Pickett, Houlon & Berman v. Haislip

• Decision Date: 12 November 1987
• Docket Number: No. 307,307
• Citation: 533 A.2d 287,73 Md.App. 89
• Parties: PICKETT, HOULON & BERMAN, et al. v. Elizabeth Catherine HAISLIP. Sept. Term 1987.
• Court: Court of Special Appeals of Maryland

Page 89

73 Md.App. 89

533 A.2d 287

PICKETT, HOULON & BERMAN, et al. v. Elizabeth Catherine HAISLIP.

No. 307 Sept. Term 1987.

Court of Special Appeals of Maryland.

Nov. 12, 1987.

Alvin I. Frederick (Jeffrey J. Hines and Eccleston and Seidler, on the brief), Baltimore, for appellants

Christopher G. Hoge (Daniel Crowley and Crowley, Hoge & Fein, on the brief), Washington, D.C., for appellee.

Argued before GILBERT, C.J., and ALPERT and ROSALYN B. BELL, JJ.

ROSALYN B. BELL, Judge.

In a legal malpractice action, a jury of the Circuit Court for Prince George's County rendered Elizabeth Haislip a verdict in the amount of $75,582.50 against Pickett, Houlon & Berman and Sanford Z. Berman.

This case began in 1981 with the retention by Mrs. Haislip of Mr. Berman of the law firm Pickett, Houlon & Berman. Prior to this time, Mrs. Haislip had separated from her husband and had filed a suit for divorce through another attorney on the grounds of adultery.

In October of 1981, a hearing was held and as a result of that hearing Mrs. Haislip was awarded a divorce. The issues of alimony and property rights were reserved by the court for later determination.

In January of 1982, the issues of alimony and property rights came before the court for trial. At that trial, Mrs. Haislip testified on her standard of living and certain alleged items of marital property. At the conclusion of the first day of trial, a conference was held with the trial judge who indicated that he had reviewed the case and was inclined to award Mrs. Haislip alimony for only three years.

Following the conference with the court, the parties entered into settlement negotiations. As a result of these negotiations, the parties agreed to four years of nonmodifiable, nonadjustable alimony, two years at $15,000 and two years at $12,000. The marital home would be sold, and the net proceeds divided. The parties agreed to divide equally three properties, Martin's Acres, 381 Joint Venture and Old Marshall Hall. In addition, Mrs. Haislip was to receive approximately $108,000 as a monetary award to be paid over six years starting in 1982 at $18,000 per year. Upon the completion of the payment, the jointly held stock of Peoples Security Bank would be conveyed to Mr. Haislip.

In December of 1983, Mr. Berman wrote Mrs. Haislip advising her that if she was not rehabilitated during her four year alimony term, she could petition the court to extend the term. The letter further advised her that she must file such a petition within the four-year period.

In August of 1984, Mrs. Haislip retained new counsel, Steven Friedman. Mr. Friedman stated that Mrs. Haislip asked him to move for an extension of alimony payments. Although Mr. Friedman thought the stipulations' provisions, "nonmodifiable, nonadjustable," meant that the alimony agreement could not be extended, he nevertheless attempted to obtain an extension. He was unsuccessful. Mr. Friedman charged Mrs. Haislip $300 for his services.

In May of 1985, Mrs. Haislip filed a legal malpractice complaint against Mr. Berman and his law firm, alleging breach of contract and negligence. The allegations central to the issues on appeal involve alimony, rights to marital property and costs incurred as a result of Mr. Berman's advice. Specifically, she contends Mr. Berman failed to conduct adequate discovery on the value of the assets and hence she received less in settlement than she should have. On appeal, appellants do not claim that the discovery was adequate. Mrs. Haislip also claims that she was damaged as a result of his advice relative to the extension of alimony, arguing that she should have received indefinite alimony.

In the malpractice case, the jury rendered a special verdict with questions and answers. These questions were in three separate categories:

I.

1. Q. "Do you find that the Defendant was negligent in failing to seek pendente lite alimony for the Plaintiff?" A. "[Y]es."

2. Q. "Do you find the Plaintiff sustained damages as a result of the Defendant's negligence in failing to seek pendente lite alimony?" A. "[Y]es."

3. Q. "What damages do you find the Plaintiff sustained as a result of the Defendant's negligent failure to seek pendente lite alimony?" A. "... $2600."

II.

1. Q. "Do you find that the Defendant was negligent in failing to pursue formal discovery concerning Mr. Haislip's assets and income?" A. "[Y]es."

2. Q. "Do you find that the Defendant was negligent in failing to employ an expert or experts to evaluate Mr. Haislip's assets?" A. "[Y]es."

