Manley v. Brown

• Citation: 1999 OK 79,989 P.2d 448
• Decision Date: 28 September 1999
• Docket Number: No. 89,379.,89,379.
• Parties: Jim D. MANLEY and John L. Houchin, Plaintiffs/Appellants, v. Jack L. BROWN, an Individual, Frank R. Patton, Jr., an individual, Patton, Brown, an Oklahoma Partnership or Joint Venture, and Patton, Brown, an Oklahoma Professional Corporation, Defendants/Appellees.
• Court: Supreme Court of Oklahoma

989 P.2d 448

1999 OK 79

Jim D. MANLEY and John L. Houchin, Plaintiffs/Appellants, v. Jack L. BROWN, an Individual, Frank R. Patton, Jr., an individual, Patton, Brown, an Oklahoma Partnership or Joint Venture, and Patton, Brown, an Oklahoma Professional Corporation, Defendants/Appellees.

No. 89,379.

Supreme Court of Oklahoma.

September 28, 1999.

Donald M. Bingham, Riggs, Abney, Neal, Turpen, Orbison & Lewis, Tulsa, Oklahoma for appellants.

Joseph R. Farris, Paula J. Quillin, Feldman, Franden, Woodard & Farris, Tulsa, Oklahoma for appellees.¹

OPALA, J.

¶ 1 The dispositive issue tendered on certiorari in this legal malpractice case is whether summary judgment for the defendants was erroneously entered. We answer in the negative and reinstate the trial court's judgment.

I THE ANATOMY OF LITIGATION

¶ 2 This is an appeal from summary judgment in an action brought by former clients, Jim D. Manley and John L. Houchin [Manley and Houchin or former clients], against Jack L. Brown, his law associate Frank Patton, Jr., as well as their law firm [collectively called Brown]. The dispute between the former clients and Brown stems from his allegedly substandard performance (a) in defending the clients in a 1986 lawsuit that resulted in judgment on a jury verdict for the plaintiffs and (b) in prosecuting an unsuccessful appeal from that adverse judgment. The Court of Civil Appeals reversed summary judgment for Brown and remanded the cause for further proceedings.

The Antecedent 1986 State Litigation

¶ 3 In September 1985 John and Deborah Bryan [Bryans or collectively called owner] entered into a $119,325 contract with Watkins Construction Company [Watkins or general contractor] for extensive remodeling of a recently purchased Tulsa home. Watkins subcontracted some of the work. The remodeling was to be completed before the owner moved in. Watkins, who ceased doing business the following year after being paid by the Bryans over $106,000 for completed work, did not pay in full several of the subcontractors on the project.

¶ 4 The subcontractors filed liens against the Bryans' home for a total amount in excess of $44,000. The owner paid several of the subcontractors directly, posted bonds to discharge some liens and successfully defended a lien foreclosure action by one of the subcontractors.² In November 1986 the Bryans sued Watkins as well as Manley and Houchin (qua managing officers of the general contractor) for allegedly misapplying project-derived funds that should have been placed in trust for payment of lienable claims for supplies delivered or services rendered in connection with the remodeling job.³ A jury awarded the owner $36,620.00 in actual damages, $76,631.00 in punitive damages, and $54,148.50 in attorney's fee. The former clients then brought an appeal from the nisi prius judgment on jury verdict. The Court of Civil Appeals [COCA] affirmed.⁴

¶ 5 Brown defended Watkins, Manley and Houchin in the antecedent action. He also brought their appeal from the adverse nisi prius disposition. After COCA's pronouncement, another law firm was hired to represent the former clients at the rehearing and certiorari stages. Petitions for rehearing and certiorari were denied.

The Professional Negligence Action

¶ 6 The former clients brought this legal malpractice action. The pivot of their claim is Brown's alleged failure to take full advantage of a fatal infirmity in subcontractors' liens because of the latter's failure to give the owner that notice which is mandated by the provisions of 42 O.S.1991 § 142.1.⁵ The cited statute requires that before commencement of work (or provision of supplies) written notice must be given to the owner who "presently occupies" the property. According to settled law at the time of trial, the former clients argue, a subcontractor who fails to give an owner written notice in substantial compliance with the terms of § 142.1 has no valid lienable claim against the property. The clients contend that had Brown asserted a defense based on the liens' fatal infirmity for lack of notice (and raised it on appeal) they would have been exonerated of liability for that part of the total obligation, there in suit, which was owed to the subcontractors. Because that point of law affords an absolute (liability-defeating) defense, the clients urge, Brown committed professional malpractice in failing to raise it in the antecedent action. ¶ 7 The trial court gave summary judgment to Brown. The Court of Civil Appeals [COCA] reversed and remanded the cause for further proceedings. According to COCA, (a) the law was settled that a plaintiff in an action for breach of the construction trust fund statutes would have to prove, as an element of recovery, prior statute-mandated notice and subsequent timely perfection of lienable claims and (b) Brown's failure to assert a valid-lienable-claims impediment raises a permissible inference of professional negligence.

