Niehoff v. Shankman & Assocs. Legal Ctr.

• Decision Date: 21 December 2000
• Citation: 2000 ME 214,763 A.2d 121
• Parties: Michael NIEHOFF v. SHANKMAN & ASSOCIATES LEGAL CENTER, P.A.
• Court: Maine Supreme Court

763 A.2d 121

2000 ME 214

Michael NIEHOFF v. SHANKMAN & ASSOCIATES LEGAL CENTER, P.A.

Supreme Judicial Court of Maine.

Argued November 8, 2000.

Decided December 21, 2000.

Francis M. Jackson (orally), Jackson & MacNichol, Portland, for plaintiff.

Wendell G. Large (orally), Anne H. Cressey, Richardson Whitman Large & Badger, P.C., Portland, for defendant.

Panel: WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, and CALKINS, JJ.

ALEXANDER, J.

[¶ 1] Michael Niehoff appeals from a judgment of the Superior Court (Cumberland County, Delahanty, J.) denying his motion for partial summary judgment and granting Shankman & Associates Legal Center's motion for summary judgment as to all claims. Niehoff contends that the court erred in: (1) ruling that Niehoff would not have been entitled to severance benefits if L.L. Bean, Inc.'s severance pay policy was considered to be a welfare plan under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461 (1985 & Supp.1993); (2) ruling in the alternative that the L.L. Bean policy did not constitute an ERISA-covered plan; and (3) failing to hold Shankman liable to Niehoff for legal malpractice. Because we determine that Niehoff failed to show he would have recovered had Shankman pled a claim under ERISA, we affirm the judgment.

I. FACTS

[¶ 2] Niehoff was employed by L.L. Bean beginning in November 1985. In October 1988, Niehoff stopped working and went on leave for a nonwork-related disability. He received short-term disability benefits from L.L. Bean during this period. Niehoff then returned to work. Due to the same disability, he once again went on leave in 1991 and received shortterm disability benefits. After six months, and in accordance with L.L. Bean's then existing employment practices, Niehoff's position was terminated and he began receiving long-term disability benefits. By February 1992, Niehoff had not worked for a year. Pursuant to company policy, Niehoff's employment was terminated at that time.

[¶ 3] When L.L. Bean refused to grant him severance benefits, Niehoff retained Shankman & Associates Legal Center to represent him. Shankman filed an action against L.L. Bean in Superior Court, asserting claims of breach of contract, misrepresentation and unjust enrichment (Niehoff I). The Superior Court (Sagadahoc County, Saufley, J.) granted summary judgment to L.L. Bean on all counts. In its order, the Superior Court sua sponte raised the issue of ERISA preemption, stating that even if Niehoff had presented material facts in dispute, ERISA preempted the state law claims because the L.L. Bean policy on severance benefits was a plan under ERISA.

[¶ 4] We affirmed the Superior Court's decision on the common law claims by a memorandum of decision in which we stated that there was no need to discuss the ERISA issue. Niehoff v. L.L. Bean, Inc., No. 7122 (Niehoff I) (Me. Feb. 1, 1995) (mem.). Niehoff then filed another lawsuit in Superior Court pleading claims under ERISA (Niehoff II). In that suit, he was represented by an attorney unaffiliated with Shankman. The Superior Court (Cumberland County, Saufley, J.) granted L.L. Bean's motion for summary judgment, finding that res judicata barred Niehoff's claims. Niehoff did not appeal from that judgment.

[¶ 5] Niehoff then brought the present action for legal malpractice against Shankman, alleging legal malpractice and breach of contract (Niehoff III). The Superior Court (Delahanty, J.) denied Niehoff's motion for summary judgment on the issue of liability and for partial summary judgment on the issue of damages applicable to severance pay. The court granted Shankman's cross-motion for summary judgment on all claims. This appeal followed.

II. STANDARD OF REVIEW

[¶ 6] The entry of summary judgment must be reviewed independently "for errors of law, viewing the evidence in the light most favorable to the party against whom the judgment was entered." Steeves v. Bernstein, Shur, Sawyer & Nelson, P.C., 1998 ME 210, ¶ 11, 718 A.2d 186, 190 (citation omitted). A summary judgment will be upheld "if the evidence demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Id. Where the defendant properly challenges all elements of plaintiff's claim, the "plaintiff must establish a prima facie case for each element of his cause of action." Id. See also Dumont v. Fleet Bank of Maine, 2000 ME 197, ¶ 10, 760 A.2d 1049, 1053

.

