Barna v. Seiler, M2008-01573-COA-R3-CV
| Decision Date | 19 April 2011 |
| Docket Number | No. M2008-01573-COA-R3-CV,M2008-01573-COA-R3-CV |
| Parties | JOSEPH C. BARNA v. W. MARTIN SEILER |
| Court | Court of Appeals of Tennessee |
Appeal from the Circuit Court for Davidson County
An investor who lost money on stock transactions filed a claim against his stockbroker that was dismissed in arbitration. The investor then filed a complaint for legal malpractice against the attorney who had represented him in the arbitration proceeding. The attorney filed a motion for summary judgment accompanied by his expert affidavit, declaring that in his representation of the investor he had complied with all applicable standards of legal professional practice. The investor did not respond with an expert testimony contradicting the defendant. Following a series of delays, the trial court granted summary judgment to the defendant attorney after declining to grant another continuance. The former client filed a motion for relief from judgment, and the trial court denied the motion. After the attorney voluntarily dismissed his counterclaim, the judgment became final, and the investor appealed. W e affirm.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Circuit Court
Affirmed
FRANK G. CLEMENT, JR. filed a dissenting opinion.
Phillip Leon Davidson, Nashville, Tennessee, for the appellant, Joseph C. Barna.
Karl M. Braun, Nashville, Tennessee, for the appellee, W. Martin Seiler.
According to the allegations of his complaint, Mr. Joseph Barna ("Mr. Barna") suffered extensive losses in his IRA and brokerage accounts during the years 2000 and 2001.He claimed that those losses were attributable to negligent handling of margin calls and IRA rollovers on the part of his broker, T. D. Waterhouse Services, Inc. In 2003, Mr. Barna filed a claim with the National Association of Securities Dealers, seeking recovery of his losses from Waterhouse. His claim was submitted to arbitration.
Prior to the arbitration hearing, Mr. Barna's attorney withdrew from representation because he was unable to procure a necessary expert witness. Mr. Barna then retained the defendant, Mr. Martin Seiler ("Mr. Seiler") to replace him. Mr. Seiler drafted a letter of engagement outlining the terms for his representation of Mr. Barna, which the client signed. Among other things, the letter cautioned Mr. Barna that Mr. Seiler could not guarantee him a favorable outcome in the arbitration proceeding. Mr. Seiler represented Mr. Barna at the arbitration hearing, which was conducted on April 18 or 19, 2005. The arbitration panel dismissed Mr. Barna's claim and awarded him no damages.
On April 21, 2006, Mr. Barna filed a complaint for legal malpractice against Mr. Seiler in the Davidson County Circuit Court. Mr. Barna claimed that Mr. Seiler had failed to represent him "in a reasonable, prudent and/or capable manner, and that the financial losses he suffered as a result of that failure entitled him to damages in an amount not less than $200,000."1 Mr. Seiler filed an answer to the complaint and a counterclaim for fraudulent misrepresentation on June 14, 2006.
In his counterclaim, Mr. Seiler alleged that Mr. Barna had negligently or intentionally failed to inform him that he had previously filed claims against Charles Schwab & Company in 1989 for financial losses likewise related to his use of margin calls, that the claims had gone to arbitration, and that the arbitration board had found Schwab & Company not liable and dismissed all claims.
On November 17, 2006, Mr. Seiler filed a motion for summary judgment accompanied by his expert affidavit. He described his professional history and qualifications and his dealings with Mr. Barna. Mr. Seiler then swore that in his representation of Mr. Barna, he had complied with the applicable standard of legal professional practice, that he did not breach any legal duty owed to his client during the course of his representation, and that to "a reasonable degree of legal certainty," nothing he did with respect to the legal services he provided to Mr. Barna proximately caused his client's losses when the arbitration panelawarded him no damages.
The summary judgment motion was scheduled to be heard on January 12, 2007. The motion was not heard on that date, and the judge assigned to the case subsequently recused himself. Mr. Barna's attorney had quit his law practice and withdrawn as his counsel, and Mr. Barna retained a new attorney. The new attorney attested to the court that he would be able to defend the pending motion within thirty days, and he asked for a continuance. Because the case had to be reassigned, the recusal essentially functioned as an indefinite continuance.
