Joos v. Drillock

• Decision Date: 15 September 1983
• Docket Number: Docket No. 58977
• Parties: Gail A. JOOS and Linda K. Avery, Plaintiffs-Appellants, v. William J. DRILLOCK, Defendant-Appellee. 127 Mich.App. 99, 338 N.W.2d 736
• Court: Court of Appeal of Michigan — District of US

Page 736

338 N.W.2d 736

Gail A. JOOS and Linda K. Avery, Plaintiffs-Appellants, v. William J. DRILLOCK, Defendant-Appellee.

Docket No. 58977.

127 Mich.App. 99, 338 N.W.2d 736

Court of Appeals of Michigan.

Submitted Oct. 14, 1982.

Decided July 11, 1983.

Rehearing Denied Aug. 29, 1983.

Released for Publication Sept. 15, 1983.

[127 MICHAPP 100] H. James Starr, Lansing, for plaintiffs-appellants.

Foster, Swift, Collins & Coey by John L. Collins, Lansing, for defendant-appellee.

Before HOLBROOK, P.J., and J.H. GILLIS and DODGE, ^* JJ.

J.H. GILLIS, Judge.

The question presented by this appeal is whether an action for legal malpractice may be validly assigned. We hold that it may not.

Plaintiffs commenced this action alleging that defendant had committed legal malpractice during his representation of Linda Avery in a prior lawsuit. Following a bench trial, the court found in favor of defendant. Plaintiffs appeal.

On January 1, 1972, a vehicle driven by Linda Avery collided with an automobile in which Gail Joos was a passenger. Gail Joos and several other parties in the Joos vehicle filed suit in tort against Linda Avery and Mickey Avery, the owner of the [127 MICHAPP 101] automobile. The Avery vehicle was insured by Auto Owners Insurance Company, which retained William J. Drillock, defendant herein, to represent the Averys in the lawsuit. The coverage limits of the insurance policy were $40,000 per accident and $20,000 per person.

Prior to trial of the Joos v. Avery suit, all plaintiffs except Gail Joos settled for a total of $23,000, leaving $17,000 in available insurance benefits. The matter was tried and the jury returned a verdict in favor of Gail Joos in the amount of $65,000. Auto Owners paid Joos the $17,000 of remaining benefits, plus interest.

Linda Avery and Mickey Avery then executed an assignment of their rights against Auto Owners to Gail Joos. Joos thereafter commenced the present action against Auto Owners, alleging that Auto Owners had refused in bad faith to settle the Joos v. Avery suit within the policy limits. Linda Avery subsequently executed a document which purported to partially assign to Gail Joos her rights against William J. Drillock. ¹ An amended complaint was thereafter filed by Gail Joos and Linda Avery against Auto Owners and William Drillock. The amended complaint repeated the allegation against Auto Owners of a bad faith refusal to settle and, in addition, alleged that [127 MICHAPP 102] William Drillock had committed legal malpractice in his representation of Linda Avery during the Joos v. Avery suit. The malpractice claim involved primarily Drillock's alleged failure to notify Avery of settlement offers made by Joos, failure to settle the case within available policy limits and failure to make proper discovery.

Prior to trial of the instant case, the claim against Auto Owners was dismissed pursuant to a settlement in which Auto Owners paid $34,600 to Gail Joos and $400 to Linda Avery. Following a bench trial on the malpractice claims, the court ruled in favor of defendant, finding that no malpractice had occurred. ² We first note that, contrary to plaintiffs' argument, the assignment issue is properly before this Court. Defendant Drillock challenged the validity of the assignment in the trial court, but the court never issued a specific ruling on the question. Under these circumstances, it was unnecessary to file a cross-appeal to bring the issue before this Court.

The assignability of a legal malpractice action is apparently a question of first impression in this state. As a general rule, actions which are deemed to survive death are assignable under the common law. State Mutual Life Assurance Co. of America v. Deer Creek Park, 612 F.2d 259, 265 (CA 6, 1979), Detroit v. Bridgeport Brass Co., 28 Mich.App. 54, 59, fn. 5, 184 N.W.2d 278 (1970), lv. den. 384 Mich. 828 (1971). Under MCL 600.2921; MSA 27A.2921, "[a]ll actions and claims survive death". However, survivability is not the only test. Other jurisdictions have held, for public policy reasons, that legal [127 MICHAPP 103] malpractice actions are not assignable. This was the holding in Goodley v. Wank & Wank, Inc., 62 Cal.App.3d 389, 133 Cal.Rptr. 83 (1976). The California Court of Appeal based its decision on the "uniquely personal nature of legal services and the contract out of which a highly personal and confidential attorney-client relationship arises". 62 Cal.App.3d 395, 133 Cal.Rptr. 83. The court noted that an attorney's duty to his client arising out of the professional relationship is a personal one running solely to the client. Because of the inherent nature of the attorney-client relationship it has been traditionally restricted to only the parties involved. The California court cited the following public policy considerations underlying its decision:

"It is the unique quality of legal services, the personal nature of the attorney's duty to the client and the confidentiality of the attorney-client relationship that invoke public policy considerations in our conclusion that malpractice claims should not be subject to assignment. The assignment of such claims could relegate the legal malpractice action to the market place and convert it to a commodity to be exploited and transferred to economic bidders who have never had a professional relationship with the attorney and to whom the attorney has never owed a legal duty, and who have never had any prior connection with the assignor or his rights. The commercial aspect of assignability of choses in action arising out of legal malpractice is rife with probabilities that could only debase the legal profession. The almost certain end result of merchandizing such causes of action is the lucrative business of factoring malpractice claims which would encourage unjustified lawsuits against members of the legal profession, generate an increase in legal malpractice litigation, promote champerty and force attorneys to defend themselves against strangers. The endless complications and litigious intricacies arising out of such commercial activities would place an undue burden on not only the legal profession but the already overburdened judicial system,[127 MICHAPP 104] restrict the availability of competent legal services, embarrass the attorney-client relationship and imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client.

" * * * [T]he ever present threat of assignment and the possibility that ultimately the attorney may be confronted with the necessity of defending himself against the assignee of an irresponsible client who, because of dissatisfaction with legal services rendered and out of resentment and/or for monetary gain, has discounted a purported claim for malpractice by assigning the same, would most surely result in a selective process for carefully choosing clients thereby rendering a disservice to the public and the profession." 62 Cal.App.3d 397-398, 133 Cal.Rptr. 83.

Similar reasoning was employed in Christison v. Jones, 83 Ill.App.3d 334, 39 Ill.Dec. 560, 405 N.E.2d 8 (1980), wherein the Illinois Court of Appeals held that a legal malpractice action was not assignable and was therefore not an asset of a bankrupt's estate. The court noted that while survivability of an action is the usual test to determine assignability, it is not the sole test. Rather, the assignability of a cause of action must be based upon an analysis of the claim sought to be assigned as well as upon the public policy considerations involved. The court made the following observations concerning the dual nature of a legal malpractice cause of action:

"It is primarily a tort action for negligence based upon an attorney's failure to exercise a reasonable degree of skill and care in...