Pawlendzio v. Haddow
| Decision Date | 20 September 2016 |
| Docket Number | Docket: Pen-15-305 |
| Citation | 148 A.3d 713,2016 ME 144 |
| Parties | Frank Pawlendzio et al. v. Jon Haddow |
| Court | Maine Supreme Court |
Jed Davis, Esq. (orally), and Aglaia Davis, Esq., Jim Mitchel and Jed Davis, P.A., Augusta, for appellants Frank and Beverly Pawlendzio
James M. Bowie, Esq. (orally), Thompson & Bowie, LLP, Portland, for appellee Jon Haddow
Panel: SAUFLEY, C.J., and ALEXANDER, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
[¶ 1] Frank and Beverly Pawlendzio appeal from an order of the Superior Court (Penobscot County, Anderson, J. ) granting summary judgment in favor of Jon Haddow on the Pawlendzios' claim alleging attorney malpractice. Because the record does not present a legally cognizable claim of legal malpractice, we affirm.
[¶ 2] For fifteen years, Frank Pawlendzio owned and operated Oak Ridge Builders, Inc., a home construction company. Oak Ridge was in business until 2007, when it filed for bankruptcy. Jon Haddow provided legal advice in connection with the bankruptcy proceedings. There is no suggestion that Haddow was negligent in providing advice regarding the corporate bankruptcy in 2007.
[¶ 3] While the corporate bankruptcy was pending, Frank decided to build a house in his individual capacity on a parcel of property that he owned with the intent to sell the house (“spec house”) upon completion. Haddow again provided Frank with legal advice concerning the venture. To finance the project, Frank obtained funding from three people: $110,000 from a longtime friend, Howard Martin; $57,500 from his elderly father-in-law, Edward King, whose accounts were controlled by Frank's wife, Beverly; and $4,000 from his brother, Stan Pawlendzio. At the time they were made, all three loans were unsecured.
[¶ 4] When the house was substantially completed but before it was sold, Frank learned that he continued to owe a significant amount of money to Oak Ridge's creditors because he had personally guaranteed some debts that were not subject to discharge in the corporate bankruptcy.
[¶ 5] Frank consulted Haddow about filing for personal bankruptcy, and because he understood from conversations with Haddow that he could protect his unsecured creditors with mortgages, Frank asked Haddow to prepare after-the-fact mortgages for the three personal lenders. Pursuant to these discussions, Haddow prepared the mortgages. The Pawlendzios subsequently filed for bankruptcy in December 2008, and sold the spec house shortly thereafter. Haddow represented the Pawlendzios in the personal bankruptcy proceeding.
[¶ 6] The after-the-fact mortgages did not, however, protect the personal lenders' interest as contemplated. At the conclusion of the bankruptcy proceedings, the bankruptcy estate distributed $500 each to King and Frank, and $105,000 to Martin. Although the bankruptcy estate repaid the majority of the funds Martin loaned to Frank, the Pawlendzios made monthly payments to him to make up the difference because they believed that he had a viable claim against them and because they wanted to salvage their friendship with Martin.
[¶ 7] Following the Pawlendzios' personal bankruptcy proceedings, on July 11, 2012, they filed a complaint against Haddow in the Superior Court asserting claims of legal malpractice and seeking damages for economic loss and extreme emotional distress. In their complaint, the Pawlendzios alleged that after learning of his substantial personal debt obligations, Frank requested that Haddow protect the investments of the three personal lenders and that Haddow was negligent in failing to do so by means of the after-the-fact mortgages or otherwise. As damages, the Pawlendzios asserted that, although their debts were discharged in bankruptcy, they had a moral obligation to repay the remainder of the debts owed to their friend, Martin, and the accounts controlled by Beverly. The Pawlendzios also asserted that Haddow's alleged failure to protect the interests of the originally unsecured creditors has caused them emotional distress.
[¶ 8] Haddow subsequently moved for summary judgment, and, on May 26, 2015, the court entered an order granting summary judgment in his favor. The Pawlendzios timely appealed.
[¶ 9] We review a grant of summary judgment de novo, considering the evidence in the light “most favorable to the nonprevailing party to determine whether the parties' statements of material facts and the record evidence to which the statements refer demonstrate that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Rainey v. Langen, 2010 ME 56, ¶ 23, 998 A.2d 342 (quoting Beal v. Allstate Ins. Co. , 2010 ME 20, ¶ 11, 989 A.2d 733 ).
[¶ 10] To prove attorney malpractice, a plaintiff must show (1) a breach by the defendant of the duty owed to the plaintiff to conform to a certain standard of conduct; and (2) that the breach of that duty proximately caused an injury or loss to the plaintiff. See Steeves v. Bernstein, Shur, Sawyer & Nelson, P.C. , 1998 ME 210, ¶ 12, 718 A.2d 186.
[¶ 11] Professional negligence, in the context...
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