[¶ 7] In legal malpractice cases, the plaintiff must show (1) a breach by the defendant attorney of the duty owed to the plaintiff to conform to a certain standard of conduct; and (2) that the breach of the duty proximately caused an injury or loss to the plaintiff. See Corey v. Norman, Hanson & DeTroy, 1999 ME 196, ¶ 10, 742 A.2d 933, 938-39

(citing Steeves, 1998 ME 210, ¶ 12,

718 A.2d at 190).

[¶ 8] The same rules of causation generally apply whether the cause of action sounds in contract, negligence, or breach of fiduciary duty. Steeves, 1998 ME 210, ¶ 10 n. 8, 718 A.2d at 190 (citations omitted). Proximate cause exists in professional malpractice cases where "evidence and inferences that may reasonably be drawn from the evidence indicate that the negligence played a substantial part in bringing about or actually causing the injury or damage and that the injury or damage was either a direct result or a reasonably foreseeable consequence of the negligence." Merriam v. Wanger, 2000 ME 159, ¶ 8, 757 A.2d 778, 780-81. "The mere possibility of such causation is not enough, and when the matter remains one of pure speculation or conjecture, or even if the probabilities are evenly balanced, a defendant is entitled to judgment." Id. at ¶ 8, 757 A.2d at 781. See also Steeves, 1998 ME 210, ¶¶ 12-13,

718 A.2d at 190. Accordingly, the same analysis as to causation applies to Niehoff's claims for breach of contract and legal malpractice. To succeed on appeal, Niehoff must identify facts which indicate that Shankman's negligence in not bringing the ERISA claim proximately caused his loss. See Corey, 1999 ME 196, ¶ 14,

742 A.2d at 940.

[¶ 9] We have indicated that to prevail in a legal malpractice action, a plaintiff must demonstrate that he or she would have achieved a more favorable result but for the defendant's alleged legal malpractice. See id., ¶¶ 13-14, 742 A.2d at 940; Steeves, 1998 ME 210, ¶¶ 12-13, 718 A.2d at 190. However, such statements have been made in the context of actions asserting legal malpractice in advice or tactics which preceded a final result on the merits of an underlying action. This is a different case. Here, the alleged negligence is in failing to plead or timely plead so that plaintiff's opportunity to get before the factfinder is lost. Requiring a plaintiff to demonstrate that a more favorable result would have been achieved is more problematic in this context. Few results from a factfinder in a civil case can be predicted as "more likely than not." Cf. Corey, 1999 ME 196, ¶ 14,

742 A.2d at 940. A factfinder can disbelieve a key witness or award plaintiff nothing for reasons that may not be explained.

[¶ 10] On appeal from a grant of summary judgment, a plaintiff-appellant in a "failure to plead" legal malpractice action must demonstrate that there are facts in dispute which are sufficient to allow a jury to conclude that: (1) the defendant attorney was negligent in representation of the plaintiff; and (2) the attorney's negligence caused the plaintiff to lose an opportunity to achieve a result, favorable to the plaintiff, which (i) the law allows; and (ii) the facts generated by plaintiff's M.R. Civ. P. 7(d)¹ statements would support, if the facts were believed by the jury. Where a plaintiff generates fact disputes on these issues, summary judgment must be denied and plaintiff is entitled to proceed to trial.

III. ERISA APPLICABILITY

[¶ 11] According to Niehoff, his state law claims were preempted by ERISA pursuant to 29 U.S.C. § 1144 (1985 & Supp. 1993).² See, e.g., Carpenters Local Union No. 26 v. U.S. Fid. & Guar. Co., 215 F.3d 136, 139 (1st Cir.2000)

. The governing statute, 29 U.S.C. § 1002(1) (Supp.1993) defines a welfare plan as "any plan, program or fund" established or maintained by an employer that provides certain benefits to employees.³ These benefits include, for example, benefits in the event of disability, death, unemployment, vacation benefits, health benefits, day care centers and prepaid legal services. 1 LEE T. POLK, ERISA PRAC. & LIT. § 2.04 (2000 ed.).

[¶ 12] L.L. Bean's severance benefits plan may fit the statutory requirements of an ERISA welfare plan, as interpreted by the Supreme Court in Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987) (in which a Maine statute providing for a one-time, lump-sum payment triggered by a single event, a plant closing, was found not to be a preempted ERISA plan). In Fort Halifax, the Court stated:

The requirement of a one-time, lumpsum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's obligation. The employer assumes no responsibility to pay benefits on a regular basis, and thus faces no periodic demands on its assets that create a need for financial coordination and control.

Id. at 12, 107 S.Ct. 2211. The Court also held that the purpose of preemption is to ensure that the administrative practices of a benefit plan are governed by only a single set of regulations, and this concern arises only when there is an "ongoing administrative program." Id. at 11, 107 S.Ct. 2211. See also Belanger v. Wyman-Gordon Co., 71 F.3d 451, 455 (1st Cir. 1995)

.

[¶ 13] Fort Halifax established that the timing and the number of payments are factors in analyzing whether an employer's obligation amounts to an ongoing administrative plan.⁴ Section 1.11D of the L.L. Bean Policy and Procedures Manual, entitled "Severance Benefits" and dated 8/1/87,...