137).  Stated differently, the law does not wish to burden would-be plaintiffs with the responsibility to question the competence of lawyers who are still representing them, and accordingly tolls the running of the statutory limitations period during the pendency of such representation.  See Hodas v. Sherburne, Powers & Needham, P.C., 938 F. Supp. 58, 59 (D. Mass. 1996) (“The doctrine recognizes that a person who has sought legal assistance cannot realistically be expected to second‑guess the attorney’s performance so long as the attorney‑client relationship continues.”).  Provided, however, even during the course of a lawyer-client engagement, the tolling activated by the continuing representation doctrine will terminate, and the limitations clock will start running anew, when a client has actual knowledge that he has suffered an appreciable harm as a result of his attorney’s conduct.  See Parr, 475 Mass. at 383.  Thus, in contrast to the discovery rule, “[i]f a client reasonably should know that the attorney has caused the client appreciable harm, but does not actually know it, the continuing representation rule continues to apply.”  Id. (emphasis added).  It bears emphasis that, in the context of a legal malpractice claim, “actual knowledge that an attorney caused a client appreciable harm generally means actual knowledge that the attorney committed legal malpractice.”  Id. at 383-84.

 

Here, the record reflects that the Plaintiffs terminated their attorney-client relationship with the Defendants on September 19, 2013, when Attorney Madan advised the Defendants that they were no longer expected to work on the Furlong litigation and that the Plaintiffs were contemplating a legal malpractice suit against them.  The present action was filed less than three years later, on January 5, 2016.  Thus, in accordance with the continuing representation doctrine, the governing statute of limitations was tolled until September 19, 2013, unless the Plaintiffs had actual knowledge of the Defendants’ putative malpractice.  Herein lies the crux of the parties’ dispute in the present motion.

  1. The Defendants’ Billing Practices

The Defendants first argue that the Plaintiffs had actual knowledge of their alleged overbilling at least as of January 27, 2010, when Ms. Donarumo objected to certain charges on the December, 2009 bill and noted that the invoiced legal fees and expenses had already exceeded the original estimate of $ 200,000 to $ 300,000.  The Defendants thus contend that Plaintiffs’ malpractice claim began to accrue shortly thereafter, when the Donarumos paid their bill and thereby suffered “an appreciable harm.”  The Court does not agree.

 

It is undisputed that the Plaintiffs never categorically complained to the Defendants that they were being overcharged.  Rather, the Plaintiffs voiced concern about the overall size of their legal bills, and objected to specific charges that appeared to be either excessive or inaccurate.  Like many clients, the Plaintiffs wanted an explanation and perhaps an accommodation.  To be sure, the record reflects that the Plaintiffs were and remained concerned about mounting legal bills that had already exceeded the Defendants’ original estimates.  But the Defendants consistently reassured the Plaintiffs that all of the billed fees and expenses had been incurred completing necessary work on the case; and the Plaintiffs continued to defer to these lawyers, even expressing confidence in the Defendants’ diligent representation of their interests.  Routine concerns and even complaints about legal fees are coin of the realm in the land of civil litigation.  But they do not, without more, rise to the level of demonstrating actual knowledge on the Plaintiffs’ part that they were being harmed by the Defendants’ billing practices or that the Defendants were committing legal malpractice by overcharging them.  Under Massachusetts’ continuing representation doctrine, the statute of limitations clock is not re-started merely because a client is unhappy about incurring unexpected legal fees.  Rather, the client must know that he is incurring those fees because of alleged malpractice.  See St. Paul Fire & Marine Ins. Co. v. Birch, Stewart, Kolasch & Birch, LLP, 379 F. Supp. 2d 183, 198 (D. Mass. 2005) (“The statute of limitations is not triggered under Massachusetts law merely because a client knew he was incurring additional legal fees; the client must know that he or she is incurring those fees because of the alleged malpractice.”).  Absent actual knowledge of a connection between the fees charged and attorney malpractice, and there is no such connection in the present case, the Defendants’ continued representation of the Plaintiffs through September 19, 2013 tolled the running of the three-year limitations period until that date.  For this reason, Plaintiffs’ negligence claims related to the Defendants’ purported overbilling were timely filed.[1]

  1. The Defendants’ Legal Advice

The Defendants relatedly argue that the Plaintiffs had actual knowledge of their alleged misrepresentations regarding the strength of the Donarumos’ defense in the Furlong litigation at least as of December 6, 2010, when the Court (Fabricant, J.) denied their motion for summary judgment.  The Court does not agree.

