Lead Opinion
[1 1] Thе federal district court for the District of Wyoming certified two questions to this Court concerning how a negligent attorney's contingency fee in the underlying personal injury action should be accounted for in a subsequent malpractice award to his former client. We conclude that, consistent with our damages jurisprudence in other areas of the law, a malpractice plaintiff is entitled to an award in the net amount he would have received under the contingent fee agreement had the underlying action been successful. We decline, however, to recognize a cause of action by an attorney against his negligent co-counsel. Consequently, the answer to the first question is "yes," and the answer to the second question is "no."
CERTIFIED QUESTIONS
[12] This Court agreed to answer the following questions certified by the federal district court:
1. Where: (a) Client agrees to a 50% attorney contingent fee in a personal injury [PI] case; (b) Attorney commits malpractice in the PI case, resulting in dismissal of Client's claims prior to trial; (c) Damages are awarded to Client as a result of attorney's malpractice; and, (d) Attorney requests that the damages awarded to Client in the malpractice case be reduced by the 50% contingent fee Attorney would have received in the absence of malpractice in the PI case:
Question: Should Client's malpractice award be reduced by the contingent fee Attorney would have received absent his malpractice in the personal injury case?
2. This question is certified only if the answer to No. 1 is yes.
Where Associated Attorney is entitled to share in a contingent fee earned by Principal Attorney in a PI case, and the malpractice award to Client is reduced by the contingent fee Principal Attorney would have received in the absence of malpractice in the PI case:
Question: Can the Associated Attorney recover the agreed portion of the contingent fee, either as an offset against the contingent fee or as a separate claim against the Principal Attorney?
FACTS
[¶3] In accordance with Wyoming Rule of Appellate Procedure 11.01, the federal district court set out the nature of the controversy and the facts relеvant to our resolution of its certified questions. On September 18, 2001, Mr. Wooster, who is a resident of Maine, was injured when the tractor-trailer
[T4] To recover compensation for his injuries, Mr. Wooster employed Mr. Duddy, an attorney who practiced in Maine. Because Mr. Duddy was not licensed in Wyoming, Mr. Duddy and Mr. Wooster employed Mr. Horn to prosecute Mr. Wooster's claims against the school district in Wyoming. Mr. Wooster and Mr. Horn entered into a contingent fee contract in which Mr. Wooster agreed to pay Mr. Horn fifty percent of any amount he recovered in the personal injury action. In addition, Mr. Horn and Mr. Duddy entered into a separate agreement wherein Mr. Dud-dy agreed to perform legal services in the personal injury action in return for one-third of Mr. Horn's fifty percent contingent fee.
[T5] Mr. Horn filed the case of Wooster v. Carbon County School District No. 1, in the state district court for Carbon County, Wyoming. The state district court granted summary judgment against Mr. Wooster because Mr. Horn had failed to timely file a notice of claim that complied with the Wyoming Governmental Claims Act, Wyo. Stat. Ann. §§ 1-39-101, et seq. (LexisNexis 2007), and Article 16, § 7 of the Wyoming Constitution. We affirmed the summary judgment in Wooster v. Carbon County School Dist. No. 1,
[T6] Mr. Wooster and Mr. Duddy subsequently filed a legal malpractice claim in the federal district court for the district of Wyoming against Mr. Horn and his professional corporation. Mr. Wooster sought to recover the damages he would have been awarded in the underlying personal injury action had Mr. Horn performed competently, and Mr. Duddy sought his portion of the contingent fee. The federal district court indicates that our answers to its certified questions may be determinative of some of the parties' claims.
DISCUSSION
Question No. 1-Should Client's malpractice award be reduced by the contingent fee Attorney would have received absent his malpractice in the personal injury case?
