680 F. App'x 269
5th Cir.2017Background
- Kennedy was sued by HCB to collect on a personal guaranty after default on a promissory note; the district court granted summary judgment for HCB and entered judgment for $2,019,495.82.
- Kennedy sued her former attorney (Hall) for legal malpractice, alleging negligent representation in the underlying guaranty action.
- Mississippi law governs and requires a malpractice plaintiff to prove but-for causation — that but for attorney negligence she would have prevailed in the underlying case.
- Kennedy’s malpractice theory focused on counsel’s failure to urge offset of guaranty liability by the fair market value of collateral property.
- The guaranty contained an express waiver by the guarantor of any right to require resort to collateral or setoff; Mississippi law treats guarantors as immediately liable upon debtor default without creditor first pursuing collateral.
- The district court granted summary judgment for defendants, finding Kennedy failed to raise a genuine issue that attorney negligence would have changed the underlying outcome; the Fifth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kennedy proved proximate (but-for) causation for malpractice | Counsel was negligent for not arguing offset of guaranty by fair market value of collateral; that negligence caused the adverse judgment | Even if counsel omitted that argument, the guaranty waived resort to collateral so such evidence would not have avoided liability | Kennedy failed to show but-for causation; summary judgment for defendants affirmed |
| Whether guaranty allowed offset or required creditor to pursue collateral first | Offsets should reduce guaranty liability | Guaranty expressly waived any right to require resort to collateral; guarantor liable upon debtor default | Guaranty waiver effective; creditor need not pursue collateral before suing guarantor |
| Standard of review for summary judgment | N/A (procedural) | N/A | De novo review applied |
| Motion to strike portions of plaintiff’s reply relying on judicial estoppel | N/A (Kennedy relied on judicial estoppel in reply) | Defendants moved to strike those portions | Motion to strike denied as moot |
Key Cases Cited
- Century 21 Deep S. Props., Ltd. v. Corson, 612 So. 2d 359 (Miss. 1992) (elements of legal malpractice and requirement to prove proximate cause)
- Hickox v. Holleman, 502 So. 2d 626 (Miss. 1987) (proximate-cause standard in malpractice actions)
- Bosarge v. LWC MS Props., LLC, 158 So. 3d 1137 (Miss. 2015) (guarantor liability principle and immediate liability upon debtor default)
- Woods-Tucker Leasing Corp. v. Kellum, 641 F.2d 210 (5th Cir. 1981) (discussion of condition for suing on a guaranty)
- Stanley v. Trinchard, 500 F.3d 411 (5th Cir. 2007) (standard of review for summary judgment)