 

Judge Fabricant’s adverse ruling on the Donarumos’ summary judgment motion did no more than signal that the Furlongs had viable claims, including one brought under Chapter 93A.  Nothing in the language of that decision, however, would have suggested to a layperson that the Donarumos’ defenses to the litigation were groundless, or that their lawyers’ professions of confidence in their case were so misguided as to constitute malpractice.  In denying a motion for summary judgment, the Court had merely ruled that the evidence was sufficient to allow the Furlongs’ claims to go to trial.  This was by no means a declaration that such claims were certain to prevail, and cannot be deemed to have placed the Plaintiffs on notice that their lawyers had committed malpractice.  See Belanger v. Boys in Berries, LLC, 89 Mass. App. Ct. 1133, 2016 WL 3912080, at *2 (2016) (unpublished) (plaintiffs surmounted the “relatively low bar required to survive summary judgment,” despite the judge’s general assessment that plaintiffs’ case was “not very strong”); Greenburg v. Puerto Rico Mar. Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987) (“[Rule 56] does not ask which party’s evidence is more plentiful, or better credentialled, or stronger[;] [r]ather, the rule contemplates an abecedarian, almost one dimensional, exercise geared to determining whether the nonmovant’s most favorable evidence and the most flattering inferences which can reasonably be drawn therefrom are sufficient to create any authentic question of material fact”).  Stated more simply, the adverse decision on summary judgment that was handed down in this case did not belie, or even significantly undermine, the Defendants’ assurances that the Furlongs’ claims were weak and would not likely succeed at trial.

 

Contrary to the Defendants’ argument, nothing in the summary judgment record suggests that the Plaintiffs had actual knowledge that the Defendants’ legal advice was lacking until the Court announced its decision in the Furlongs’ favor following the bench trial on May 24, 2013.  Prior to that time, indeed throughout the pendency of trial, the record makes clear that the Defendants were forecasting a Donarumo victory.  In these circumstances, a malpractice claim premised on the Plaintiffs’ reliance on their lawyers’ advice – viz., not to settle the lawsuit for the demands made by the Furlongs, because ultimate success was all but assured – cannot be deemed to have accrued until the adverse outcome at trial.  See Spilios v. Cohen, 38 Mass. App. Ct. 338, 339 (1995) (legal malpractice claim based on failure to accept settlement offer did not accrue until client knew whether or not that decision would be vindicated by a successful trial outcome).  Given that the present action commenced within three years of that trial outcome, the Court concludes that Plaintiffs’ negligence claims are not barred by the statute of limitations.

  1. Chapter 93A Claims

Plaintiffs’ Chapter 93A claims are likewise not barred by the applicable statute of limitations.  Pursuant to G.L. c. 260, _ 5A, all actions under Chapter 93A must be brought within four years of the date that they accrue.  “The accrual dates of … c. 93A claims are established by the same principles as govern the determination of the underlying actions.”  Hanson Hous. Authy. v. Dryvit Sys., Inc., 29 Mass. App. Ct. 440, 448 (1990).  Here, the Plaintiffs’ Chapter 93A claims are premised on the Defendants’ alleged legal malpractice.  Thus, for the same reasons set forth above, these claims are not time-barred by the statute of limitations, because the claims were commenced well within four years of the date when they accrued.

  1. The Defendants’ Duty to Exercise Reasonable Care

The Defendants next argue that Plaintiffs have failed to set forth sufficient evidence to support their claims that Defendants did not exercise adequate care and skill in providing their legal opinions during the Furlong litigation.  The Court does not agree.

