Merritt v. Goldenberg

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State: Illinois

Court: 5th District Appellate

Docket No: 5-04-0122 NRel

Case Date: 10/20/2005

NOTICE

Decision filed 11/4//05. The text ofthis decision may be changed orcorrected prior to the filing of aPetition for Rehearing or thedisposition of the same.

NO. 5-04-0122

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

________________________________________________________________________

DAVID WAYNE MERRITT, SR., Special ) Appeal from the

Administrator of the Estate of David ) Circuit Court of

Wayne Merritt, Jr., DAVID WAYNE ) Madison County.

MERRITT, SR., and TIFFANY MERRITT, )

)

Plaintiffs-Appellees, )

)

v. ) No. 01-L-1093

)

HOPKINS GOLDENBERG, P.C., JOHN )

HOPKINS, and MARK GOLDENBERG, ) Honorable

) Phillip J. Kardis,

Defendants-Appellants. ) Judge, presiding.

________________________________________________________________________

JUSTICE HOPKINS delivered the opinion of the court:

The plaintiffs, David Wayne Merritt, Sr., individually and in his capacity as thespecial administrator of the estate of David Wayne Merritt, Jr., and Tiffany Merritt, filed thisaction against the defendants, Hopkins Goldenberg, P.C., John Hopkins, and MarkGoldenberg, alleging that the defendants committed legal malpractice in obtaining aninadequate settlement in an underlying wrongful-death-and-survival action involving DavidJr., who had died in an automobile accident.

On appeal, the defendants argue that the plaintiffs failed to prove their legalmalpractice claim and that, therefore, the circuit court improperly denied the defendants'motions for a directed verdict and for a judgment notwithstanding the verdict. Alternatively,the defendants contend that the verdict was against the manifest weight of the evidence andthat various errors in the admission of evidence, an erroneous denial of their motion totransfer, jury instruction errors, an improper closing argument, and an improper damagesaward entitle them to a new trial.

We reverse and remand for a new trial.

FACTS

On May 16, 1998, David Sr. entered into a contingent fee agreement with thedefendants to institute a negligence action against Missouri Dry Dock and Repair Company(Missouri Dry Dock) for the wrongful death of his six-year-old son, David Jr., who died onMay 14, 1998, as a result of an automobile accident in Alexander County. David Jr.'smother, JoAnn, and sister, Tiffany, were also involved in the collision. Although JoAnnoriginally retained the defendants to represent her regarding her personal injury claims, sheterminated the attorney-client relationship due to disagreements with David Sr. On May 27,1998, David Sr. was appointed by the circuit court of Alexander County as a specialadministrator to prosecute the wrongful-death-and-survival action. The defendantsrepresented David Sr. in this capacity, and on November 18, 1999, the plaintiffs settled theaction for $200,000.

On July 3, 2001, the plaintiffs brought this legal malpractice action against thedefendants, alleging that the defendants settled the plaintiffs' claim for an inadequate amount. The plaintiffs alleged that the defendants committed malpractice by failing to adequatelyinvestigate the claim, by improperly advising David Sr. that $200,000 was a fair andadequate settlement, and by failing to adequately prepare the necessary medical data andtestimony to make a proper disposition of the claim. On October 31, 2003, the defendantsfiled a motion to transfer venue from Madison County to Alexander County, and the circuitcourt denied the defendants' motion on November 3, 2003.

At the trial on November 4, 5, and 6, 2003, defendant John Hopkins, a partner of thedefendant law firm, testified that John Simmons, who was at that time an employee of thedefendant law firm, had initiated the plaintiffs' underlying action. Hopkins testified that hetook charge of the plaintiffs' case in November 1998. Hopkins testified that the defendantsinvestigated the accident, prepared and filed the 21-page complaint, conducted written andoral discovery, issued trial subpoenas, and prepared jury instructions for trial. Hopkinsacknowledged that he did not take statements in the underlying case and that the legalresearch he completed was stored in his memory, not the file.

