New Hampshire Bar Association
About the Bar
For Members
For the Public
Legal Links
Publications
Newsroom
Online Store
Vendor Directory
NH Bar Foundation
Judicial Branch
NHMCLE

The most experienced neutrals as selected by local litigation firms across the United States.

Visit the NH Bar Association's Lawyer Referral Service (LRS) website for information about how our trained staff can help you find an attorney who is right for you.
New Hampshire Bar Association
Lawyer Referral Service Law Related Education NHBA CLE NHBA Insurance Agency

Member Login
username and password

Bar Journal - June 1, 1999

Legal Malpractice: A Summary of Important NH Cases

By:
 

Legal malpractice is an issue that grips the attention of attorneys who, in this age of increased litigation, hope never to confront a legal malpractice claim against themselves or their firm. Only in the last twenty-three years have the New Hampshire Supreme Court ("Supreme Court") and the United States District Court for the District of New Hampshire ("United States District Court") addressed claims of legal malpractice. During this time period, the Supreme Court has acted consistently to protect the interests of clients to recover for legal negligence. It has done so, for instance, by ensuring that the discovery rule applies to legal malpractice claims and extending the availability of a legal malpractice claim against a drafter of a will to the foreseeable will beneficiaries.

However, the Supreme Court has acted also to provide fairness for attorneys who have been the subject of legal malpractice suits. The Supreme Court protects the ability of attorneys to exercise reasonable and professional judgment, for legal malpractice cannot be established unless the plaintiff establishes a breach of the reasonable standard of care. The Supreme Court, for example, requires that legal malpractice plaintiffs meet their legal burden of proof in legal malpractice cases, and it has refused to extend the liability of attorneys to include responsibility that does not encompass legal skill or knowledge, such as the emotional health of their clients. Likewise, the application of the "trial within a trial" standard ensures that a malpractice plaintiff cannot recover for a legal malpractice claim without proving that "but for" the alleged misconduct, the plaintiff would not have been injured.

The following summary is intended to provide a brief outline and analysis of legal malpractice cases addressed by the Supreme Court and the United States District Court. It is not intended to be an exhaustive statement of the law on the subject, and it does not include malicious prosecution, malicious defense or professional conduct claims. The article outlines also some recent decisions on legal malpractice coverage in which the Supreme Court has expanded the standard applied to determine timely notice of a professional malpractice claim to an insurance carrier. This article should act as a guide to the elements necessary to prove legal malpractice and some defenses that have been successfully or unsuccessfully raised, as well as to trace the development of the law concerning legal malpractice claims and recent professional liability insurance coverage decisions in New Hampshire.

I. 1976-1986, EXPLORATION OF THE SCOPE OF LEGAL MALPRACTICE CLAIMS

The Supreme Court acted to preserve the interests of clients in McKee v. Riordan, its first opinion on legal malpractice. In McKee the plaintiffs sought to apply the common law discovery rule to a claim that the defendant attorney negligently failed to prosecute a cause of action within the appropriate statute of limitations.1  Acknowledging that a lay client has a limited understanding of legal issues, the Supreme Court compared legal malpractice cases to medical malpractice cases in which the cause of action does not accrue until a plaintiff discovers, or with reasonable care should have discovered, the injury.2  The Supreme Court found that there was no good reason not to extend the discovery rule to legal malpractice cases and said, "[i]t follows that the client may not recognize professional acts when they occur and should not be expected to. Accordingly, we hold that in this case the cause of action accrued at the time when the plaintiffs discovered or through reasonable care and diligence should have discovered that their action was barred by the statute of limitations."

Seven years later the Supreme Court was confronted with defining the scope of an attorney's duty to a client, when in McLaughlin v. Sullivan, it ruled that an attorney cannot be held liable for a client's psychological and emotional well being.4  In McLaughlin, the defendant attorney represented a client on criminal charges of burglary, possession of burglary tools and two counts of the unauthorized possession of a controlled drug.5  A jury found the client guilty on all four charges and, unfortunately, the client committed suicide by hanging himself in his jail cell.6  The administrator of the client's estate brought a wrongful death claim against the defendant attorney on the theory that the attorney's negligent representation was the proximate cause of the client's death.7  The administrator argued that the client had been negligently represented, wrongfully convicted and incarcerated, and as a result, committed suicide.8  In a careful and thorough analysis, the Supreme Court ruled that lawyers do not generally have either the expertise or the training necessary to judge or foresee that a client will commit suicide, or to prepare appropriate responses to such a risk.9  Instead, the Supreme Court found the "connection between negligence and the practice of law, and the harm which befell the client... to be simply too attenuated to impose legal liability on the part of the defendant. To hold otherwise would undoubtedly open the floodgates of unexpected and inequitable liability on the part of attorneys."10  The Supreme Court acknowledged also that attorneys, if exposed to such liability, would likely be discouraged from representing what could be a sizeable number of depressed or unstable criminal defendants, in the fear of a wrongful death claim based on legal malpractice.11 

In 1986, the Supreme Court found that the practice of law was not within the scope of business practices to which the Consumer Protection Act, RSA Chapter 358-A, applies. In Rousseau v. Eshleman, the defendant attorney represented the client for the purchase of commercial property at a "legal fee of one percent of the purchase price for the closing of a sale on property, and one to two percent of the purchase price for assistance in securing financing" and informed the client that the foregoing contingent fee was the usual and customary rate for attorneys practicing in the area of real estate law.12  During the representation, the defendant attorney advised the client incorrectly that the mortgage for the commercial property purchased could be assumed, when in fact the note became a demand note upon purchase.13  With the assistance of the defendant attorney, the client purchased a shopping center, but subsequently failed to make payments and lost both the property and a substantial portion of his investment.14  Thereafter, the client brought claims of legal malpractice, fraud, and unfair and deceptive trade practices under the Consumer Protection Act, RSA 358-A, against the defendant attorney.15  After trial, the jury awarded the plaintiff damages and found that the defendant attorney had committed legal malpractice and violated the Consumer Protection Act.16  The Superior Court subsequently denied the defendant attorney's motion for nonsuit and held that the Consumer Protection Act applied to "an attorney who advertised services to the public."17 

On appeal, in a 3-2 majority decision, the Supreme Court overturned the Superior Court's award of relief under the Consumer Protection Act and examined whether the Consumer Protection Act applies to the practice of law.18  Pursuant to RSA 358-A:3,I, the Consumer Protection Act provides an exemption for "[t]rade or commerce otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of this State or of the United States."19  The Supreme Court observed that as provided under this exception, physicians, electricians and plumbers are presumably exempt from the Consumer Protection Act, because they are regulated under State law.20  Finding that the New Hampshire Professional Conduct Committee of the Supreme Court regulates the practice of law as a regulatory board acting under statutory and constitutional authority of this State, the Supreme Court concluded that the practice of law qualifies under the specific language of RSA 358-A:3,I exempting "trade or commerce" that is "administered by any regulatory board ... acting under statutory authority of this State."21  The Supreme Court explained that the practice of law and regulation of conduct of attorneys in New Hampshire has been shared by the legislative and judicial branches, and absent careful legislative consideration and a clearly expressed legislative intent, refused to interpret the Consumer Protection Act to apply to the practice of law. 22 