 

“When asserting a claim for legal malpractice, a plaintiff bears the burden of proving that its attorney committed a breach of the duty to use reasonable care, that the plaintiff suffered actual loss, and that the attorney’s negligence proximately caused such loss.”  Atlas Tack Corp. v. Donabed, 47 Mass. App. Ct. 221, 226 (1999).  The standard of reasonable care extends to a lawyer’s expressions of opinion to a client regarding the likelihood of success for a plaintiff or the potential liability for a defendant.  See Coastal Orthopaedic Inst., P.C. v. Bongiorno, 61 Mass. App. Ct. 55, 58 (2004).  “As a predicate to rendering such litigation opinions, the legal engagement by the attorney involves the undertaking of a comprehensive review of the case facts and an analysis of applicable law, in which endeavors the attorney must ‘act[ ] with a proper degree of attention, with reasonable care, and to the best of his skill and knowledge.’”  Id. at 58-59 (quoting Colucci v. Rosen, Goldberg, Slavet, Levenson & Wekstein, P.C., 25 Mass. App. Ct. 107, 111 (1987)).  “An attorney’s legal opinion as to the prospects of litigation success or the risks of liability must adhere to these standards, but in the final analysis, any such opinion concerning the merits of the affirmative case, or the defendability of the defense case, is not to be measured by perfection in predictability of outcome, nor by infallibility in opinion determination.”  Coastal Orthopaedic Inst., P.C., 61 Mass. App. Ct. at 59.

Here, the Defendants argue that Plaintiffs cannot establish that their conduct fell below this standard of care for each of three reasons: (1) Plaintiffs concede that they understood there was no guarantee that they would prevail at trial; (2) Plaintiffs did prevail on at least some the Furlongs’ claims; and (3) Plaintiffs were found liable on other claims because the Court did not credit Mr. Donarumo’s trial testimony.  None of these arguments, taken singly or together, foreclose the conclusion that the Defendants’ legal counsel fell below the standard of reasonable care.

 

That the Plaintiffs acknowledge that they were never “guaranteed” to prevail at trial does not, perforce, mean that the Defendants failed to provide them with reasonable legal counsel.[2]  This fact, at the very most, goes to the weight of the evidence of Defendants’ claimed malpractice.  The same holds true for the fact that the Plaintiffs managed to prevail on some of the claims asserted against them by the Furlongs.  The Defendants led the Donarumos to believe that the lawsuit which had been brought against them was frivolous, and did not warrant more than relatively modest amounts to settle.  That the Plaintiffs ultimately defeated some of the Furlongs’ claims might well suggest that the Defendants’ representation of them was not an unmitigated failure.  But this fact, while arguably relevant to the weight of the Plaintiffs’ claims, will not obscure the true nature of the Defendants’ alleged malpractice.  Here, the Defendants are charged with negligently misjudging the risks posed by the Furlong litigation, and then counseling the Donarumos to spurn a settlement they could and would have secured had they been more prudently advised.  In these circumstances, the fact that the Plaintiffs succeeded on some but not all of the Furlongs’ claims will not preclude a finding that they were the victims of malpractice when the claims on which they did not prevail turned out to carry very large liabilities.[3]

 

As for the suggestion that the Plaintiffs lost at trial, at least to some extent, on account of the fact that the trial judge rejected the testimony of Mr. Donarumo, the Court finds that the Defendants once again misapprehend the gravamen of the malpractice claims asserted against them.  Plaintiffs do not allege that they should have prevailed in the Furlong litigation, and do not even appear to fault the Defendants for their loss at trial.  This is simply not the theory of causation upon which the present malpractice claims rest.  The Plaintiffs’ argument, rather, is that they failed to settle the Furlong lawsuit earlier because they relied on the Defendants’ unreasonably rosy advice regarding both the strength of their defense and their limited risks of loss.  Absent that improvident legal advice, it is claimed, the Plaintiffs would have sought to mitigate their exposure to risk by engaging more seriously in settlement negotiations with the Furlongs.  This would have included entertaining (and accepting) settlement offers that demanded well less than half what the case ultimately resolved for in the aftermath of a trial defeat.  This is a theory of “lost opportunity” malpractice liability that courts have recognized.  See D. Barry and W. Boesch, “Massachusetts Legal Malpractice Cases 2000-2009,” 93 Mass. L. Rev. 321, 328 (2011) (reviewing cases).[4]

