David D. EASTMAN, et al., Appellants, v. FLOR-OHIO, LTD., etc., Appellee.
No. 98-920
District Court of Appeal of Florida, Fifth District
September 17, 1999
Clarification Denied October 28, 1999
744 So. 2d 499
Arnold R. Ginsberg of Ginsberg & Schwartz and Nance, Cacciatore, et al., Miami, for Appellee.
ANTOON, C.J.
Upon review of appellant‘s motion for rehearing of the July 2, 1999 opinion of this court, we withdraw the same and issue the following corrected opinion. In all оther respects, the motion for rehearing is denied.
In this negligence action, a jury found Attorney David D. Eastman and his firm, Parker, Skelding, Labasky & Corry, P.A. (the law firm), liable to Flor-Ohio, Ltd. (the park owner) for legal malpractice. The law firm appeals the final judgment arguing the trial court erred in 1) denying its motion for summary judgment based on the theory that the park owner had abandoned its cause of action for legal malpractice by voluntarily dismissing its appeal in an earlier related case, 2) not admitting into evidence a settlement agreement, and 3) denying its motion for a new trial. We affirm.
The park owner owns and operates a mobile home community known as The Lakes of Melbourne. Residents of the community own their mobile homes but pay the park оwner rent for the lots upon which the homes are located. In 1988, the park owner hired the law firm to effectuate rental rate increases on its lots. The law firm assigned the project to one of its associates, Attorney Eastman, who prepared rate increase notices effective May 1, 1989. Attorney Eastman sent the notices to the park owner‘s residеnt manager for distribution. Again in 1990, 1991, and 1992, Attorney Eastman prepared rate increase notices for the park owner and sent the notices to the park owner‘s resident manager for distribution.
In October 1989, the board of directors of The Lakes of Melbourne Homeowners’
Upon motion filed by the home owners, the trial court entered summary judgment against the park owner, finding that the park owner had failed to comply with the notice requirement of
After the appeal was filed, the park owner entered into a settlement with the home owners. Upon execution of a settlement agreement, the park owner voluntarily dismissed its pending appeal.
The park owner thereafter filed this negligence action against the law firm alleging legal malpractice in relation to the home owners’ class action suit. The complaint alleged that the law firm was negligent in failing to prepare the notice of rental increases in compliance with the requirements set forth in
The law firm filed a pretrial motion for summary judgment arguing that, as a matter of law, judgment should be entered in its favor because the park owner could not establish its claim of legal malpractice because its appeal in the underlying class action suit had been voluntarily dismissed. More specifically, the law firm argued that the park owner had abandoned its legal malpractice claim by voluntarily dismissing its appeal. After considering argument of counsel, the trial court denied the motion on appeal; the law firm challenges that ruling.
The issue of whether a party‘s voluntary dismissal of an appeal involving a related case constitutes an abandonment of that party‘s subsequent action for legal mаlpractice based upon allegations of negligence occurring in the related case was considered by the third district in Pennsylvania Insurance Guaranty Association v. Sikes, 590 So. 2d 1051 (Fla. 3d DCA 1991). In Sikes, an insurance company sued its trial counsel for legal malpractice alleging that counsel had been negligent in defending the company in a related personal injury lawsuit. In the personal injury lawsuit, the trial court had determined that thе insurance company‘s pleadings were inadequate and the court denied the company‘s motion to amend its pleadings. The matter proceeded to trial and a verdict was later returned against the insurance company. Of particular importance to our discussion is the fact that, after the adverse judgment was entered against the insurance company, the company immediately retained new counsel and appealed the final judgment. The claims of error raised in the appeal related to whether the trial court erred in ruling on the adequacy of the insurance company‘s pleadings. However, before the appeal was perfected, the insurance company settlеd the underlying personal injury lawsuit and voluntarily dismissed the pending appeal.
Thereafter, the insurance company sued its trial counsel for malpractice, alleging that the attorney had negligently prepared the pleadings in the personal injury lawsuit. To support this claim, the insurance
A close reading of the Sikes opinion reveals that the third district recognizеd that the vital element presented by the facts in that case was that the alleged error upon which the insurance company‘s entire claim of legal malpractice was based (i.e., the trial court‘s finding that defensive pleadings filed by trial counsel were inadequate) turned out to be an error made by the trial court which would have been corrected hаd the appeal not been dismissed. This fact was vital to the success of trial counsel‘s abandonment theory because it was clear to the third district that, had the insurance company prosecuted its appeal in the personal injury lawsuit, reversal of the judgment entered against the insurance company would have been required because the trial court had erred in ruling that the insurance company‘s pleadings were inadequate. In so ruling, the third district specifically concluded that the insurance company‘s trial counsel had not been negligent in drafting the pleadings. We agree with the third district that this concept of abandonment can be applied only in limited circumstances where facts similar to those which existed in Sikes are presented. See also Segall v. Segall, 632 So. 2d 76 (Fla. 3d DCA 1993) (affirming the court‘s refusal to establish a bright line rule requiring complete appellate review as a condition precedent for pursuit of a subsequent legal malpractice action, and admonishing that not every legal malpractice plaintiff is required to prosecute an appeal of the underlying action to conclusion before asserting a claim for legal malpractice.)