Justice Johnson, joined by Justice Batchelder, dissented from the Rousseau majority opinion and recommended that the Consumer Protection Act should apply to "the commercial aspects of the practice of law," such as advertising and billing, which do not require an attorney's professional judgment, legal knowledge and skill.23  Justice Johnson disagreed that the professional conduct committee is a regulatory board within the meaning of RSA 358-A:3,I, for the professional conduct is not subject to the authority of the legislature, but of the judicial branch.24  He also expressed concern that claims of unfair or deceptive trade practices, such as improper billing or false advertising, are not necessarily encompassed by a legal malpractice action because a violation of RSA 358-A does not require fault or a breach of duty.25  Additionally, because legal malpractice claims are often complex and expensive, Justice Johnson feared that clients would be deterred from raising claims for recovery.26  He recommended that the application of the Consumer Protection Act to the commercial aspects of the practice of law would provide further protection and financial recovery to a client.  However, Justice Johnson warned firmly that the Consumer Protection Act should not be extended to an attorney's professional judgment, because it would expose an attorney to a strict liability standard that "would make it virtually impossible for the attorney to function in the traditional role of counsel." Such a result would be untenable since the law is often vague and unsettled, with numerous varying legal opinions, and a case may have no single legal strategy or answer.27

The Rousseau Court thereafter had an opportunity to reconsider its majority decision but refused to do so. Because the New Hampshire Attorney General ("Attorney General")was not given timely notice of the Rousseau case under RSA 358-A:10, II, the case was reargued. The Attorney General moved to reconsider and argued that RSA 358-A:3,I of the Consumer Protection Act exempts, "[t]rade or commerce otherwise permitted under laws as administered by any regulatory board or officer ..." and therefore exempts an attorney's conduct which is permitted by the New Hampshire Professional Conduct Rules, but not conduct that is inconsistent or not permitted by those rules. The Rousseau Court was not persuaded to reconsider and denied the motion. However, prior to rehearing, Chief Justice King retired from the Supreme Court, and Justice Thayer joined the Court. In a special concurrence, Justice Thayer indicated that he agreed with the minority opinion discussed above, but found that the negligent representation of which the Rousseau plaintiff complained constituted the practice of law by an attorney and was not subject to the Consumer Protection Act.28

Since the Rousseau decision and denial of reconsideration, the Supreme Court has not again addressed the application of the Consumer Protection Act to attorneys, but in Gilmore v. Bradgate Assoc., the Court adopted and applied a similar analysis as that proposed above by the Attorney General to developers and sellers of condominiums. In that decision, the Supreme Court said that the reasoning behind the Rousseau majority "is applicable only within the context of attorneys, whose individual conduct and practice is subject to a comprehensive regulatory and disciplinary framework under the jurisdiction of this court."29

II. 1988-1992, DEFINING THE ELEMENTS NECESSARY TO PROVE LEGAL MALPRACTICE

Decisions from the United States District Court for the District of New Hampshire and the Supreme Court from 1988 through 1992 outlined the elements of legal malpractice that a plaintiff must prove to win a legal malpractice case in New Hampshire. In Fairhaven Textile Corp. v. Sheehan, Phinney, Bass & Green, P.A., the United States District Court addressed cross-summary judgment motions and had the opportunity to set forth the now well accepted elements that a plaintiff must prove in order to recover a judgment in a legal malpractice case:

  1. An attorney-client relationship, or some other basis to establish the existence of a duty between the attorney and client;
  2. The attorney's neglect of a reasonable duty; and
  3. Proof that the alleged negligence resulted in and was the proximate cause of loss to the plaintiff.30

The Fairhaven Court first addressed the plaintiff's motion for partial summary judgment on breach of duty and explained that in a legal malpractice case which includes mixed questions of law and fact, the court must first decide whether the attorney committed a legal error.31 If legal error is found, the jury must then determine if the attorney was negligent in making such error and will consider whether "an attorney of ordinary skill, knowledge, and ability in the profession, utilizing reasonable care, [would] have made the same error."32  Using this methodology, the Fairhaven Court decided the question of law of whether the defendant law firm made a mistake in failing to raise a defense, to a breach of warranty claim, that the underlying plaintiff did not provide timely notice of a product defect.33  The Fairhaven Court found that the failure to raise a notice defense was a legal error and granted the plaintiff's motion for partial summary judgment on that legal issue.34  Nevertheless, because the remaining issue of whether the defendant attorney was negligent in making the legal error was a factual determination, the United States District Court denied the plaintiff's motion for summary judgment on negligence and left that decision to the jury.35

The Fairhaven Court adopted also the now well established standard that the plaintiff must prove proximate causation by showing that the plaintiff would not have been injured, but for the attorney's misconduct.36  Put another way, it is not enough to prove merely that a plaintiff suffered injury, for "[i]f the harm would have resulted irrespective of such negligence, then that negligence is not a substantial factor or cause-in-fact" of the loss.37  Where a factual dispute concerning proximate cause exists, the method by which a jury determines if the attorney's legal malpractice was the actual cause in fact of the plaintiff's damages is determined by a "trial within a trial."38 According to this methodology, the jury substitutes itself as the trier of fact in the underlying case and, after hearing the same evidence that should have been presented to the original trier of fact, decides if the plaintiff's loss would have occurred but for the attorney's negligence.39

Using this "but for analysis" the Fairhaven Court considered whether the defendant law firm's alleged failure to raise the improper notice of product defect in a timely manner was the proximate cause of the underlying trial court's ruling against the plaintiff.40 The Fairhaven Court found that the trial court addressed the notice issue on the merits, that the defendant law firm presented legal arguments supporting a lack of notice defense, and that further legal arguments urged by the plaintiff would not have promoted a favorable decision for the plaintiff on the notice issue. 41 As such, the alleged failure to raise a notice defense prior to trial, standing alone, was not the substantial cause of the plaintiff's injury.42 However, the Fairhaven Court did find an issue of fact as to whether the defendant law firm negligently failed to introduce evidence that the underlying plaintiff, with commercially reasonable diligence, should have discovered the product defects at an earlier date.43 Consequently, the Fairhaven Court denied the defendant's motion for summary judgment on proximate causation so that a jury could consider if the plaintiff would have won the underlying case if such evidence had been presented.44

These same principles were applied in North Bay Council, Inc. v. Bruckner, a legal malpractice action concerning an attorney's failure to discover and disclose adequately a cloud on title to real property in the form of a right of first refusal. In North Bay, the Supreme Court reversed a directed verdict in favor of the defendant attorney and entered a directed verdict for the plaintiff.45 After outlining the elements of legal malpractice necessary to prove legal malpractice, the Supreme Court ruled that the interpretation of the terms of a deed is an issue of law and held that the defendant attorney breached his duty because "a cloud is sufficient to render a title unmarketable," and the attorney failed to properly warn his client that such a cloud on title could result in a third-party claim.46 It was the Supreme Court's opinion that "it was in the realm of reasonable argument that there was no express limit of time within which [the former owner or his heirs] were entitled to first refusal," and that there was no expert evidence contradicting the legal conclusion that the right of first refusal created an objectionable cloud on the title.47 The Supreme Court held also that there was no factual evidence contradicting the finding that "but for" the defendant attorney's failure to advise of the cloud on title, the harm to the plaintiff would not have occurred.48 Accordingly, the Supreme Court ruled that a directed verdict should have been entered for the plaintiff on liability and remanded the case for a new trial on damages.49