[17 This Court has never had occasion to address how a negligent attorney's contingent fee should be treated in a subsequent malpractice action brought by the client. Other jurisdictions have, however, adopted various theories to address this issue. See generally, S. Cohen, The Deduction of Contingent Attorneys' Fees Owed to the Negligent Attorney From Legal Malpractice Damage Awards: The New Modern Rule, 24 Tort & Ins. L.J. 751 (1989); John E. Theu-man, Measure and Elements of Damages Recoverable for Attorney's Negligence in Preparing or Conducting LIitigation-T'wen-tieth Century Cases, 90 A.L.R.Ath 1088, § 14 (1991). Historically, a negligent attorney was entitled to deduct from a subsequent malpractice award the amount he would have been entitled to as a contingent fee in the underlying action. See, e.g., Childs v. Comstock,
[18] In the latter part of the twentieth century, some courts began to rule a negligent attorney is not entitled to such a deduction. See, Cohen, supra, at 756-759. According to Cohen, supra, at 756, Benard v. Walkup,
[T9] Other courts have answered the contingent fee issue by simply stating that a negligent attorney should not benefit from shoddy or negligent work. See, e.g., Campagnola v. Mulholland, Minion & Roe,
In resolving the question of how, in Wyoming, a malpractice plaintiffs damages should be calculated, we begin with a review of our precedent regarding legal malpractice in general. The elements of a legal malpractice claim are: the existence of a duty arising from the attorney/client relationship; the accepted standard of legal care; and the departure by the attorney from the standard of care which causes harm to the client. Gayhart v. Goody,
[Til] In Long-Russell, we considered the types of damages available in legal malpractice cases. Relying on a Minnesota Supreme Court case, Lickteig v. Alderson, Ondov, Leonard & Sween, P.A.,
"We therefore hold that, as in other negligence actions, emotional distress damages are available in limited cireumstances. There must be a direct violation of the plaintiff's rights by willful, wanton or malicious conduct; mere negligence is not sufficient. Here, in the absence of an allegation or proof on these essential elements, the award of emotional distress damages was improper."
Id., quoting Lickteig,
[T12] Thus, our precedent establishes that, in absence of willful conduct, the damages recoverable for legal malpractice are those typically available for breach оf contract. In an action for breach of contract, the damages award is designed to put the plaintiff in the same position as if the contract had been performed, less proper deductions. JBC of Wyo. Corp. v. City of Cheyenne,
[113] Furthermore, characterization of the action as arising in contract or tort does not materially change the damages analysis. The damages available in a tort case involving a loss of business opportunity
[114] In a well-reasoned decision, the First Cireuit discussed the legal theories utilized by other courts in deciding whether a negligent attorney was entitled to an offset, in the amount of his contingent fee, against the malpractice award. Moores,
[T 15] Applying these principles, an aggrieved client should be entitled to recover from the negligent attorney the amount he would have expected to recoup if his underlying action had been successful. It would, therefore, be appropriate to deduct the attorney's contingency fee from the amount the jury determines the underlying judgment would have been because the client's ultimate recovery in the underlying action would have been reduced by that expense. The approach holding that a client is not responsible for the expenses of successful completion of the attorney/client contract is inconsistent with the principles we typically apply in determining compensatory damages. See, Alexander v. Meduna,
[1{16] The courts that have refused to allow the deduction do not explain their rationale in the context of typical damages analy-ses. Instead, some courts simply state that the attorney is precluded from deducting his contingent fee because he was negligent. See, e.g., McCafferty,
[T17] By refusing to deduct the contingent fee from the malpractice award simply because the attorney was negligent, the courts appear to be punishing the attorney for his negligence rather than compensating the client for his loss. See, Moores,
[T 18] The Moores court rejected the theory that a plaintiff in a legal malpractice action should be entitled to a greater award than a plaintiff in any other type of case. Moores,
[119] While we do not believe that attorneys should be treated more favorably than any other class of negligent defendants, we think they are entitled to equal treatment. See Moores,
. Restricting the client's recovery in a ... malpractice action to the realizable net proceeds from his earlier case does not allow a culpable attorney to "collect" anything. More importantly, the argument to the contrary overlooks that the fundamental purpose of such damages is to compensate a plaintiff, not punish a defendant.
Moores,
[120] We, therefore, reject a general rule that a client may recover more than he lost simply because the defendant was an attorney who was negligent in performance of his duties. Instead, the well-accepted principles for calculation of damages in both contract and tort cases should be applied and the plaintiff should receive an awаrd that would place him in the same position he would have enjoyed had the negligence not occurred.
