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KO. 87-128
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987

GERALD CARLSON and PRECISION
AUTOMOTIVE, INC., a Montana
corporation,

Plaintiff and Appellant,

-VS-

DOUGLAS K. MORTON,
Defendant and Respondent.

APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Michael Keedy, Judge presiding.

COUNSEL OF RECORD: For Appellant: Richard DeJana argued, Kalispell, Montana For Respondent: Warden, ~hfistiansen, Johnson & Berg; Stephen Berg argued, Kalispell, Montana
Submitted:  October 6, 1987  
Decided:  November 24, 1987  
Filed:  

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Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

Plaintiff appeals an order of the District Court of the
Eleventh Judicial District granting a directed verdict to
defendant Morton. The plaintiff had sued Morton alleging
that he had been negligent in handling certain legal matters
for the plaintiff and had misrepresented his interests. The
attorney for the plaintiff notified the court and the
defendant when the matter came on for trial January 19, 1987
that he would not. be calling an expert witness, as he had
stated at pretrial conference. Plaintiff's attorney then
made his opening statement, at the end of which, the
defendant made a motion to dismiss the case for failure to
provide expert testimony. Both sides briefed the question to
the court. The court then heard arguments and entered an
order under Rule 50, M.R.Civ.P., dismissing the case.

We affirm.

Morton was a loan officer and vice president of First
Security Bank in Kalispell, Montana when he met Carlson in
1977. Morton, a law school graduate, has been admitted to
the practice of law in Montana and did practice for several
years before he returned to banking in the mid-1970s. He
continued to moonlight practicing law after he joined the
bank. He and Carlson built a friendship around their mutual
interest in old cars. Morton had the opportunity to do some
legal work concerning Carlson's property settlement and
custody agreement when Carlson's marriage dissolved.

In 1981, Carlson purchased a business on which the
Small Business Administration and the Bank of Columbia Falls
were foreclosing. To aid in this purchase, Carlson asked
Morton to incorporate the newly acquired business in the name
of Precision Automotive, Inc. On December 18, 1981, the

Secretary of State approved the proposed articles of
incorporation and issued a certificate of incorporation.
Carlson contends, however, that Morton failed to effectively
complete the corporation since he failed to file bylaws or
organizational minutes for some fifteen months.

Carlson, though, operated the business as if it had
been incorporated. He hired a man by the name of Jack
Manning to work at Precision Automotive. Manning brought
with him a pinpress that he said Carlson could use in his
business. The pinpress served as security for some car
repairs that Manning had not been able to pay for. On July
1, 1982, Manning approached Morton at First Security Rank
about the possibility of obtaining a $2,000 loan. He was
told that since he had not worked for a full year in the
Flathead Valley, the bank would require a guaranty. Manning
suggested that his employer Carlson could serve as a
guarantor. It is not clear what happened at this point. But
taking into consideration the allegations most favorable to
the appellant, it appears that Carlson told Morton he was
reluctant to sign a guaranty. Nevertheless, the loan was
made, Carlson was named as guarantor but had not signed the
note, Manning got his $2,000 after pledging the pinpress as
security, and Manning then left the area. On July 25, 1982,
after it was apparent that Manning had no intention of
repaying the loan, Morton presented the written guaranty to
Carlson for his signature as guarantor. There was some
discussion as to whether Carlson should sign the guaranty.
Morton encouraged him to sign and so Carlson did sign the
guaranty. The guaranty note at some point was backdated to
the date of the loan. Carlson had told Morton he feared that
others might have an interest in the pinpress. Carlson told
Morton he was thinking of removing the serial number to
retard any prior lien holder's right to the pinpress.