II THE PARAMETERS OF LIABILITY IMPOSED BY COLLINS v. WANNER⁶

¶ 8 Before us is a two-prong breach-of-duty claim targeting (a) Brown's failure to assert want of notice at trial as well as (b) his failure to press that issue on appeal. Clients' negligence action is governed by the Collins v. Wanner⁷ standard of professional care. The plaintiff in a legal negligence action must prove (1) the existence of an attorney-client relationship, (2) breach of a lawyer's duty to the client, (3) facts constituting the alleged negligence, (4) a causal nexus between the lawyer's negligence and the resulting injury (or damage) and (5) but for the lawyer's conduct, the client would have succeeded in the action.⁸

¶ 9 In a negligence case for rendition of substandard legal service, the primary issue is whether a lawyer's conduct of litigation-related defense fell below the acceptable professional standards. A lawyer who acts in good faith and in an honest belief that his advice and acts are well founded and in the best interest of his client is not answerable for a mere error of judgment when dealing with a point of law which has not been settled by a precedent-setting pronouncement⁹ and about which reasonable doubt may be entertained by well-informed lawyers.¹⁰ When the state of the law is doubtful or debatable, a lawyer will not be held responsible for failing to anticipate how the uncertainty will ultimately be resolved.¹¹

¶ 10 We look in this cause not to whether Brown's defense service in the antecedent case was at an optimum nor to whether the litigation might have resulted in a more favorable outcome had his strategy choices been different. Our task is rather to search the summary-process record for the presence of triable facts that would support the clients' claim of professional negligence.

III THE UNSETTLED STATE OF PRECEDENTIAL § 142.1 JURISPRUDENCE AT THE CRITICAL COMMENCEMENT-OF-CONSTRUCTION STAGE GAVE NO MEANINGFUL GUIDANCE ON WHO IS "PRESENTLY OCCUPYING" PREMISES AS OWNER WITHIN THE MEANING OF THE § 142.1 NOTICE REQUIREMENT AND ON THE LEGAL IMPACT LACK OF STATUTE-MANDATED NOTICE WOULD HAVE ON THE OWNER'S RIGHTS AGAINST THE CONTRACTOR

¶ 11 The law in force at the critical time of the work's commencement — the furnishing of labor or materials — was far from settled as to (a) the nature of possession necessary to support the owner's claim to a § 142.1 notice and (b) the legal impact want of statute-mandated notice would have on contractor's liability to the owner.

A. The Unsettled Nature Of "Occupancy" Which Entitles An Owner To Notice At The Commencement Stage Of Construction

¶ 12 According to the former clients the law stood firmly settled that an owner's "constructive occupancy" of a dwelling is sufficient to make notice mandatory under § 142.1. They direct us to a COCA decision in C & C Tile & Carpet Co. v. Aday,¹² where the court pronounced the "constructive occupancy" doctrine. Giving the cited statute a liberal construction, COCA held that where "residing owners" temporarily vacate a residential dwelling during the course of repairs and return upon the work's completion, for application of the § 142.1 notice the property is deemed "presently occupied".¹³

¶ 13 The invoked COCA opinion does not settle by a binding precedential pronouncement¹⁴ the characteristics of possession an owner must meet to qualify for mandatory notice under § 142.1 as one who "presently occupied" the property (at the critical time of the work's commencement). Extant precedent-setting § 142.1 jurisprudence neither did then nor does now settle (a) who is to be deemed an owner in occupancy at the critical time, (b) whether and when constructive occupancy will satisfy the "present occupancy" requirement, and (c) whether an absentee owner who has never taken possession of the purchased premises may be regarded as having constructive occupancy. When the meaning of a statute is unsettled, the lawyer is left adrift and hence utterly free to select what will appear to be the best strategy choices under the circumstances.¹⁵

¶ 14 Moreover, while at first blush COCA's construction of the statute appears favorable to the former clients' position, on closer examination it is fraught with weaknesses. If COCA's view of constructive occupancy is indeed correct, every record owner would be entitled to the § 142.1 notice. This is so because by Oklahoma's common law everyone in that class of owners stands in constructive possession of the premises.¹⁶ COCA's construction could not be viewed as free from doubt. The legislature would doubtless not have used, in § 142.1, the words "presently occupied" if it had intended that statutorily mandated notice be every absentee record owner's due.

¶ 15 Furthermore, the facts in C & C Tile, the COCA case, are clearly distinguishable. There, the owners could be said to have been "presently residing" on the property before the work came to be commenced. They had temporarily removed themselves from the premises for the duration of repairs....