Baldridge v. Lacks
| Decision Date | 26 July 1994 |
| Docket Number | 64243,Nos. 64242,s. 64242 |
| Citation | 883 S.W.2d 947 |
| Parties | Karen A. BALDRIDGE, Respondent/Cross-Appellant, v. David B. LACKS, et al., Appellants/Cross-Respondents. |
| Court | Missouri Court of Appeals |
Thomas C. Walsh, David S. Slavkin, Kathryn S. Elliott, Bryan Cave, Eugene K. Buckley, Evans & Dixon, St. Louis, for appellant.
W. Morris Taylor, William K. Meehan, Clayton, for respondent.
In this action seeking damages for legal malpractice, the trial court entered judgment on a jury verdict for plaintiff in the amount of $6,834,926. An amended judgment was subsequently entered by the trial court in the remitted amount of $2,424,966. Defendants appeal from the judgment and plaintiff cross-appeals the remitted judgment. We reverse and remand for a new trial, and dismiss the cross-appeal as moot.
We view the evidence adduced at trial in the light most favorable to the verdict. Plaintiff and Kenneth Baldridge were married on June 6, 1975. On January 26, 1976, plaintiff executed a postnuptial agreement, at the behest of her husband, without the advice of independent counsel. The agreement was prepared by Kenneth Baldridge's attorney and signed at the attorney's office. The Baldridges lived together as husband and wife until June, 1986, at which time plaintiff retained defendant Lacks to represent her in an action to dissolve her marriage.
Over the following two years, the Baldridges unsuccessfully attempted to reconcile several times, but eventually decided to dissolve their marriage. At a July 1988 meeting, plaintiff and defendant Lacks discussed the possibility of settling the divorce. Plaintiff testified that Lacks told her that Baldridge was attempting to prove his entire net worth was composed of non-marital assets because it was attributable to the original million dollars he had prior to the marriage. Plaintiff further testified that Lacks advised her to settle because, if Baldridge were successful in doing so, or if the postnuptial agreement was found to be valid, she "could walk away with nothing from the marriage." Lacks spent the remainder of 1988 negotiating a settlement with Kenneth Baldridge's attorneys.
In December, 1988, plaintiff again spoke with Lacks. At the meeting, they decided to file a motion pendente lite (PDL) seeking temporary child support and maintenance. Plaintiff testified that Lacks told her there was a "real strong chance" the postnuptial agreement would be held valid. Lacks also told her that he thought Baldridge would be able to prove that everything was attributable to his original million dollars. Plaintiff testified that Lacks said, Lacks advised plaintiff that her options were to risk receiving nothing or to settle the case.
The PDL hearing was set for March 10, 1989. On that day, prior to the hearing, plaintiff met with Lacks, who informed her that Baldridge had offered one million dollars and a condominium in Florida to settle the divorce. Plaintiff testified that Lacks told her that Baldridge was going to prove that "everything you own is separate," and that she should "take [the offer] and run." 1
A dissolution hearing was held on March 10, 1989. An oral settlement agreement was dictated into the record. Plaintiff testified that she understood the property she would receive under the settlement agreement was her share of the marital property and all she would receive from Kenneth Baldridge. Plaintiff also testified that she was aware that Kenneth Baldridge might have had as much as fifteen million dollars in property and that she was releasing and waiving all rights to any of that property. Plaintiff further testified that she understood that if her divorce were to proceed to trial, the court could give her substantially more than what she was to receive under the settlement agreement. She acknowledged that she understood what she was to receive was her "total share of the marital property, whatever it might be worth, and whatever it might consist of." The court later signed and entered a decree of dissolution, finding that the settlement agreement was not unconscionable.
After the dissolution of marriage, plaintiff's ex-husband suggested to plaintiff that she had gotten a bad settlement and that she could have recovered more money than she had agreed to accept. Plaintiff brought this legal malpractice action against defendant Lacks and his law partners, seeking damages for their allegedly negligent handling of her divorce.
