Title: ROBERT W. HORN and ROBERT W. HORN, P.C. v. ALBERT WOOSTER and TERRANCE DUDDY

State: wyoming

Issuer: Wyoming Supreme Court

Document:

ROBERT W. HORN and ROBERT W. HORN, P.C. v. ALBERT WOOSTER and TERRANCE DUDDY2007 WY 120165 P.3d 69Case Number: No. 06-195Decided: 08/01/2007
APRIL 
TERM, A.D. 2007

 
 
ROBERT 
W. HORN and ROBERT W. HORN, P.C.,

 
 
Appellants

(Defendants),

 
 
v.

 
 
ALBERT 
WOOSTER and 
TERRANCE DUDDY,

 
 
Appellees

(Plaintiffs).

            

Certified Questions from 
the United 
States District 
Court

District of 
Wyoming

The 
Honorable Clarence A. Brimmer, Judge

 
 
Representing 
Appellants:

Weston W. Reeves and Anna R. Olson of Park Street Law 
Office, Casper, Wyoming.  
Argument by Mr. Reeves.

 
 
Representing 
Appellees:

C. M. Aron of Aron & Henning, LLP, Laramie, Wyoming.        

 
 
Before VOIGT, C.J., and 
GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, J., delivers the 
opinion of the Court.  BURKE, J., 
files a dissenting opinion.

 
 

KITE, 
Justice.

            

[¶1]      The 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

 
 
[¶2]      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 relevant 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 he was driving 
on Interstate 80 near Rawlins, Wyoming collided head-on with a Carbon County 
School District No. 1 school bus.  
The bus driver lost control of the bus and crossed into Mr. Wooster's 
lane of traffic.

 
 
[¶4]      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. Duddy agreed to perform legal 
services in the personal injury action in return for one-third of Mr. Horn's 
fifty percent contingent fee.  

 
 
[¶5]      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, 
2005 WY 47, 109 P.3d 893 (Wyo. 2005).

 
 
[¶6]      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?

 
 
[¶7]      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. 
Theuman, Measure and Elements of Damages 
Recoverable for Attorney's Negligence in Preparing or Conducting 
LitigationTwentieth Century Cases, 90 A.L.R.4th 1033, § 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, 74 N.Y.S. 643, 649 
(N.Y. Ct. App. 1902), disagreed with by Andrews v. Cain, 406 N.Y.S.2d 168 (N.Y. 
Ct. App. 1978); Moores v. Greenberg, 
834 F.2d 1105 (1st Cir. 1987); Sitton v. Clements, 385 F.2d 869 
(6th Cir. 1967) (affirming malpractice award reflecting a deduction 
for the attorney's contingent fee although the appropriateness of the deduction 
was not specifically discussed); McGlone 
v. Lacey, 288 F. Supp. 662 (D. S.D. 1968) (recognizing deduction rule but 
deciding case on the basis that the attorney owed no duty to the plaintiff 
because no attorney/client relationship existed between the parties).  The cases held the deduction was 
warranted so the judgment would accurately reflect the amount the client would 
have recovered if the attorney had not committed malpractice and the client's 
action had been successful.  See Childs, 74 N.Y.S.  at 649.  See also, Cohen, supra, at 753-56.  

 
 
[¶8]      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, 77 Cal. Rptr. 544 
(Cal. Ct. App. 1969), was the first reported decision to deny the 
deduction.   Responding to the specific facts 
presented in that case, the court noted the amount of fee owed to the attorney 
was uncertain because the retainer agreement included a sliding scale contingent 
fee, with the fee increasing as the litigation progressed.  Id. 
at 551.  Because of the flexibility 
in the fee, the court stated:  
"Clearly there is  . . . no 
way in which we can ascertain what amount of damages would have been produced by 
full performance of the contract on both sides."  Id.  
See also, Andrews, 406 N.Y.S.2d  at 169.  Moreover, the attorney's negligence 
in that case resulted from his failure to file an action before the statute of 
limitation expired and the court remarked that there was no evidence that the 
attorney had performed any part of his agreement.  Benard, 77 Cal. Rptr.  at 546, 
551.  On those facts, the Benard court refused to deduct the 
negligent attorney's contingent fee in the underlying case from the client's 
malpractice award.  Id. at 551.   

