Sanders v. Townsend

• Decision Date: 29 June 1987
• Docket Number: No. 2-285-A-55,2-285-A-55
• Citation: 509 N.E.2d 860
• Parties: Charlene SANDERS and Levon Sanders, Appellants, (Plaintiffs Below), v. Earl TOWNSEND, Jr. and Townsend, Hovde, Townsend & Montross, Appellees, (Defendants Below).
• Court: Indiana Appellate Court

Page 860

509 N.E.2d 860

Charlene SANDERS and Levon Sanders, Appellants, (Plaintiffs Below), v. Earl TOWNSEND, Jr. and Townsend, Hovde, Townsend & Montross Appellees, (Defendants Below).

No. 2-285-A-55.

Court of Appeals of Indiana Second District.

June 29, 1987.

Jon R. Pactor, Indianapolis, for appellants.

Cory Brundage, Indianapolis, for appellees.

SHIELDS, Presiding Judge.

Charlene Sanders was injured in an automobile accident with a third party in Tipton County on December 15, 1980. Charlene and her husband, Levon, retained Earl Townsend, Jr. and Townsend, Hovde, Townsend & Montross (afterwards collectively referred to as Townsend) to represent them in their claim for damages for Charlene's injuries and Levon's loss of consortium. After suit was filed Townsend negotiated, and the Sanders accepted, a $3,000 settlement from the third party's insurance company. The Sanders subsequently sued Townsend claiming they were coerced into an inadequate and unfair settlement. Townsend moved for summary judgment, which the trial court granted. The Sanders' motion to correct error was denied and this appeal followed.

We affirm in part and reverse in part.

Summary judgment is proper only when there is no issue of material fact. An issue of fact is material if it is relevant to the proof or disproof of any legal element necessary to sustain a cause of action or defense. Even if the facts are not disputed, summary judgment is not appropriate when conflicting inferences may be drawn from the facts. Steele v. Davisson, Davisson & Davisson P.C. (1982), Ind.App., 437 N.E.2d 491.

A defendant seeking summary judgment must demonstrate the undisputed material facts negate at least one element of the plaintiff's claim. ¹ This is true even where, as here, the plaintiff would have the burden of proof at trial. McCullough v. Allen (1983), Ind.App., 449 N.E.2d 1168. To counter a summary judgment motion filed by the defendant and supported as provided by Indiana Rule of Trial Procedure 56, the plaintiff:

"may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

T.R. 56(E). In ruling on a motion for summary judgment the trial court does not resolve factual controversies but only determines whether there is a material issue of fact which must be resolved by trial.

Therefore, in reviewing the trial court's ruling, we must first discern whether Townsend's material supporting his motion for summary judgment set forth facts negating any material element of the Sanders' claim, and if so, determine whether, in response, the Sanders controverted those facts thereby creating a genuinely disputed issue for trial.

I. Negligence

The Sanders' complaint noticed a claim for legal malpractice grounded in negligence. "The law is well settled in Indiana that an attorney may be held liable to his client for damages resulting from his failure to exercise ordinary care, skill and diligence." Anderson v. Anderson (1979), Ind.App., 399 N.E.2d 391, 401 (citations omitted). Breach of that duty, combined with damages proximately caused by the breach, completes a cause of action for attorney negligence. See Fiddler v. Hobbs (1985), Ind.App., 475 N.E.2d 1172, 1173.

The Sanders alleged Townsend failed to attend a hearing on the third party's motion for change of venue to the county with preferred venue and was sanctioned by the court for his failure to appear, advised the Sanders to sign settlement papers which destroyed the Sanders' insurance company's subrogation rights, and did not adequately investigate the worth of the Sanders' claim. The Sanders claimed as a result of Townsend's negligence, they settled the case for an amount far less than its actual worth.

We now look to determine if Townsend, pursuant to his motion for summary judgment, successfully adduced uncontroverted facts negating any element of the Sanders' case as a matter of law: duty, breach, proximate cause, or damages. As previously discussed, Townsend owed to the Sanders a duty to use ordinary care, skill and diligence in his representation of their claim. Turning to the question of a breach, among the interrogatories, depositions, and affidavits filed by Townsend, he asserted the Sanders asked him to attempt to settle for $3,000; he did not attend the preferred venue hearing because of illness; and, he did not advise the Sanders of the subrogation consequences of signing the release because the Sanders never told him another insurance company was involved.