At trial, plaintiff's expert, attorney Allen Russell, testified that Lacks failed to meet the standard of care in regard to the duty to ensure that the client has facts necessary to make a decision as to whether a settlement proposal is acceptable, fair and equitable. Russell further testified that Lacks did not meet the standard of care concerning the proposed settlement because Lacks failed to engage in discovery, failed to trace assets and did not know the extent of the marital and nonmarital estates. Russell also opined that Lacks was not equipped with the necessary information to advise his client as to the advantages and disadvantages of a proposed settlement.
On the other hand, one of defendants' experts, attorney Jack Cochran, testified that the fact that discovery was not completed at the time the case was settled does not indicate that defendant Lacks failed to meet the requisite standard of care. He concluded that there was nothing Lacks did or failed to do in his representation of plaintiff that was a violation of the standard of care attorneys owe their clients.
Defendants' other expert, attorney Charles Todt, testified that an attorney's paramount duty is to do what the client tells him to do and, therefore, defendant Lacks' discovery was sufficient because plaintiff instructed him to settle the case. Todt stated that it is not unusual for a client to want to settle a case before the attorney thinks it prudent. He further testified that the tracing of assets is not always necessary prior to settlement because the client may indicate how much she is willing to accept. In Todt's opinion, once a client decides to settle, the attorney is obligated to do so, and the attorney has no duty to tell the client whether the settlement is good or bad. Todt opined that Lacks met an attorney's standard of care in handling plaintiff's divorce.
In their first point, defendants claim the trial court erred in denying their motion for a directed verdict. They argue that plaintiff's malpractice claim is barred by collateral estoppel because she is seeking to relitigate the reasonableness of the settlement, an issue which she previously conceded and which had already been judicially determined. We disagree.
Defendants contend that plaintiff, by entering into a contractual, court-approved settlement of the dissolution action and by giving sworn testimony agreeing to be bound by the settlement, is barred from a collateral attack on the reasonableness of the settlement by means of a malpractice action against Lacks.
In reviewing whether to apply the doctrine of collateral estoppel, a court should consider: (1) whether the issue decided in the prior adjudication was identical with the issue presented in the present action; (2) whether the prior adjudication resulted in a judgment on the merits; (3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication; and (4) whether the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior suit. Missouri Insurance Guaranty Association v. Wal- Mart Stores, Inc., 811 S.W.2d 28, 32 (Mo.App.1991).
Defendants cite State ex rel. O'Blennis v. Adolf, 691 S.W.2d 498 (Mo.App.1985) and Ahern v. Turner, 758 S.W.2d 108 (Mo.App.1988) for the proposition that plaintiff is collaterally estopped from recanting her previous voluntary acceptance of the settlement by taking a diametrically opposed position in a malpractice suit against her ex-lawyer.
This court addressed a similar argument in Novack v. Newman, 709 S.W.2d 116 (Mo.App.1985). In Novack, the plaintiff's legal malpractice action arose as a result of an earlier medical malpractice case for which the plaintiff had retained defendant attorneys to represent him. Before the medical malpractice case went to trial, the plaintiff settled with the defendant physicians. The plaintiff subsequently filed a motion to set aside the settlement on the basis that he had settled the case because his attorneys had provided him with misinformation and coerced him into the settlement. The plaintiff's motion was denied after an evidentiary hearing and the denial was affirmed on appeal. Novack v. Drey, 668 S.W.2d 259 (Mo.App.1984).
The plaintiff then brought the legal malpractice action, alleging that the defendant attorneys' negligence in handling the medical malpractice action caused him to enter into the settlement. The trial court sustained the defendants' motion for summary judgment on the basis that the collateral estoppel effects of the Novack v. Drey decision barred the legal malpractice action.
On appeal from the summary judgment, defendant attorneys argued that the issue of the voluntariness of the plaintiff's settlement was adjudicated adversely to plaintiff when his motion to set aside the settlement was denied, thereby precluding the plaintiff from collaterally attacking that settlement in his legal malpractice action. In support of their position, the defendant attorneys relied heavily on O'Blennis.
This court held that in the Novack v. Drey case, where the court refused to set aside the settlement as between the plaintiff and the defendant...
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