California Bar Journal
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Ruling really doesn't alter malpractice
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Don't burn your malpractice premium notice just yet. I know many lawyers who are euphoric after a cursory reading of Marshak v. Ballesteros, 1999 Daily Journal D.A.R. 6425. These attorneys naively believe that inadequate settlement advice in legal malpractice cases in California no longer casts a dark shadow across our beleaguered profession.

In Marshak, a family law practitioner was sued for simple malpractice in allegedly failing to competently advise the client in settlement negotiations, advising him to settle for "less than the case was worth." In what may appear to be a surprising decision, the court granted a motion for summary judgment of the "single cause of action." The court held that the plaintiff could only recover for legally certain damages, which were not established in the opposition. Marshak was in propria persona when he filed. A marginally inspired plaintiff's attorney would have included a claim for breach of fiduciary duty, potentially blocking the summary judgment.

Diane KarpmanAstonishingly, the court maintained that for the plaintiff to prove his damages, he would have to "prove that his ex-wife would have settled for less than she did . . ." This is quixotic, in that it may be impossible to obtain a former spouse's agreement to this fact or perhaps any other for that matter. This could create an insurmountable burden for a plaintiff.

Marshak has not changed a lawyer's fundamental obligations in the settlement arena. This still includes the duty to fully advise clients of the benefits and detriments of the proposal, the ramifications, etc.

However, negligence in the failure to competently advise a client in settlement negotiations is a perplexing issue. Blunders and flaws may seem easy to distinguish by remorseful settlors. The courts are well aware of this hindsight factor.

Remember that there are other types of professional errors or omissions, including breach of fiduciary duty, which is often labeled as "constructive fraud" because it lacks true "intent." This type of breach is inherently more wrong, sounds in tort, and can thereby justify putative damages.

In Marshak, the court was reaffirming that since the case was for "plain vanilla" professional negligence, the plaintiff would need to establish the difference between what he received from the settlement and what he claims he should have received. This situation is more akin to a claim for breach of contract, where speculative damages are always verboten.

Inadequate settlement advice may appear to be a difficult burden from a California plaintiff's point of view. Gosh, it would almost appear as if an inept lawyer could profit from his or her incompetence by mucking up the case, making it impossible for a plaintiff to establish legally certain damages. Other states maintain that where an attorney's grossly inadequate settlement advice prevents the client from authentically consenting to the settlement, attorneys cannot use their own incompetence to escape liability. Better to pay your premium. Nothing has really changed.

Diane Karpman specializes in lawyer law. She can be reached at 310/887-3900 or