GMG Insurance Agency v. Margolis Edelstein, 319 A.3d 256

GMG Insurance Agency (GMG) hired Margolis Edelstein to represent both itself and employee Howard Wilson in a Court of Chancery lawsuit involving claims that GMG aided Wilson in breaching a non-compete with his former employer, Lyons Insurance Agency.
Margolis handled discovery and summary judgment briefing; however, GMG later alleged Margolis was inexperienced in Chancery practice and mishandled key aspects of discovery and legal argument.
As a result, Lyons's tortious interference claim survived summary judgment, though GMG won dismissal of several other claims.
GMG replaced Margolis with new counsel, who produced new documents and engaged in additional discovery. Just before trial, Wilson—now with separate counsel—recanted prior testimony and submitted an affidavit detrimental to GMG, leading to settlement of the case.
GMG sued Margolis for legal malpractice in Superior Court, alleging that Margolis’s negligence caused the negative outcome; the Superior Court granted summary judgment to Margolis, finding no breach of care and that Wilson’s affidavit was a superseding cause.
On appeal, the Delaware Supreme Court held the grant of summary judgment was improper, identified genuine fact disputes about Margolis’s conduct, and remanded for trial.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Margolis breached the standard of care in Chancery	Margolis failed to handle discovery, develop the record, and defend adequately at summary judgment	Margolis’s actions were competent; GMG’s wins on most claims prove proper representation	Genuine fact disputes—issue must go to jury
Whether negligence in discovery and briefing harmed GMG	With proper handling, no claims would have survived, avoiding fees and a $1.2M settlement	GMG can't show Margolis’s alleged deficiencies caused harm	Must be decided by jury on remand
Whether Wilson's affidavit was a superseding cause	Would not have been an issue if the claim hadn't survived summary judgment	Wilson’s recanting testimony unforeseeable, broke chain of causation	If no claim had survived, affidavit would be immaterial; causation dispute is factual
Whether conflict of interest in representing GMG and Wilson was malpractice	Margolis had an unwaived conflict, which harmed GMG’s ability to be advised fully	Interests were aligned, and GMG suffered no harm from joint representation	Factual dispute—summary judgment inappropriate

Jones v. Crawford, 1 A.3d 299 (Del. 2010) (standards for summary judgment, especially on negligence)
Hazel v. Delaware Supermarkets, Inc., 953 A.2d 705 (Del. 2008) (burden of proof on summary judgment in negligence cases)
Williams v. Geier, 671 A.2d 1368 (Del. 1996) (review standard for summary judgment)
WaveDivision Holdings, LLC v. Highland Cap. Mgmt., L.P., 49 A.3d 1168 (Del. 2012) (elements of tortious interference claim)
Ebersole v. Lowengrub, 180 A.2d 467 (Del. 1962) (negligence usually an issue for the jury)