Meagher v. Kavli

• Decision Date: 12 June 1959
• Docket Number: No. 37646,37646
• Citation: 97 N.W.2d 370,256 Minn. 54
• Parties: Ira E. MEAGHER, Jr., Arthur B. Geer, Burr B. Markham and Clyde F. Anderson, copartners d.b.a. Meagher, Geer, Markham & Anderson, Respondents, v. Albert C. KAVLI, individually, and d.b.a. Kavli Realty Co., et al., Appellants.
• Court: Minnesota Supreme Court

Page 370

97 N.W.2d 370

256 Minn. 54

Ira E. MEAGHER, Jr., Arthur B. Geer, Burr B. Markham and Clyde F. Anderson, copartners d.b.a. Meagher Geer, Markham & Anderson, Respondents, v. Albert C. KAVLI, individually, and d.b.a. Kavli Realty Co. et al., Appellants.

No. 37646.

Supreme Court of Minnesota.

June 12, 1959.

Syllabus by the Court

1. A lawyer's professional conduct in representing his client in litigation is to be appraised in the light of all the surrounding circumstances existing prior to and during the course of such litigation and not solely according to an omniscience of hindsight gained after the litigation has been completed.

2. When a lawyer, in a personal injury action against several joint tort-feasors, is of the opinion that the defendant he represents will be found liable, and is also of the opinion that another defendant whom he does not represent may likewise be found liable, and such other defendant contests liability, he has the duty to protect his client from being unjustifiably saddled with the entire damage burden when it ought to be shared by such other defendant, and in the discharge of that duty to his client, it is neither improper nor negligent for him to conclude, under the peculiar circumstances of the case, that his client's liability ought to be denied to the end that all Related questions of liability may be litigated as contested issues.

3. A different situation arises, however, with respect to a lawyer representing a tort plaintiff whose claim he knows is untenable and who yet futilely and unnecessarily goes forward to trial.

4. When a lawyer points out the hazards of a tort action brought against his client by expressing an Opinion that his client will lose on the issue of liability, it does not necessarily follow that liability exists as a matter of law, or that regardless of the surrounding circumstances, liability may not be properly denied for the purpose of having an adjudication on the merits and, that is especially true when that issue must, in any event, be litigated as to codefendants.

5. An attorney who acts in good faith and in an honest belief that his advice and acts are well founded and in the best interest of his client is not answerable for a mere error of judgment or for a mistake in a point of law which has not been settled by the court of last resort in his state and on which reasonable doubt may be entertained by well-informed lawyers.

6. A new trial for prejudicial conduct or argument is granted only to prevent a miscarriage of justice and whether a new trial is to be granted rests in the discretion of the trial court whose decision will be reversed upon appeal only for a clear abuse of discretion.

7. An omission or a refusal to give a requested instruction is not error where the evidence will not sustain a finding of facts essential to make the instruction applicable.

Harry H. Peterson and L. W. Crawhall, Minneapolis, for appellants.

Henry Halladay and Dorsey, Owen, Scott, Barber & Marquart, Minneapolis, for respondents.

MATSON, Justice.

Defendants appeal from an order denying their motion for a new trial.

This action brought to recover an unpaid balance of attorneys' fees is before this court for the second time. The facts are exhaustively set forth in the opinion on the prior appeal. Meagher v. Kavli, 251 Minn. 477, 88 N.W.2d 871. In the course of the present opinion we shall restate only such basic facts as are necessary for a discussion of the issues.

The attorneys' fees in dispute are for legal services performed by plaintiffs' law firm in representing two brothers, A. C. Kavli and E. L. Kavli, in a personal injury action brought against them and the Harris Machinery Company by one Glen Dix. At the close of plaintiff's case, defendant A. C. Kavli was dismissed from the action, Dix recovered a verdict for $15,000 against E. L. Kavli, Harris Machinery Company, and one Clarence Peterson, and appeal was taken to this court. See, Dix v. Harris Machinery Co., 240 Minn. 218, 60 N.W.2d 628. Plaintiffs for such legal services made a charge of $2,338.75. Two payments of $300 each were made on account. The present action arises from defendants' refusal to pay the unpaid balance of $1,738.75, which consists of $113.75 for expenses and $1,625 for legal fees. The jury awarded plaintiffs a verdict for the entire amount.