Carlson  alleges  that  Morton  encouraged  him  to  do  that.  
Carlson subsequently removed the serial number.  
Morton  completed  the  incorporation  of  Precision  

Automotive in March 1983 when he finished the bylaws and
organizational minutes. In April 1983, the bank sued Carlson
for possession of the pinpress. In an affidavit in support
of the bank's claim, Morton indicated that the serial number
had been removed. The District Court upheld the bank's claim
to the pinpress. Carlson's business at Precision Automotive
was seriously affected by the loss of the pinpress and within
several months, Precision Automotive was forced out of
business. Carlson and Precision Automotive filed a cause of
action on May 20, 1983 naming Morton as defendant. The
complaint, as amended on October 26, 1983, alleged that
Morton had violated Disciplinary Rules, 1-102(A)(4),
5-101(A), 5-104, 5-105, 5-107, 6-101 and 7-102 of the Code of
Professional Responsibility. Carlson claims that the
violation of these Disciplinary Rules was implied malice and
as such constituted negligence on the part of the attorney.

The District Court ruled that such charges require
expert testimony to delineate the degree of care expected of
an attorney handling a client's affairs. The court ruled
that since reasonable minds could properly differ over the
plaintiff's contentions, it would be unfair to lay jurors to
force them to figure out the responsibility of an attorney in
this matter without the aid of an expert witness. On appeal,
Carlson urges that the Code of Professional Responsibility's
Disciplinary Rules state a minimum standard of care, that,
when breached, establishes malpractice. He argues that these
Disciplinary Rules state the attorney's duty so succinctly
that an expert witness is not required to demonstrate that
Morton's actions were improper and negligent. The question

of whether expert testimony is required in a legal
malpractice case is one of first impression in Montana.

The Canons of Professional Ethics and their
accompanying Disciplinary Rules were adopted by this Court in
1973 (see 160 Mont. xxiii) to assure the utmost integrity in
the legal profession and the impartial administration of
justice. State ex rel. Coburn v. Bennett (1982), 202 Mont.
20, 32, 655 P.2d 502, 508. In 1985, this Court replaced the
Canons with the Rules of Professional Conduct, Montana
Supreme Court Order No. 84-303, dated June 6, 1985, but the
intent of governing the conduct of attorneys remained.
Carlson claims Morton engaged in fraudulent or dishonest
misrepresentations in violation of DR 1-102(A)(4); used a
confidence of the client to his disadvantage as prohibited by
DR 4-101(B); undertook employment when his interests impaired
his professional judgment as prohibited in DR 5-101; did not
refuse employment even though it might possibly be adverse to
his interest as a bank officer as proscribed by DR 5-104 and
DR 5-105, and neglected a matter entrusted to him, in
violation of DR 6-101. These disciplinary rules have
counterparts in the Model Rules of Professional Conduct
adopted in 1985, which while differing in language and
construction, establish the bounds of ethical conduct by
lawyers and are employed for disciplinary purposes.

At issue is whether the applicable ethical rules create
a duty in and of themselves so that a jury may determine a
breach of a legal duty merely by determining whether the
attorney abided by the rules. If the answer to that inquiry
is negative, then an expert witness must testify so as to
acquaint the jurors with the attorney's duty of care. It is
fundamental that any attorney is required to use reasonable
care or skill in handling his client's affairs. Clinton v.
Miller (1951), 124 Mont. 463, 483-84, 226 P.2d 487, 498. The

failure to employ such skill may result in the attorney's liability for damages to his client. Clinton, 226 P. 2d at 498. The Canons of Professional Ethics and the later Model Rules of Professional Conduct have been used exclusively in disciplinary proceedings in Montana. J. Faure and R.K. Strong, The Model Rules of Professional Conduct: No Standard for Malpractice, 47 Mont.L.Rev. 363, 369 (1986). When plaintiffs have based claims for negligent practices of law on attorneys1 duties to abide by ethical codes, courts have dismissed such cases. In Bickel ~r.Mackie (N.D. Iowa 19781, 447 F.Supp. 1376, affld (8th Cir. 1983), 590 F.2d 341, the trial court ruled that violation of the Code of Professional Ethics is not necessarily a tortious act and does not create a private cause of action. Bickel, 447 F.Supp. at 1383. Similarly, in Bob Godfrey Pontiac, Inc. v. Roloff (Or. 1981), 630 P.2d 840, a used car dealer sued two attorneys who had failed in a lawsuit against the car dealer. The car dealer alleged that the two attorneys had misled the court with false statements of fact, which he claimed was in direct violation of the Code of Professional Conduct. However, the
court ruled that a violation of the Code of Professional

Conduct does not give rise to a private cause of action.