Subsequently, in Witte v. Desmaris, the Supreme Court identified further claims which were inappropriate causes of action in a legal malpractice case and provided additional guidance on a plaintiff's burden to prove causation of damages. The Witte Court considered an appeal of the Superior Court's decision granting the defendant's motion to dismiss, and except for one count of legal malpractice, affirmed the Superior Court's decision.50 The Supreme Court first rejected the plaintiff's claim that he was not represented at the final divorce hearing by a particular partner in the defendant law firm, who was unavailable due to illness.51 The Supreme Court found that there was no suggestion that the law firm intentionally or inadvertently withheld information regarding the partner's unavailability, and that the law firm made a point to inform the plaintiff he could retain other counsel.52 With respect to this complaint, the Supreme Court ruled that the client failed to plead that the defendant law firm breached its duty to competently and diligently represent him, and that a "law firm is not a guarantor of its attorneys' good health and does not breach its duty by simply informing a client that the attorney he or she originally requested is no longer available."53

Next, the Supreme Court rejected the plaintiff's argument that the defendant attorney breached his duty when he failed to disclose the potential prejudices of the hearing officer until the parties were walking into the hearing room.54 The Supreme Court summarily dismissed this claim that the disclosure was a "callous disregard of the plaintiff's emotional state" and reiterated its holding from McLaughlin v. Sullivan "that the professional skills expected of an attorney are those arriving out of legal training and experience, and do not include...the ability to diagnosis the psychological state of a client..."55 The Supreme Court found also that the Superior Court properly dismissed the plaintiff's claim that the defendant attorney failed to "procure formal court approval of his motion for a special marital master to preside over the final hearing...thus subjecting the client to a hearing in which the presiding officer had no actual authority to hear the case."56 The Supreme Court held that such claim was unfounded because the special master whom the plaintiff requested actually heard the case, and the allegation therefore failed to postulate any harm.57

Finally, after refusing to consider some allegations that were not preserved properly for appeal, the Supreme Court considered whether the plaintiff's last claim was too speculative to constitute legal malpractice.58 The plaintiff claimed that his defense counsel was negligent because he allegedly gave the plaintiff conflicting instructions first to conceal the existence of a $4,000 cashier's check during testimony, and thereafter to reveal that asset.59 When evaluating this claim, the Supreme Court distinguished between the defendant's position that the claim was so speculative that a jury could not determine, without complete conjecture, if the plaintiff suffered any damage from the alleged misconduct, and the separate issue of whether damages are too "speculative" to calculate.60 The Supreme Court explained that the issue of whether damages are remote or speculative is not controlled by the difficulty in calculating the amount, but is driven by the more fundamental question of whether the plaintiff suffered any recognizable damage from the attorney's alleged misconduct.61 In cases where the causation of damages is judged not too speculative or remote, "the fact finder is left to determine what should have happened in the original action," and "[t]he process becomes "a trial within a trial."62 Applying this analysis, the Supreme Court concluded that it was not too speculative to presume that the alleged conflicting instructions concerning the $4,000.00 cashier's check could damage the plaintiff's credibility in the eyes of the marital master, potentially resulting in a less favorable property distribution and support order and remanded that remaining issue for trial.63

III. EXPANSION OF LEGAL MALPRACTICE CLAIMS CONCERNING WILLS TO THIRD PARTY BENEFICIARIES

In 1994, the Supreme Court expanded the scope of legal malpractice in a case concerning wills, when it found in Simpson v. Calivas, that an attorney who drafts a will for a client has a duty that extends to the intended beneficiaries of the will.64 The plaintiff claimed that the defendant attorney failed to draft a will that incorporated the actual intent of his father, Robert Simpson Sr., to leave all of his land to the plaintiff in fee simple, except for a life estate in the marital home to his stepmother.65 The defendant attorney drafted Robert Simpson Sr.'s will with language leaving all of his real estate to the plaintiff except for a life estate in the homestead to the plaintiff's stepmother.66 After reviewing a joint petition from the plaintiff and stepmother for a determination of the meaning of the will, the probate court interpreted the will to leave the stepmother a life estate in all the real property.67 The probate court found the word "homestead" to be ambiguous and therefore permitted factual evidence that Mr. Simpson Sr. was close to the plaintiff's stepmother, but chose to preclude notes of the defendant attorney indicating that Mr. Simpson Sr. wanted to leave the "[h]ouse to wife as a life estate remainder to son, Robert H. Simpson, Jr. .... Remaining land ... to son Robert A. [sic] Simpson, Jr."68 Following the probate court's decision, the plaintiff bought out the life estate from his stepmother for $400,000.00.69

The plaintiff brought a lawsuit against the defendant attorney based on a third-party beneficiary theory for legal malpractice and breach of contract.70  The Superior Court directed a verdict for the defendant attorney based on the plaintiff's failure to introduce any evidence on damages or breach of duty.71  The Superior Court also directed a verdict to the defendant attorney on the basis that the plaintiff failed to introduce any evidence of intent that conflicted with the terms of the will as used, and dismissed the claim because the attorney who drafted the will owed no duty to the plaintiff.72  The Supreme Court reversed the Superior Court's decision and held that an attorney who drafts a will for a client owes a duty of reasonable care to the intended beneficiaries of the will.73

The Supreme Court found that although the scope of duty is limited generally to those in privity of contract with each other, there are exceptions to this rule where the risk to persons not in privity is apparent.74  The Supreme Court acknowledged that the majority of other jurisdictions have held that a duty runs from an attorney to an intended beneficiary of a will and quoted with approval the California Supreme Court case, Heyer v. Flaig, for the principle that an exception to the privity rule exists where there is foreseeable injury to the intended beneficiary. The Heyer Court stated:

When an attorney undertakes to fulfill the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client's intended beneficiaries. The attorney's actions and omissions will affect the success of the client's testamentary scheme; and thus the possibility of thwarting the testator's wishes immediately becomes foreseeable. Equally foreseeable is the possibility to an intended beneficiary. In some ways, the beneficiary's interests loom greater than those of the client. After the latter's death, a failure in his testamentary scheme works no practical effect except to deprive his intended beneficiaries of the intended bequests.75

The Supreme Court refused also to accept the defendant attorney's arguments that the privity rule should be applied only to those cases where the testator's intent as expressed in the will, and not shown by extrinsic evidence, was frustrated by attorney error. This interpretation was found to be too narrow and discriminatory against the clients whose attorneys omitted the testator's intention from the will.76  The Supreme Court concluded that an attorney who drafts a will has reason to know that the motivating cause of the attorney-client relationship with the testator is to provide a benefit to the third party beneficiary to the will. In such cases, the Supreme Court ruled that a third party beneficiary of the will may enforce the terms of the contract between the attorney who drafted the will and the testator.77 

