Whiteaker v. State
| Decision Date | 19 February 1986 |
| Docket Number | No. 84-1943,84-1943 |
| Parties | Gary W. WHITEAKER, Appellant, v. STATE of Iowa, Appellee. |
| Court | Iowa Supreme Court |
Robert A. Nading II of Hall & Nading, Ankeny, for appellant.
Thomas J. Miller, Atty. Gen., and Charles S. Lavorato, Asst. Atty. Gen., for appellee.
Considered by REYNOLDSON, C.J., and McGIVERIN, LARSON, CARTER, and WOLLE, JJ.
Plaintiff Gary W. Whiteaker brought this law action against the State for damages allegedly caused by malpractice of a lawyer (the State attorney) working in the consumer protection division of the Iowa Attorney General's office. Whiteaker's malpractice lawsuit is premised on his contention that an underlying claim and lawsuit would have resulted in a judgment for damages, or at least a favorable settlement, if the State attorney had not been negligent in several respects. Following a bench trial the trial court found that Whiteaker had not proved several elements of his malpractice action and entered judgment for the State. We affirm.
The underlying claim which Whiteaker alleges was mishandled by the State attorney arose out of his investment in postal vending machines. In 1975 Whiteaker had contacted a California-based company known as United Postal Corporation (UPC) to inquire about a newspaper advertisement for the sale of postal vending machines. He eventually purchased several machines, then became convinced that UPC had defrauded him. Whiteaker filed a complaint against UPC with the consumer protection division of the attorney general's office. He then met with the State attorney and had him write a letter demanding full restitution of Whiteaker's investment in the postal machines. UPC rejected that proposal.
In October of 1976 UPC hired an Iowa attorney to defend against the claim which the State attorney was threatening to file on behalf of Whiteaker and other persons who had purchased the vending machines. In a conversation concerning the possibility of settling both Whiteaker's personal damage claim and UPC's attempt to collect amounts due on his contract, UPC's attorney refused to negotiate with the State attorney because of what he believed was a conflict of interest. The conflict arose from the fact that the State attorney was representing all Iowa consumers and also the plaintiff on his individual stake in the matter. UPC's attorney at that point requested that the State attorney advise the plaintiff to obtain separate, private counsel. Plaintiff contends that the State attorney never informed him of this conversation or of UPC's willingness to negotiate a settlement with plaintiff through such separate private counsel as the plaintiff might have retained.
Subsequent proceedings on the underlying claim proved less than satisfactory to plaintiff. The State attorney filed a consumer fraud action to enjoin UPC from allegedly unfair sales practices and to require UPC to make restitution to Whiteaker and all other claimants. UPC responded with a cross-petition against Whiteaker for the unpaid balance owing on his contract to purchase vending machines.
After trial commenced on the underlying lawsuit, the trial court decided that the State attorney's conflict of interest required a separate, later trial of UPC's cross-petition against Whiteaker, and trial proceeded only on the State's action for injunctive relief. Following submission of the narrowed issues, the court granted the injunctive relief the State had requested, thereby prohibiting UPC from engaging in unfair sales practices and from collecting payments still due on outstanding UPC contracts.
The trial court conditioned granting Whiteaker relief in that action on his return of postage vending machines sold to him. This election requirement confused Whiteaker and the private counsel he by then had retained. When the trial court in the underlying lawsuit subsequently clarified its decree concerning the required election, it also directed Whiteaker to amend his pleadings by filing a separate cross-petition if he wished to proceed with his claim against UPC for damages personal to him. Whiteaker's private counsel did not file that amended cross-petition until eight months later, and permission to amend was denied. UPC's cross-petition against Whiteaker was still pending in district court in January of 1980 when UPC dissolved as a corporation.
Whiteaker filed his state tort claim and then this malpractice lawsuit on May 25, 1982, alleging that the State attorney's negligent handling of his personal interest in the UPC litigation had cost him a judgment for damages against UPC or at least an opportunity to receive a fair settlement of the claim personal to him. Following a bench trial, judgment was entered dismissing Whiteaker's malpractice action. The trial court's findings of fact and conclusions of law identified several issues on which Whiteaker had failed to satisfy his burden of proof. Whiteaker contends in this appeal that the evidence fully supported both his malpractice theories: (1) that the mishandling of his stake in the litigation deprived him of a favorable judgment for money damages against UPC on his underlying claim that never was brought to trial; and (2) that the State attorney's negligence deprived him of a favorable settlement.
In our review of this law action the trial court's findings of fact have the effect of a special verdict. Kurtenbach v. TeKippe, 260 N.W.2d 53, 54 (Iowa 1977); Baker v. Beal, 225 N.W.2d 106, 109 (Iowa 1975). We review the evidence in the light most favorable to the judgment. Briggs Transportation Co. v. Starr Sales Co., 262 N.W.2d 805, 808 (Iowa 1978). When there is doubt or ambiguity in the trial court's findings, they will be construed to uphold rather than defeat the judgment. Eldridge v. Herman, 291 N.W.2d 319, 321 (Iowa 1980). Moreover, when the trial court following a bench trial denies recovery because a party has failed to sustain its burden of proof on an issue, we will not interfere unless we find the party carried its burden as a matter of law. Anthony v. State, 374 N.W.2d 662, 664 (Iowa 1985); Kurtenbach, 260 N.W.2d at 54. To support a contrary judgment, the evidence supporting such a result must be so overwhelming that only one reasonable inference on each critical fact issue could be drawn. Anthony, 374 N.W.2d at 664-65; Roland A. Wilson & Associates v. Forty-O-Four Grand Corp., 246 N.W.2d 922, 925 (Iowa 1976).
In reviewing the trial court's determination that Whiteaker had not sustained his burden of proof, we need focus only on two damage issues. The trial court found against Whiteaker on both issues. One issue concerns Whiteaker's claim that the underlying lawsuit would have been terminated with a favorable and collectible judgment against UPC but for negligence of the State attorney. The second issue concerns Whiteaker's claim that the State attorney's negligence deprived him of a favorable and collectible settlement. On neither issue was the evidence so strong as to compel the conclusion that Whiteaker satisfied his burden of proof as a matter of law.
Proof of damages proximately caused by negligence is a fundamental element of a malpractice action. When the alleged legal malpractice consists of a client's assertion that the defendant lawyer has mishandled a claim or lawsuit, proof of damages necessarily involves analysis of the value of that underlying cause of action. See Baker v. Beal, 225 N.W.2d 106, 110-11 (Iowa 1975). The measure of injury to the client's cause of action is the difference between what the client should have recovered but for the negligence, and what the client actually recovered. R. Mallen & V. Levit, Legal Malpractice § 303, at 354-55 (2d ed. 1981). Moreover, in proving the value of the underlying claim the client has the burden to show not just that a judgment in an ascertainable amount would have been entered, but the amount that would have been collected on that judgment. Beeck v. Aquaslide 'N' Dive Corp., 350 N.W.2d 149, 160 (Iowa 1984); Pickens, Barnes & Abernathy v. Heasley, 328 N.W.2d 524, 526 (Iowa 1983).
The rationale of this collectibility requirement is fully explained in Beeck:
At the trial of the malpractice action, can the lawyer successfully contend that, regardless of the substantial amount of the probable verdict in the underlying suit, the measure of the client's damages is limited to the amount he would have actually recovered by way of a satisfied judgment? The question should be answered affirmatively, since otherwise the client would be placed in a better position as a result of the lawyer's malpractice than he would have been in had the attorney not...
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