Forbes v. Edley Hixson & St. Martin, Mahoney & Assocs., Prof'l Law Corp. (In re Estate of Saint)
| Decision Date | 22 May 2014 |
| Docket Number | No. 2010–CT–00380–SCT.,2010–CT–00380–SCT. |
| Parties | In the Matter of the ESTATE OF Louis ST. MARTIN, Deceased : James R. Forbes v. Edley HIXSON and St. Martin, Mahoney & Associates, Professional Law Corporation. |
| Court | Mississippi Supreme Court |
145 So.3d 1124
In the Matter of the ESTATE OF Louis ST. MARTIN, Deceased : James R. Forbes
v.
Edley HIXSON and St. Martin, Mahoney & Associates, Professional Law Corporation.
No. 2010–CT–00380–SCT.
Supreme Court of Mississippi.
May 22, 2014.
[145 So.3d 1127]
Stephen J. Maggio, attorney for appellant.
Kyle S. Moran, James G. Wyly, III, Gulfport, attorneys for appellees.
EN BANC.
LAMAR, Justice, for the Court:
¶ 1. James Forbes settled his personal-injury action while he was represented by Louis St. Martin. Forbes later sued St. Martin, challenging the validity of his contingency-fee arrangement with St. Martin and the associated attorneys' fees. The Chancery Court of Harrison County granted summary judgment to St. Martin; the Court of Appeals reversed the chancery court's decision and remanded the case for further proceedings. We reverse the Court of Appeals' judgment and find that summary judgment in favor of St. Martin was proper.
¶ 2. In early August 1998, Forbes was severely injured in a gas-station explosion in Biloxi, Mississippi. He was transported to Mobile, Alabama, for medical treatment, where he remained in a comatose state for several weeks. While Forbes was comatose, St. Martin, an attorney licensed in Louisiana, visited Forbes's wife, Lisa, in the hospital in Mobile at the request of Lisa's family members. Lisa entered into a contingency-fee contract for representation with St. Martin, under which St. Martin would receive one-third of any settlement or judgment obtained. St. Martin gave Lisa $700 for living expenses on the day she executed the contingency-fee contract.
¶ 3. Thereafter, St. Martin associated Jon Mark Weathers, a Mississippi attorney, to serve as local counsel. Weathers drafted and filed a personal-injury complaint on behalf of Forbes. St. Martin did not sign the complaint, but he was listed as “of counsel.” In October 1998, approximately two months after Lisa signed the initial contract, St. Martin met with Forbes in the Mobile hospital. St. Martin and Forbes discussed the contingency-fee contract and St. Martin's representation, but Forbes did not execute a new contract. Over the course of his representation, St. Martin advanced the Forbeses approximately $100,000 for living and medical expenses, vacations, a car, and other personal expenses.
¶ 4. In June 1999, the Forbeses traveled to St. Martin's Louisiana office to discuss a settlement offer, which they ultimately rejected. During that meeting, the Forbeses executed a second contingency-fee contract, under which St. Martin would receive one-third of any settlement or forty percent of any settlement or judgment obtained if the case went to trial. Forbes's case eventually was settled for more than $13 million. St. Martin never signed any pleadings and never entered an appearance in Forbes's case; however, St. Martin was listed as “of counsel” on the initial complaint and did attend depositions in Mississippi. St. Martin testified that he was listed on the initial complaint by mistake and his name was promptly removed, and that, although he attended, he did not participate in the depositions.
¶ 5. Nearly a year-and-a-half after Forbes settled his personal-injury claim, Forbes sued St. Martin alleging breach of fiduciary duty, fraud, and conversion, and requesting rescission of the contract, imposition of a constructive trust, attorneys'
[145 So.3d 1128]
fees, and actual and punitive damages. 2 He amended his complaint in 2007 to add an allegation of professional negligence. Forbes argued that the contracts were void and sought to recover the fees St. Martin received under the contracts. The parties filed competing motions for summary judgment. After a hearing, the chancery court granted summary judgment in favor of St. Martin. Forbes appealed, and we assigned the case to the Court of Appeals.
¶ 6. The Court of Appeals found that the chancery court had erred in granting summary judgment on all claims, because there were disputed questions of fact, and it remanded the case for further proceedings. We granted certiorari.
