In many legal malpractice cases, particularly those where liability is undisputed, the attorney’s defense will be based upon the plaintiff’s ability to prove damages. One such manner of challenging damages focuses on whether the attorney’s error proximately caused plaintiff’s damages where the underlying tortfeasor is either uncollectible or has limited collectibility. The rationale asserted in other jurisdictions for proof of collectibility of the underlying tortfeasor is that the plaintiff in a legal malpractice case should not be entitled to a windfall award against their attorney in excess of the amount the plaintiff ever could have collected from the tortfeasor in the underlying case. Until recently, the Ohio Supreme Court had never addressed the issue of collectibility.
When the Eleventh Appellate District determined in Paterek v. Petersen & Ibold, et al., that the collectibility of the underlying tortfeasor was irrelevant to a legal malpractice plaintiff’s damages claim, the Reminger law firm was asked to assist the defendant lawyers in petitioning the Ohio Supreme Court to review the issue and ultimately establish a rule in Ohio that the collectibility of the underlying tortfeasor is an element of proof in the plaintiff’s case. Reminger was privileged to have been requested by the Ohio Association of Civil Trial Attorneys to prepare an amicus brief on behalf of the defendants- appellees for the purposes of establishing a collectibility rule which would benefit Ohio attorneys state-wide.
In Paterek v. Peterson & Ibold, et al., the defendant-attorneys represented the plaintiff in a clear liability personal injury action. After the case was not re-filed within one year, the plaintiff
sued the defendants for legal malpractice on the basis of the lost claim. Defendants argued both at the trial court level and on appeal that the legal malpractice damages should be capped at $100,000, which was the maximum amount of recovery from the underlying tortfeasor because that was the limit of his auto liability policy. After the jury returned a verdict in the amount of $382,000 for the plaintiffs following the legal malpractice trial, the trial court capped plaintiffs’ damages at $100,000. The Eleventh Appellate District reversed the decision and re-instated the $382,000 jury verdict based on the rationale that the collectibility of the underlying tortfeasor was irrelevant to the plaintiffs’ proof on damages. The parties had stipulated at trial that the tortfeasor was uncollectible above and beyond his $100,000 auto liability policy limits.
After accepting discretionary review, the Ohio Supreme Court was asked in Paterek v. Peterson & Ibold, 2008-Ohio-2790, to determine the issue of first impression in Ohio as to whether evidence of the collectibility of the underlying tortfeasor is relevant in a legal malpractice case. In addition, the Court was urged in the amicus brief filed on behalf of the Ohio Association of Civil Trial Attorneys to accept the majority position and hold that the collectibility of the underlying tortfeasor is an element of a plaintiff’s case upon which the plaintiff ultimately bears the burden of proof at trial. The Supreme Court held that in an attorney malpractice case, proof of the collectibility of the judgment lost due to malpractice is an element of the plaintiff’s claim against the negligent attorney.
The Ohio Supreme Court’s opinion is critical to legal malpractice defendants in that the court has shifted the burden of proving collectible damages to the Plaintiff. In other jurisdictions, a minority position had surfaced which required defendants to plead and assert collectibility as an affirmative defense. Rejecting the minority position, the Ohio Supreme Court sided with the majority in holding that plaintiffs should not be entitled to a windfall opportunity by virtue of the defendant attorney’s alleged negligence:
We disagree with the minority view. We find that collectibility is logically and inextricably linked to the legal malpractice plaintiff’s damages, for which the plaintiff bears the burden of proof. In proving what was lost, the plaintiff must show what would have been gained. The Smith court is correct that, in other types of civil cases, the plaintiff is not required to prove collectibility. The malpractice plaintiff need not prove the collectibility of the attorney she is suing, but she must prove that the attorney she is suing has indeed injured her through neglecting to property handle a lawsuit that would have generated recompense. And her injury is measured by what she actually would have collected.
The impact of the Court’s ruling in Paterek is yet to be determined, although a shift in the manner in which legal malpractice damages issues are litigated is manifest. For example, in its decision the Supreme Court noted that the plaintiff neglected to offer expert testimony at trial as to the value of a judgment against a person of the tortfeasor’s age (17) and financial status. Based on the Court’s language, it is anticipated that where collectibility is an issue, plaintiffs will seek the services of experts to opine as to potential collectibility and speculative damages depending on the status of the tortfeasor at the time of litigation. Although it is premature to anticipate each intricacy of legal malpractice litigation in light of the collectibility ruling, defense attorneys will want to keep contact information for collection attorneys close at hand to rebut plaintiff’s “collectibility” expert. Needless to say, the Ohio Supreme Court’s opinion in Paterek v. Peterson & Ibold has leveled the playing field for legal malpractice defendants on the issue of damages and will affect the manner in which legal malpractice cases are litigated in Ohio for the foreseeable future.