Opinion
Case No. 3D04-1301.
Opinion filed June 7, 2006.
An Appeal from the Circuit Court for Miami-Dade County, Fredricka Smith, Judge, Lower Tribunal No. 00-20859 CA 24.
Colson Hicks Eidson and Marc Cooper and Maureen E. Lefebvre and Roberto Martinez, for appellants.
Hall, Lamb and Hall and Andrew C. Hall and Adam J. Lamb, for appellee.
Before LEVY and GREEN, JJ., and SCHWARTZ, Senior Judge.
While we otherwise affirm all aspects of the judgment below in this legal malpractice action, we find that the trial court erred in denying the plaintiff, Bell Holdings Inc.'s ("Bell"), motion for judgment notwithstanding the verdict on comparative negligence as to Count I only, and in reducing Bell's recovery on that Count.
In this case, the defendant-attorney, Clay Parker, approved a legal malpractice insurance policy as adequate protection against theft of money Bell placed in the trust account of another attorney, Jorge Hernandez, for a transaction referred to by the parties as the "A.S." transaction. In fact, the insurance policy did not provide coverage for theft, and Hernandez stole the money from his trust account. Bell subsequently sued Parker and his law firm, Kirkpatrick and Lockhart, LLP, for various claims of malpractice.
The policy that Parker approved as adequate security for the money was Hernandez's legal malpractice policy.
In Count I, Bell alleged negligence in the A.S. transaction, specifically: that Parker negligently failed to conduct due diligence on the transaction; that he negligently allowed the money to be held in Hernandez's trust account rather than Kirkpatrick and Lockhart's trust account and failed to require two signatures on the account; and that he negligently accepted the certificate of malpractice insurance as proof of insurance protection for theft of the money or fraud. Count II alleged negligence in an audit of Bell's loan files. Parker raised multiple theories of comparative negligence with regard to Count I. The court allowed Parker to defend on one theory: failure of Bell to conduct due diligence on the A.S. transaction.
Ultimately, the jury found Parker negligent in approving the insurance policy as adequate protection from theft of the money. However, the jury also found Bell 50% comparatively negligent in failing to conduct due diligence on the A.S. transaction the money was to fund, and the trial court accordingly reduced Bell's award in the appropriate amount. Bell subsequently filed a motion for judgment notwithstanding the verdict asserting, among other things, that the issue of comparative negligence should not have been presented to the jury with regard to the A.S. transaction. The trial court denied the motion. We reverse on this issue. Given the facts of this case, it was error to submit the issue of comparative negligence to the jury.
In Tarleton v. Arnstein Lehr, 719 So. 2d 325, 331 (Fla. 4th DCA 1998), the Fourth District held that "[a] client cannot be found to be comparatively negligent for relying on an attorney's erroneous legal advice or for failing to correct errors of the attorney which involve the exercise of professional expertise." In Tarleton, the client was advised by the firm representing her in her marital dissolution proceeding that she could bring a separate action to enforce promissory notes given to her by her husband, despite a release clause in the settlement agreement she entered into with her husband in the dissolution proceeding. When she could not sue on the notes because of the release clause, she brought a malpractice action against the firm. During the malpractice action, the client's motion for directed verdict on the issue of comparative negligence was denied. From a final judgment in favor of the firm, the client appealed. Tarleton, 719 So. 2d at 328.
In finding that the trial court erred in failing to direct a verdict in favor of the client on the issue of comparative negligence, the court reasoned that the client did not have a burden to "second guess" her attorney's advice, or hire a second attorney to see if the advice was proper, simply because she was "somewhat sophisticated" in business matters. Tarleton, 719 So. 2d at 331. On remand, the court was ordered to strike the jury's comparative negligence finding and reinstate the jury's original verdict finding the firm negligent. Id. at 331.
In the instant case, Bell sought legal advice to protect the money that it was placing in Hernandez's trust account for the A.S. transaction. Bell's attorney, Parker, responded that the money would be protected by Hernandez's malpractice insurance policy. This advice was incorrect, and the jury found Parker negligent on this point. Therefore, Bell cannot be found to be comparatively negligent for relying on Parker's erroneous legal advice regarding the insurance coverage.
Parker argues, however, that Tarleton does not apply to the facts of this case because Bell was not found comparatively negligent based upon its reliance on Parker's erroneous advice regarding the insurance policy, but instead for its own negligence in failing to conduct due diligence. This argument fails because any negligence on Bell's part, in failing to perform due diligence regarding all aspects of the A.S. transaction, would not have made a difference in the loss had Parker's advice been correct.
The specific advice that Parker gave regarding the insurance policy was given in response to his client's desire to make the money "bulletproof" from theft. In essence, the insurance policy was to protect against Bell's own negligence. Having given advice on how to protect the money in any circumstance, Bell was entitled to rely on Parker's advice in that regard and any comparative negligence argument is irrelevant. In other words, had Parker's advice been correct, or the money properly secured, no loss would have occurred regardless of Bell's conduct and investigation of the A.S. transaction.
Therefore, the motion for judgment notwithstanding the verdict on the comparative negligence issue regarding the A.S. transaction should have been granted, and Bell awarded the full amount of damages on that claim. The remaining points raised by the parties in both the appeal and cross appeal lack merit. Accordingly, this matter is remanded to the trial court for further action as may be appropriate and consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
LEVY and GREEN, JJ., concur.
I disagree with the Court only in its rejection of the appellants' contention that the award to Bell Holdings of $458,250 — reduced by comparative negligence to $229,125 — is, to the extent of $290,000, unsupported by competent, substantial evidence. The basis of the $290,000 in question is that if the law firm had timely informed Bell of defects in the audit of Hernandez's accounts, it could have demanded and Hernandez would have returned that sum from funds already invested. That Hernandez, who was hundreds of thousands of dollars in the red at all pertinent times to numerous individuals and entities he had stolen from, could, let alone would have done so is so unlikely that the term "speculative" puts much too favorable a face on it. I believe, therefore, that the award on count II should be reduced to $84,125 ($168,250 ($458,250 minus $290,000) reduced by fifty percent comparative negligence). See Stensby v. Effjohn Oy Ab, 806 So. 2d 542 (Fla. 3d DCA 2001); Smith v. Austin Dev. Co., 538 So. 2d 128 (Fla. 2d DCA 1989); Fla. Outdoor, Inc. v. Stewart, 318 So. 2d 414 (Fla. 2d DCA 1975), cert. denied, 333 So. 2d 465 (Fla. 1976).
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.