IV. 1997-1998, APPLICATION OF THE LEGAL MALPRACTICE ELEMENTS

In 1997 the Supreme Court had opportunities to consider whether plaintiffs met their burden of proof to establish legal malpractice and found that where the elements of legal malpractice are not met, a legal malpractice claim must fail. In Follender v. Scheidegg, the Supreme Court determined whether a legal malpractice plaintiff could prove malpractice without expert testimony on causation - especially when the plaintiff had been ordered by the Superior Court to provide such expert testimony. 78 The plaintiff's attorney sued the defendant for unpaid legal fees, and the defendant counterclaimed for legal malpractice.79  The Supreme Court assumed without deciding that, at least for the purpose of the Follender case, expert testimony was required to prove proximate cause.80 While the Supreme Court noted that there is generally a liberal amendment practice in this State, the defendant had ignored ample notice from the Superior Court that he "must present expert testimony respecting the causal link between the alleged negligence and the alleged damages."81

The Superior Court dismissed the legal malpractice claim ruling that "the record establishes that [the defendant's] expert has no opinion that [the plaintiff's] conduct caused [the defendant] any injury or damage. Further, [the defendant] has not supplemented his response to expert discovery and apparently declines to do so absent a Court Order."82 On appeal, the Supreme Court found that the Superior Court did not abuse its discretion in denying the defendant's motion to amend the expert disclosure because the defendant "was not entitled to burden the courts and opposing counsel with further attempts" to correct his deficient expert disclosure, and affirmed the order dismissing the defendant's counterclaim of legal malpractice.83

In that same year, the Supreme Court in Holden Engineering & Surveying, Inc. v. Law Offices of Raymonde P. D'Amante, P.A., upheld an order granting summary judgment to the defendant attorneys and rejected the plaintiff's claim that the defendant attorneys failed to properly secure a mechanic's lien.84 The issue raised was whether the mechanic's lien attachment was defective because the standard return of service form did not state specifically that the attachment was made to secure a mechanic's lien, although the language of the writ so indicated.85  The Supreme Court rejected this narrow and formalistic interpretation of RSA 447:10 and found that the writ and return of service were to be read as a whole.86 Employing this interpretation, the Supreme Court concluded that the writ and return, the front and back pages of the same document, expressed distinctly the purpose of securing a mechanic's lien as required by RSA 447:10, and affirmed the Superior Court's order granting summary judgment because there was no breach of duty by the defendant attorney or defendant law firm.87

V. 1998, APPLICATION OF THE STATUTE OF LIMITATIONS AFTER THE 1986 AMENDMENT TO RSA 508:4,I

The Supreme Court revisited the application of the statute of limitations to legal malpractice cases in Draper v. Brennan in 1998.88 At issue was a "settlement agreement" which was negotiated by the defendants to resolve an action between the plaintiff and his employer, a local bank ("the bank") and its president, and memorialized on the record before the Superior Court on February 12, 1986.89 The Supreme Court interpreted the plaintiff's allegations against the defendant attorney and law firm as claiming a failure to obtain a bond or annuity to secure the bank's obligation to provide the plaintiff's health insurance, and failure to negotiate the settlement agreement terms to insure that the bank had to pay the plaintiff's entire health insurance premium regardless of whether it might later require its employees to pay a share of their coverage.90 The plaintiff claimed also that the defendant law firm negligently filed an untimely appeal of a Superior Court order denying a motion to reconsider its refusal to enforce total financial coverage of the plaintiff's medical care.91

Without reaching the merits of the legal malpractice claims, the Supreme Court examined first whether the six-year pre-1986 statute of limitations barred the plaintiff's claim that the defendant attorney failed to properly negotiate a settlement which provided security for future health insurance payments. The February 12, 1986 settlement agreement was placed on the record before the Superior Court, at which time the plaintiff expressed concern over certain language and ambiguities in the settlement agreement regarding the provision of medical insurance coverage for him.92 The Supreme Court applied the pre-1986 common law discovery rule and found that the plaintiff "discovered or, in the exercise of reasonable diligence, should have discovered both the fact of his injury and the cause thereof" and dismissed the plaintiff's argument that he did not know of his claimed injury at the time of the February 12, 1986 settlement agreement.93 The Supreme Court concluded that although the defendant attorney reassured the plaintiff that the bank accepted an obligation to pay for plaintiff's health insurance, such assurance did not relate to the plaintiff's concern that the defendant attorney did not obtain security for the maintenance of the health insurance.94 Consequently, the Supreme Court decided that the plaintiff's cause for this alleged breach accrued on the date of the settlement agreement, February 12, 1986, and was barred after February 12, 1992.95

The Draper Court next considered whether the post-1986 statute of limitations barred the plaintiff's claim that the defendant attorney failed to require that the bank cover the entire cost of the plaintiff's health insurance until the plaintiff reached the age of 65. The Supreme Court found that while this alleged breach of duty occurred on February 12, 1986, the three-year post-1986 statute of limitations applied because the plaintiff did not discover that his health insurance was not completely covered until he was given notice of his obligation to contribute to health insurance premiums between November 1990 and March 27, 1991.96 The Supreme Court held that the plaintiff's cause of action accrued as of February 15, 1991, when the Superior Court denied his motion to enforce complete coverage of his health insurance, because on that date the plaintiff should have known both that the settlement agreement did not provide free health insurance until age 65 and the possible nexus between the plaintiff's obligation to pay for his insurance and the defendant attorney's alleged error in drafting the settlement agreement.97

The Supreme Court rejected the plaintiff's argument that his cause of action should be tolled until the appeal process was complete. The plaintiff argued that the order on the motion to enforce did not become final until the appeal period expired on April 18, 1991, because the defendant attorney moved for reconsideration of the Superior Court's order on the motion to enforce.98 The Supreme Court agreed with the jurisdictions that recognize that "the focus of [the statute of limitations] is on discovery of the malpractice and actual injury, not success on appeal or proof of the total amount of monetary damages suffered by the former client."99 The Supreme Court held that the plaintiff's cause of action accrued no later than February 15, 1991 and was barred after February 15, 1994. As a result, the plaintiff's cause of action was barred by the statute of limitations since it was not filed until April 18, 1994.100

Finally, the Supreme Court examined the plaintiff's third alleged claim of malpractice that the defendant attorney failed to file a timely appeal from the Superior Court order on the motion to enforce, which appeal was due on April 18, 1991. Holding that this final cause of action was raised in a timely manner, the Supreme Court reversed the Superior Court's order with respect to this sole remaining claim and remanded it to determine if the claim otherwise survived the defendants' motion for summary judgment.101

VI. 1998-1999, INTRODUCTION OF THE "REASONABLE ATTORNEY" STANDARD FOR PROVIDING NOTICE OF A POTENTIAL CLAIM TO A LIABILITY CARRIER AND APPLICATION OF THAT STANDARD TO PROFESSIONAL CORPORATIONS AND CLAIMS-MADE PROFESSIONAL LIABILITY POLICIES.

