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David Thomas v. Marsharina Bethea No. 7, Sept. Term, 1998

Attorney malpractice; negligence in recommending settlement; measure of damages.

Circuit Court for Baltimore City Case No. 95079017/CL-194080 IN THE COURT OF APPEALS OF MARYLAND

No. 7 September Term, 1998 ______________________________________

DAVID THOMAS

v.

MARSHARINA BETHEA

______________________________________ Bell, C.J. Eldridge Rodowsky Chasanow Raker Wilner Cathell, JJ. ______________________________________ Opinion by Wilner, J. Chasanow and Cathell, JJ., concur and dissent. ______________________________________ Filed: October 9, 1998

In Prande v. Bell, 105 Md. App. 636, 656, 660 A.2d 1055, 1065 (1995), the Court of Special Appeals held that an attorney may be liable for professional malpractice for recommending that a client's case be, or not be, settled on particular terms if "the attorney's recommendation in regard to settlement was one that no reasonable attorney, having undertaken a reasonable investigation into the facts and law as would be appropriate under the circumstances, and with knowledge of the same facts, would have made." Applying Prande v. Bell, the appellate court in this case reversed a judgment N.O.V. entered by the Circuit Court for Baltimore City and reinstated a $125,000 judgment entered against an attorney upon a jury verdict. We granted certiorari to review that decision and shall affirm it.

BACKGROUND Like most cases tried on their merits, some of the relevant facts in this action were in dispute. Because what is before us is the appropriateness of a judgment N.O.V., overturning the effect of a jury verdict in favor of the plaintiffs, we must view the evidence and the permissible inferences from that evidence in a light most favorable to the plaintiffs. Impala Platinum v. Impala Sales, 283 Md. 296, 389 A.2d 887 (1978); Houston v. Safeway, 346 Md. 503, 697 A.2d 851 (1997). The principal issues before us, however, are essentially legal, rather than factual, ones. In August, 1981, petitioner, David Thomas, commenced representation of the

respondents, Marsharina Bethea (a minor) and her mother, Gerrine Bethea,1 in a lead paint poisoning case. Eventually, suit was filed in the Circuit Court for Baltimore City against three landlords -- the owners of 209 East Lafayette Avenue, 1322 Myrtle Avenue, and 1217 East Preston Street, each of whom was alleged to be responsible for the elevated level of lead in Marsharina's blood. The owners of the first two properties were served; Thomas was unable to effect service on the owner of the Preston Street property, however. In December, 1983, Thomas received an offer of settlement from the two served defendants in the amount of $2,500, but the offer was conditioned on a general release of all three defendants. Allegedly upon Thomas's recommendation, Gerrine Bethea, on behalf of herself and Marsharina, accepted the settlement offer and executed the releases demanded by the settling defendants. In March, 1995, nearly 12 years after accepting the settlement, Marsharina filed this lawsuit against Thomas in the Circuit Court for Baltimore City, alleging that, as a result of Thomas's failure to properly investigate, prosecute, and litigate her claim and his recommendation to Gerrine that she accept a settlement that was "grossly inadequate to cover the damages," Gerrine accepted the $2,500 settlement. Following the decision in Prande v. Bell, supra, Marsharina amended her complaint to add the allegation that Thomas's recommendation to settle "was one that no reasonable attorney, having undertaken a

The record shows the elder Ms. Bethea's name sometimes as Gerinne and sometimes as Gerinna. The child, Marsharina, was married by the time of trial in this case. Her current surname is Gillard. -2-

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reasonable investigation of the facts and law as would be appropriate under the circumstances, and with the knowledge of the same facts, would have made." The essence of her case, as it was presented at trial, was Thomas's recommendation that the Betheas accede to a release of the unserved owner of 1217 East Preston Street, W.H. Groscup & Sons, Inc., as a condition of the $2,500 settlement. Although her expert witness testified to the inadequacy generally of the $2,500 settlement, Marsharina later stipulated that the alleged breach of the standard of care by Thomas concerned only the settlement with respect to Groscup. With that stipulation, her contention was not that $2,500 was an unreasonable consideration for releasing the owners of the other two properties, but rather that a valuable case against Groscup was surrendered for no compensation at all. In that regard, Marsharina presented evidence that Gerinne advised Groscup, before entering into the lease, that Marsharina had an elevated lead level, that Groscup informed her that the apartment was free of lead paint, that there was, in fact, flaking or peeling lead paint there, and that there was $300,000 of insurance on the property. Her expert witness, C. Christopher Brown, Esq., opined that "the settlement that was entered into by Mr. Thomas was woefully inadequate in terms of what the fair amount, reasonable amount would have been in light of the facts of the case and the law applicable to the case; and that as a consequence no reasonable attorney should have entered into such a settlement." Mr. Brown stated that a reasonable lawyer might settle for such a small amount if the landlord had no assets or threatened bankruptcy, or if the client herself was in some way irresponsible, but that neither those factors nor any similar ones were present in this case. His view was that
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Marsharina had a "strong case" which "should not merely be settled for $2500, but a case which should be off to a trial for however much the jury determines is an appropriate sum."2 No evidence was produced by the plaintiff as to what a reasonable settlement amount would have been in 1983 or what a likely verdict would have been had the case proceeded to trial. It was, instead, left to the malpractice case jury to determine what kind of verdict would have been returned had the lead paint poisoning case against Groscup been tried on its merits. At the conclusion of trial, the court submitted a number of specific issues for the jury to resolve. In response to the questions posed, the jury determined that (1) Groscup was negligent in regard to the presence of a lead paint hazard; (2) the presence of that hazard was a substantial factor in causing injury to Marsharina; (3) Thomas's recommendation in regard to the settlement of Marsharina's lead paint poisoning case was one that no reasonable attorney would have made; (4) the amount that a reasonable attorney would have recommended to Gerrine for Marsharina's claims was $25,000; and (5) Marsharina sustained $125,000 in damages as a result of her exposure to lead paint at 1217 East Preston Street. Upon those special verdicts, judgment was initially entered in favor of Marsharina in the amount of $125,000. That judgment was soon vacated, however. Concluding that the proper measure of damages, assuming liability, would have been the amount of a reasonable

As we indicated, there was a significant dispute over the propriety of Mr. Thomas's conduct. Thomas stated that the case against Groscup was weak, in part because of conflicts in the evidence, that Gerinne insisted that the case be settled, and that he got the best settlement possible. His expert, George Russell, Esq., opined that "the settlement made by Mr. Thomas was not only reasonable but because of the problems he had in the case was ultimately a gift because had the case gone to trial he could not have won the case . . . ." -4-

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settlement with Groscup in 1983, and not the value of Marsharina's claim against that defendant, and finding that there was no evidence as to what a reasonable settlement would have been, the court granted Thomas's motion for judgment N.O.V. and entered judgment in his favor. In an unreported Opinion, the Court of Special Appeals, applying its decision in Prande v. Bell, reversed the judgment N.O.V. and reinstated the $125,000 judgment entered on the jury's verdict. It concluded that, in the case before it, evidence of the fair settlement value was unnecessary. Citing RONALD E. MALLEN
MALPRACTICE,

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