 
 
[¶9]      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, 
555 N.E.2d 611, 614-15 (Ct. App. N.Y. 1990); McCafferty v. Musat, 817 P.2d 1039, 1045 
(Colo. Ct. App. 1991), as modified on denial of rehearing (1991); Strauss v. Fost, 517 A.2d 143, 145 (N.J. 
Ct. App. 1986) (stating it rested its "decision upon the proposition that a 
negligent attorney in the appropriate case is not entitled to recover his legal 
fees.").  Other decisions focus on 
the "case within a case" nature of a malpractice action.  See, e.g., Andrews, 62 A.D.2d  at 613; Carbone v. Tierney, 864 A.2d 308, 319-20 
(N.H. 2004).   In order to 
prevail in the malpractice case, the client must employ another attorney to 
prove the underlying action would have been successful and also prove the first 
attorney's negligence.  Thus, some 
courts hold that deduction of the first attorney's contingent fee from the 
malpractice award is not appropriate because the client incurred a second 
attorney's fee in prosecuting the malpractice case.  See Andrews, 62 A.D.2d  at 613; Carbone, 864 A.2d  at 319-20.  These decisions state that the benefit 
the client gets from not having the negligent attorney's contingent fee deducted 
from his malpractice award is "canceled out" by the fee the client incurred in 
prosecuting the malpractice action.  
See, e.g., McCafferty, 817 P.2d  at 1045; Winter v. Brown, 365 A.2d 381, 386 (D.C. 
Ct. App. 1976); Togstad v. Vesely, Otto, 
Miller & Keefe, 291 N.W.2d 686, 695-96 (Minn. 1980), citing with approval dicta in Christy v. Saliterman, 179 N.W.2d 288, 
306-07 (Minn. 
1970).   Employing a related, though somewhat 
different, rationale, some courts have held that the client may recover his 
attorney's fee in the legal malpractice action as a consequential or incidental 
damage resulting from his attorney's negligence.1  Foster v. Duggin, 695 S.W.2d 526, 527 
(Tenn. 
1985).    

 
 
[¶10]   In resolving the question of how, 
in Wyoming, a 
malpractice plaintiff's 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, 2004 WY 112, ¶ 16, 98 P.3d 164, 169 (Wyo. 2004); Moore v. Lubnau, 855 P.2d 1245, 1248 
(Wyo. 
1993).  These elements reveal the 
hybrid nature of a legal malpractice claim.  Long-Russell v. Hampe, 2002 WY 16, ¶ 11, 
39 P.3d 1015, 1019 (Wyo. 2002).   Although the standard of care 
element reflects the law of torts, Moore, 855 P.2d  at 1248-49, we have 
consistently held the legal relationship between an attorney and his client is 
contractual in nature.  Jackson State Bank v. King, 844 P.2d 1093, 1095 (Wyo. 1993).  Thus, "[e]ven though legal malpractice 
may be attributable to negligence on the part of the attorney, . . . the right 
to recompense is based upon the breach of the contract with the client."  Id. at 1096.  See also, Kolschefsky v. Harris, 2003 WY 86, ¶ 9, 
72 P.3d 1144, 1146 (Wyo. 2003).  

 
 
[¶11]   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., 556 N.W.2d 557, 560-62 (Minn. 1996), we stated 
that, in most cases, the tort and breach of contract aspects of a legal 
malpractice case are interrelated.  
Answering the specific question presented, we ruled that an aggrieved 
client generally may not recover damages for emotional distress resulting from 
his attorney's negligence.  "In 
general, extra-contractual damages, including those for emotional distress, are 
not recoverable for breach of contract except in those rare cases where the 
breach is accompanied by an independent tort."'  Long-Russell, ¶ 11, 39 P.3d  at 1019, 
quoting Lickteig, 556 N.W.2d  at 
560-62.  In order to recover for an 
independent tort, the attorney's conduct must have been willful.  Id. at 1020.  We summarized our ruling as 
follows:

 
 
"We therefore hold that, 
as in other negligence actions, emotional distress damages are available in 
limited circumstances.  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, 556 N.W.2d  at 560-62 
(footnotes omitted).    

