Sun Valley Potatoes, Inc. v. Rosholt, Robertson & Tucker

• Decision Date: 28 May 1999
• Docket Number: No. 24627,24627
• Citation: Sun Valley Potatoes, Inc. v. Rosholt, Robertson & Tucker, 981 P.2d 236, 133 Idaho 1 (Idaho 1999)
• Parties: SUN VALLEY POTATOES, INC., an Idaho corporation, Plaintiff-Appellant, v. ROSHOLT, ROBERTSON & TUCKER, Chartered, an Idaho professional corporation, Defendant-Respondent. Boise, February 1999 Term
• Court: Idaho Supreme Court

Page 236

981 P.2d 236

SUN VALLEY POTATOES, INC., an Idaho corporation, Plaintiff-Appellant, v.ROSHOLT, ROBERTSON & TUCKER, Chartered, an Idaho professional corporation, Defendant-Respondent.

No. 24627.

Supreme Court of Idaho,

Boise, February 1999 Term.

May 28, 1999.

Rehearing Denied Aug. 3, 1999.

Ellis, Brown and Sheils, Chtd., Boise, for appellant. Allen B. Ellis argued.

Eberle, Berlin, Kading, Turnbow & McKlveen, Chtd., Boise; Ling, Nielsen & Robinson, Rupert, for respondent.Warren E. Jones argued.

TROUT, Chief Justice.

This legal malpractice case against Respondent, Rosholt, Robertson & Tucker (RR & T), arose from RR & T's representation of Sun Valley Potatoes, Inc.(Sun Valley) in a contract dispute.In the underlying contract action, a jury returned a verdict against Sun Valley and in favor of the plaintiff, Mainline Ranches (Mainline), for in excess of $500,000 based upon Sun Valley's allegedly wrongful rejection of a large quantity of potatoes.Subsequently, SunValley sued RR & T alleging three causes of action, including legal malpractice.RR & T responded with a counterclaim seeking to recover the remainder of their attorney fees incurred in the Mainline/Sun Valley litigation.Sun Valley appeals from the trial court's decision granting RR & T's motion for partial summary judgment on the malpractice claim.

I.FACTUAL AND PROCEDURAL HISTORY

Sun Valley is an Idaho corporation engaged in potato processing.While the record does not reveal the exact nature of the claims filed in the Mainline/Sun Valley litigation, one issue involved whether Sun Valley wrongfully rejected potatoes stored in a cellar, commonly known as the "Blincoe" cellar.Sun Valley's allegations of legal malpractice relate to three evidentiary matters which bore on the amount of damages sustained by Mainline.

August Blase(Blase), Sun Valley's president, asserts that before the trial commenced he informed RR & T that some of the potatoes, before being placed in the Blincoe cellar, may have been subjected to freezing temperatures.There was no evidence that these particular potatoes did indeed sustain damage from freezing; however, other potatoes grown in the general vicinity had sustained such damage.As a consequence, Blase believed that Mainline's damage calculations were inflated.RR & T did not use the information at trial.During the trial, Blase for the first time informed RR & T that the Blincoe cellar could not physically hold 160,000 cwt. of potatoes as Mainline contended, which would again call into question Mainline's damage calculations.RR & T did not challenge the cellar size at trial.Finally, as part of its presentation of damages, Mainline submitted evidence that because of Sun Valley's breach, it suffered losses on 160,000 cwt. of potatoes stored in the Blincoe cellar.One piece of evidence, in the form of a report, concluded: "AMOUNT OF MITIGATED DAMAGES INCURRED BY MAINLINE RANCHES ... $546,506.79," to which RR & T did not object.The jury returned a verdict in favor of Mainline and awarded damages consistent with Mainline's calculations.

On October 26, 1995, Sun Valley sued RR & T alleging excessive billing, violations of Idaho's Consumer Protection Act, and at issue here, legal malpractice.RR & T answered and filed a counterclaim seeking to recover uncollected attorney fees.On September 17, 1997, RR & T moved for partial summary judgment seeking a dismissal of the malpractice claim.RR & T argued that each incident of alleged negligence involved tactical decisions and was protected by the "Attorney Judgment Rule."

RR & T initially supported their motion by attaching only Blase's deposition.Thereafter, shortly before the summary judgment hearing, RR & T supplemented the record with an affidavit from Jerry Jensen, the attorney at RR & T who specifically represented Sun Valley in the underlying litigation.While the exact date is disputed, RR & T served Sun Valley with a copy of the affidavit either one or three days before the hearing on the motion.It is undisputed, however, that RR & T did not file the affidavit until the day before the hearing.In response, Sun Valley filed a motion to strike the affidavit as untimely under I.R.C.P. 56(c).