On February 26, 2007, Mr. Barna's new attorney filed another motion to continue and an affidavit in which he stated that he had had the case for less than 90 days and had not yet received the complete file from his client or from the previous counsel. He also stated that he had been diligently seeking to locate an attorney to provide an expert affidavit to counter Mr. Seiler's affidavit, and that "[a]s of February 25, 2007, I am in contact with an attorney who has agreed to participate for purposes of testifying as an expert witness in this matter, but who cannot attend to the matter for several days." Mr. Barna also filed his own affidavit, in which he denied some of the factual allegations in Mr. Seiler's affidavit.
A hearing on the summary judgment motion was scheduled for March 2, 2007, but was not conducted until March 23, 2007. At the hearing, Mr. Barna again asked for a continuance because he had not yet managed to obtain the testimony of an expert. The trial court did not specifically rule on the motion for continuance, but entered an order on April 2, 2007, granting summary judgment to Mr. Seiler and dismissing Mr. Barna's case with prejudice.
Mr. Barna subsequently retained yet another attorney, who filed a motion on July 25, 2007, requesting relief from the court's judgment pursuant to Tenn. R. Civ. P. 60.02(5). The attorney argued that Mr. Barna's previous attorney had found an expert but was unable to obtain an opinion from him in time to oppose the summary judgment motion, that this created "a case of extreme hardship," and thus that the trial court should have given him additional time to respond.
After hearing argument by counsel and reviewing the record, the trial court decided that it had to treat Mr. Barna's motion under Tenn. R. Civ. P. 54.02 rather than as a Rule 60.02 motion for relief from a final judgment.2 Mr. Barna did not submit an expert affidavit to the court with his motion, even though four additional months had passed since summaryjudgment was entered. The trial court found that Mr. Barna had not satisfied the burden for relief from the summary judgment under either Rule 54 or Rule 60. Mr. Seiler subsequently dismissed his counter-claim without prejudice, thereby rendering the trial court's decision final and setting the stage for this appeal.
"In order to prove legal malpractice, a plaintiff must establish that (1) the defendant attorney owed a duty to plaintiff; (2) the attorney breached that duty; (3) the plaintiff suffered damages; and (4) the breach proximately caused the plaintiff's damage." Tenn-Fla Partners v. Shelton, 233 S.W.3d 825, 830 (Tenn. Ct. App. 2007) (citing Horton v. Hughes, 971 S.W.2d 957, 959 (Tenn. Ct. App. 1998)); Blocker v. Dearborn & Ewing, 851 S.W.2d 825, 827 (Tenn. Ct. App. 1992).
In a legal malpractice case, the defendant attorney's duty is to serve the client with "that degree of care, skill, and diligence which is commonly possessed and exercised by attorneys practicing in the same jurisdiction." Sanjines v. Ortwein and Assoc., P.C., 984 S.W.2d 907, 910 (Tenn. 1998). Thus, the elements of duty and of breach of duty in a legal malpractice case are measured by the applicable standard of professional practice. Cleckner v. Dale, 719 S.W.2d 535, 540 (Tenn. Ct. App. 1986).
If that standard is beyond the knowledge of an ordinary layperson, then the testimony of an expert witness is required to prove the applicable standard of practice and that the defendant's conduct fell below that standard. Bursack v. Wilson, 982 S.W.2d 341, 343 (Tenn. Ct. App. 1998); Cleckner v. Dale, 719 S.W.2d at 540. In a legal malpractice case, an attorney is entitled to render an expert opinion on his own behalf. Hunter v. Cohen, 55 S.W.3d 571, 574 (Tenn. Ct. App. 2001) (citing Cleckner v. Dale, 719 S.W.2d 535 (Tenn. Ct. App. 1986)
Mr. Barna's allegations in this case relate to securities arbitration proceedings. He has alleged, among other things, that Mr. Seiler failed to recognize which securities are marginable and which are not, failed to recognize the difference between a house call and an exchange call, and failed to show the arbitrators that Waterhouse had not followed NY S tock Exchange rules and its own rules in connection with the "Grossover extension of credit." The standard of professional legal practice in such matters is clearly beyond the knowledge of ordinary laymen. Consequently, the elements of duty, breach of duty, and causation were required to be shown by expert testimony.
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Tenn. R. Civ. P. 56.04; Blair v. West Town Mall, 130 S.W.3d 761, 764 (Tenn. 2004); Pero's Steak & Spaghetti House v. Lee, 90 S.W.3d 614, 620 (Tenn. 2002); Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993).
A trial court's decision on a motion for summary judgment enjoys no presumption of correctness on...
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