Hopkins acknowledged that he wrote an initial settlement demand letter, datedNovember 24, 1998, to Al Pranaitis, the attorney hired by the insurance company to defendMissouri Dry Dock and its driver, Gerald Robinson, in the underlying action. In the letter,Hopkins stated that the underlying case was worth in excess of $2 million if it were pursuedin Madison or St. Clair County but that because the case was filed in Alexander County andthe policy limit of Missouri Dry Dock's insurance was $1 million, his tendered settlementdemand was $750,000. Hopkins testified that initial settlement demands were generallytwice as much as the case was worth and were inflated to send a signal to opposing counsel.

On December 15, 1998, Hopkins wrote another letter to Pranaitis, encouraging asettlement by the end of the year. Hopkins testified that although he had spoken with DavidSr. on the telephone at that time and David Sr. had indicated that he wanted to settle the case,the two men had not met in person. Hopkins testified that, throughout the case, he primarilycommunicated with David Sr. by telephone.

On February 25, 1999, Hopkins wrote another letter to Pranaitis, stating that DavidSr. was interested in a quick conclusion and suggesting that the parties settle the case.Hopkins testified that at that time, the depositions of Gerald Robinson and David Sr. hadbeen taken. Hopkins met David Sr. in person at his deposition.

On March 22, 1999, Pranaitis offered to settle the underlying case for $60,000. OnMarch 26, 1999, Hopkins refused Pranaitis's offer of $60,000, characterized the offer as aninsult, and stated that the previous demand of $750,000 was more than reasonable, but helowered the settlement demand to $400,000.

On March 31, 1999, Pranaitis offered to settle the underlying case for $90,000. OnApril 5, 1999, Hopkins rejected the $90,000 offer and stated that the only resolution wouldbe to try the cause in Alexander County that next October.

On June 17, 1999, Pranaitis offered to settle the underlying case for $100,000. OnJune 21, 1999, Hopkins rejected Pranaitis's $100,000 offer, stating that he would entertainsettlement discussions more in line with $400,000. On October 11, 1999, Hopkins offeredto settle the underlying case for $300,000, stating that the offer was based on his client'sinsistence to settle.

Hopkins testified that on November 5, 1999, within two weeks of the trial date,Pranaitis notified him that Missouri Dry Dock was admitting liability. Hopkins testified thatthe admission of liability was a tactical decision on Missouri Dry Dock's behalf to removethe circumstances of the accident from the case and to narrow the issues to damages only,thereby lowering damages. Hopkins testified that he advised David Sr. that if he lost, theunderlying case might be reduced significantly to $100,000 but that if he won, the case mightstill have a value of $300,000. Hopkins testified that David Sr. told him that he wanted thecase completed because he was in pain and was having trouble dealing with JoAnn. Theparties agreed to settle the underlying case for $200,000. On November 18, 1999, the circuitcourt of Alexander County entered its order approving the $200,000 settlement.

Hopkins testified that when settling the underlying case, he considered issuesregarding a release JoAnn had signed. Hopkins characterized the release as a cloud on thecase because it was unclear whether JoAnn had released her wrongful death claim along withher bodily injury claim. Hopkins testified that the release's language was broad, that therelease would be construed against JoAnn because her attorney had drafted it, and thatJoAnn's settlement of $100,000 for bodily injuries only was high considering that hermedical expenses and lost wages were only $7,500. Hopkins testified that if the trial courtruled on the release matter and then the matter was appealed, the case would be prolonged,and David Sr. continued to assert that he wanted the case resolved. Hopkins testified thatin determining the value of the underlying case, he also considered problems occurringbetween David Sr. and JoAnn.

Hopkins testified that he filed the case in Alexander County because it was the siteof the accident. Hopkins acknowledged that he could have filed the case in the federal courtin Benton, Illinois, but he testified that both Alexander County and the federal court inBenton were considered conservative jurisdictions. Hopkins testified that in his practice, hewas familiar with general areas in Southern Illinois, including those south of Madison andSt. Clair Counties. Hopkins testified that as the venues moved away from Madison and St.Clair Counties, the jurors were more conservative and the verdicts and settlements werelower. Hopkins testified that very few cases were filed in Alexander County, as evidencedby the underlying case's number, which was 12, meaning that during the first five months of1998, before the underlying case was filed, only 11 other cases of this type were filed inAlexander County.

