HUNZINGER CONST. v. Quarles & Brady

• Decision Date: 30 June 1999
• Docket Number: No. 96-3399, No. 96-3625.
• Citation: 735 So.2d 589
• Parties: HUNZINGER CONSTRUCTION CORPORATION, a Delaware corporation and Hunzinger Construction Company, a Wisconsin corporation, Appellants, v. QUARLES & BRADY General Partnership, Appellee.
• Court: Florida District Court of Appeals

735 So.2d 589

HUNZINGER CONSTRUCTION CORPORATION, a Delaware corporation and Hunzinger Construction Company, a Wisconsin corporation, Appellants, v. QUARLES & BRADY General Partnership, Appellee.

Nos. 96-3399, 96-3625.

District Court of Appeal of Florida, Fourth District.

June 30, 1999.

Charles H. Damsel, Jr. of Damsel & Gelston, P.A., West Palm Beach and Marjorie Gadarian Graham of Marjorie Gadarian Graham, P.A., Palm Beach Gardens, for appellants.

Margaret L. Cooper of Jones, Foster, Johnston & Stubbs, P.A., West Palm Beach, for appellee.

ON MOTION FOR REHEARING

WARNER, J.

We grant the motion for rehearing, withdraw our previously issued opinion, and substitute the following in its place.

This is an appeal from a judgment in favor of the law firm Quarles and Brady for its fees, which were incurred during litigation it conducted for appellants, Hunzinger Construction Corporation and Hunzinger Construction Company (collectively, "the Hunzinger Companies" or "Hunzinger"), and during the Hunzinger companies' subsequent claims of legal malpractice. We reverse the trial court's directed verdict on one claim of malpractice, finding that the trial court erroneously determined that failure to pursue an appeal in the underlying action constituted an abandonment of the malpractice claim. We also hold that the trial court erred in giving several jury instructions which constituted improper comments on the evidence. As to the remaining issues, we affirm.

The factual scenario of this litigation is very complex and does not need to be repeated at length. In brief, Hunzinger Construction Corporation was hired to construct a development in Palm Beach County in 1986. While Quarles & Brady did not represent Hunzinger in the negotiation of the construction contract, it undertook to represent it during disputes with the owner, Concordia Properties. Construction disputes ultimately resulted in a lawsuit filed by Concordia against the Hunzinger companies and a counterclaim filed by Hunzinger Construction Corporation. Quarles & Brady represented the Hunzinger companies. After a substantial net judgment in favor of Concordia, the Hunzinger companies ultimately settled the case instead of pursuing an appeal, which would have bankrupted the companies. Hunzinger then sued Quarles & Brady for legal malpractice, alleging two acts of malpractice. Quarles & Brady answered, counterclaimed for its fees in representing Hunzinger, and moved for summary judgment on one of the malpractice counts. Partial summary judgment was granted, and Hunzinger thereafter filed a second amended complaint of malpractice. Although the court determined that most of the claims in the amended complaint were barred by the statute of limitations and did not relate back to the initial complaint, it nevertheless allowed Hunzinger to assert those claims as affirmative defenses to Quarles & Brady's cause of action for its fees. After substantial pretrial preparation and motion practice, the case went to trial and ultimately resulted in a verdict in Quarles & Brady's favor, a judgment of $360,081.76, and an award of additional fees pursuant to section 768.79, Florida Statutes (1995). Hunzinger appeals from those judgments.

As its first point on appeal, Hunzinger maintains that the trial court erred in granting partial summary judgment in favor of Quarles & Brady on its claim that the firm negligently failed to tender a defense to Hunzinger's insurance company. Hunzinger's complaint alleges that, had the defense been tendered, the insurance company would have undertaken the defense and would have paid a "vast majority" of the defense fees.¹ Prior to institution of the legal malpractice action, Hunzinger sued the insurance company for reimbursement of its attorney's fees in the Concordia litigation. Its complaint was dismissed on the ground that there was no insurance coverage because Concordia's suit was a breach of contract claim, which was not within the policy provisions. Our court affirmed the dismissal. In the instant case, in granting summary judgment in favor of Quarles & Brady on the legal malpractice claim, the court determined from a review of the policy and the Concordia complaint that the allegations of the complaint were not covered under the policy. Therefore, there was no duty for the firm to tender the defense to the insurance company.

