Hipwell By and Through Jensen v. Sharp

• Decision Date: 11 August 1993
• Docket Number: No. 920218,920218
• Citation: 858 P.2d 987
• Parties: Shelly HIPWELL, an individual by and through her guardians, Sherrie JENSEN and Shayne Hipwell, Plaintiffs and Appellees, v. Roger SHARP, Tim W. Healy, and Does I through X, Defendants and Appellants.
• Court: Utah Supreme Court

Page 987

858 P.2d 987

Shelly HIPWELL, an individual by and through her guardians Sherrie JENSEN and Shayne Hipwell, Plaintiffs and Appellees, v. Roger SHARP, Tim W. Healy, and Does I through X, Defendants and Appellants.

No. 920218.

Supreme Court of Utah.

Aug. 11, 1993.

Rehearing Denied Sept. 23, 1993.

Richard D. Burbidge, Stephen B. Mitchell, Gary R. Johnson, Salt Lake City, and Simon H. Forgette, Kirkland, WA, for plaintiffs.

Glenn C. Hanni, David R. Nielson, Salt Lake City, for Sharp.

Thomas L. Kay, Mark O. Morris, Paul D. Newman, Salt Lake City, for Healy.

Intervenor R. Paul Van Dam, Atty. Gen., Debra J. Moore, Asst. Atty. Gen., for State.

HALL, Chief Justice:

Defendants Roger Sharp and Tim Healy filed this interlocutory appeal after the trial court denied their motions for summary judgment. We affirm the trial court's denial of defendants' motions and remand for further proceedings consistent with this opinion.

I. FACTS

"[I]n reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." ¹ We state the facts here accordingly.

This is a legal malpractice action filed on behalf of Shelly Hipwell ("Hipwell") by her guardians Sherrie Jensen and Shayne Hipwell. Hipwell's guardians brought suit against her former attorneys for allegedly failing to adequately research and investigate her medical malpractice claim against the University of Utah Medical Center before settling that claim for $250,000.

Hipwell's ordeal began on December 13, 1988, when the twenty-six-year-old was admitted to McKay-Dee Medical Center in Ogden, Utah, suffering from complications in connection with her pregnancy. She was transferred to the University Hospital (the "Hospital") in Salt Lake City for further treatment on December 23, 1988. On January 18, 1989, a resident physician punctured and lacerated Hipwell's heart while attempting to perform a bone marrow biopsy. The error caused her to become comatose and suffer severe brain damage, rendering her totally and permanently disabled. She died on May 27, 1992, after this suit was filed.

On February 10, 1989, Hipwell's guardians retained defendants to represent Hipwell's interests in a medical malpractice action. Approximately three months later, defendants advised Hipwell's guardians to enter into a settlement agreement with the University Medical Center, releasing it from all claims that Hipwell may have had against the Hospital or its employees. No lawsuit was ever filed on Hipwell's behalf, and no doctors or other employees who were present when the allegedly negligent procedure was performed were interviewed by defendants before the claim was settled.

In the complaint in this action, Hipwell's guardians alleged that defendants breached the duty of care owed to her by failing to adequately research and investigate the relevant facts and law before settling her malpractice claim for an amount far less than her actual damages. Specifically, she claimed that defendants advised settlement without taking into consideration our decision in Condemarin v. University Hospital, ² which was decided six days before the settlement agreement was finalized.

In Condemarin, we declared that the $250,000 damage recovery limit (the "cap") in the Utah Governmental Immunity Act (the "Act") was unconstitutional as applied to the Hospital. ³ Hipwell's guardians allege, among other things, that the case was worth far more than $250,000 and that encouraging settlement for that amount when the cap did not apply to the Hospital constituted legal malpractice.