John Simmons testified that within a couple of days after the accident, he met withDavid Sr. and JoAnn and visited the accident scene. Simmons testified that he had noexperience with trying or settling cases in Alexander County. In June 2001, Simmons, whoat that time was no longer an employee of the defendant law firm, called David Sr., learnedof the settlement amount, and introduced David Sr. to the attorney who prosecuted this legalmalpractice case.

Roy Dripps, an attorney and a resident of Madison County, testified that he primarilyrepresents plaintiffs in personal injury and wrongful death cases. Dripps testified that afterreviewing the underlying case against Missouri Dry Dock, he opined that Hopkins' legalrepresentation had been substandard and that Hopkins had failed to employ reasonable skillin negotiating the settlement. Dripps testified that Hopkins had not acted as a reasonablycompetent attorney because he failed to obtain discovery regarding Missouri Dry Dock'sassets and therefore failed to pressure the insurance company to prevent an excess judgmentagainst Missouri Dry Dock. Dripps testified that Hopkins should have argued to opposingcounsel that JoAnn's release, which Hopkins had considered in advising David Sr. to acceptthe $200,000 settlement, only released her bodily injury claims, not her wrongful deathclaim. Dripps testified that Hopkins should have told David Sr. that Missouri Dry Dock hadconceded liability, that there would be no defense verdict, and that only the amount ofdamages was at issue.

Dripps testified that the case was worth between one and two million dollars and thatthe $200,000 settlement offer was inadequate. Dripps acknowledged, however, that he hadtried only one wrongful death case to a verdict and that the case did not involve the wrongfuldeath of a minor. Dripps also acknowledged that the location of the case is a factor toconsider in determining a settlement or verdict value, that he had dealt with only onepersonal injury case in Alexander County, that he had not tried a case in Alexander County,that he had never picked a jury there, and that he had completed no research regardingsettlements in Alexander County.

Dripps testified that Hopkins could have filed in alternative venues, including thefederal court in East St. Louis or Benton, state court in Cape Girardeau, Missouri, or federalcourt in Cape Girardeau, Missouri, because Missouri Dry Dock and its driver were locatedin Missouri. Dripps testified that an important consideration in choosing a forum is thelength of time before the case gets to trial. Dripps acknowledged that any greater recoveryin a different forum would have been reduced by the two-year delay in getting to trial.

David Sr. testified regarding his loss of society because of his son's death. David Sr.testified that he met with Hopkins, for the third time, in the Alexander County courthouse,where he first learned the settlement amount. David Sr. testified that, while at thecourthouse, Hopkins told him that if they pursued the case to trial, there was a good chancethat he would recover nothing. David Sr. testified that he was generally intimidated byHopkins. However, he acknowledged that he had agreed to settle and that he had toldHopkins that he wanted the case resolved. David Sr. testified that he did not tell Hopkinsthat he did not want to go to trial.

The parties stipulated that Missouri Dry Dock was a solvent corporation and that theparties to the release intended to release the claims for JoAnn's and Tiffany's bodily injuries.

Pranaitis, defense counsel in the underlying wrongful death case, testified for thedefense. Pranaitis testified that before the underlying case, he had not worked on cases inAlexander County but had worked on cases in counties near Alexander County, e.g.,Williamson and Franklin Counties. Pranaitis testified that, prior to Hopkins' first settlementdemand, he had determined that there was 100% liability on the part of Missouri Dry Dockand Gerald Robinson, that, if the case proceeded to a jury trial, the jury would probablyaward damages in the amount of $100,000 to $200,000, and that the settlement value of theunderlying case ranged from $125,000 to $150,000. Pranaitis based these amounts on thevenue of the case, i.e., Alexander County was a rural and poor county with little litigation. Pranaitis also based his determination on the damages that could be recovered in a caseinvolving the wrongful death of a child, i.e., the loss of income is not considered, and child-rearing expenses are deducted from the jury's award.