Upon this appeal we have issues as to whether plaintiffs are barred from recovering their fees because their services were unnecessary and involved professional misconduct and negligence. Further issues relate to alleged errors of the court in its rulings and in its instructions to the jury and also to alleged misconduct of counsel in the instant case. 1. We turn first to the basic issue of whether plaintiffs are barred from recovering legal fees for their professional services on the theory that in defending their clients in a negligence action (involving in addition to their clients another joint tortfeasor as a defendant) they unnecessarily or unjustifiably denied liability and litigated that issue as to one of their clients, despite the fact that from the outset they had frankly advised their clients that in their Opinion at least one of them would be found liable and that a jury would not find plaintiff contributorily negligent. A lawyer's professional conduct in representing his client in litigation is to be appraised in the light of all the surrounding circumstances existing prior to and during the course of such litigation and not solely according to an ommiscience of hindsight gained after the litigation has been completed. In this case plaintiffs' clients were two brothers and one of them, E. L. Kavli, was the fee owner of the building in which the elevator-shaft accident occurred. The other brother, A. C. Kavli, had participated in the management and operation of the building. Another principal defendant in the tort action, not represented by plaintiffs but by independent counsel, was the Harris Machinery Company, ¹ which occupied the building as tenant of E. L. Kavli. Dix, plaintiff in the tort action to recover $46,000 in damages, fell into the elevator shaft while he was visiting the Harris Machinery Company as a prospective customer. ²

At the initial consultation, plaintiffs' law firm was represented by Arthur B. Geer, an experienced trial lawyer, and the Kavlis were represented by A. C. Kavli who was accompanied by his regular attorneys, L. W. Crawhall and Arthur M. Lystad. Mr. Geer, whose firm had theretofore investigated the case in behalf of Kavli's insurer which had since failed, then gave them his Opinion that because of the violation of St. Paul city ordinances ³ and state statutes ⁴ relating to elevators, E. L. Kavli, as building owner, and the Harris Machinery Company (herein referred to as Harris), as the tenant, would both be held negligent, and that consequently he recommended that the case be settled for $12,000 to be paid in equal amounts by such owner and tenant. Mr. Geer was, however, unable to make any offer of settlement because codefendant Harris, denying all liability as tenant, refused to contribute anything.

2--3. Under the circumstances no contribution could be expected from Harris unless its liability was first established in the litigation. It was definitely to the interest of plaintiffs' client, E. L. Kavli, and at the outset at least to the interest of his brother, A. C. Kavli, that the issue of Harris' negligence be thoroughly and vigorously litigated lest the Kavlis be unjustifiably left wholly responsible for the payment of all damages awarded. When a lawyer, in a personal injury action against several joint tortfeasors, is of the opinion that the defendant he represents will be found liable, and he is also of the opinion that another defendant whom he does not represent may likewise be found liable, and such other defendant contests liability, he has the duty to protect his client from being unjustifiably saddled with the entire damage burden when it ought to be shared by such other defendant, and in the discharge of that duty to his client, it is neither improper nor negligent for him to conclude, under the peculiar circumstances of the case, that his client's liability ought to be denied to the end that all Related questions of liability may be litigated as contested issues.

We do not here have the case of an attorney representing a tort Plaintiff whose claim he knows is untenable and who yet futilely and unnecessarily goes forward to trial. It is illogical to align the instant fact situation of a tort defendant with a tort-plaintiff situation. Almost all of the many cases cited by defendants go to the problem of the unnecessary and unbeneficial services of an attorney representing a tort Plaintiff.

4. A conscientious lawyer usually gives his client a frank appraisal of any hazards faced by him as a defendant in a lawsuit. When he points out the hazards of a tort action brought against his client by expressing an Opinion that his client will lose on the issue of liability, it does not necessarily follow that liability exists as a matter of law, or that regardless of the surrounding circumstances, liability may not be properly denied for the purpose of having an adjudication on the merits and, this is especially true when that issue must, in any event, be litigated as to codefendants. defendants. Any realistic consideration of the circumstances in this case leads to the conclusion that plaintiffs were not negligent and that they adopted an ethical, reasonable, and prudent course for the protection of the interest of their clients. The trial court did not err in so instructing the juey. Under the circumstances of this case defendants' argument that Mr. Geer's services were false, sham, and meritless and that he violated Canon 30 of Professional Ethics of American Bar Association ⁵ and Rule 11 of Minnesota Rules of Civil Procedure ⁶ and that he should therefore be...