A. Introduction of the Reasonable Attorney Standard for Providing Notice of a Potential Legal Malpractice Claim

The Supreme Court next provided guidance on what constitutes reasonable notice to an insurance carrier of a potential legal malpractice claim in Shaheen, Cappiello, Stein & Gordon, P.A. v. The Home Insurance Company, ("Shaheen") and introduced the standard of a "reasonable attorney" to determine if notice to the insurance company was timely. In Shaheen, the Supreme Court addressed an appeal by a professional liability insurance carrier of a declaratory judgment decision awarding coverage to the plaintiff law firm.102  The Shaheen plaintiff represented a client for the purpose of executing a prenuptial agreement between the client and her prospective husband, but failed to include language providing for the distribution of certain property to the spouse who contributed the funds to acquire it.103  After signing the prenuptial agreement, the client and her husband purchased a home with the client's funds and held it in a joint tenancy.104  Six years later the plaintiff law firm represented the client in a divorce from her husband and discovered in April 1991 that the prenuptial agreement did not have the language protecting the purchase of the marital home for the client.105  Although the plaintiff law firm informed the client that she could have a potential legal malpractice claim if arguments to secure the home were unsuccessful, it did not notify the defendant liability carrier of a potential legal malpractice action until October 1992, after a September 1992 ruling that the prenuptial agreement did not apply to the property distribution of the marital home.106  When the client brought a legal malpractice lawsuit against the firm in April 1994, the liability insurance carrier denied any obligation to provide professional malpractice coverage to the plaintiff law firm on the grounds that the October 1992 notice was untimely.107 

The Supreme Court affirmed the Superior Court's ruling that the plaintiff law firm provided reasonable notice of a legal malpractice claim.108  In making this determination, the Supreme Court evaluated whether the plaintiff law firm met the insurance contract language that, "[u]pon the Insured becoming aware of any act or omission which would reasonably be expected to be the basis of a claim or suit covered hereby, written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable, together with the fullest information obtainable."109  Because the term "reasonably be expected" was not defined by the insurance policy, the Supreme Court focused the inquiry on whether a "reasonable attorney" would have reported a potential claim under similar circumstances.110  The Supreme Court found that the test is one of reasonableness, that is, whether a reasonable attorney would find that it is it more likely than not that an incident will lead to a claim.111  The Supreme Court advised that while there are cases that are clear cut, such as a missed statute of limitations, most cases "require that the attorney exercise his professional judgment in evaluating the possibility that an adverse development will give rise to a claim."112 

Applying the reasonable attorney standard, the Supreme Court concluded that the law concerning prenuptial agreements was uncertain when the issue of the omitted language arose in May 1991, and that a reasonable attorney could believe that persuasive arguments could be made to preserve the client's interest in the marital home.113  The Supreme Court found that the insurance contract language was ambiguous, and that it did not indicate whether notice was to be given when all of the elements of a malpractice claim are present, or when, based on the parties and the circumstances, a malpractice claim on the merits is likely.114  Employing the latter view, the Supreme Court interpreted it in favor of providing coverage to the law firm and affirmed the Superior Court's ruling that the claim was not "reasonably . . . expected to be at the basis of a claim or suit" until September 1992.115  

B. Application of the Reasonable Attorney Standard to a Law Firm that is a Professional Corporation

In Bianco P.A. v. The Home Insurance Co.,116  the Supreme Court further defined and applied the "reasonable attorney" standard set forth in Shaheen to nearly identical insurance policy language. The Bianco Court affirmed in part and reversed in part the Superior Court's holding in a declaratory judgment petition that the defendant professional liability insurance carrier must provide coverage for a claim that the plaintiff law firm and its attorneys failed to file a cause of action within the appropriate statute of limitations.117  In its opinion, the Supreme Court explained that the primary analysis to be applied to determine if there was reasonable notice of a potential claim is whether an attorney, acting in good faith, would not reasonably believe that liability would result from an incident, act, or omission.118  If an attorney acts with such good faith and reasonable belief that a liability claim will not arise, notice is timely if the attorney provides it promptly to the carrier when he receives notice that a claim will in fact be made.119 

Using the "reasonable attorney standard," the Supreme Court addressed initially whether individual coverage should be denied to two attorneys at the law firm because they failed to give notice in 1992 that a claim might be brought against them individually. The Supreme Court held that it was not reasonable for the sole shareholder of a law firm which was a professional corporation, to reasonably believe he would be the subject of a legal malpractice claim.120  Under RSA 294-A:17, IV (1987), the personal liability of a shareholder of a professional corporation is no greater that of a shareholder of a business corporation, and a corporate shareholder is personally liable only for his own acts.121  Additionally, an employee of a professional corporation is not liable for another employee's conduct "unless he is at fault in appointing, supervising, or cooperating with them," which was not alleged against the sole shareholder of the firm.122  Based on the law controlling a professional corporation, and evidence that the sole shareholder did not actively control or supervise the underlying case, and was not expected to do so by the associate who handled the majority of the case, the Supreme Court held that the sole shareholder should not reasonably have expected that his conduct would be the subject of a legal malpractice claim, and that he did not violate the notice provi sions handled in 1992.123 

The law governing professional corporations was also controlling with respect to a former associate who had worked on the underlying case for a year. The associate had transferred the underlying matter to another associate for handling well before the statute of limitations had expired in 1991 and had done no meaningful work on the file since the transfer.124  Under RSA 294-A:17, II, employees of a professional corporation are liable only for negligent or wrongful acts or omissions in which they participate.125  Based on these facts and the law governing professional corporations, the Supreme Court found that the former associate could not reasonably be expected to believe that a claim would be raised against him.126  Where the underlying case was being handled by another attorney, and the sole shareholder and former associate had only peripheral involvement in it, the Supreme Court held that as a matter of law neither of those attorneys should have reasonably expected personal liability in the 1992-93 policy year.127 

Next, the Supreme Court addressed whether those same attorneys should be denied personal coverage because they failed to give notice of the potential lawsuit against the professional association and the attorney who was handling the case during the 1992-93 policy year.128  The Supreme Court examined the interpretation of the word "insured" in two notice provisions of the policy and found that it could refer to either the specific insured being sued or to any insured under the policy. Construing the language in favor of coverage, the Supreme Court concluded that "insured" referred to "one against whom a claim is asserted."129  Therefore, where a claim had not been asserted against the sole shareholder or former associate, the Supreme Court held that they had no duty to report the potential legal malpractice claim against the professional association and the attorney who handled the case in order to be entitled to personal coverage.130 

C. Application of the "Reasonable Attorney" Standard to a Claims-Made Liability Insurance Policy

In spite of these decisions that coverage should not be denied to the sole shareholder and above discussed former associate for failure to provide notice of the subject claim in the 1992-93 policy period, the Supreme Court next drew a distinction between "claims-made" and "occurrence" liability policies and proceeded to deny coverage under the 1993-94 policy to the professional association and the associate who handled the majority of the case.131  The superior court applied the "reasonable attorney standard" and found that the professional association and the attorney who handled the majority fo the claim, would reasonably be expected to be aware that a claim would be brought against them, and should have provided notice of the claim. In spite of this, the Superior Court allowed coverage because no prejudice resulted to the insurance carrier from the late notice.132  The Supreme Court reversed the Superior Court's decision and held that the insurance carrier did not have to show prejudice to deny coverage for a claims-made policy.133  Instead, the Supreme Court held that under a claims-made policy, there is a presumption of prejudice if prompt notice of a potential claim against an insured is not given. Unless prompt notice is received under a claims-made policy, in which case the carrier is contracted to provide coverage for claims made during the policy period, an insurance carrier will not have the required contractual notice to provide coverage for a potential claim.134  Prompt notice has a distinct importance under a claims-made policy as compared with an "occurrence policy," which covers all claims that occur during a policy period regardless of whether a claim is made known to the insured or insurer during that particular policy period.135  As a result of this distinction, and because the trial court found that under the "reasonable attorney" test the professional association and the attorney who handled the claim should have given notice to the insurance carrier in November 1992, the Supreme Court denied coverage to those plaintiffs for the 1993-94 policy period.136 

