Teodorescu v. Bushnell, Gage, Reizen & Byington, Docket No. 133474

• Decision Date: 17 August 1993
• Docket Number: Docket No. 133474
• Citation: 201 Mich.App. 260,506 N.W.2d 275
• Parties: Anahid TEODORESCU, Plaintiff-Appellee, v. BUSHNELL, GAGE, REIZEN & BYINGTON, Defendant-Appellant. (On Remand)
• Court: Court of Appeal of Michigan — District of US

Page 275

506 N.W.2d 275

201 Mich.App. 260

Anahid TEODORESCU, Plaintiff-Appellee, v. BUSHNELL, GAGE, REIZEN & BYINGTON, Defendant-Appellant. (On Remand)

Docket No. 133474.

Court of Appeals of Michigan.

Submitted Feb. 2, 1993, at Detroit.

Decided Aug. 17, 1993, at 9:05 a.m.

Released for Publication Oct. 19, 1993.

[201 Mich.App. 262] Samuel H. Gun, Southfield, for plaintiff.

Plunkett & Cooney by Christine D. Oldani and Frank W. Brochert, Detroit, for defendant.

Before WAHLS, P.J., and MICHAEL J. KELLY and CONNOR, JJ.

ON REMAND

PER CURIAM.

This is a legal malpractice claim that arose out of defendant's representation of plaintiff in a divorce action. A 37th District Court jury found in favor of plaintiff and awarded her damages of $128,000. Defendant appealed to the Macomb Circuit Court, which affirmed the judgment's award of $100,000 for plaintiff's loss of the marital home, but reversed the award of $28,000 for legal fees. This Court denied defendant's application for leave to appeal, but the case was subsequently remanded to this Court for consideration as on leave granted. 436 Mich 871 (1990). On appeal, defendant claims that the trial court erred in denying its motion for a directed verdict, raising numerous arguments. We disagree and affirm.

According to the testimony presented by plaintiff, she retained defendant in October 1976. She was told that her trial, if one occurred, would be handled by Mr. Gage or Mr. Reizen, attorneys with defendant. Mr. Henry, another attorney with defendant, was responsible for reviewing the business records of plaintiff's husband. Henry told plaintiff that her husband, a medical doctor, had substantial assets. The husband had been ordered to continue paying the mortgage on the marital home during the proceedings. Just before trial commenced in November 1977, plaintiff received notice that her husband had stopped making mortgage payments. Plaintiff informed another of defendant's attorneys, Chrys Kotsis, of this, and was told, "We'll handle it."

Gage, Reizen, and Henry were not present at trial. Instead, the trial was handled by Kotsis and David Kohl. Kotsis did not recall whether any of the husband's business records were offered as evidence at trial, while Kohl admitted that he did not review the records. No expert testimony was presented regarding the value of the husband's practice. At the conclusion of the trial on December 2, 1977, the trial judge indicated from the bench that plaintiff would be awarded the house, free and clear of the mortgage, alimony, and other things. The house was the most valuable asset awarded.

Plaintiff received a notice of foreclosure on December 28, 1977. Kotsis knew the following day that proceedings for foreclosure and a sheriff's sale had begun. Defendant took no action concerning the foreclosure. Plaintiff consulted with other attorneys, but did not hire them. After plaintiff met with defendant's attorneys on January 19, 1978, defendant decided to withdraw as plaintiff's counsel and filed its motion on January 31. The parties to the divorce appeared in court on February 6. Plaintiff had other counsel present at the hearing, but he did not file an appearance. The trial court informed those present that it would not allow counsel for either side to substitute or withdraw until after the judgment was entered, which occurred the same day.

Eleven days after the judgment was entered, foreclosure occurred. Despite her efforts to retain the house, plaintiff was evicted the following year. Plaintiff filed the present action on February 6, 1980, alleging attorney malpractice in that defendant had inadequately represented her in the divorce and had failed to protect from foreclosure the marital home that had been awarded to her.