Defendants moved for summary judgment, claiming that Condemarin's invalidation of the cap was incorrect or, alternatively, that a 1987 amendment to the Act remedied any constitutional infirmity that the cap presented in Condemarin. Hence, defendants alleged, settling Hipwell's malpractice claim for the maximum amount permitted under section 63-30-34(1) of the Act was reasonable as a matter of law. The trial court denied defendants' motions, and this interlocutory appeal followed.

On appeal, defendants ask us to reexamine our holding in Condemarin regarding the constitutionality of the cap. They again claim that if we find that Condemarin was flawed or that the 1987 amendment remedied the Act's constitutional deficiency, then their decision to settle cannot be negligent and summary judgment in their favor should be granted.

The parties have presented interesting arguments concerning the continuing viability of our decision in Condemarin. However, this case does not present the situation in which those arguments can be addressed. The sufficiency of the professional advice rendered by defendants must be judged based on the law as it existed when such advice was actually given.

II. GOVERNING LAW

Defendants ask this court to rule that Condemarin's holding as to the Hospital's liability is incorrect and then retroactively apply a decision addressing Condemarin to protect them from a negligence claim arising from their representation of Hipwell in 1989. This court had just decided Condemarin when defendants recommended that Hipwell's guardians settle the claim against all potential defendants associated with the Hospital.

Condemarin held that the cap, which limited the amount injured plaintiffs could recover from the Hospital for the negligent acts of hospital employees, violated article I, section 11 of the Utah Constitution and was unconstitutional. ⁴ Hence, under the law existing at the time, Hipwell's recovery against the Hospital, where she was a patient, was not limited to $250,000. ⁵

It is well settled that an evaluation of the reasonableness of an attorney's services must be based on the law as it existed at the time such services were rendered, not after a subsequent legal malpractice action is filed. ⁶ As the Supreme Court of California stated in a legal malpractice action:

We cannot, however, evaluate the quality of defendant's professional services on the basis of the law as it appears today. In determining whether defendant exhibited the requisite degree of competence in his handling of plaintiff's divorce action, the crucial inquiry is whether his advice was so legally deficient when it was given.... ⁷

Therefore, the reasonableness of defendants' decision to recommend settlement against all potential defendants in Hipwell's medical malpractice claim is governed by Condemarin, which was the applicable law at the time.

The defendants challenge Condemarin's premise that both the state (and therefore the state-owned Hospital) and municipal corporations were subject to suit at common law when exercising proprietary functions. ⁸ Defendants assert that at common law the state was actually completely immune from suit regardless of whether it was engaged in a governmental or a proprietary function. Therefore, the argument continues, a legislative limitation on the amount of recovery against the state does not abrogate a common law right, and the open courts clause is not implicated. The common law distinction between the state and municipal corporations was not raised by the parties in Condemarin and thus was not addressed by the court in that case.

In any event, the merits of defendants' argument need not be addressed at this time. Even if we were to revisit Condemarin now, any change we might make could not be utilized by defendants. The "serendipity defense," in which an attorney attempts to use case law decided after he or she rendered allegedly negligent advice to fend off a malpractice claim, has been rejected. ⁹ Therefore, whether this court chooses to reevaluate a case long after the alleged negligent advice was given can have no effect on the present malpractice suit against defendants.

Defendants also claim that the 1987 amendment to section 63-30-2 of the Act, which was not discussed specifically by the Condemarin court, remedied the Act's constitutional deficiency and reinstated the cap as to the Hospital. ¹⁰ Defendants claim that subsection 63-30-2(4) reimposed governmental immunity for the Hospital by obliterating the distinction between "governmental" and "non-governmental" and "essential" and "non-essential" that Condemarin relied on in determining that the Hospital does not qualify for immunity under the Act. The 1987 amendment, defendants point out, was in place when the decision to settle Hipwell's case was made.

The constitutional status of subsection 63-30-2(4) was not at issue in Condemarin. However, changing the language of that section cannot by itself remedy the Act's constitutional deficiency as set forth in Condemarin. ¹¹ Moreover, there is no indication in the record in this case that defendants were aware of the amendment or relied on it when they...