[T21] Some courts rely upon the fact that the plaintiff had to pay fees to his attorney in the malpractice action as justification for a gross, rather than net, malpractice award. This approach confuses two separate and distinct issues: 1) what damages the client incurred, and 2) whether a client should be responsible for his attorney's fees in the malpractice action. As we explained above, with regard to the first issue, there is no legal rationale for granting the plaintiff damages in excess of what he would have obtained if the underlying action had been successful.
[122] Turning to the second issue, we have clear authority regarding a prevailing party's right to collect attorney's fees from his opponent. In Wyoming, we apply the American rule which holds that each party is generally responsible for his own fees and costs. See, e.g., Rock Springs Land and Timber, Inc. v. Lore,
[123] In a more recent trend, some courts have ruled that a negligent attorney is not entitled to a deduction of his contingent fee from a malpractice award against him but, utilizing a quantum meruit theory, may be entitled to a deduction for the value of his services which benefited the client. See Cohen, supra, at 759-762; Foster,
Quantum meruit recovery would appéar to reconcile the facially opposed policies of both cases that deduct and cases that refuse to deduct attorneys' fees from legal malpractice damage awards. Cases de*76 ducting such fees desire to avoid a windfall to the former client where, because of the negligence of the attorney in the underlying case, the ex-client and now malpractice plaintiff gets free legal services. Quantum meruit recovery would permit the former attorney to recover fees for any benefits provided to the former client as a result of the now terminated attorney client relationship. At the same time, there is no risk of the client's receiving a windfall of free attorney time and effort because of the necessity of providing to the court hosting the legal malpractice claim the validity of the underlying claim and its value. The requirement of the "case within a case" in legal malprаctice forces the client to hire an attorney to prove whatever portions of the underlying case that were not already completed by the attorney discharged for negligence.
Quantum meruit recovery would also meet the concerns of the courts that refuse to deduct attorneys' fees from legal malpractice damage awards. The concern that the attorney has not earned the fee is directly rebutted by the quantum meruit recovery rule. Under a quantum merult recovery, fees are only deducted from the damage award for legal services that actually benefited the client.
Quantum meruit recovery also better addresses the burden on former clients, now legal malpractice plaintiffs, of pursuing the legal malpractice action. In the past it was assumed that whatever legal fees were charged in the underlying case would offset the fees from the legal malpractice case. However, no comparison of the two fees was attempted.
Quantum meruit recovery, in comparison, would better match actual costs for processing each case with potential recoveries. If the attorney being sued for legal malpractice did very little work that benefited the client, such as in the case of a claim that was time barred by the statute of limitations, then almost all fees should be recovered by the legal malpractice attorney. If the attorney being sued for legal malpractice did a substantial amount of work, such as completely trying the case to a verdict, then attorney's fees would have to be awarded to both the attorney being sued for legal malpractice and the legal malpractice attorney.
Cohen, supra, at 761-62.
[124] The quantum meruit approach is attractive upon first glance because it seems to be a reasonable compromise between refusing to recognize, altogether, the attorney's fee as an expense of litigation in a malpractice award and allowing a deduction from the malpractice award for the negligent attorney's full fee. However, we conclude that actual application of the theory would add unworkablе complications to an already complicated case. The elements of quantum meruit, or unjust enrichment, are: 1) valuable services were rendered; 2) to the party to be charged; 3) which services were accepted, used and enjoyed by the charged party; and 4) under cireumstances that reasonably notified the party being charged that the other party would expect payment for the services. Recovery is appropriate only when the benefited party would be unjustly enriched. Jacoby v. Jacoby,
[$25] The initial inquiry, then, would be to determine what services rendered by the first attorney were "valuable" to the client. Making that determination would be very difficult because it necessarily must be done in "hindsight" and in the context of the malpractice case rather than the original personal injury action. For example, how would a jury determine the "value" to the client of each item of discovery found by the first attorney? As every attorney knows, the discovery process usually results in some worthwhile evidence and other information that is, ultimately, useless to the action. What standard will the jury use to determine if the work was "valuable?" Will the attorney only be credited for the work he did to uncover the worthwhile evidence when any other reasonable attorney would have undertaken the same steps which resulted in the useless information, as well? Will one deposition be considered valuable while another is not? Will individual interrogatories be subject to serutiny as to whether or not they revealed evidence which actually benefited the client?
