Labair v. Carey
2016 Mont. LEXIS 942
| Mont. | 2016Background
- In 2003 the Labairs’ newborn died after a C-section; they retained Carey in 2004 to pursue a medical‑malpractice claim against Dr. Baumgartner.
- Carey failed to file the required Montana Medical Legal Panel application and miscalculated the statute of limitations, causing the underlying claim to be time‑barred.
- On appeal (Labair I) the Montana Supreme Court held duty, breach, and causation against Carey were established and remanded for trial only on damages — specifically whether the Labairs more probably than not would have recovered a settlement or verdict and the value of any lost recovery.
- At the remand jury trial both parties presented settlement‑probability and value experts (plaintiffs’ expert: 90%+ chance, $500,000–$750,000 value; defense expert: 95% general settlement rate, $100,000–$300,000 value). The jury found breach but that the underlying breach did not cause damages and answered “No” to whether the Labairs lost the opportunity to recover a settlement.
- During deliberations the jury asked whether Question 4 required considering only lost opportunity or whether it had to decide if the Labairs “would have settled.” The court instructed the jury to decide whether the Labairs would have settled (Instruction No. 36). The jury answered No and the district court entered judgment for Carey.
- The Supreme Court vacated and remanded: it held the trial court misinstructed the jury by adding a requirement that the Labairs show they would have actually accepted a settlement; the Labairs had already met the Labair I threshold that settlement was more probable than not, so only the settlement value remains for retrial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper burden to prove lost‑settlement damages in legal malpractice (whether plaintiff must show they would have actually accepted a settlement vs. only that a settlement was more probable than not and its value) | Labair: Labair I required only proving the probability of settlement and its likely value (met via experts) | Carey: Plaintiffs must also prove they would have accepted a settlement; otherwise no actual injury | Held: Court reversed — Labair I required proof that a settlement was more probable than not and proof of value; the district court erred by adding an element that plaintiffs would have actually settled. The Court granted judgment as a matter of law that settlement was more probable than not and remanded for trial on settlement value only. |
Key Cases Cited
- Labair v. Carey, 367 Mont. 453 (Mont. 2012) (Labair I) (established duty, breach, and causation; remanded to decide whether settlement or verdict was more probable than not and to determine lost value)
- Merzlak v. Purcell, 252 Mont. 527 (Mont. 1992) (malpractice damages must be proven and not merely speculative)
- Lieberman v. Emp’rs Ins. of Wausau, 84 N.J. 325 (N.J. 1980) (legal malpractice plaintiff must show by preponderance the injuries suffered; discusses proof methods)
- Stott v. Fox, 246 Mont. 301 (Mont. 1991) (in malpractice "suit within a suit," jury must determine whether a reasonable jury would have found for the plaintiff in the underlying case)