Pranaitis testified that the negotiations in the underlying case were typical of thethousands of cases he had handled in his 27 years of experience and that, of those thousandsof cases, he could not recall one where the amount recovered exceeded his initial evaluation. Pranaitis testified that it was his opinion that $200,000 was more than he thought theinsurance should pay as a settlement. Pranaitis acknowledged that, since the settlement, hehad represented Hopkins as a client.

Mark Johnson, a trial attorney who had practiced law in Alexander County since1982, testified that his office handled approximately two or three wrongful death actions atany given time and that he had represented families in the wrongful death of a minor on fouroccasions. Johnson testified that he had reviewed the pleadings, discovery, and otherdocumentation involving the underlying case and that, in his opinion, Hopkins had notdeviated from the standard of care.

Johnson testified that the $200,000 settlement amount was fair and reasonable,considering that it was a wrongful death claim for a minor and that it was filed in AlexanderCounty. Johnson testified that there were approximately one or two civil trials in AlexanderCounty per year, that the southern area of Illinois was economically depressed, thatAlexander County was either the poorest or the second poorest county in Illinois, and thatunemployment was in double digits most of the time. Johnson testified that both Pranaitisand Hopkins contacted him within one year after David Jr. had died to inquire about juryverdicts in Alexander County. Johnson testified that the largest verdict recovered inAlexander County's history was $300,000. In that case, the plaintiff had a severe backinjury, lost wages, and expensive medical bills.

In the legal malpractice case, the jury returned a verdict in favor of the plaintiffs andassessed damages in the amount of $675,000. The jury specifically found that $200,000 wasnot a fair and reasonable settlement for the plaintiffs' claims against Gerald Robinson andMissouri Dry Dock under the circumstances in 1999. On November 13, 2003, the circuitcourt entered a judgment on the jury's verdict. On January 22, 2004, the circuit court deniedthe defendants' timely posttrial motion, which had argued, inter alia, that the jury's verdictwas against the manifest weight of the evidence. On February 10, 2004, the defendants fileda timely notice of appeal.

ANALYSIS

The defendants argue that the circuit court erred in denying the defendants' motionfor a judgment notwithstanding the verdict because the plaintiffs failed to establish theelements of their legal malpractice claim. Alternatively, the defendants argue that the verdictwas against the manifest weight of the evidence.

The trial court should enter a judgment notwithstanding the verdict when all of theevidence, viewed in the light most favorable to the opponent, so overwhelmingly favors themovant that no contrary verdict based on that evidence could ever stand. Pedrick v. Peoria& Eastern R.R. Co., 37 Ill. 2d 494, 510 (1967). We review de novo the denial of a motionfor a judgment notwithstanding the verdict. McClure v. Owens Corning Fiberglas Corp.,188 Ill. 2d 102, 132 (1999).

"On a motion for a new trial a court will weigh the evidence and set aside the verdictand order a new trial if the verdict is contrary to the manifest weight of the evidence." Mizowek v. De Franco, 64 Ill. 2d 303, 310 (1976). To direct a verdict, the court considersa much more conclusive evidentiary situation than is necessary to justify a new trial. Pedrick, 37 Ill. 2d at 509-10. "The determination of whether a new trial should be grantedrests within the sound discretion of the trial court, whose ruling will not be reversed unlessit reflects an abuse of that discretion." Snelson v. Kamm, 204 Ill. 2d 1, 36 (2003).

A plaintiff who settles an underlying claim is not automatically barred from bringinga malpractice action against the attorney who represented him in that claim. McCarthy v.Pedersen & Houpt, 250 Ill. App. 3d 166, 172 (1993). "The principle that a lawyer may beheld liable for negligence in the handling of a case that was ultimately settled by the client,whether based on deficiencies in preparation that prejudiced the case and more or lessrequired a settlement or on a negligent evaluation of the client's case, has been accepted bynearly every court that has faced the issue." Thomas v. Bethea, 351 Md. 513, 527, 718 A.2d1187, 1194 (1998) (citing, inter alia, McCarthy, 250 Ill. App. 3d 166). The attorneymalpractice action should be allowed where the plaintiff can show that he settled for a lesseramount than he could reasonably expect without the malpractice. Brooks v. Brennan, 255Ill. App. 3d 260, 270 (1994).