In an unexpected step, the Supreme Court then addressed an issue not raised by the parties and denied coverage for both former associates under the 1993-94 policy because they were not named in the renewal application for attorneys listed under the 1993-94 policy.137  The Supreme Court acknowledged that the associates could have been covered by general language in the policy for "any lawyer who previously qualified as an Insured..." However, while covered under that policy by said general language, neither attorney reported the missed statute of limitations claim. Because no notice had been made, the Supreme Court found that if it were to allow the former associates coverage, the policy would become essentially an occurrence policy covering liability regardless of the date of notice, so long as the event underlying the claim arose during an active policy period. The Supreme Court declined to so change the policy, but noted that the exclusion did not necessarily preclude the former associate who had only peripheral involvement in the case from coverage under the policy of the firm where he was employed in 1993 and which firm had provided notice.138

D. Recommendations Concerning the "Reasonable Attorney" Standard and its Application

In sum, the Supreme Court has provided definitive guidance as to when notice of a potential claim must be provided if an insurance policy includes language similar to that in Shaheen and Bianco, but the Supreme Court has removed also the requirement that an insurance carrier prove prejudice from improper notice before denying coverage under a claims-made policy. Therefore, an attorney with a claims-made policy must consider carefully whether the "reasonable attorney" standard is met when providing notice of a claim, for the safety-net that an insurance carrier must show prejudice to deny coverage has been removed. In addition to these changes, an attorney who has left a firm which has a claims-made policy and who is aware, or has reason to be aware, that a claim against him would reasonably be expected to be made during a policy period, must take care to report it to his former firm and the carrier to ensure coverage under that policy. Likewise, law firms should take care to list attorneys who should be subject to coverage under the policy in their insurance coverage renewal applications, such as attorneys who may have left a firm, or the attorneys may have their coverage put at risk.

VII. 1999, APPLICATION OF AN AUGMENTED STANDARD OF PROOF FOR LEGAL MALPRACTICE CLAIMS FOR NEGLIGENT REPRESENTATION OF A CRIMINAL CLIENT

The Supreme Court's most recent legal malpractice decision, Mahoney v. Shaheen, Cappiello, Stein & Gordon, confronts a legal malpractice claim brought by a client for negligent representation in a criminal matter.139  The defendant attorneys in Mahoney represented the plaintiff in grand jury proceedings prior to the plaintiff's indictment for theft by deception, falsification of evidence, and Medicaid fraud.140  These charges ensued from the plaintiff's theft of Medicaid and private insurance funds totaling over $373,000.00 while he was employed as a pharmacist at Health Center Pharmacy, Inc. ("HCP"), a corporation in which the plaintiff was a majority shareholder.141  The Mahoney plaintiff destroyed documents sought by two State grand jury subpoenas.142  Although the plaintiff maintained that he told the defendant law firm that he had destroyed much of the requested documentation, the defendant law firm denied being informed of such conduct.143  Focusing on the voluminous nature of the requested records and the burdensome, costly and time-consuming effort needed for compliance with the subpoenas, the defendant law firm tried to enjoin the grand jury from issuing a subpoena for some of the documents, sought to enjoin proceedings, pursued an interlocutory appeal, and tried to challenge the propriety of the grand jury subpoenas in Federal Court.144  The defendant law firm represented the plaintiff before the grand jury and for two hearings in which the plaintiff and HCP were held in contempt and charged with $60,000.00 in fines.

The plaintiff ultimately pled guilty to multiple felony charges of Medicaid fraud, theft by deception and falsifying physical evidence.145  He was sentenced to serve seven to fourteen years at the State prison and ordered to pay restitution and contempt fines of $60,000.00 imposed on him and HCP prior to his indictment.146  While in prison, Mahoney brought a legal malpractice action against the defendant law firm claiming negligent representation.147  He sought recovery of the civil contempt fines imposed upon him by the Superior Court, as well as the attorney's fees paid to the defendant law firm.148 

The Supreme Court held that a plaintiff who claims legal malpractice for negligent representation in a criminal matter must meet an "augmented standard" to establish his cause of action.149  It found that public policy requires that a criminal legal malpractice plaintiff prove not only all the elements necessary for a civil malpractice action, but he must additionally allege and demonstrate, by a preponderance of the evidence, actual innocence.150  This rigorous standard of proof was approved based on three public policy reasons which have been recognized in other jurisdictions:

  1. [T]he criminal justice system affords individuals charged with crimes a panoply of protections against abuses of the system and wrongful conviction, including safeguards against incompetent and ineffective counsel;
  2. [I]t is wrong to allow a guilty defendant to profit from criminal behavior; and
  3. [T]he pool of legal representation available to criminal defendants, especially indigents, needs to be preserved.151 

The Supreme Court found further justification for the augmented burden of proof in the State's criminal justice system which affords criminal defendants enhanced protections, including a right to constitutionally effective defense counsel, a right against unconstitutional search and seizure, a requirement that a conviction must be proven beyond a reasonable doubt, and the availability of post-conviction relief following conviction.152  It was the Supreme Court's concern that because the purpose of a criminal trial is to discover the truth, permitting a recovery in a legal malpractice action against former criminal defense counsel without proof of actual innocence would shift the responsibility for the criminal conduct away from the criminal defendant and indirectly reward the wrongdoer for criminal activity. The Supreme Court concluded additionally that an actual innocence standard was important to protect the willingness of criminal defense attorneys to take on pro bono and reduced fee criminal clients and to continue to work in the area of criminal law.153  Many criminal defendants are indigent, and the Supreme Court found that the public has "a strong interest in encouraging the representation of criminal defendant."154  Because Mahoney did not allege actual innocence, and because he admitted both to destroying the records and to committing the crimes with which he was charged, his legal malpractice claim failed as a matter of law.155 

VII. CONCLUSION

The progression of legal malpractice cases in New Hampshire since the Supreme Court first addressed a legal malpractice claim in 1976 has resulted in the development of a distinct body of law that provides an opportunity for legal malpractice plaintiffs to seek recovery of damages for an attorney's negligent representation. The Supreme Court has set forth distinct requirements of what elements must be met to prove legal malpractice, and like any other negligence plaintiff, a legal malpractice plaintiff must meet his burden of proof to succeed in such a claim. Similar to other professional causes of action, the Supreme Court has applied the discovery rule to legal malpractice claims so that a lay plaintiff may bring a claim when an injury is discovered, even though the statute of limitations has expired since the actual work was completed. In addition, the Supreme Court has recognized a limited exception to the rule that a duty is owed between two parties only if privity of contract exists, so that third party beneficiaries of wills may seek recovery if an attorney fails to draft properly a will for his client. However, while these protections of legal malpractice plaintiffs are in place, the Supreme Court requires that legal malpractice meet statutory requirements, such as bringing a claim within the appropriate statute of limitations once the claim is discovered, and charges plaintiffs with complying with Superior Court rules and orders. Since 1976, the Supreme Court has acted consistently to protect legal malpractice plaintiffs' rights, but has required that legal malpractice plaintiffs establish their cases and has not hesitated to reject claims that do not meet the required burden of proof.

