Allied Productions, Inc. v. Duesterdick

• Decision Date: 04 March 1977
• Docket Number: No. 751444,751444
• Citation: 217 Va. 763,232 S.E.2d 774
• Parties: ALLIED PRODUCTIONS, INC., et al. v. Roy H. DUESTERDICK, etc., et al. Record
• Court: Virginia Supreme Court

Page 774

232 S.E.2d 774

217 Va. 763

ALLIED PRODUCTIONS, INC., et al. v. Roy H. DUESTERDICK, etc., et al.

Record No. 751444.

Supreme Court of Virginia.

March 4, 1977.

Edward D. Barnes, Richmond (Bremner, Byrne, Baber & Janus, Richmond, on briefs), for plaintiffs in error.

Philip J. Walsh, Washington, D.C. (James C. Gregg, Randell Hunt Norton, Macleay, Lynch, Bernhard & Gregg, Washington, D.C., on brief), for defendants in error.

Before I'ANSON, C.J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

COCHRAN, Justice.

This writ of error was granted to test the sufficiency of a motion for judgment seeking damages for legal malpractice.

Allied Productions, Inc., a Georgia corporation, Howard E. Caldwell, Martha Caldwell, and Charles D. Wheeler (collectively, the client) filed a motion for judgment against Roy H. Duesterdick, individually, and Richard N. Baylinson, Roy H. Duesterdick, and Morton Kudysh, t/a Baylinson, Duesterdick & Kudysh, a partnership engaged in the practice of law (collectively, the attorney). The motion alleged that, by reason of the attorney's negligence in failing to defend a suit sounding in fraud, the client had suffered a default judgment upon a jury's verdict awarding compensatory damages of $10,000 and punitive damages of $200,00. The motion sought $500,000 in damages based upon several claims, Viz., the principal and interest of the default judgment, attorneys' fees, court costs, mental anguish, inconvenience, grief, and embarrassment. The motion did not allege that any part of the default judgment had been paid. The attorney demurred, and for purposes of the demurrer, the parties stipulated that no payment had been made and that the client's claim based upon injuries other than the default judgment would be withdrawn without prejudice.

By final order entered August 7, 1975, the trial court ruled that 'since the plaintiffs have not paid any portion of the judgment against them, the damages, if any, are too remote, speculative and contingent' and that 'the Motion for Judgment fails to allege actual damages'. Upon these rulings, the demurrer was sustained and the case dismissed.

Although this Court decided the first legal malpractice case reported in the United States, Stephens v. White, 2 Va. (2 Wash.) 203 (1796), we have not passed upon the precise issue presented here. Nevertheless, we have followed the general rule that in order to recover damages for the negligence of his attorney the client must prove the extent of the damages. Thus, in Staples' Ex'ors v. Staples, 85 Va. 76, 85, 7 S.E. 199, 203 (1888), we said:

'(I)n cases of negligence, the extent of the damages sustained by the complainant must be affirmatively shown; for the attorney is only liable for the actual injury his client has received, and not necessarily for the nominal amount of the demands for collection. 2 Greenl. Ev., sec. 146. Accordingly, when a debt is alleged to have been lost by the attorney's negligence, it must be shown that it was a subsisting debt, and that the debtor was solvent.' (Citations omitted.)

This case was cited as being in accord with the weight of authority in Maryland Casualty Co. v. Price, 231 F. 397, 401 (4th Cir. 1916), where it was said at 401--03:

'In a suit against an attorney for negligence, the plaintiff must prove three things in order to recover: (1) The attorney's employment; (2) his neglect of a reasonable duty; and (3) that such negligence resulted in and was the proximate cause of loss to the client. . . .

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'. . . The rule established by these cases is to the effect that suits against attorneys for negligence are governed by the same principles as apply in other negligent actions. If an attorney, in disregard of his duty, neglects to appear in a suit against his client, with the result that a default judgment is taken, it does not follow that the client has suffered damage, because the judgment may be entirely just, and one that would have been rendered notwithstanding the efforts of the attorney to prevent it. It is said that there is a difference between the case of an attorney who fails to do anything for his client, and one who makes an inexcusable mistake in attempting to comply with instructions; but we do not perceive any basis in principle for such a distinction. In either case the burden is upon the client to prove the damages he has suffered.'

The court affirmed the ruling of the trial court which sustained the demurrer of the attorneys in an action against them initiated by the client to recover the amount of a default judgment entered against and paid by the client because of the alleged failure of the attorneys to defend a suit. The basis of the ruling was the failure of the client to allege that it had a meritorious defense to the suit, which the attorney negligently failed to interpose, and that the judgment would not have been recovered against the client or that such judgment would have been for a lesser amount. To the same effect see Feldesman v. McGovern, 44 Cal.App.2d 566, 568, 112 P.2d 645, 647 (1941), and cases cited therein.

In Weiner v. Moreno, 271 So.2d 217, 219 (Fla.App.1973), after stating that the rule established by Price, supra, had been adopted in legal malpractice cases in approximately 45 states, the Florida court approved the rule requiring, as its third prerequisite, proof of proximate cause of loss to the client. See also Wooddy v. Mudd, 258 Md. 235, 265 A.2d 458 (1970); Annot., 45 A.L.R.2d 5; Annot., 45 A.L.R.2d 62.

It has been said that the better reasoned cases support an award of damages in the full amount of the judgment suffered and paid by the client where he can prove that a timely appeal, which the attorney negligently failed to file, would have resulted in a reversal of the judgment and entry of judgment in his favor as a matter of law. Better Homes, Inc. v. Rodgers, 195 F.Supp. 93, 97 (N.D.W.Va.1961).

In our consideration of the present case we are guided by the analogy we find in the rules governing other types of cases. We have held that a right of contribution arises only when one tortfeasor has paid or settled a claim for which other wrongdoers are also liable. Bartlett v. Recapping, Inc., 207 Va. 789, 793, 153 S.E.2d 193, 196 (1967). We have also held that there can be no recovery on an indemnity obligation where there has been...