[126] The quantum meruit theory is also subject to criticism because it ignores the original agreement between the client and the negligent attorney. Had they wanted to, the parties could have agreed to a fee structure based upon an hourly rate. The client, however, did not want to have to pay for the attorney's services if the personal injury action was not successful; consequently, he hedged his bets by entering into the contingent fee arrangement.
[127] Wyoming legal ethics rules specifically allow contingent fee agreements in personal injury actions
[128] We hold that Mr. Wooster is entitled to damages that would put him in the same position he would have enjoyed had he been successful in the underlying action. In this contingent fee situation, Mr. Horn's fee should be deducted from what the jury deter'mines the underlying judgment in favor of Mr. Wooster would have been. Our ruling is consistent with our damages jurisprudence in other areas of the law and honors the agreement the attorney and client originally executed. Consequently, we answer the first certified question in the affirmative.
Question No. 2-Can the Associated Attorney recover the agreed portion of the contingent fee, either as an offset against the contingent fee or as a separate claim against the Principal Attorney?
[4130] The plaintiffs do not cite any authority to support thеir position that an attorney should be allowed to maintain an action against his co-counsel for negligence in prosecuting the underlying personal injury action. In contrast, Mr. Horn cites to cases which patently reject the proposition. In Mazon v. Krafchick,
[131] The Washington Supreme Court adopted a bright-line rule refusing to recognize a cause of action by one attorney against his negligent co-counsel. The court held "no duties exist between col-leounsel that would allow recovery for lost or reduced prospective fees." Id. at 1172. The court relied on a California case, Beck v. Wecht,
[182] In addition, the California court made the following pertinent observations:
Public confidence in the legal system may be eroded by the spectacle of lawyers squabbling over the could-have-beens of a concluded lawsuit.... Considerations of public policy support the conclusion that an attorney's duty of undivided loyalty to his client should not be diluted by imposing upon him obligations to the client's [other] attorney[.]
Id. at 421.
[138] The plaintiffs try to make Mr. Duddy's claims more palatable than the
[134] To adopt a cause of action between co-counsel simply because the attorney proposed to give the client the benefit of any judgment in his favor would not square with our other precedent and could, in the future, result in a case where the client's best interests are compromised by the self intеrests of feuding attorneys. Consequently, we answer the second certified question in the negative.
CONCLUSION
[185] We decline to adopt a means of measuring damages in legal malpractice actions that is different from other areas of the law. We conclude that the malpractice client is only entitled to a judgment which reflects the net recovery he would have received had the underlying action been successful. In addition, 'we refuse to recognize a cause of action in favor of an attorney against his negligent co-counsel. We answer the first certified question in the affirmative and the second in the negative.
BURKE, J., files a dissenting opinion.
Notes
. While not precisely similar, a contingency fee agreement is analogous to a "business opportunity" in that the attorney and the client agree to pursue the client's claim with the understanding that if the effort is successful they will share the judgment in an agreed upon fashion, but if it is not, the attorney will not receive a fee.
. In addition to compensatory damages, punitive damages may be available to a wronged client if the attorney's misconduct involved more than simple negligence and was, instead, outrageous, malicious, and/or willful and wanton. Alexander v. Meduna,
. -The fact that contingent fees are appropriate in personal injury actions distinguishes them from cases where contingent fees are considered unethical, such as divorces and criminal actions. See Rules of Professional Conduct for Attorneys at Law, Rule 1.5(d); Rules Governing Contingent Fees for Members of the Wyoming State Bar, Rule 3. See also, Morfeld v. Andrews,
. The dissent advocates for adoption of quantum meruit to value the services provided by the first attorney and argues that the Moores case, upon which we rely, was actually a quantum meruit case. The Moores passage quoted by the dissent pertaining to the amount of work performed by the first attorney was simply an attempt to distinguish the rationale employed in Berard, the seminal case denying the deduction. The Moores decision did not include any quantitative analysis of the work performed by the first attorney but, instead, simply approved a deduction from the malpractice award in the amount of the agreed upon contingent fee.
