Cannata v. Wiener, 00-488.
| Decision Date | 19 December 2001 |
| Docket Number | No. 00-488.,00-488. |
| Parties | Charles CANNATA v. Marc E. WIENER |
| Court | Vermont Supreme Court |
Present: AMESTOY, C.J., DOOLEY, MORSE, JOHNSON, SKOGLUND, JJ.
Plaintiff Charles Cannata appeals from a decision by the Chittenden Superior Court denying his malpractice claim against attorney Marc Wiener. After a bench trial, the court held that plaintiff failed to prove that advice given by attorney Wiener was the proximate cause of any damage to plaintiff. We affirm.
This case arose out of a complicated real estate transaction that originated with the purchase of a building in Burlington, Vermont. The relevant facts, as determined by the trial court, are as follows. The building was purchased in 1985 by Prime Properties, which was a business partnership of plaintiff and Drew Chace. That transaction required the partnership to give a $50,000 note, secured by a mortgage, to members of the Blanchard family, the previous owners of the property. Approximately one year later, another real estate investor, Steven Gracie, sought to purchase the property from the partnership. As part of the sale, Gracie assumed the $50,000 note that the partnership owed to the Blanchards. Plaintiff and Chace, however, remained liable on the note by way of a clause in the sale agreement that states that the Blanchards "do not waive or release any claim or right they may have against Drew C. Chace and/or Charles P. Cannata, d/b/a Prime Properties, arising from the ... note and mortgage." Shortly after this sale, the partnership formally dissolved.
Several years later, Gracie ran into financial trouble. Gracie was unable to make payments on the $50,000 note owed to the Blanchards as well as on a first mortgage on the property held by Chittenden Bank, and he eventually went bankrupt. The bank began foreclosure proceedings on the property. At this point, plaintiff and Chace individually contacted attorney Wiener because they were worried about their financial exposure that might result from the foreclosure. Although at that time attorney Wiener represented Gracie, Wiener had previously represented the partnership in the purchase and sale of the property. Attorney Wiener told them that Gracie did not have any assets, that hiring an attorney would be a waste of money, and that neither had any exposure. Precisely what attorney Wiener understood plaintiff and Chace to be asking about — i.e. whether they were inquiring about exposure on Chittenden Bank's foreclosure action alone, or whether their question included exposure on the $50,000 note — was a matter of intense dispute at trial. Although the trial court found that attorney Wiener's advice did not consider the $50,000 debt, this determination is not important to our resolution of the case. Chittenden Bank foreclosed on the property, and the Blanchards sued plaintiff and Chace because the $50,000 note was now unsecured and Gracie had defaulted on it. At that trial, which was appealed to this Court, plaintiff and Chace were found jointly and severally liable on the $50,000 note. Chace subsequently declared bankruptcy and Cannata paid the Blanchard judgment, which amounted to $78,406, including interest.
The present litigation arose when plaintiff sued attorney Wiener alleging that the advice to plaintiff regarding his exposure was negligent. Plaintiff claims that Wiener's advice to plaintiff and Chace was essentially to "do nothing" in the face of the foreclosure action by Chittenden Bank. This advice, plaintiff argues, was negligent given the liability to which he was eventually exposed on the $50,000 note. After a two-day bench trial, the court found that plaintiff had failed to demonstrate that any advice given by attorney Wiener was the proximate cause of plaintiff's injuries. Plaintiff appealed.
On appeal, plaintiff claims that 1) attorney Wiener had a conflict of interest when he gave the advice because his previous representation of the partnership conflicted with his representation of Gracie; 2) the advice given to plaintiff was negligent because plaintiff was thereby led to believe he had no exposure from the assumption agreement; 3) attorney Wiener's actions violated ethical considerations of the Code of Professional Responsibility; and that 4) plaintiff's losses were proximately caused by attorney Wiener's advice. We address only the final issue because it is dispositive of the appeal.
A claim for legal malpractice resembles any other negligence claim. In order to recover, the plaintiff must prove not only that the attorney was negligent, but also that the negligence was the proximate cause of the plaintiff's injuries. Powers v. Hayes, 172 Vt. ___, ___, 776 A.2d 374, 375 (2001); see Rivers v. State, 133 Vt. 11, 14, 328 A.2d 398, 400 (1974). I...
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