3. Q. "Do you find that the Defendant was negligent in presenting Mrs. Haislip's case to the Court on January 25, 1982?" A. "[N]o."

4. Q. "Do you find as a result of the Defendant's negligence that Mrs. Haislip failed to receive an equitable distribution of the marital property." A. "[Y]es.

"The amount of these damages as found by the jury is $72,682.50."

5. Q. "Do you find as a result of the Defendant's negligence that Mrs. Haislip failed to receive an award of permanent alimony?" A. "[N]o."

III.

1. Q. "Do you find that the Defendant was negligent in advising the Plaintiff that the Court had the authority to extend the alimony payments that the parties had agreed to on January 26, 1982?" A. "[Yes]."

2. Q. "Do you find that the Plaintiff sustained damages as a result of the Defendant's negligence in advising her that she could seek an extension of the alimony payments that the parties had agreed to on January 26th, 1982?" A. "[Y]es."

3. Q. "What damages do you find the Plaintiff sustained as a result of the Defendant's negligence in advising her that she could seek an extension of the alimony payments agreed to on January 26th, 1982?" A. "The damages awarded are $300."

Following the jury verdict in the legal malpractice trial, Mr. Berman and Pickett, Houlon & Berman appealed. They contest the verdict in categories II and III. They raise four questions:

"I. Whether the trial court improperly denied Appellants' Motion for Directed Verdict when the Appellee failed to produce sufficient evidence regarding the identity and value of alleged marital property.

"II. Whether the trial court improperly denied Appellants' Motion for Separate Trial on the issues of alimony and marital property disposition.

"III. Whether the trial court acted improperly by failing to instruct the jury that the Appellee had the burden "IV. Whether Appellant Berman's advice was correct as a matter of law when he advised Appellee that she possessed the right to seek an extension of alimony payments."

of proving the identity and value of the items Appellee alleged constituted marital property.

Mrs. Haislip cross-appealed and raises one question:

"Whether the trial Court properly excluded post-January 26, 1982 evidence regarding of [sic] the Haislips' respective standards of living."

SUFFICIENCY OF THE EVIDENCE

In order to recover based on legal malpractice, the claimant must establish: "(1) the attorney's employment; 2) his neglect of a reasonable duty; and (3) that such negligence resulted in and was the proximate cause of loss to the client." Kendall v. Rogers, 181 Md. 606, 611, 31 A.2d 312 (1943); Glasgow v. Hall, 24 Md.App. 525, 529, 332 A.2d 722 (1975).

In the case sub judice, appellants do not contest the employment or neglect elements but contend that appellee did not establish that appellants' negligence resulted in and was the proximate cause of her loss. Appellants primarily contend that to do so, appellee was required to "prove that she would have prevailed in the underlying divorce action but for the alleged acts or omissions of the appellants." Appellee claimed that appellants' actions caused her to receive less than an equitable share of the marital property. Thus, appellants assert that appellee must affirmatively prove this alleged equitable share. Appellants insist that appellee failed in her proof in that she did not identify all the marital assets, did not value all the marital assets, did not identify the source of funds, and did not classify the debt. Appellants conclude that because appellee failed to identify and value all the marital property the jury was barred from finding that she was entitled to recover. We disagree.

The case sub judice, while implicating marital property laws, is a malpractice action. The primary focus is therefore on whether appellee met her burden to survive a directed verdict motion in a legal malpractice case. In order to understand the damages claimed in the legal malpractice case, it is necessary to examine the Marital Property Act. ¹ This Act forms the basis for a monetary award in a divorce case.

-- Marital Property Act--

Maryland defines marital property as "property, however titled, acquired by 1 or both parties during the marriage." Md.Fam. Law Code Ann. § 8-201(e)(1) (1984). ² Marital property does not include property acquired before marriage, acquired by gift or inheritance from a third party, or excluded by valid agreement. In addition, any property directly traceable to these sources is excluded. Md.Fam.Law Code Ann. § 8-201(e)(2) (1984). In a divorce proceeding where property disposition is at issue, the party asserting a marital property interest in specific property has the burden of producing evidence as to the identity and value of that property. Green v. Green, 64 Md.App. 122, 139, 494 A.2d 721 (1985). The court must then follow a three-step process when disposing of the marital property. First, if there is a dispute as to whether certain property is marital property, the court shall determine which property is marital property. § 8-203(a). In resolving that dispute, the source of the funds rule may be applicable. In applying the rule, we consider not only which spouse contributed the funds but also whether the ultimate source was marital or nonmarital. Grant v. Zich, 300 Md. 256, 477 A.2d 1163 (1984); Harper v. Harper, 294 Md. 54, 448 A.2d 916 (1982). --Standard of Review--

                Secondly, it must

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