 
 
[¶12]   Thus, our precedent establishes 
that, in absence of willful conduct, the damages recoverable for legal 
malpractice are those typically available for breach of 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, 843 P.2d 1190, 1195 (Wyo. 1992).  See also, Ruby Drilling Co. v. Duncan Oil Co., 
2002 WY 85, ¶ 26, 47 P.3d 964, 973 
(Wyo. 2002).  Proper deductions from 
a breach of contract damages award include the expenses the plaintiff would have 
incurred as part of full performance of the contract.  See id.  See also, Ekberg v. Sharp, 2003 WY 123, ¶¶ 16, 20, 
76 P.3d 1250, 1255-56 (Wyo. 2003) (approving deduction of expenses incurred by 
defendant in maintaining property awarded to plaintiff).  Robert W. Anderson Housewrecking and 
Excavating, Inc., v. Board of Trustees, School Dist. No. 25, Fremont County, 
681 P.2d 1326, 1332-33 (Wyo. 1984), illustrates this principle.  In that case, we approved an award of 
damages in the amount of the net profit a contractor would have earned if the 
school district had not breached an agreement for the contractor to demolish a 
building.  Id.  
  

 
 
[¶13]   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 opportunity2 are similar to breach of contract 
damages.  In such cases, the proper 
measure of damages is not the gross revenues expected from the transaction, but 
the plaintiff's net loss, after deduction of appropriate expenses.  See, e.g., Exotex Corp. v. Rinehart, 3 P.3d 826, 
830 (Wyo. 2000); Wagon Wheel Village, 
Inc. v. Harris, 993 P.2d 323, 326 (Wyo. 1999).  Similarly, other courts have described 
damages in a legal malpractice case as being the client's actual loss as 
"measured by the judgment the plaintiff lost in the underlying action.'"  Carbone, 864 A.2d  at 319, quoting Kituskie v. Corbman, 714 A.2d 1027, 1030 
(Pa. 1998). 

 
 
[¶14]   In a well-reasoned decision, the 
First Circuit 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, 834 F.2d 1105.  The Moores court stated that, in a 
negligence action, the plaintiff is entitled to recover "only those damages 
which [were] a foreseeable consequence of [the] defendant's negligence.'"  Id. at 1109, quoting Stubbs v. Bartlett, 478 A.2d 690, 693 
(Me. 
1984).  The foreseeable damages 
would only include the net proceeds 
from any judgment in the underlying personal injury action.  Moores, 834 F.2d  at 1109 (emphasis added).  
The court also recognized that the damages in a contract action, i.e. 
the amount which would place the plaintiff in the position he would have enjoyed 
had there been no breach, would be very similar to the damages foreseeable in a 
negligence action.  Id. at 1110.  

 
 
[¶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, 2002 WY 83, ¶ 36, 
47 P.3d 206, 217-18 (Wyo. 2002).  

 
 
[¶16]   The courts that have refused to 
allow the deduction do not explain their rationale in the context of typical 
damages analyses.  Instead, some 
courts simply state that the attorney is precluded from deducting his contingent 
fee because he was negligent.  See, e.g., McCafferty, 817 P.2d  at 1045; Campagnola, 555 N.E.2d  at 614.  One could also argue that the contingent 
fee contract provided the attorney would only receive a fee if the case was 
successful, the case was not successful because of the attorney's negligence, ergo the contingency fee should not be 
deducted.  However, either of those 
approaches, ignores, and is inconsistent with, the fact that compensatory 
damages are calculated as if the attorney had not been negligent and the 
underlying action was successful.  
Assuming the fiction of a successful case as we must, it is only logical 
that the ultimate recovery would be calculated by deducting the reasonable 
expenses associated with obtaining a favorable judgment.  