In its written decision, the district judge denied Sun Valley's motion to strike the Jensen affidavit reasoning that Sun Valley failed to demonstrate unfair prejudice resulting from the late service.Agreeing with RR & T, the district judge granted the motion for partial summary judgment finding that each of the alleged deficiencies involved tactical decisions protected by the attorney judgment rule, also referred to as the "judgmental immunity doctrine".The trial court dismissed Sun Valley's claim for legal malpractice and issued a Rule 54(b) certificate.Sun Valley appeals.

II.DISCUSSION

Our review of a trial court's ruling on a motion for summary judgment is the same as that required of the trial court when ruling on the motion.Friel v. Boise City Hous. Auth., 126 Idaho 484, 887 P.2d 29(1994).Pursuant to I.R.C.P. 56(c), summary judgment must be entered when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."I.R.C.P. 56(c).As when the motion is initially considered by the trial court, this Court on review, liberally construes the record in favor of the party opposing the motion and draws all reasonable inferences and conclusions in that party's favor.Farm Credit Bank of Spokane v. Stevenson, 125 Idaho 270, 869 P.2d 1365(1994).If we determine reasonable people could reach different conclusions or draw conflicting inferences from the evidence, we will deny the motion.Id. at 272, 869 P.2d at 1367.However, if the evidence reveals no disputed issues of material fact, only a question of law remains, and this Court exercises free review.Id.

To establish a claim for legal malpractice, Sun Valley must prove (1) it had an attorney-client relationship with RR & T; (2) the existence of a duty on the part of RR & T; (3) that RR & T breached that duty; and (4) that RR & T's failure to perform the duty proximately caused Sun Valley's damages.Lamb v. Manweiler, 129 Idaho 269, 272, 923 P.2d 976, 979(1996).Only if, after liberal construction of the record in Sun Valley's favor, this Court finds that there are no genuine issues of material fact as to any element above is summary judgment proper.

It is undisputed that Sun Valley and RR & T had an attorney-client relationship.As a matter of law, an attorney owes his client a duty to use and exercise reasonable care, skill, discretion, and judgment in the representation.See, e.g., IDAHO RULES OF PROFESSIONAL CONDUCT Rules 1.1--1.3.It is also not disputed that a jury returned a verdict against Sun Valley awarding Mainline more than $500,000 in damages.The only issues remaining are whether RR & T breached its duty, and, if so, whether that breach proximately caused Sun Valley's damages; that is, did it affect Mainline's award in the underlying litigation.Sun Valley's allegations of legal malpractice can be separated into two categories: (1) RR & T's failure to object to improper testimony and an improper exhibit concerning Mainline's damage calculations and (2) RR & T's failure to challenge the basis for those calculations.The district judge determined, based upon Jensen's affidavit, that all of the allegations relating to RR & T's breach of duty were covered by the judgmental immunity rule and, therefore, RR & T was shielded from liability for these tactical decisions.As the district judge noted, whether judgmental immunity is recognized in a legal malpractice action in Idaho is a matter of first impression and, therefore, in analyzing the grant of summary judgment in this case, we must first determine the parameters and applicability of such a rule.

A.Judgmental Immunity

The "rule" as applied in other jurisdictions has been articulated in different ways.¹Most commonly it appears that the courts have simply ruled that in certain circumstances an attorney is not liable "as a matter of law" and thus, the issue need not be submitted to a jury for decision.All courts acknowledge the standard of care with which all attorneys must comply and that is: they are held to that degree of care, skill, diligence and knowledge commonly possessed and exercised by a reasonable, careful and prudent lawyer.The courts have then held as a matter of law that an attorney cannot be held liable for failing to correctly anticipate the ultimate resolution of an unsettled legal principal.See, e.g., Halvorsen v. Ferguson, 46 Wash.App. 708, 735 P.2d 675, 681(1986).Other courts have stated that, in the context of litigation, an attorney will not be held liable for a mere error in judgment or trial tactics if the attorney acted in good faith and upon an informed judgment.See, e.g., Simko v. Blake, 448 Mich. 648, 532 N.W.2d 842, 847(1995).The "non-liability" rule in both situations, however, is conditioned upon the attorney acting in good faith and upon an informed judgment after undertaking reasonable research of the relevant legal principals and facts of the given case.See, e.g., Smith v. Lewis, 13 Cal.3d 349, 118 Cal.Rptr. 621, 530 P.2d 589, 595(1975).In other words, an attorney must act with that degree of care, skill, diligence and knowledge commonly possessed and exercised by a reasonable, careful and prudent lawyer.

Certain jurisdictions have then characterized this determination that an attorney cannot be held liable as "judgmental immunity."Rather than being a rule which grants some type of "immunity" to attorneys, it appears to be nothing more than a recognition that if an attorney's actions could under no circumstances be held to be negligent, then a court may rule as a matter of law that there is no liability.As in any other negligence...