"To establish legal malpractice, a plaintiff must prove the existence of an attorney-client relationship; a duty arising from that relationship; a breach of that duty; a proximatecausal relationship between the breach of duty and the damages sustained; and actualdamages." Glass v. Pitler, 276 Ill. App. 3d 344, 349 (1995). The malpractice plaintiff mustprove a case within a case, that is, the plaintiff is required to prove the underlying action andwhat his recovery would have been in that prior action absent the alleged malpractice. Foxv. Berks, 334 Ill. App. 3d 815, 817 (2002); Glass, 276 Ill. App. 3d at 351. The plaintiff mustestablish that "but for" the attorney's negligence, the client would not have suffered thedamages alleged. Glass, 276 Ill. App. 3d at 349. "The injuries resulting from legalmalpractice are not personal injuries but pecuniary injuries to intangible property interests." Glass, 276 Ill. App. 3d at 349. "Damages must be incurred and are not presumed [citation];and the plaintiff must affirmatively plead and prove that he suffered injuries as a result of theattorney's malpractice." Glass, 276 Ill. App. 3d at 349.

Alexander County was a proper forum for the underlying wrongful-death-and-survivalaction. David Sr. and his family were residents of Alexander County, and the accidentoccurred in Alexander County. See 735 ILCS 5/2-101 (West 2004); Dawdy v. Union PacificR.R. Co., 207 Ill. 2d 167, 173 (2003) (when the plaintiff chooses his home forum or the siteof the accident or injury, it is reasonable to assume that the forum is proper because thelitigation has the aspect of being decided at home); see also Botello v. Illinois Central R.R.Co., 348 Ill. App. 3d 445, 459 (2004) (the county's interest in ensuring safety at local railroadtracks strongly militated in favor of deciding the action in that county). A plaintiff's use offorum-shopping to suit his individual interests is a strategy contrary to the purposes behindthe venue rules and is against Illinois's public policy. See Dawdy, 207 Ill. 2d at 175 (decentjudicial administration could not tolerate forum-shopping as a legitimate reason forburdening communities with litigation that arose elsewhere).

The plaintiffs presented evidence that Hopkins failed to notify David Sr. that MissouriDry Dock had admitted liability and instead advised David Sr. otherwise. Therefore, theplaintiffs presented sufficient evidence that Hopkins breached the standard of care he owedto his client. However, considering the particular circumstances in the present case, theplaintiffs failed to present sufficient evidence that but for Hopkins' breach of the standard ofcare, the plaintiffs would have received an amount in excess of $200,000 for their wrongful-death-of-a-minor claim, properly filed in Alexander County. See Northern IllinoisEmergency Physicians v. Landau, Omahana & Kopka, Ltd., Nos. 97895, 97899 (September22, 2005) (even if an attorney's negligence is established, no action will lie against theattorney unless the negligence proximately caused damage to the client); Fox, 334 Ill. App.3d at 818 (the plaintiff could not prove that she was damaged because she could not provethat she would have been able to enforce a larger judgment); Brooks, 255 Ill. App. 3d at 271(the plaintiff failed to present evidence that she settled for a lesser amount of damages thanshe could have reasonably expected to have recovered without the attorney's allegedmalpractice). The plaintiffs' expert provided no basis to support his testimony that the valueof the underlying wrongful-death-of-a-minor case, properly filed in Alexander County, wasgreater than $200,000. Dripps testified that the case was worth between one and two milliondollars; however, he acknowledged that he had tried only one wrongful death case to averdict and that he had never gone to a verdict in a wrongful death case where the decedentwas a minor. Although Dripps acknowledged that the location of the suit was a factor toconsider when determining the value of a case, he admitted that he had never picked a juryin Alexander County and had conducted no research regarding settlements in AlexanderCounty. Dripps's testimony failed to establish that the plaintiffs could have recovered morethan $200,000 for their Alexander County wrongful-death-of-a-minor case and thereforefailed to sufficiently establish proximate cause to sustain the jury's verdict.