Directed verdicts are disfavored in most negligence cases. Vsetula v. Whitmyer, 187 Mich.App. 675, 679, 468 N.W.2d 53 (1991). In reviewing the denial of a motion for a directed verdict, we will examine the evidence presented up to the time of the motion in a light most favorable to the plaintiff. The plaintiff is given the benefit of every reasonable inference that may be drawn from the evidence. If reasonable minds could differ with regard to whether the plaintiff has met the burden of proof, a motion for a directed verdict should not be granted. Howard v. Canteen Corp., 192 Mich.App. 427, 431, 481 N.W.2d 718 (1992); Goldman v. Phantom Freight, Inc., 162 Mich.App. 472, 477, 413 N.W.2d 433 (1987). A defendant is entitled to a directed verdict where a plaintiff has failed to establish a prima facie case. Stoken v. J.E.T. Electronics & Technology, Inc., 174 Mich.App. 457, 463, 436 N.W.2d 389 (1988). In an action for legal malpractice, a plaintiff must establish (1) the existence of an attorney-client relationship, (2) the acts that are alleged to constitute negligence, (3) that the negligence was a proximate cause of the injury, and (4) the fact and extent of the injury alleged. Coleman v. Gurwin, 195 Mich.App. 8, 10-11, 489 N.W.2d 118 (1992); Lowman v. Karp, 190 Mich.App. 448, 451, 476 N.W.2d 428 (1991).

Defendant first claims plaintiff failed to show any acts of negligence. In particular, defendant argues that it cannot be held liable for plaintiff's loss of the house because the attorney-client relationship had ended before the sheriff's sale. ¹ We disagree. First, the testimony of defendant's expert witness that defendant refers to on appeal is irrelevant to our review of the denial of a motion for a directed verdict. Evidence of numerous acts of negligence were presented in plaintiff's case in chief, including defendant's failure to take any steps to prevent foreclosure and its allowing the house to be included in the judgment, without objection, despite the pending foreclosure. The trial court in the divorce action awarded plaintiff the house free and clear, and, had the court been made aware of the status of the house, it would probably have awarded plaintiff unencumbered assets to achieve an equitable division of property. The ultimate loss of the house was merely the manifestation of the injury caused by defendant's negligence. ² We also find defendant's reliance on Boyle v. Odette, 168 Mich.App. 737, 425 N.W.2d 472 (1988), to be misplaced. ³ Boyle does not hold that an attorney may cut off his liability for negligent acts by ending the attorney-client relationship before the harm caused by the acts reaches its full extent.

Defendant next claims that plaintiff failed to show that defendant's negligence was a proximate cause of her damages. Proximate cause is a question of fact that is generally to be decided by a jury. Fiser v. Ann Arbor, 417 Mich. 461, 474-475, 339 N.W.2d 413 (1983). Defendant does not specifically discuss the substance of plaintiff's proofs in connection with this argument, but rather casts the issue of proximate cause as one of law. That is, defendant argues that irrespective of whether plaintiff's proofs showed causation in fact, defendant should not be held legally responsible. Again, the testimony of defendant's experts regarding proximate cause, noted in defendant's appellate brief, is irrelevant to whether plaintiff established a prima facie case.

With regard to the legal component of proximate cause, legal cause is often stated in terms of foreseeability. Richards v. Pierce, 162 Mich.App. 308, 317, 412 N.W.2d 725 (1987). We hold that it is readily foreseeable that defendant's failure to take steps to prevent foreclosure or to seek the inclusion of other unencumbered assets in the judgment would cause plaintiff financial harm. Defendant also argues that plaintiff's failure to avail herself of the judgment's "fraud provision" should bar this action. The fraud provision was concerned only with concealed assets. The marital home was not a concealed asset, nor is there any indication that the business assets of plaintiff's husband were concealed. Rather, defendant failed to attempt to discover them or present evidence of their value at trial. Furthermore, we do not consider resort to the fraud provision to be an element of a prima facie case of legal malpractice. If defendant's argument is understood to be that plaintiff failed to mitigate her damages, then it was defendant's burden to prove so, not plaintiff's. Brooks v. Rose, 191 Mich.App. 565, 571-572, 478 N.W.2d 731 (1991); Dep't of Civil Rights v. Horizon Tube Fabricating, Inc., 148 Mich.App. 633, 637, 385 N.W.2d 685 (1986). The same is true with regard to the 1983 money judgment that the plaintiff obtained against her former husband, which will be discussed infra, and the apparent failure of plaintiff's subsequent counsel to seek a contempt order against her husband. Nor is the "suit within a suit" doctrine applicable to this case. See Coleman, supra, 195 Mich.App. p. 12, 489 N.W.2d 118, for a brief discussion of the limited scope of the doctrine.

Defendant also claims that plaintiff "failed in her proximate causation burden...