This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Filed April 5, 2005
Hennepin County District Court
File No. MP 03-8087
John F. Bonner, III, Thomas F. DeVincke, Bonner & Borhart, LLP, U.S. Bank Plaza, Suite 1750, 220 South Sixth Street, Minneapolis, MN 55402 (for appellant)
Timothy D. Kelly, George O. Ludcke, Sarah E. Bushnell, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Kalitowski, Presiding Judge, Peterson, Judge, and Crippen, Judge.
Appellant Joyce Witzman brought this legal malpractice action against her former attorneys, respondents Duane W. Krohnke and Faegre & Benson, LLP, alleging that Krohnke negligently represented her interests by failing to investigate her claims and provide her with material information, wrongfully causing her to enter into a settlement in the underlying trust litigation, and that Faegre & Benson was vicariously liable for Krohnke’s actions. The district court granted summary judgment to respondents, concluding that an action for legal malpractice could not be proved because respondents had used reasonable care in exercising their professional judgment on behalf of appellant. On appeal, appellant argues that the court erred because there is no evidence as a matter of law that respondents exercised reasonable care in rendering advice that led to the settlement. Because the record supports the district court’s conclusions, we affirm.
Appellant and her brother,
Appellant had received very little information regarding the trusts because Wolfson failed to file annual accountings. In 1992, appellant hired Faegre & Benson to represent her interests in the trusts; Krohnke, an experienced litigator, eventually became appellant’s counsel. It became apparent that Wolfson had committed some dubious acts during his trusteeship; respondents identified various claims against him, but were also aware that Wolfson had defenses to some of these claims that had some merit.
In 1993, respondents obtained a $1 million distribution from the trust for appellant, as co-beneficiary, and Wolfson received the same. Also in 1993, respondents filed three petitions in the probate court, alleging improper actions by Wolfson as trustee. They demanded trust account records, hired a neutral accounting firm to review the records and a private investigator to look into Wolfson’s activities, filed a petition for interim relief blocking any further transfer of trust assets and limiting fees, conducted discovery, and sought information about replacing Wolfson with a professional trustee.
In October 1994, appellant and Wolfson entered into a settlement agreement. Appellant received a total of $4.8 million, representing her one-half share of the liquidation of the trusts’ assets and an additional amount based on appellant’s claims against Wolfson. Her pre-settlement demands had been higher, calling for an additional payment of approximately $2 million based on other claims. Appellant brought this action against respondents, asserting damages equal to some or all of these unrecovered claims.
Both appellant and respondents moved for summary judgment. The district court made extensive findings of fact, which are essentially undisputed; these findings confirm the nature and volume of the work respondents performed on appellant’s behalf. This appeal is based on appellant’s dissatisfaction with the district court’s resulting conclusion that because respondents used reasonable care in the exercise of their professional judgment, appellant’s claims against them are barred by the professional judgment rule. In particular, appellant argues that the district court erred by concluding that designated parts of respondents’ advice were matters of professional judgment free of a claim of legal malpractice, in particular citing advice on (1) the possibility of bias based on her religious affiliation; (2) the potential difficulty of collecting from Wolfson in the event of a bankruptcy; and (3) the chance of prevailing on an undue influence claim.
D E C I S I O N
1. Standard of Review
judgment is appropriate when the pleadings, discovery, affidavits, and
depositions show there is no genuine issue of material fact and one party is
entitled to judgment as a matter of law.
matter is an action for legal malpractice, for which a plaintiff must show four
elements: (1) the existence of an attorney/client relationship; (2) acts
amounting to negligence or a breach of contract; (3) that such acts were the
proximate cause of plaintiff’s damages; and (4) but for the malpractice, the
plaintiff would have been successful in the action. Rouse
v. Dunkley & Bennett,
plaintiff alleging legal malpractice in the case of a settlement must show not
that a jury would have awarded him or her more than the settlement, but that
the attorney was negligent in advising the settlement or conducting the
case. Virsen v. Rosso, Beutel,
argues that the district court improperly concluded that respondents were
shielded by the professional judgment rule because respondents failed to
exercise reasonable care. This so-called
“rule” is actually a set of principles that protects an attorney from errors
stemming from the honest exercise of professional judgment. Wartnick
v. Moss & Barnett, 490 N.W.2d 108, 113 (
particular, appellant asserts that the district court erred by finding
reasonable care in Krohnke’s speculation about the effect of her religious
affiliation, his advice about complications based on a potential Wolfson
bankruptcy, and his assessment of her undue influence claim. Certainly, it would be improper if Krohnke
made a knowingly false speculation that the probate court would be biased
because of appellant’s Jewish faith. But
an attorney is obliged to consider and appraise the “hazards of a tort
action.” Meagher v. Kavli, 256
undisputed testimony, respondents undertook an investigation of appellant’s
claim of Wolfson’s undue influence on
Appellant also asserts that respondents failed to exercise reasonable care in their settlement advice regarding reservation of appellant’s rights to bring claims against Wolfson’s attorney and accountant and in their disclosure of the trust financial statements provided by Wolfson and forwarded to appellant in 1994. As appellant requested, the settlement agreement contained a reservation of rights. There is no evidence in this record that respondents represented to appellant that these would be meritorious claims and, by virtue of the fact that appellant lost both suits, it is evident that these were, in fact, without merit. There is no showing of fault of respondents.
Finally, appellant argues that respondents were negligent in failing to include a cover letter accompanying the financial statements provided by Wolfson and stating that the documents were unaudited and for limited purposes. But the documents forwarded to appellant contained a notation on each page that the statements were unaudited. The omitted cover letter was a pro forma declaration that would accompany an unaudited statement, but has no significance rising to the level of actionable negligence.
would have us rely on the opinions of her expert witnesses, attorney
The record supports the district court’s conclusion that appellant’s claims are barred by the professional judgment rule because respondents exercised reasonable care in rendering professional advice.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
Appellant has been involved in extensive post-settlement litigation. In 1995, the probate court dismissed her suit
against Wolfson based on title problems associated with certain trust real
estate. In 1997, appellant sued Wolfson,
alleging fraudulent misrepresentation; Wolfson was ultimately granted summary
judgment in 2002. Witzman v. Wolfson, 2002 WL 338155, No. C9-01-1405 (