Rouse v. Dunkley & Bennett, P.A., C6-93-777

• Court: Supreme Court of Minnesota (US)
• Writing for the Court: GARDEBRING; ANDERSON
• Citation: 520 N.W.2d 406
• Parties: Alan ROUSE, Respondent, v. DUNKLEY & BENNETT, P.A., et al., Petitioners, Appellants.
• Docket Number: No. C6-93-777,C6-93-777
• Decision Date: 26 August 1994

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520 N.W.2d 406 Alan ROUSE, Respondent,
v.
DUNKLEY & BENNETT, P.A., et al., Petitioners, Appellants. No. C6-93-777. Supreme Court of Minnesota. Aug. 26, 1994.
Rehearing Denied Oct. 20, 1994.

Syllabus by the Court

1. The plaintiff's burden in response to a summary judgment motion on the causation element of a legal malpractice action is to show that the plaintiff would have survived summary judgment on the underlying, but foregone, claim.

2. Where there is no evidence that the defendant in a defamation action published the allegedly defamatory statement and where the plaintiff has not identified any person to whom he was compelled to publish the statement, nor provided any documentary evidence substantiating his claim, he has not met his burden on the publication requirement of a defamation action and has not

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shown evidence of a genuine issue of material fact on that element.

John M. Degnan, Charles E. Lundberg, Bassford, Heckt, Lockhart, Truesdell & Briggs, P.A., Minneapolis, for appellants.

Thomas J. Lyons, Mary C. Ivory, Lyons Sawicki Neese, P.A., St. Paul, for respondent.

HEARD, considered and decided by the court en banc.

OPINION

GARDEBRING, Justice.

Respondent in this case, Alan Rouse, filed a legal malpractice action in 1990 against the appellant law firm, Dunkley & Bennett, P.A., alleging that the firm's lawyers were negligent in representing him in a lawsuit against his former employer. Appellants Dunkley & Bennett ("the lawyers") had represented Rouse in the lawsuit, which ended in a stipulated default judgment against the former employer for $100,000.00. ¹ Rouse brought claims against the lawyers for legal malpractice, breach of fiduciary duties and misrepresentation. ² The trial court granted the lawyers' summary judgment motion in all respects. ³

On appeal, the court of appeals affirmed summary judgment for the lawyers on most of the issues involved in the case. Rouse v. Dunkley & Bennett, No. C6-93-777, 1993 WL 430351 (Minn.App. Oct. 26, 1993). However, the court of appeals reversed the trial court on respondent's claim that the lawyers negligently failed to pursue a cause of action for defamation, concluding that this claim should have survived summary judgment. Id. at 7. The court of appeals found that Rouse had established the existence of fact issues on all of the elements of his defamation claim. Id. at 8-11. On appeal to this court, the only issue is whether the court of appeals correctly reversed summary judgment for the lawyers on respondent's legal malpractice claim for negligent failure to plead defamation.

Rouse was employed as a loan officer at Independent Mortgage Services, Inc. ("IMS") from February 1, 1984 to September 26, 1984. The defamation claim arises from statements Daniel Iverson, the president of IMS, made to Rouse when he terminated Rouse on September 26, 1984. Rouse claims Iverson told him he was being fired for taking two loan applications from the same applicants for two pieces of residential property and representing that the couple would owner-occupy both properties, an action that would have violated company policy and perhaps federal law. Rouse claims that this

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statement was defamatory and denies that he took two loan applications from the couple in question. Iverson claims that his statement was truthful. Rouse met with the lawyers of Dunkley & Bennett in January 1985, and subsequently retained them to represent him in all claims against IMS. In July 1985, the lawyers filed a complaint that did not include a defamation claim.

Rouse claims that the lawyers allowed the two year statute of limitations on his defamation claim to expire before they told him they would not bring that claim. In a June 1987 letter to Rouse, the lawyers said that they would not bring a defamation claim on Rouse's behalf because they saw no good faith basis for doing so, ⁴ but did not mention that, at that time, the statute of limitations on the defamation claim had already expired. The defamatory statements were allegedly made to Rouse in September of 1984; thus, it appears that a defamation action brought after September of 1986 would have been barred by the statute of limitations.

Rouse stated in his affidavits that he inquired about bringing a claim of defamation several times before the statute of limitations expired. He also provided an affidavit from an expert stating that the lawyers deviated from the applicable standard of care in representing him in part by failing to assert the defamation claim and failing to advise him of the statute of limitations applicable to that claim before it expired. The expert also gave an opinion that any judgment on the defamation claim would have been collectible under Rouse's former employer's insurance policy, unlike the other claims that the lawyers did bring on his behalf.

As evidence that they were not the proximate cause of Rouse's failure to bring a defamation claim, the lawyers point to two letters written by respondent's son Kevin, an attorney who was advising his father during the course of the litigation. In one letter, written after the statute of limitations expired, the younger Rouse requested that the lawyers consider bringing a defamation claim after deposing the employer. He noted that a defamation claim would allow for personal liability against respondent's former employer and would trigger directors' and officers' liability insurance. In another letter, written later in response to the lawyers' refusal to bring the defamation claim, he stated that the complaint should be amended to include the defamation claim if Rouse's employer were to admit in his deposition to having published the allegedly defamatory statement. The lawyers assert, however, that when the employer's deposition was taken he denied repeating the statement to anyone else.

To prevail in a legal malpractice action, the plaintiff must prove: (a) the existence of an attorney-client relationship; (b) acts amounting to negligence or breach of contract; (c) that such acts were the proximate cause of the plaintiff's damages; and (d) that but for defendant's conduct, the plaintiff would have been successful in the action. Blue Water Corp. v. O'Toole, 336 N.W.2d 279, 281 (Minn.1983). Failure to prove any one of these elements defeats the plaintiff's case. Id. at 282. Here, there appears to be no dispute as to the existence of an attorney-client relationship, and, for purposes of this appeal, the defendant lawyers have acknowledged that a fact issue exists regarding their negligence.

The continued viability of this lawsuit turns on the issue of whether Rouse in fact had a viable defamation claim in the underlying action. The parties have characterized

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this as a causation issue. We have set out the following test for proximate cause in legal malpractice cases:

For negligence to be the proximate cause of an injury, it must appear that if the act is one which the party ought, in the exercise of ordinary care, to have anticipated was likely to result in injury to others, then he is liable for any injury proximately resulting from it, even though he could not have anticipated the particular injury which did happen.

Wartnick v. Moss & Barnett, 490 N.W.2d 108, 113 (Minn.1992). In this case, the lawyers could not have anticipated that their failure to bring a defamation cause of action was likely to result in injury to Rouse unless...