St. Denis & Davey, P.A.

Legal Malpractice Issues

Malpractice case emerges from easement dispute

| Jan 31, 2020 | Legal Malpractice Law |

Some Florida residents might think that a lawyer and a potential client have to explicitly agree to establish representation for their relationship to be legally enforceable. However, a ruling by a California appellate court supports the idea that an implied-in-fact attorney-client relationship may be sufficient to hold a lawyer responsible for malpractice. In the case in question, a man hired a lawyer to prepare an easement for property. The easement then became an issue in litigation involving a development company’s project, which was later cancelled as a result.

The development company alleged that the lawyer was negligent in preparing and defending the easement. The real estate company wound up paying $200,000 to settle the litigation it was facing as a result of the easement controversy. It sued the lawyer for legal malpractice, breach of fiduciary duty, and unjust enrichment, saying that his misconduct was responsible for the company’s losses. However, the lawyer said that he could not be held accountable because his contract was with the man who represented the company and a construction firm, not the development company itself.

Initially, the case against the lawyer was dismissed on the basis that there was no attorney-client relationship, because the fee agreements did not include the injured party. However, the appeals court reinstated the case, noting that the attorney’s files were labeled with the company name and it paid the bills for the legal work involved. The court said that both parties understood that they had an attorney-client relationship.

When lawyers fail to follow through on work they agreed to perform, the costs to a client can be substantial, including business failures, cancelled projects or other losses. If the lawyers did not uphold their professional responsibilities to the client, they may be held accountable in a legal malpractice action.