 
 
[¶17]   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, 834 F.2d  at 1110-11.    Indeed, some courts seem apologetic 
because a member of their profession acted negligently and appear to want to 
avoid any possible inference that they did not deal severely enough with the 
negligent acts of one of their own.  
See, e.g., Campagnola, 555 N.E.2d  at 614; McCafferty, 817 P.2d  at 1045.  

 
 
[¶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, 834 F.2d  at 1110-11.  It could identify no legal reason to 
deny an attorney a deduction from the award against him for appropriate 
expenses, including the legal fees which would have been owed by the client, 
when similar deductions would be available to defendants in other cases.  Id.  
See also, David A. 
Barry, Legal Malpractice in 
Massachusetts: Recent Developments, 78 Mass. L. Rev. 74, 82 (1993) 
(advocating allowing the contingent fee deduction from a subsequent malpractice 
award because "the client should only be entitled to recover the amount he would 
have obtained in the underlying matter absent the lawyer's 
malpractice").

 
 
[¶19]   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, 834 F.2d  at 1110-11.  The cases which rule that a negligent 
attorney should not "collect" for negligent or shoddy work focus on the wrong 
question.  The ultimate question is 
not whether the attorney is entitled to "collect" his fee, but what amount the 
client is entitled to receive as damages for his loss.  "The objective and office of damages is 
to compensate for loss."  Douglas Reservoirs Water Users Ass'n v. 
Cross, 569 P.2d 1280, 1284 (Wyo. 1977).  The theory that a negligent attorney 
should not "collect" a fee for his shoddy work improperly takes the focus off 
the correct questionwhat the injured client has lost and is entitled to 
recover.  The Moores court spoke to this 
issue:

 
 
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, 834 F.2d  at 1111.  Concentrating on the question of what 
the client lost as a result of the attorney's negligence requires the deduction 
of all expenses which the client would have incurred in order to successfully 
prosecute his claim, including the attorney's fee expense.  This rationale focuses on compensating 
the client rather than punishing the negligent attorney.3

 
 
[¶20]   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 award that would place him in the same position 
he would have enjoyed had the negligence not occurred.  

 
 
[¶21]   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.

 
 
[¶22]   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, 2003 WY 100, ¶ 37, 75 P.3d 614, 628 (Wyo. 2003).  A prevailing 
party is only entitled to be reimbursed for his attorney's fees when express 
statutory or contractual authorization exists for such an award, or in 
circumstances involving fraud and a corollary award of punitive damages.  McNeill Family Trust v. Centura Bank, 
2003 WY 2, ¶ 32, 60 P.3d 1277, 1289 
(Wyo. 2003) quoting Alexander, ¶ 49, 
47 P.3d  at 220-21 (citations omitted).  In our view, refusing a deduction for the 
contingent fee on the basis that the second fee cancels out the first, or 
allowing an award as consequential or incidental damages of the malpractice, is 
inconsistent with the American rule.  
We see no reason for creating an exception to the American rule when 
legal malpractice is involved, and, in fact, believe such an exception would 
undermine the rule because in any litigation it could be argued the plaintiff is 
harmed because of the need to pay attorney's fees to pursue his or her legal 
rights.  See also Moores, 834 F.2d  at 1111.  

 
 
[¶23]   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, 695 S.W.2d  at 527; Strauss, 517 A.2d  at 145; Schultheis v. Franke, 658 N.E.2d 932, 
940-41 (Ind. Ct. App. 1995).  Cohen 
advocates using a quantum meruit rule 
of recovery to reconcile the conflicting lines of 
authority.

 
 

Quantum meruit 
recovery 
would appear 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 deducting 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 malpractice 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 meruit 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 plantiffs, 
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.  

 
 
[¶24]   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 unworkable 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 circumstances 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, 2004 WY 140, ¶10, 100 P.3d 852, 855-56 (Wyo. 2004).