The plaintiffs cite Mayol v. Summers, Watson & Kimpel, 223 Ill. App. 3d 794, 807 (1992), for the proposition that an attorney's admission concerning the value of a case issufficient to sustain the jury's award of damages, and accordingly, they cite to Hopkins'initial negotiation letter to Pranaitis, stating that the settlement value of the underlying casewas $750,000. We find Mayol distinguishable from the present case because the attorneyin Mayol estimated the value of the case to his client. Mayol, 223 Ill. App. 3d at 807. Here,during negotiations Hopkins estimated the settlement value of the case to opposing counsel. See Bowman v. Illinois Central R.R. Co., 11 Ill. 2d 186, 213 (1957) (matters relating to offersof compromise are ordinarily inadmissible). Hopkins testified, and common sense dictates,that Hopkins' initial settlement demand of $750,000 was inflated for negotiation purposes. The evidence regarding Hopkins' initial settlement proposal was not sufficient to support thejury's verdict and failed to sufficiently establish causation, i.e., that but for Hopkins'negligence, the plaintiffs could have recovered more than $200,000 in the Alexander Countywrongful-death-of-a-minor suit.

Pranaitis testified that he initially estimated the settlement range to be $125,000 to$150,000, considering that the case was filed in Alexander County, the case involved no lostwages, and child-rearing expenses would be deducted from the loss-of-society award. Pranaitis testified that his initial settlement estimates were rarely wrong and that $200,000was more than he thought the insurance company should have paid as a settlement.Johnsontestified that his office handled approximately two to three wrongful death actions at a timeand that he had previously represented families in the wrongful death of a minor. Johnsontestified that he had practiced law in Alexander County since 1982, that Alexander Countywas one of the most impoverished counties in Illinois, that the largest verdict recovered inAlexander County was $300,000, and that in that case, the plaintiff had a severe back injury,lost wages, and expensive medical bills. Johnson testified that the $200,000 settlementamount in the underlying action was fair and reasonable, considering the damages availablein the underlying case and considering that the case was in Alexander County.

The plaintiffs failed to provide sufficient evidence to show that but for the attorney'snegligence, they could have recovered more than $200,000, considering the availabledamages in the underlying case and considering that the proper forum of the underlying casewas Alexander County and that Alexander County was a conservative jurisdiction withregard to damage awards. See Thomas, 351 Md. at 532, 718 A.2d at 1197 ("A lawyer cannotbe held liable for not having held out for a settlement that could not have been achieved inany event"). We therefore find that the jury's verdict was contrary to the manifest weight ofthe evidence and that the circuit court should have granted a new trial. See Mizowek, 64 Ill.2d at 311.

We also find that the appropriate forum for this legal malpractice case was AlexanderCounty. The plaintiffs were residents of Alexander County, the underlying vehicle accidentoccurred in Alexander County, the settlement was approved by the circuit court of AlexanderCounty, and the defendants' expert, Johnson, practiced law from his office in AlexanderCounty. See 735 ILCS 5/2-101 (West 2004); Dawdy, 207 Ill. 2d at 172 (in determining themost appropriate forum, a court considers private-interest factors: the convenience of parties,the ease of access to evidence, the availability of compulsory process, the cost to obtain theattendance of willing witnesses, and the possibility of viewing the premises). In addition,the evidence demonstrated that Alexander County's docket was not congested, and AlexanderCounty has a strong interest in determining the value of a wrongful-death-of-a-minor suitoriginating in its forum. See Dawdy, 207 Ill. 2d at 173 (in determining the most appropriateforum, a court considers public-interest factors: administrative difficulties caused whenlitigation is handled in congested venues, the unfairness of imposing jury duty on residentsof a county with no connection to the litigation, and the interest in having local controversiesdecided locally). The circuit court abused its discretion by denying the defendants' motionto transfer the case to Alexander County. Accordingly, we reverse the circuit court'sjudgment on the jury's verdict and remand the cause to the circuit court with directions totransfer the case to Alexander County for a new trial, pursuant to the doctrine of forum nonconveniens.

CONCLUSION

For the foregoing reasons, the judgment of the circuit court of Madison County isreversed, and the cause is remanded with directions to transfer it to Alexander County fora new trial.

Reversed; cause remanded with directions.

McGLYNN and COOK, JJ., concur.