Other courts have recognized and discussed the limited application of this abandonment theory. See Coble v. Aronson, 647 So. 2d 968 (Fla. 4th DCA 1994), rev. denied sub nom. Fine, Jacobson, Schwartz, Nash, Block & England, P.A. v. Coble, 659 So. 2d 1086 (Fla.1995); see also Roger Zitrin, M.D., P.A. v. Glaser, 621 So. 2d 748 (Fla. 4th DCA 1993). In Lenahan v. Russell L. Forkey, P.A., 702 So. 2d 610, 611 (Fla. 4th DCA 1997), the fourth district joined the third district in declining to articulate a bright line test for application of the abandonment rule, pointing out that only in “very narrow” circumstances should it be applied as a matter of law. See also Parker v. Graham & James, 715 So. 2d 1047 (Fla. 3d DCA 1998).
Applying this case law to the instant facts, we note first that the law firm invites this court to depart from the historically narrow application of the abandonment
The Peat, Marwick opinion focused on the question of when causes of action for professional malpractice arise for purposes of determining when the statute of limitations commences to run. The specific issue before the court was “whether the commencement of the limitations period in an accounting malpractice action relating to income tax preparation occur[red] with the receipt of a ‘Ninety-Day Letter’ or with the conclusion of the appeals process, under circumstances where the accountant disagree[d] with the IRS‘s determination.” Id. at 1325. In deciding that the statute of limitations commenced to run only upon the stipulated order issued by the tax court because that is when redressable harm occurred, the Florida supreme court relied on decisions issued by the district courts involving legal malpractice.2 These cases held that a cause of action for legal malpractice does not accrue until the underlying legal proceeding has been concluded on appeal. See Peat, Marwick at 1325 (citing Zakak v. Broida & Napier, P.A., 545 So. 2d 380 (Fla. 2d DCA 1989). In so ruling, the courts reasoned that, until conclusion of the appeal, it cannot be determined whether there was “actionable error by the attorney.” Id. It is upon this quoted language that the law firm relies. Such reliance is misplаced.
Neither the Peat, Marwick opinion, nor the cases cited therein, addressed the issue of whether the filing and prosecution of an appeal in a related case is a condition precedent to the subsequent filing of a legal malpractice claim based upon negligent conduct allegedly occurring in that case. As aptly observed by then Judge Pariente, “[t]he principle of Peat, Marwick does not mean that in every case involving attorney malpractice, the dismissal or settlement of a related case, or the failure to take an appeal of the underlying lawsuit, will automatically translate into an inability to establish redressable harm.” Lenahan, 702 So. 2d at 611.3
Accordingly, we reject the law firm‘s invitation to liberally expand the abandonment theory and issuе such a bright line rule, deciding instead to heed the sound reasoning set forth in Sikes and Lenahan that only under narrow circumstances should a cause of action for legal malpractice be deemed abandoned based upon the voluntary dismissal of the appeal taken from a related adverse judgment.
We next must discuss whether the instant case possesses factual circumstаnces similar to those presented in Sikes. As noted above, the underlying class action lawsuit which precipitated the instant action for legal malpractice centered on the home owners’ claim of improper notice of
The law firm‘s argument is flawed in another respect. Even if we assume arguendo that there had been a likelihood that this court would have reversed the summary judgment order entered in the class action suit, the law firm is not able to show that it was prejudiced by the ruling. This is because in this appeal the law firm failed to raise for our consideration the issue of whether the trial court properly construed
Before concluding our discussion of the abandonment theory, we comment on the serious policy reasons which militate against liberalizing the abandonment theory beyond the narrow parameters set forth in Sikes. Perhaps the least compelling reason is the negative effect such a ruling would have on the work load of the appellate сourts. If we were to issue a ruling that appeals are required in all cases in order to preserve the client‘s right to subsequently pursue a claim for legal malpractice, meritless appeals would be prosecuted by litigants solely for the purpose of preserving their right to later assert a malpractice claim. Of course, such a ruling would also discourage parties from settling pending appeals and would be inconsistent with the party‘s legal duty to mitigate their damages. See Zinn v. GJPS Lukas, Inc., 695 So. 2d 499, 501 (Fla. 5th DCA 1997) (holding that where business suffers from act of negligence, the amount of lost profits recoverable will depend, in part, upon whether the plaintiff discharged their duty to mitigate their damages). A more important reason is that such a ruling would require litigants to spеnd yet more of their resources prosecuting an appeal to judicial conclusion even though they may disagree with the theory of the appeal they would be required to maintain. For example, here the park owner would have been first required to pursue its appeal arguing that the trial court erred in ruling that the law firm had improperly prepared and delivered the rental increase notices. Thereafter, in its legal malpractice case, the park owner would have been required to argue that the law firm was negligent in preparing and delivering the notices.
The law firm raised two other claims of trial error. First, the law firm contended that the trial court erred in refusing to admit into evidence the settlement agreement between the park owner and the lot owners. The record reflects
AFFIRMED.
COBB and THOMPSON, JJ., concur.