Since that first 1976 legal malpractice case, the Supreme Court has addressed numerous cases involving legal malpractice, and it is clear that legal malpractice is a continuous reality for the practice of law into the next century. However, just as much as a legal malpractice claim affords an opportunity for recovery to a plaintiff, the elements necessary to prove professional negligence provide necessary safeguards from being held liable when negligence has not occurred. With the limited exception of the Simpson case, where an intended (and therefore foreseeable) beneficiary of a will was held to be able to bring a legal malpractice claim against the drafter of the will, a legal malpractice plaintiff may only succeed with a p, rofessional liability claim if an attorney-client relationship exists. In addition, the development of case history in New Hampshire has recognized the inherent importance and significance of the professional judgment of attorneys to the practice of law. A plaintiff cannot prove legal malpractice without demonstrating that the attorney breached the standard of reasonable care, which necessarily includes a deviation from the reasonable judgment of an attorney. Likewise, the "trial within a trial" methodology and requirement that a plaintiff establish that "but for" the attorney's conduct, the plaintiff's claim would have been successful, act to ensure that legal malpractice can be proven only if the attorney's conduct is the cause in fact of a plaintiff's loss.

Future legal malpractice claims may focus on further efforts to chip away at the requirement that malpractice plaintiff have an attorney-client relationship with the attorney before a legal malpractice claim can be brought. Such efforts should be evaluated with great care for an attorney's duty to zealously represent could be threatened if the duty could be extended to persons other than the client. Efforts may be made to seek relief from attorneys without having to satisfy the legal malpractice burden of proof. For instance, there is an appeal before the Supreme Court to challenge the Court's previous 3-2 decision not to apply the Consumer Protection Act to the practice of law. These efforts should be examined also with great care so that the attorney's duty to a client is preserved and to ensure that the unique role of an attorney's professional judgment to evaluate strategies, tactics, differences in the law and other legal tasks for a client is not undermined. The peculiar nature of a lawyer's work is that there is often more than one way of approaching a case, and the attorney's duty to use reasonable, professional judgment that is based on learning and experience should be preserved. Finally, there will likely be future cases examining notice requirements to an insurance carrier, and it is wise to be aware of the notice provisions and what notice the Supreme Court has recommended as reasonable.

ENDNOTES

1.

McKee v. Riordan, 116 N.H. 729 (1976).

2.

Id. at 730-31.

3.

Id.

4.

McLaughlin v. Sullivan, 123 N.H. 335 (1983)

5.

Id. at 336.

6.

Id. at 337.

7.

Id.

8.

Id.

9.

Id. at 342.

10.

Id.

11.

Id. at 342-43.

12.

Rousseau v. Eshleman, 128 N.H. 564 (1986); recons. denied, 129 N.H. 306 (1987).

13.

Id. at 565.

14.

Id.

15.

Id.

16.

Id.

17.

Id. at 566.

18.

Id.

19.

Id. at 567; RSA 358-A:3,I (emphasis added).

20.

Id. at 567.

21.

Id; RSA 358-A:3,I. The Supreme Court explained that under statutory and constitutional authority, it has established an integrated bar association (with mandatory membership of New Hampshire Bar members) and a professional conduct committee to regulate attorney conduct. See RSA 490:4, RSA Chapter 311; N.H. Const. Pt. II, Art. 73-a; In re Unified New Hampshire Bar, 112 N.H. 204 (1972).

22.

Id. at 567; see RSA 490-a; RSA Chapter 311; N.H. Const. Pt. 2, Art. 73-a.

23.

Id. at 567.

24.

Id. at 569.

25.

Id. at 573-74.

26.

Id.

27.

Id. at 575-77.

28.

Rousseau, 129 N.H. 306 (denying reconsideration) (1987).

29.

Gilmore v. Bradgate Assoc., 135 N.H. 234, 238 (1992).

30.

Fairhaven Textile Corp. v. Sheehan, Phinney, Bass & Green, P.A., 695 F. Supp. 71, 73 (D.N.H. 1988)

31.

Id.

32.

Id.

33.

Id. at 74.

34.

Id. at 75.

35.

Id.

36.

Id. (citing 4 S. Speiser, C. Krause, A. Gans, The American Law of Torts sec. 15:87 (1987)).

37.

Id. at 75 (quoting 4 S. Speiser, C. Krause, A. Gans, The American Torts at 719) (emphasis added)).

38.

Id. at 77.

39.

Id.

40.

Id. at 75.

41.

Id. at 75-76.

42.

Id.

43.

Id.

44.

Id.

45.

North Bay Council, 131 N.H. 538, 540 (1989).

46.

Id. at 545-46.

47.

Id. at 546-47.

48.

Id. at 547-49.

49.

Id. at 550.

50.

Witte v. Desmaris, 136 N.H. 178, 181 (1992).

51.

Id. at 182-83

52.

Id.

53.

Id. at 183-84.

54.

Id. at 184.

55.

Id. (citing McLaughlin, 123 N.H. at 340).

56.

Id. at 185.

57.

Id.

58.

Id. at 186.

59.

Id.

60.

Id. at 186-88.

61.

Id. at 188 (citing 1 R. Mallen & J. Smith, Legal Malpractice 16.3 at 894-95 (3d ed. (1989))).

62.

Id.

63.

Id. at 189-90.

64.

Simpson v. Calivas, 139 N.H. 1 (1997).

65.

Id. at 3.

66.

Id.

67.

Id.

68.

Id.

69.

Id.

70.

Id. at 3-4.

71.

Id.; The Superior Court admitted the evidence of the attorney's notes but sustained objections to the plaintiff's attempts to introduce evidence of damages, including the plaintiff's own testimony concerning the $400,000 paid to his stepmother, because he had not disclosed a damages expert during discovery. Id. at 4.

72.

Id. at 3.

73.

Id.

74.

Id. at 5; see Morvay v. Hanover Insurance Co. 127 N.H. 723, 726 (1986) (finding that investigators hired by an insurance company to investigate the cause of a fire owed a duty to the insureds to perform their investigation with due care despite the absence of privity); Spherex, Inc. v. Alexander Grant & Co., 122 N.H. 898 (1982) (deciding that accountants may be liable in negligence to those who reasonably rely on their work even if no privity of contract exists); Robinson v. Colebrook Savings Bank, 109 N.H. 382, 385 (1969) (holding that bank owes duty to beneficiary of account with survivorship features set up by depositor).

75.