¶ 7. We review the grant or denial of a motion for summary judgment de novo, viewing the evidence “in the light most favorable to the party against whom the motion has been made.” 3 Summary judgment is appropriate and “shall be rendered” 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 judgment as a matter of law.” 4 Importantly, the party opposing summary judgment “may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, will be entered against him.” 5 Furthermore, “summary judgment ‘is appropriate when the non-moving party has failed to “make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial.” ’ ” 6
¶ 8. This is a legal malpractice case. “In order to recover for legal malpractice, a plaintiff must prove by a preponderance of the evidence the existence of a lawyer-client relationship, negligence on the part of the lawyer in handling his client's affairs entrusted to him, and some injury proximately caused by the lawyer's negligence.” 7 It is undisputed that an attorney-client relationship existed between St. Martin and Forbes; therefore we begin our analysis by addressing Forbes's negligence claims.
¶ 9. “Negligence is a failure to do what the reasonable person would do under the same or similar circumstances.” 8 To state a negligence claim, a plaintiff must prove that the defendant owed the plaintiff a duty, that the defendant breached its duty, and that the breach caused an injury to the plaintiff.9
Generally, attorneys owe to their clients duties falling into three broad categories.
[145 So.3d 1129]
First[,] he owes a duty of care consistent with the level of expertise he holds himself out as possessing. This duty of care imports not only skill or expertise, but diligence as well. Second[,] he owes his client a duty of loyalty and fidelity, which includes duties of confidentiality, candor and disclosure. Third, he owes any duties created by his contract with his client.10 Forbes accuses St. Martin of violating his duty of care and his duty of loyalty. The analysis is different for the two duties, therefore we will address them separately.
¶ 10. A lawyer's duty of care requires him “to exercise the knowledge, skill, and ability ordinarily possessed and exercised by the members of the legal profession similarly situated.” To recover for a duty-of-care violation, a plaintiff must show that “but for their attorney's negligence, he would have been successful in the prosecution or defense of the underlying action.” 11 This is commonly known as the “trial-within-a-trial test.” 12
¶ 11. It is undisputed that St. Martin helped Forbes obtain a favorable settlement of Forbes's personal-injury action. Forbes repeatedly testified that he was happy with the result of his case and that he thought St. Martin did an excellent job. In fact, in his appellate brief, Forbes asserts that:
This is not a legal malpractice case in the usual sense. Mr. Forbes is not claiming his lawyers committed error which adversely affected the outcome of his case. St. Martin and his attorneys place great emphasis on the fact that he was asked over thirty times whether he was satisfied with his attorney's representation and the outcome of his legal matter and in each instance he said he was. However, that argument is misplaced. If asked a million times more, he would answer the same. Mr. Forbes'[s] satisfaction with the representation and the handling of the lawsuit is not at issue.
We find no evidence that St. Martin breached his duty of care.
II. Duty of Loyalty
¶ 12. An attorney's duty of loyalty is also known as his fiduciary duty.13 “When a legal-malpractice claim is based on an allegation of breach of fiduciary duty, the plaintiff must establish (1) the existence of an attorney-client relationship; (2) the acts constituting a violation of the attorney's fiduciary duty; (3) that the breach proximately caused the injury; and (4) the fact and extent of the injury.” 14 However, unlike a duty-of-care violation, a plaintiff alleging a duty-of-loyalty violation does not have to prove “that, but for the breach, the plaintiff would have won the underlying case. Rather, the proof of proximate cause in such cases is to be tailored to the injury the client claims and the remedy he elects.” 15 Here, the injury Forbes alleges is being bound by a one-third contingency-fee agreement with St. Martin, and the remedy he seeks is the return of the fee he paid to St. Martin.
[145 So.3d 1130]
¶ 13. There are two disputed contracts, both of which contain a one-third contingency-fee provision. The first contract was executed by St. Martin and Lisa Forbes in Mobile, Alabama, on August 11, 1998 (1998 contract). The second contract was executed by St. Martin, Lisa Forbes, and James Forbes in New Orleans, Louisiana, on June 10, 1999 (1999 contract). Forbes presents multiple challenges to the propriety of the contracts based on their provisions and St. Martin's behavior.
A. Contract provisions¶ 14. Forbes claims that both contracts contain two invalid provisions that void the contracts in their entirety. The first provision reads:
My (Our) attorney is to have the exclusive handling of this claim and I(we) will cooperate with him. No compromise can or will be made without my (our) signature(s) and without the approval and signature of my (our) attorney....
The second provision reads:
My (Our) attorney may be...
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