Western Thrift and Loan Corp. v. Rucci, 0:11-cv-03644

Western Thrift sued Rucci for legal malpractice and breach of contract arising from Rucci’s representation in a Minnesota underlying action.
Rucci represented both Homeowners and Western Thrift; Western Thrift paid a $25,000 retainer.
Rucci’s admission he represented both clients created a fiduciary duty to Western Thrift.
Rucci failed to inform Western Thrift of multiple critical developments (denied pro hac vice admission, local counsel issues, remand, bankruptcy conflict, default motion).
A default judgment was entered against Western Thrift in the underlying action, with substantial damages and fees assessed to the defendants.
Western Thrift settled the underlying action for $215,000 and incurred substantial additional fees defending the default motion; Western Thrift filed this malpractice suit seeking summary judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an attorney-client relationship existed	Rucci represented both Homeowners and Western Thrift	Rucci’s representation did not extend to Western Thrift	Yes; an attorney-client relationship existed with Western Thrift
Whether Rucci breached the duty of care	Rucci failed to keep Western Thrift informed and to disclose material information	Rucci had a strategy and was lawful to pursue; no breach	Yes; Rucci breached fiduciary duties and duty of care
Whether Rucci’s negligence proximately caused damages	Rucci’s failure to inform caused default and damages	Damages may have been caused by other factors; no proximate causation shown	Yes; proximate causation supported by expert, but issue remained for trial due to other factors
Whether but-for causation exists	But-for Rucci’s negligence, Western Thrift would have won or avoided damages	But-for causation not established; alternative explanations possible	Genuine issue of material fact; but-for causation unresolved
Whether damages are recoverable and amount is appropriate	Damages include judgments, settlements, and attorney fees caused by negligence	No dispute as to amounts; but-for causation blocks recovery	Damages quantification acknowledged; but summary judgment denied due to causation issues

Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980) (establishes but-for causation in legal-malpractice actions)
Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852 (8th Cir. 1996) (merits not needed for default judgments; but-for causation remains key)
Fontaine v. Steen, 793 N.W.2d 672 (Minn. Ct. App. 2009) (ineffective strategy not per se negligence; but-for causation still relevant)
Wartnick v. Moss Barnett, 490 N.W.2d 108 (Minn. 1992) (causation and foreseeability in negligence analysis)
Rice v. Perl, 320 N.W.2d 407 (Minn. 1982) (fiduciary duties and disclosure obligations in attorney-client relationships)
Selover v. Hedwall, 184 N.W.2d 180 (Minn. 1921) (duty to communicate material matters in representation)