P. Kevin Barkal, M.D. and Pemcor, Inc. v. Gouveia & Associates
2016 Ind. App. LEXIS 464
| Ind. Ct. App. | 2016Background
- In 2000 Webb sued Dr. P. Kevin Barkal and related entities (Barkal Entities) in California; a settlement/judgment and appointment of a receiver followed after default. The California court found alter-egos and entered contempt orders against Barkal.
- Barkal (now in Indiana) retained Attorney Freeland for a personal Chapter 13 filing; Freeland engaged Attorney Gouveia to represent the Barkal Entities to avoid a conflict.
- Bankruptcy Court denied turnover of the entities’ accounts receivable to Barkal’s Chapter 13 estate and concluded the accounts receivable were not property of Barkal’s Chapter 13 estate; parties discussed converting strategy to Chapter 11 for the entities.
- Gouveia’s firm declined to file corporate bankruptcies for the entities; Barkal later retained Attorney Welch, who filed Chapter 11 petitions for several Barkal Entities (Pemcor never filed). The cases were later converted to Chapter 7 and transferred to California.
- Appellants (Barkal and Pemcor) sued Gouveia in Indiana for legal malpractice, alleging Gouveia breached the standard of care by advising/allowing a Chapter 13 filing, waiving an evidentiary hearing, and failing to take action after dismissal.
- Trial court granted summary judgment for Gouveia because Appellants failed to designate admissible expert testimony establishing the applicable standard of care and breach; the court rejected the common-knowledge exception. This Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs designated expert testimony to establish the applicable standard of care/breach in a legal-malpractice action | Welch and Zuckerberg’s depositions (both experienced bankruptcy attorneys) supply expert opinions showing Gouveia breached the standard of care | The designated testimony does not provide expert opinions on Gouveia’s conduct; both witnesses disclaimed having reviewed files or forming opinions and were not retained as experts | Held for defendant: no admissible expert testimony designated to establish standard of care or breach; summary judgment affirmed |
| Whether the common-knowledge exception excuses the expert requirement | The alleged errors (e.g., advising Chapter 13, waiving hearing) are obvious enough that lay jurors can evaluate negligence without an expert | Bankruptcy practice is specialized; choice of chapter and related strategy are not within common knowledge | Held for defendant: common-knowledge exception does not apply; expert testimony required |
| Causation/damages — whether plaintiffs showed they would have obtained better bankruptcy outcomes but for Gouveia’s conduct | Plaintiffs claim lost bankruptcy protections and resulting losses (lost meritorious cases) | Defendant challenges existence of causation and damages and ties failure to plaintiffs’ own conduct and later filings by other counsel | Court resolved plaintiff’s claim on the expert-rule failure and did not find material evidence of causation presented; summary judgment appropriate |
| Affirmative defenses (unclean hands; Rooker–Feldman) | Plaintiffs argued their suit should proceed | Defendant contended plaintiffs’ claims were barred by unclean hands and Rooker–Feldman | The trial court relied on the lack of expert testimony as dispositive and granted judgment; on appeal the court affirmed on that basis (other defenses noted but not necessary to decision) |
Key Cases Cited
- Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009) (standard for materiality and genuine issues on summary judgment)
- First Farmers Bank & Trust Co. v. Whorley, 891 N.E.2d 604 (Ind. Ct. App. 2008) (appellate review of summary-judgment rulings)
- Blasche v. Himelick, 210 N.E.2d 378 (Ind. Ct. App. 1965) (attorney’s duty of fidelity and good faith to client)
- Clary v. Lite Machines Corp., 850 N.E.2d 423 (Ind. Ct. App. 2010) (attorney must exercise ordinary skill and knowledge)
- Beal v. Blinn, 9 N.E.3d 694 (Ind. Ct. App. 2014) (elements of legal malpractice and but-for causation)
- Hacker v. Holland, 570 N.E.2d 951 (Ind. Ct. App. 1991) (expert testimony required to establish attorney’s standard of care)
- Doe v. Shults-Lewis Child & Family Servs., Inc., 718 N.E.2d 738 (Ind. 1999) (trial court as gatekeeper on admissibility of expert testimony under Evidence Rule 702)
- Howerton v. Red Ribbon, Inc., 715 N.E.2d 963 (Ind. Ct. App. 1999) (expert opinion must be more than subjective belief or speculation)
- Sears Roebuck & Co. v. Manuilov, 742 N.E.2d 453 (Ind. 2001) (credibility and weight of expert testimony are for the trier of fact)
- Storey v. Leonas, 904 N.E.2d 229 (Ind. Ct. App. 2009) (common-knowledge exception to expert requirement is limited to obvious malpractice)
- Hannan v. Pest Control Services, Inc., 734 N.E.2d 674 (Ind. Ct. App. 2000) (trial court’s evidentiary rulings on expert testimony reviewed for abuse of discretion)