Townsend also denied the Sanders were damaged by the settlement. He submitted an affidavit from the Sanders' insurance company stating the company would not pursue any subrogation claim it might have against the Sanders and an affidavit of an attorney stating the settlement amount was reasonable. Townsend also set forth circumstances surrounding the settlement, including an unfavorable doctor's report and Townsend's opinion the case would not be favorably venued. ² Townsend thus denied he breached the duty owed to the Sanders and denied the Sanders were damaged, two elements of the Sanders' cause of action. Accordingly, the Sanders were required to respond with appropriate materials in opposition--showing genuinely disputed facts surrounding the breach of duty and damages.

In depositions, affidavits, and interrogatories, the Sanders at least created a factual issue as to whether Townsend breached a duty owed them. Charlene reiterated in a deposition the allegations in the complaint, and also stated she specifically discussed her insurance company's subrogation status with Townsend. Without considering every possible alleged breach, the material before the trial court establishes genuine issues of material fact which, if true, a reasonable fact finder could conclude constitutes the breach of the duty owed by an attorney to his client.

As for damages, the majority of recent cases requires a plaintiff, in proving attorney negligence in the context of challenging a settlement or jury award as inadequate, must show, had the attorney not been negligent, the settlement or verdict award would have been greater. See Glenna v. Sullivan (1976), 310 Minn. 162, 245 N.W.2d 869; Nause v. Goldman (1975), Miss., 321 So.2d 304; Becker v. Julien Blitz & Schlesinger (1977), 95 Misc.2d 64, 406 N.Y.S.2d 412. See generally Annot: Attorney Negligence-Damages, 45 A.L.R.2d 62 Sec. 2 and later case service. Although Indiana courts have not yet addressed the issue, we agree such a showing is a prerequisite for recovery and deem it axiomatic if the result would not have been otherwise, absent the negligence, the plaintiff is not damaged.

In her deposition Charlene stated the scar on her face was worth more than $3,000 to her and in affidavits Charlene and Levon stated they were forced to give up the original lawsuit for less money than they thought it was worth. Also the Sanders' attorney executed an affidavit with an attached report estimating the value of the Sanders' automobile accident claim and excerpts from Verdict Magazine containing reports based on information allegedly submitted by Townsend disclosing settlement and jury award amounts in personal injury cases.

Because the issue of damages is whether, in the absence of attorney negligence, the settlement would have been greater than $3,000.00, any evidence tending to establish Charlene's injuries had a settlement value of more than $3,000 would create an issue of fact. The affidavits of Charlene and Levon stating Charlene's forehead scar was worth more to them than $3,000 fail to address this inquiry. The affidavits of the Sanders only express their personal opinions as to the value of the scar to them and not in the context of the many considerations relevant to value in a settlement context, such as liability, expense of trial, etc. A litigant's personal opinion of a scar's value to the litigant, standing alone, is irrelevant to the issue of the settlement value of the scar, and accordingly, does not controvert a factual assertion of value based upon relevant considerations. Accordingly, the affidavits of the Sanders fail to create a disputed issue of fact on the question of the reasonableness of the settlement figure, i.e., on the element of damage.

The Sanders also contend the jury verdict research report creates a material issue of fact concerning damages. The report was an evaluation of the Sanders' accident claim prepared by Jury Verdict Research Inc. and based in part on information provided to the company by the Sanders' attorney. The report bore the initials of a representative of the company, but no signature, and gave little indication how the conclusion valuing the claim at $17,250.00 was reached. The report was attached to an affidavit executed by the Sanders' attorney which related how he obtained the information he submitted to Jury Verdict Research, Inc. Because the conclusion of the report was based on information within the special knowledge of Jury Verdict Research Inc., as well as the facts submitted by the Sanders' attorney, the report did not represent facts within the personal knowledge of the affiant as required by T.R. 56. Accordingly, because an affidavit was not submitted by a representative of Jury Verdict Research, the report contains hearsay. No exception to the hearsay rule applies to the report, and consequently, the trial court could not consider the report in ruling on Townsend's summary judgment motion.

Finally, the excerpts from Verdict Magazine may not be considered in determining whether the Sanders' created a genuine issue of fact on damages. The excerpts, allegedly based on information supplied by Townsend, are out-of-court statements by Verdict Magazine, offered for the truth of the assertions...