While Hunzinger points out in its brief that the duty to defend is broader than the duty to indemnify, in order to activate the duty to defend, there must be facts alleged in the complaint which would create potential coverage under the insurance policy. See Grissom v. Commercial Union Ins. Co., 610 So.2d 1299, 1306-07 (Fla. 1st DCA 1992)

. Hunzinger does not make the argument that the allegations of the complaint come within the coverage of the policy. Instead, it points to the fact that when the defense of one of the individual defendants was tendered to the insurance company sometime after the suit had been instituted, the insurance company paid fees, including those for representation of the Hunzinger companies, while it investigated to determine if there was coverage. But the act of paying the fees does not show that there was coverage or that the complaint made allegations which came within the coverage. Nor did the payment of fees establish that the complaint's allegations raised the duty to defend. Thus, it does not establish that Quarles & Brady breached a duty of care. The existence of a duty is a question of law. See Scott v. Future Invs. of Miami, Inc., 559 So.2d 726, 727 (Fla. 4th DCA 1990). Here, the trial court determined that there was no duty owed to the client on the part of the lawyer to submit the defense to the insurance company, where the complaint did not allege any cause of action which arguably came within the coverage of the policy. We find no error in the trial court's ruling.

Hunzinger's second point on appeal involves the trial court's direction of a verdict in favor of Quarles & Brady on the remaining claims of malpractice. First, Hunzinger complains that the trial court denied it due process when it specified the procedure for presentation of the malpractice claims. At the time of trial, two allegations of malpractice remained in Hunzinger's complaint. The other claims had been dismissed as beyond the statute of limitations and reduced to offsets to Quarles & Brady's counterclaim for fees and costs due for the Concordia litigation. Based upon the order of the pleadings, the order of proof would have required Hunzinger to present evidence as to the two remaining allegations of malpractice in its complaint first. Quarles & Brady would then present its proof as to its fees and any defenses to Hunzinger's two malpractice claims. Hunzinger would then be entitled to present its defenses to the counterclaim for fees, including the dismissed claims of malpractice which would offset the fee claim. In their pretrial statement, the parties disputed whether Quarles & Brady would then be entitled to present a defense to the dismissed malpractice claims that were asserted as affirmative defenses. The trial court resolved this by changing the order of proof at trial. It required Hunzinger to initially present all of its claims of malpractice, even those relegated to affirmative defenses. Then Quarles & Brady could present its defense of the malpractice claims and prove up their claim for fees. Next, Hunzinger would be allowed to rebut Quarles & Brady's evidence. At trial, however, the trial court directed a verdict as to several of the claims which had been filed as offsetting affirmative defenses at the close of Hunzinger's presentation of its initial case. Hunzinger now claims that it was a denial of due process to direct a verdict because it prevented Hunzinger from presenting rebuttal testimony.

Although denominated affirmative defenses, Hunzinger's claims of legal malpractice were initially brought as independent causes of action and only relegated to the status of affirmative defenses because of the passage of the statute of limitations. Therefore, we do not understand Hunzinger's claim that by requiring it to prove these claims first it was somehow being compelled to anticipate the defendant's case and prove a defense to the defense. Had these claims been asserted in the order of the original pleadings filed by Hunzinger in the Second Amended Complaint, the proofs would have been presented in exactly the same manner as the trial court ordered. Hunzinger has not pointed to any specific evidence that it was prevented from using as a result of the order of presentation of evidence. The trial court has authority to regulate the introduction of evidence, and its discretion in this regard will not be interfered with unless clearly abused. See Parrish v. State, 90 Fla. 25, 105 So. 130, 132 (1925), disagreed with on other grounds by Swafford v. State, 533 So.2d 270, 274, n. 2 (Fla.1988)

. Here, the trial court acted to avoid juror confusion and fragmentation of the issues. Hunzinger had the opportunity to present its entire case of legal malpractice, and it has failed to show how it was denied any opportunity to be heard. We therefore affirm.

As its next point for review, Hunzinger claims it was error for the trial court to direct a verdict on Hunzinger's claim of legal malpractice, which was based on Quarles & Brady's late filing of a mechanic's lien. In the Concordia litigation, the trial court held that the mechanic's lien was not timely filed. After judgment, Hunzinger filed an appeal but then settled the case before the appeal was completed. In the instant suit, on motion for a directed verdict, Quarles & Brady's attorney argued to the court that there was no malpractice because the attorney's advice regarding the filing of the lien was accurate. The reason that the trial court ruled adversely to Hunzinger in the Concordia litigation was because it made a factual finding that Hunzinger...