. Although the certified question infers that the court will make the contingent fee deduction, as a matter of law, from the amount awarded in the jury's verdict, we note that task could be left to a properly instructed jury. See Moores,
. The Rules of Professional Conduct for Attorneys at Law govern the appropriate fee relationships between attorneys from different law firms. Rule 1.5 states, in relevant part:
shore dle ok
(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer and, each lawyer assumes joint responsibility for the representation;
(2) the client is informed of the arrangement; and
(3) the total fee is reasonable.
(f) A lawyer shall not pay or receive a fee or commission solely for referring a case to another lawyer.
. Interestingly, the opinion suggests the settlement amount reflected a deduction for the attorneys' contingent fee. The case settled for $1.3 million, and the non-negligent attorney sought to recoup $325,000 for the contingent fee he lost as a result of the other attorney's negligence. Footnote 2 explained the requested amount as follows:
The math supporting this amount proceeds as follows, according to [the plaintiff]: [the client] received a $1.3 million net recovery. A judgment of $1.95 million results in a $1.3 million recovery. Therefore, the 1/3 contingency fee is $650,000; ! of which is $325,000.
Mazon,
Dissenting Opinion
dissenting.
[136] I respectfully dissent because I do not believe it is appropriate to adopt a rigid rule allowing deduction of the attorney's contingent fee percentage in all legal malpractice cases. The deductibility of those fees should be tied to the benefit that the client received from the attorney's efforts. Where the client has received no benefit, no deduction should be allowed.
[187] As noted by the majority, the issue presentеd is one of first impression for this Court. Understandably, the majority seeks guidance from other jurisdictions, and it relies upon several cases from other jurisdictions as support for its decision. Such reliance is misplaced. The majority's interpretation of Moores v. Greenberg,
[188] The majority describes the Moores case as "well-reasoned" and as standing for the proposition that the attorney's contingent fee should be deducted in all cases in caleu-lating a client's damages. Upon examination, however, it becomes readily apparent that the Moores court did not hold that attorney fees should be deducted in all cases. In Moores, the alleged malpractice consisted of the attorney's failure to convey a $90,000 settlement offer to Plaintiff. After Plaintiff lost at trial, Plaintiff sued his attorney claiming that he would have accepted the offer if he had known about it. The Moores court allowed deduction of the 1/3 contingent fee. There was no dispute that the settlement offer resulted from the efforts of the attornеy. The Moores court noted, however, that the case might have been decided differently if the attorney had performed no services that benefited the client. The court stated:
The case before us, however, is altogether different. There was nothing uncertain or problematic about Greenberg's fee. The amount of the gross recovery was fixed: had the lawyer not breached his duty, $90,000 would have been paid. This is a far ery from cases like Andrews v. Cain, [62 A.D.2d 612 , 613,406 N.Y.S.2d 168 , 169 (1978) ] where the attorney failed to file suit-leaving up in the air the question of how much money, if any, 'his client would have recovered. See also Duncan v. Lord, [409 F.Supp. 687 , 691-92 (E.D.Pa.1976)] (similar; case involuntarily dismissed for want of prosecution due to counsel's laggardness in answering interrogatories). And the fee arrangement between Moores and Greenberg-a straight one-third-was equally definite, had the*80 offer been communicated and accepted, counsel's recompense would have been $30,000. This contrasts sharply with cases such as Andrews, where the court believed "it was impossible to determine what the deduction from plaintiffs award would have been."406 N.Y.S.2d at 169 .