Id. (quoting Heyer v. Flaig, 449 P.2d 161, 164 (Ca. 1969)). Heyer was later overruled in part on other grounds in Faird v. Blacker, 828 P.2d 691 (Ca. 1992).

76.

Id. at 6.

77.

Id. at 7. The Supreme Court found that the because the principle task of the probate court was limited to interpreting the intent of the testator as expressed in the language of the will and not the "actual intent" of the will, the probate court's determination of "actual intent" was not an essential decision and did not act as a collateral estoppel to a determination of "actual intent" in the legal malpractice action. Id. The Supreme Court held also that the Superior Court should have admitted the inventory appraisals as reliable, probative and relevant evidence of the value of the life estate, but agreed with the Superior Court's refusal to allow the plaintiff to testify as to the $400,000 he paid his stepmother, because such evidence was not probative of the value of the real property on the date of the testator's death. Id.

78.

Follender v. Scheidegg, 141 N.H. 192, 193 (1997).

79.

Id.

80.

Id.

81.

Id.

82.

Id. at 194.

83.

Id.

 84.

Holden Engineering & Surveying, Inc. v. Law Offices of Raymonde P. D'Amante, P.A., 142 N.H. 213, 214 (1997).

85.

Id.

86.

Id.

87.

Id.

88.

Draper v. Brennan, 142 N.H. 780 (1998).

89.

Id. at 781. In evaluating this claim, the Supreme Court had to decide not only when the statute of limitations began to run, but also whether the pre-1986 (six years) or post-1986 (three years) statute of limitations applied. Id. at 783; see RSA 508:4, I (1983) (amended 1986). The Supreme Court reiterated its holding in Conrad v. Hazen, 140 N.H. 249, 250-51 (1995) that the statute of limitations does not begin to toll until a cause of action has "accrued" - that is when a plaintiff who has suffered an injury discovers or reasonably should have discovered that the injury had occurred. Id. at 783-84.

90.

Id. at 784.

91.

Id. at 784, 782.

92.

Id. at 784-85.

93.

Id. at 785.

94.

Id.

95.

Id.

96.

Id. A March 27, 1991 letter in the record indicated that the plaintiff had made payments towards his premiums before that date. In addition, the plaintiff conceded he was put on notice of his alleged injury by a November 20, 1990 letter notifying him that he had to pay a portion of his premiums. Id. at 785-86.

97.

Id. at 786-87.

98.

Id.

99.

Id. at 787 (citation omitted).

100.

Id.

101.

Id. at 787-88.

102.

Shaheen, Cappiello, Stein & Gordon, P.A. v. The Home Insurance Company, 1998 N.H. LEXIS 64 (Sept. 30, 1998).

103.

Id. at 1.

104.

Id.

105.

Id. at 2.

106.

Id.

107.

Id.

108.

Id. at 3-4.

109.

Id. at 3 (emphasis in original).

110.

Id.

111.

Id. at 4.

112.

Id. (citing Legal Malpractice: The Law Office Guide to Purchasing Legal Malpractice Insurance 5.14, at 32, R. Mallen, 2d ed. 1997)).

113.

Id. The issue was also discussed fully with the client, who testified that she did not consider a malpractice action against the plaintiff law firm until late summer 1992.

114.

Id. at 5.

115.

Id.

116.

Bianco Professional Association v. The Home Insurance Company 1999 N.H. LEXIS 30 (April 13, 1999).

117.

Id. at 1-2.

118.

Id. at 6-7.

119.

Id.

120.

Id. at 7-8.

121.

Id. (citing RSA 294-A:17, IV (1987) & RSA 293-A:6.22(b) (Supp. 1998) (recodifying and amending RSA 293-A:25,I (1987))).

122.

Id. (quoting RSA 294-A:17, II (1987)).

123.

Id. at 8 - 9.

124.

Id. at 9-10.

125.

Id. (citing RSA 294-A:17,II).

126.

Id. at 8.

127.

Id. at 10.

128.

Id. at 10-11.

129.

Id. at 11-12.

130.

Id. at 12.

131.

Id. at 13-16.

132.

Id. at 13-14.

133.

Id. at 15.

134.

Id.

135.

Id.

136.

Id. at 15-16.

137.

Id. at 16-17.

138.

Id. at 16-17 & 19. The Supreme Court rejected the liability insurance carrier's argument that the failure to disclose the potential malpractice claim on the insurance renewal application constituted a material misrepresentation under RSA 417-C:1 (1998), such that the 1993-94 policy was void. While the Supreme Court acknowledged that the plaintiff knew that a claim could reasonably be expected to be made against it, and did not disclose it in the renewal application, the Supreme Court found that RSA 417-C:1 applies to fire, casualty, marine, or multi-peril insurance and is not applicable to professional liability policies. The Supreme Court did not address whether other grounds for recission existed based on material representation because the liability insurance carrier did not raise any. Id. at 17-19.

139.

Mahoney v. Shaheen, Cappiello, Stein & Gordon, No. 96-640, slip op. (N.H. Sup. Ct., April 16, 1999).

140.

Id. at 1.

141.

Id.

142.

Id. at 2-3.

143.

Id. at 3.

144.

Id.

145.

Id.

146.

Id. at 1-2.

147.

Id. at 3-4. The plaintiff claimed that the defendant law firm was negligent in its (1) decision and method of resisting subpoenas for documentation; (2) representation of parties with adverse interests (HCP and Mahoney); (3) failure to negotiate immunity for Mahoney's testimony before the grand jury, and (4) failure to properly seek post-decision relief from the Superior Court's contempt findings for failure to comply with the State's subpoenas. Id.

148.

Id. at 2.

149.

Id. at 5.

150.

Id. Other jurisdictions have adopted this standard also. See Glenn v. Aiken, 569 N.H. 783, 788 (Mass. 1991); State Ex. Rel. O' Blennis v. Adolf, 691 S.W. 2d 498, 503 (Mo. Ct. App. 1985); Carmel v. Lunney, 511 N.E. 2d 1126, 1128 (N.Y. 1987).

151.

Id. at 5 (citations omitted).

152.

Id. at 5-6.

153.

Id. at 7.

154.

Id.

155.

Id. at 7-8. The fact that the Mahoney plaintiff sought damages for only the civil contempt fines and attorney's fees, and not for his conviction, made no difference to the Supreme Court's analysis. The Supreme Court said that proof of actual innocence is equally critical in a criminal malpractice action seeking damages for alleged tactical or strategic decisions, because the decisions are part of an integrated, continuous representation of the criminal client in defense of a criminal charge.

The Author

Attorney Anne Davidson is an associate with the firm of Dean, Rice & Kane, P.A., Manchester, NH.

 

 

Click for directions to Bar events.

Home | About the Bar | For Members | For the Public | Legal Links | Publications | Online Store
Lawyer Referral Service | Law-Related Education | NHBA•CLE | NHBA Insurance Agency | NHMCLE
Search | Calendar

New Hampshire Bar Association
2 Pillsbury Street, Suite 300, Concord NH 03301
phone: (603) 224-6942 fax: (603) 224-2910
email: NHBAinfo@nhbar.org
© NH Bar Association Disclaimer