Hayenga v. Gilbert (CA1 2/12/15)

The court holds that if you sue the wrong defendant then the malpractice claim against you doesn’t accrue until the lawsuit you did file is over.

Plaintiff bought land based on a representation that the City of Phoenix had zoned it in a particular way. It hadn’t, so she sued the seller. She lost at trial, during which she learned that the mistake was the City’s fault; the court entered a large judgment for costs and fees against her. She got new lawyers. They moved for new trial but lost; they appealed but eventually dropped it and she satisfied the judgment. They also sued the City; they were able to settle part of the claim but lost the rest on summary judgment because the statute of limitations had run. So Plaintiff got yet another lawyer and sued her first one.

But by that time more than two years had passed since she learned of the City’s culpability. Defendant therefore moved for summary judgment. Plaintiff argued that she was not injured until the conclusion of the underlying litigation, less than two years  before. The trial court granted the motion.

The Court of Appeals reverses and remands. When malpractice occurs during litigation there is no damage until the appeals are over. Although the court discusses that as if it were an interesting bit of law, its hornbook law and has been for a long time. The question here is whether not including the City in the case against the seller constituted malpractice during the course of it. The court holds that it did. The analysis, though padded with case citations, policy discussion, etc., is actually brief and conclusory. (Our point is that it’s right and should have been brief and conclusory without the padding.)

The analysis is also a bit strange because it treats separately with the two claims Plaintiff purports to make: that the lawyer was negligent for not suing the City and was also negligent for not anticipating that the seller would blame the City. That there’s a significant analytical difference isn’t particularly apparent from the decision. What’s more interesting is that they’re both somewhat artificial; Plaintiff’s real theory, which the court at one point vaguely alludes to – without mentioning (presumably because the record doesn’t) that her present lawyer explained it to a newspaper reporter – is that her old lawyer deliberately didn’t sue the City because that would have given him a conflict of interest.

(link to opinion)