There is another important line of de-mareation as well. Many of the cases hawked by Moores, typically ones in which a lawyer neglected to sue before a temporal deadline expired, stress the fact that the attorney-defendant had furnished no services to his client. E.g., Andrews,406 N.Y.S.2d at 169 ; Benard,77 Cal.Rptr. at 551 (defendant had "not established that [the lawyer] performed any part of the contract"). These "do-nothing" cases are also distinguishable. Where a lawyer accepts an engagement and thereafter fails to show up at the starting gate, e.g., id. (failure to file suit within statute of limitations); Winter v. Brown,365 A.2d 381 (D.C.1976) (failure to serve mandatory notice of claim within prescribed period), it is arguably equitable to fix damages without regard to a fee entitlement which would only have come into existence had the lawyer performed the contract. Those rough equities are in a different balance, however, where the lawyer-notwithstanding that he was guilty of some breach of duty-actually did the work. And the difference in the equities is heightened in a case like this one, where the sum in dispute-the $90,000 offer-arose during the trial, presumably in direct rеsponse to Greenberg's labors on his client's behalf. Cf. Strauss v. Fost,517 A.2d at 145 ("We can envision cases where on a quantum meruait basis the efforts of a defendant attorney may have so benefited ... a plaintiff ... that it would be unfair to deny" the deduction); Foster v. Duggin,695 S.W.2d at 527 ("in an appropriate case, the attorney may be entitled to credit for expenses ... which ultimately benefitted the client").
Id.,
[139] The majority believes that Moores allows the deduction of attorney's fees in all legal malpractice cases, and observes that this is consistent with the typical rule for recovering breach of contract damages. As noted above, however, I believe that Moores supports a more flexible rule. Additionally, courts that have specifically considered applying a typical contract damages analysis to contingent fees in malpractice cases have rejected that approach because of the special nature of the attorney-client relationship.
We conclude that a reduction of the client's recovery should not be allowed in this casе and for reasons of public policy, we decline to apply the traditional rules of contract damages to permit a negligent attorney to obtain credit for an unearned fee.
As we not too long ago observed, "[the unique relationship between an attorney and client, founded in principle upon the elements of trust and confidence on the part of the client and of undivided loyalty and devotion on the part of the attorney, remains one of the most sensitive and confidential relationships in our society." (Demov, Morris, Levin & Shein v. Glantz,53 N.Y.2d 558 , 556[,444 N.Y.S.2d 55 ,428 N.E.2d 387 ] ). Because of the role attorneys play in the vindication of individual rights in our society, they are held to the highest standard of ethical behavior (Code of Professional Responsibility, Preamble; EC 6-5). Yet without this relationship of trust and confidence an attorney is unable to fulfill this obligation to effectively represent clients by acting with competence and exercising proper care in the representation. (Demov, Morris, Levin & Shein v. Glantz,53 N.Y.2d 553 , 556[, 444 N.Y.S.24 55,428 N.E.2d 387 ], supra ).
Because of the uniqueness of the attorney-client relationship, traditional contract principles are not always applied to govern disputes between attorneys and clients. Thus it is well established that notwith*81 standing the terms of the agreement between them, a client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney. (Shaw v. Manufacturers Hanover Trust Co.,68 N.Y.2d 172 , 177[,507 N.Y.S.2d 610 ,499 N.E.2d 864 ]; Teichner v. W & J Holsteins,64 N.Y.2d 977 , 979[,489 N.Y.S.2d 36 ,478 N.E.2d 177 ]; Demov, Morris, Levin & Shein v. Glantz, supra; Crowley v. Wolf,281 N.Y. 59 , 64-65[,22 N.E.2d 234 ]; Martin v. Camp,219 N.Y. 170 , 176[,114 N.E. 46 ]). Where that discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. (Teichner v. W & J Holsteins, supra; Demov, Morris, Levin & Shein v. Glantz,53 N.Y.2d, at 557 [,444 N.Y.S.2d 55 ,428 N.E.2d 387 ], supra). Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, notwithstanding a specific retainer agreement. (Teichner v. W & J Holsteins,64 N.Y.2d, at 979 [,489 N.Y.S.2d 36 ,478 N.E.2d 177 ], supra; Crowley v. Wolf281 N.Y., at 65 ,22 N.E.2d 234 ], supra). "Thlis] rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." (Martin v. Camp,219 N.Y., at 176 [,114 N.E. 46 ], supra ).
We view the public policy considerations that underpin this rule as both relevant and sufficiently compelling to warrant denying unearned attorney's fees, or credit for the monetary equivalent, to an attorney who is guilty of legal malpractice that rеsults in the client's loss of recovery upon a valid claim. The attorney's malpractice constitutes a failure to honor faithfully the fidelity owed to the client and to discharge competently the responsibilities flowing from the engagement. It is especially appropriate to deny credit for a fee where, as here, the defendant attorneys performed absolutely no services in connection with the disputed claim....