Roloff, 630 P.2d at 849.
Such reasoning is supported by the Preamble to the

Model Rules of Professional Conduct as promulgated by the

American Bar Association. That preamble states in part:

Violation of a Rule should not give rise
to a cause of action nor should it create
any presumption that a legal duty has
been breached. The Rules are designed to
provide guidance to lawyers and to
provide a structure for regulating
conduct through disciplinary agencies.
They are not designed to be a basis for
civil liability. Furthermore, the
purpose of the Rules can be subverted

when they are invoked by opposing parties
as procedural weapons. The fact that a
Rule is a just basis for a lawyer's
self-assessment, or for sanctioning a
lawyer under the administration of a
disciplinary authority, does not imply
that an antagonist in a collateral
proceeding or transaction has standing to
seek an enforcement of the Rule.
Accordingly, nothing in the Rules should
be deemed to augment any substantive
legal duty of lawyers or the
extra-disciplinary consequences of
violating such a duty.

It is true that this Court's order of June 6, 1985, which
adopted the Model Rules of Professional Conduct, adopted
expressly only the Rules; it did not mention the Preamble.
It also is true that the matters complained of here occurred
before we adopted the Model Rules of Professional Conduct.
Nevertheless, this portion of the Preamble aptly states the
thinking and rationale of those who developed a complicated
scheme by which to judge the conduct of attorneys in various
and disparate matters, often at times where one ethical rule
seems to contradict another.

In any professional negligence action, the plaintiff
must prove that the professional owed him a duty, that the
professional failed to live up to that duty, thus causing
damages to the plaintiff. Negligence cannot be inferred from
the simple fact that a loss occurred. Montana Deaconess
Hospital v. Gratton (19761, 169 Mont. 185, 191, 545 P.2d 6701

673. Scott v. Robson (1979), 182 Mont. 528, 537-38, 597 P.2d
1150, 1155, citing Thompson v. Llewellyn (1959), 136 Mont.
167, 169, 346 P.2d 561, 562. The field of legal malpractice
is relatively unexplored, however, it is undisputed in
Montana law that one charging medical malpractice must be
able to support his claim that the physician departed from
the prevalent standard of medical care. Montana Deaconess

Hospital, 545 P.2d at 672-73; Collins v. Itoh (1972), 160
Mont. 461, 469, 503 P.2d 36, 41. Without either expert
testimony identifying the doctor's care as negligent or the
defendant-doctor's own testimony clearly establishing his own
conduct as negligent, the defendant-doctor is entitled to
summary judgment. Where plaintiffs failed to present expert
testimony and the defendant-doctor did not identify his care
as negligent, the District Court rightfully granted summary
judgment since a jury of laypersons cannot determine for
itself what caused an infection. Montana Deaconess Hospital,
545 P.2d at 673. The requirement that an expert witness is
needed to establish the standard of care has been extended to
dentists and orthodontists, Llera v. Wisner (1976), 171 Mont.
254, 262, 557 P.2d 805, 810; to manufacturers and
distributors of pharmaceuticals, Hill v. Squibb and Sons

(1979), 181 Mont. 199, 207, 592 P.2d 1383, 1388, to
abstractors of title, Doble v. Lincoln County Title Co.
(Mont. 1985), 692 P.2d 1267, 1270, 42 St.Rep. 128, 131.
Professors Prosser and Keeton may have best summarized
the rationale behind this rule:
Professional persons in general, and
those who undertake any work calling for
special skill, are required not only to
exercise reasonable care in what they do,
but also to possess a standard minimum of
special knowledge and ability. Most of
the decided cases have dealt with
surgeons and other doctors, but the same
is undoubtedly true of dentists,
pharmacists, psychiatrists,
veterinarians, lawyers, architects and
engineers, accountants, abstractors of
title, and many other professions and
skilled trades.