 

In the case at bar, the Plaintiffs have set forth substantial evidence to support a lost settlement opportunity claim.  To wit, the record reflects that the Defendants maintained both prior to and during trial that the Furlongs’ claims were groundless and that the Donarumos had a very strong defense.  These lawyers likewise asserted that the Furlongs’ Chapter 93A claim was not a matter of concern; and, for this reason, they consistently advised against making a pre-trial settlement offer above $ 188,000, the level that counsel inaccurately defined as the Donarumos’ worst-case outcome.   The Plaintiffs have additionally cited an expert report from Judge Allan van Gestel (Ret.), which report concludes that the Defendants’ advice-giving in this regard fell well below the applicable professional standard of care.  Judge van Gestel opines that, due to obvious weaknesses in the Donarumos’ defense and the potential for an award of multiple damages and attorneys’ fees, the prudent course would have been to advise the Plaintiffs to pursue a negotiated settlement aggressively.  See Atlas Tack Corp., 47 Mass. App. Ct. at 226 (expert opinion may be necessary to prove legal malpractice claim).   Viewing all of this evidence in the light most favorable to the Plaintiffs, the Court finds that there is abundantly sufficient basis for the Donarumos’ legal malpractice claims to proceed to trial.

CONCLUSION AND ORDER                          

For the foregoing reasons, the Defendants’ Motion for Summary Judgment Pursuant to Mass. R. Civ. P. 56 is DENIED.

SO ORDERED.

_________________________

Robert B. Gordon

Justice of the Superior Court

 

 

 

Dated:     April 2, 2018

[1] The Court rejects the contention that the Plaintiffs’ characterization of the Defendants’ fees and expenses as “substantial” in a pleading filed in another, unrelated case in April of 2010 somehow demonstrates that Plaintiffs actually knew the Defendants had committed billing malpractice as of that filing date.  If a client voicing concern about substantial legal fees were evidence of malpractice, the undersigned would not have a bar card much less a black robe.

[2] Would there be any doubt that a defense lawyer who unreasonably forecast a 99% likelihood of success, who grossly understated the financial risks of loss, and who then counseled his client to spurn an offer to settle a potentially million-dollar liability for nuisance amounts had committed malpractice?  The tempering of a lawyer’s legal advice with the trope that success at trial cannot be conclusively assured carries no talismanic immunity to malpractice liability.  See Sierra Fria Corp. v. Donald J. Evans, P.C., 127 F.3d 175, 179-80 (1st Cir. 1997) (duty of reasonable care requires that an attorney “must advise [his] client of any significant legal risks involved in a contemplated transaction, and must do so in terms sufficiently plain to permit the client to assess both the risks and their potential impact on his situation”).

[3] The family of a patient who dies following cancer surgery takes no solace in the fact that the surgeons successfully removed most of their loved one’s tumor.

[4] The Defendants’ similar attempt to evade malpractice liability by pointing to the fact that Mr. Donarumo testified ineffectively at trial is also quite off the mark.  It is akin to a physician who failed to diagnose cancer denying that he contributed to his patient’s death by pointing to the fact that the decedent had cancer.  The patient may well have had a life-threatening condition; but what he had a right to expect from his doctor was a timely diagnosis of that condition and a reasonable plan for addressing its risks. So, too, the Donarumos.  The Defendants concededly did not create the facts of this case, and bear only limited responsibility for how Mr. Donarumo presented at trial.  What the Defendants did owe their clients, however, was professionally competent and balanced counsel regarding the relative strengths and weaknesses of their legal position.  This is the failure that lies at the heart of the Plaintiffs’ malpractice claim.

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