Campagnola v. Mulholland,
[T 40] -In addition to Moores, the majority relies upon three other cases from different jurisdictions allowing the deduction. All are problematic. Childs,
[141] Sitton,
In determining whether or not a malpractice award should be reduced by the fee which the attorney would have received had he competently handled the litigation, we are faced with two opposing lines of - decision. Those cases allowing the reduction hold, generally, that the client should recover only what he would have received had the original matter been properly handled. Since the client would have had to pay the attorney his fee, that fee is deducted from the malpraсtice award. See, e.g., Childs v. Comstock,69 App. Div. 160 ,74 N.Y.S. 643 , 649 (1902); McGlone v. Lacey,*82 288 F.Supp. 662 , 665 (D.S.D.1968). There is some support for this view in Tennessee. See In re Woods,158 Tenn. 383 ,13 S.W.2d 800 , 803 (1929); Sitton v. Clements,257 F.Supp. 63 , 65 (E.D.Tenn.1966), aff'd385 F.2d 869 (6th Cir.1967).
The contrary line of decision, which appears to be the majority view, holds that no credit is due the attorney since he has breached the contract by performing negligently, and since deduction of his fee would not fully compensate the client who has incurred additional legal fees in pursuing the malpractice action. These additional fees are said to cancel out any fees which the plaintiff would have owed the attorney had he performed competently. See, e.g., Christy v. Saliterman,288 Minn. 144 ,179 N.W.2d 288 , 307 (1970); Andrews v. Cain, 62 App. Div.2d 612,406 N.Y.S.2d 168 , 169 (1978); Kane, Kane & Kritzer, Inc. v. Altagen,107 Cal.App.3d 36 , 43,165 Cal.Rptr. 534 , 538 (1980).
On the facts of this case, we hold that Mr. Duggin should be denied any credit for the legal fees which he originally was to receive. It is the negligent attorney who is at fault for breaching the contract, and the burden of his incompetence should not be placed upon the innocent client. While in an appropriate case the attorney may be entitled to credit for expenses which were incurred on behalf of the client and which ultimately benefitted the client, the record here is silent as to any benefit incurring to the plaintiffs from the actions of Mr. Duggin. To the contrary, the plaintiffs have had to incur additional legal fees to pursue this malpractice action, and they should not be required to assume the burden of twice paying for legal representation. By taking into account the legal fees which plaintiffs have incurred in pursuing this malpractice action we are not, as Mr. Duggin argues, awarding the plaintiffs their attorney fees. The additional fees necessary to pursue this action are in the nature of incidental damages flowing from Mr. Duggin's breach of the contract. See Winter v. Brown,365 A.2d 381 , 386 (D.C.App.1976).
Foster v. Duggin,
[142] McGlone,
[143] Most courts that have considered the issue have denied the deduction under the specific facts presented, but leavе open the possibility that the deduction should be allowed on a quantum meruit basis.
[144] While as a general rule courts do not allow the deduction, most allow for the possibility that, in the appropriate case, a deduction is warranted. As one court explained:
Also, in Strauss v. Fost (1986), N.J.Super.A.D.,
Schultheis v. Franke,
[T45] In the final analysis, it does not appear that any court currently applies the rule adopted by the majority. I find the modern view regarding deductibility appropriate and the reasoning supрorting that view persuasive. We should adopt the general rule that the contingent fee should not be deducted. However, in those cases where it would be inequitable to disallow the deduction, as exemplified by Moores, a quantum meruit approach would be more appropriate.
. Indeed, while the majority does not explicitly say so, in fact it relies almost entirely on the unique nature of the attorney-client relationship to answer the second certified question in the negative.
. The exception appears to be Carbone v. Tierney,
. As Justice Kaye noted in Campagnola:
Should the application of this rule yield an absurd result in a future case presenting different facts ... lawyer defendants can be trusted to bring such additional facts to courts' attention, and the law can be trusted to respond sensibly in calculating and awarding damages.