Since juries composed of laymen are
normally incompetent to pass judgment on

[such] questions . . .it has been held in the great majority of malpractice cases that there can be no finding of negligence in the absence of expert testimony to support it ...Where the matter is regarded as within the common knowledge of laymen, as where the surgeon saws off the wrong leg .. . it is often held that the jury may infer negligence without the aid of any expert.
Prosser and Keeton on The Law of Torts, 5 32, 5th Edition,
(1984).

Carlson's argument throughout has been that expert testimony was not required because lay jurors could examine the conduct of Morton and determine that it violated the Canons of Professional Ethics. And if the jurors had any doubts, they would be referred to the various Disciplinary Rules, which summarize the lawyer's obligations. Such contentions are lacking. First, we note that Carlson initially intended to introduce expert testimony from a Missoula attorney. Second, Rule 702 of the Montana Rules of Evidence specifically authorizes the use of expert witnesses "[i] f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence ...11 Third, the evidence concerning the alleged improprieties involved in this case, while seemingly straightforward, might very easily confuse and befuddle lay jurors unacquainted with general notions of civil procedure, incorporation, and professional legal responsibility. To expect a jury to sit through hours of examination and cross-examination, without the guidance of an attorney's expert testimony and then arrive at a verdict consistent with the evidence is asking much. This is not because the average juror is not capable of understanding such matters but only because he or she has never had the occasion or desire to
study such matters. The attorney's standard of care depends
upon the skill and care ordinarily exercised by attorneys, a
criteria that rarely falls within the common knowledge of
laymen. While proof of the violation of some disciplinary
rules may by itself establish negligence, such is not the
case with the rules cited by Carlson. Carlson must prove not
that various disciplinary rules were breached in his opinion;
rather he must demonstrate that Morton failed in his legal
duty. Proof of such a breach requires expert testimony. ABC
Trans Nat'l Transp., Inc. v. Aeronautic Forwarders, Inc.

(Ill. 1980), 413 N.E.2d 1299, 1310-11; Lenius v. King (S.D.
1980), 294 N.W.2d 912, 914; Hughes v. Malone (Ga.Ct.App.
1978), 247 S.E.2d 107, 111; Faure and Strong, The Model Rules
of Professional Conduct: No Standard for Malpractice, 47
Mont.L.Rev. at 376 (1986).

It is true that there are instances in which legal malpractice actions have been submitted for fact determination without the use of expert testimony. The theory in such cases is that the attorney's misconduct is so obvious that no reasonable juror could not comprehend the lawyer's breach of duty. These include the failure of a criminal defendant's attorney to appear in court on his client's behalf, Bowman v. Doherty (Kan. 1984), 686 P.2d 112, 120; the lawyer's failure to file suit within the appropriate statute of limitations; George v. Caton (N.M.Ct.App. 1979), 600 P.2d 822, 829; Collins v. Greenstein (Hawaii 1979), 595 P.2d 275, 283; failure of the attorney to retain a first mortgage for seller on property being conveyed despite seller's clear demand for a first mortgage; Olfe v. Gordon
(Wis. 1980), 286 N.W.2d 573, 576; attorney's interjection of
client's claims as a permissive counterclaim in state court
despite client's clear demand to file it as a separate claim
in federal court is a question of material fact that may or

may not require expert testimony. Nemec v. Deering (S.D.
1984), 350 N.W.2d 53, 56; the attorney's failure to insulate
one client from the debts of another client, Hill v. Okay
Const. (Minn. 1977), 252 N.W.2d 107, 116; and the attorney's

failure to notify a client he was resigning from the case thus resulting in a default judgment, Cental Cab. Co. v. Clarke (Md. 1970) , 270 A.2d 662, 667.
We are aware of the above cases but will apply a rule
similar to that for medical malpractice, where expert
testimony is required, and so hold that this suit fails for
the lack of espert testimony.

The District Court's order granting a directed verdict
to defendant Morton is affirmed.

We concur:

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