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A former client may have an action against a lawyer if the client can prove (1) the attorney's employment, (2) the attorney's neglect of a reasonable duty, and (3) loss to the client proximately caused by that neglect of duty. There is nothing extraordinary about applying that principle to an attorney's recommendation regarding the settlement of a dispute in, or susceptible to, litigation.
The attorney, David Thomas, represented the clients who were the plaintiffs in a lead poisoning case. Allegedly upon the attorney's recommendation, the clients accepted a settlement offer and executed the releases demanded by Groscup, the settling defendants. Several years later, the clients filed a lawsuit against the attorney, alleging that the attorney's recommendation to settle was one no reasonable attorney would have made. Their main contention was surrender of the claim against one of the defendants for no compensation. The trial court found that there was no evidence as to what a reasonable settlement would have been, granted the attorney's motion for judgment notwithstanding the verdict, and entered judgment in favor of the attorney. The appellate court reversed the judgment n.o.v. and reinstated the money judgment in favor of the clients, concluding that evidence of the fair settlement value was unnecessary. The court granted certiorari.
Under the circumstances, could the attorney be held liable for his negligence in handling the case, notwithstanding the fact that the case was ultimately settled by the client?
After granting certiorari, the court confirmed that a lawyer could be held liable for negligence in the handling of a case that was ultimately settled by a client and that the trial within a trial approach was an appropriate method. The court noted that in order to prevail under a trial within a trial approach, a plaintiff is required to prove (1) that the attorney was negligent in recommending acceptance of the settlement; (2) that the defendant could have been served within a reasonable time in order to permit the action to proceed against it; (3) that the defendant was liable to the plaintiff under a theory pled in the complaint against it and had no exculpating defense to the action; (4) that the plaintiff suffered compensable injury; and (5) the amount of damages that (i) would have been awarded by the jury had the case against the defendant proceeded to trial, and (ii) would have been collectible with reasonable effort. In this case, the attorney did not attack the sufficiency of the evidence relating to the liability of Groscup, i.e., that, had the case proceeded against Groscup, a favorable verdict would have resulted. The fact that, had the case proceeded, Groscup could have been served was something the jury could infer.