 
 
[¶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 scrutiny as to whether or not they 
revealed evidence which actually benefited the client?  How will these services be valued when, 
in a typical contingent fee case, the attorney does not keep track of the hours 
he works on individual aspects of the case?  When viewed in this light, it is clear 
that trying a legal malpractice case using a quantum meruit approach to calculate 
damages would be incredibly difficult because the facts will present nearly 
unlimited opportunities for the client to second-guess the first attorney's 
tactics and work product.  See Carbone, 864 A.2d  at 320, (rejecting quantum meruit approach because "[w]e 
think, as a practical matter, that it would be difficult for a jury to assign a 
value to the services provided by the first lawyer, particularly where there is 
considerable disagreement about whether those services benefited the client in 
any meaningful way").  

 
 
[¶26]   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.  

 
 
[¶27]   Wyoming legal ethics rules specifically allow 
contingent fee agreements in personal injury actions.4  See, Wyoming Rules of Professional Conduct for 
Attorneys at Law, Rule 1.5; Rules Governing Contingent Fees for Members of the 
Wyoming State Bar, Rules 1 through 6.  
The contingent fee arrangement is different from the typical way a 
professional is compensated for his services.  Most professionals are compensated on an 
hourly basis, e.g., engineers and attorneys in standard cases, or by a set fee 
for performance of a particular procedure or project, e.g., physicians and 
architects.  In contrast to the 
contingent fee arrangement for legal services, other professionals typically do 
not agree to forego all compensation until the end of a large project or make 
their entire fee contingent upon a certain outcome.  It is, therefore, difficult to find 
situations analogous to the contingent fee arrangement.  Because of these unique circumstances, 
it is important to give effect to the fee arrangement freely negotiated by the 
attorney and client prior to their dispute.5  

 
 
[¶28]   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 determines 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.6  

 
 
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?  

 
 
[¶29]   Mr. Duddy and Mr. Horn entered into 
a separate agreement whereby, upon successful completion of Mr. Wooster's 
personal injury case, Mr. Duddy was to be paid a fee in the amount of one-third 
of Mr. Horn's fifty percent contingent fee.7  In the legal malpractice action, Mr. 
Duddy apparently asserted a claim against Mr. Horn for the fee he lost because 
of Mr. Horn's negligence in handling Mr. Wooster's governmental claim.  Despite the wording of the certified 
question, Mr. Duddy stated in his submissions to this Court that any benefit 
arising from his claim will inure to Mr. Wooster because it will simply be 
credited against the reduction for Mr. Horn's contingent fee.  In other words, Mr. Duddy's fee will be 
subtracted from the contingent fee deduction in order to increase the award to 
Mr. Wooster.  

 
 
[¶30]   The plaintiffs do not cite any 
authority to support their 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, 144 P.3d 1168 (Wash. 2006) (en banc), the Washington Supreme 
Court considered a case similar to the case here.  Two attorneys co-represented a client in 
a personal injury action and one of the attorneys failed to have the defendant 
served with the complaint in a timely fashion.  Id. 
at 1169-70.  Consequently, the 
statute of limitations expired and the client lost his claim.  Id.  
The client sued both attorneys for malpractice and received a 
substantial settlement from the attorneys' insurance carrier.  Id. at 1170.  After the malpractice suit settled, the 
non-negligent attorney sued the other, "seeking to recover for the loss of his 
expected contingency fee,8 for the amount his insurance 
company paid to settle the client's lawsuit, for his out of pocket insurance 
deductible, and for the costs he advanced in the client's lawsuit."  Id. (footnote added).    

 
 
[¶31]   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 co[-]counsel that would allow 
recovery for  lost or reduced 
prospective fees."  Id. at 1172.  The court relied on a California case, Beck v. Wecht, 48 P.3d 417 (Cal. 2002), in holding it 
would violate public policy to allow co-counsel to sue one another in 
malpractice.  Id. at 1171-73.  Because both attorneys owe their client 
an undivided duty of loyalty, recognizing an independent duty between the 
attorneys could undermine the fiduciary duty owed to the client.  Id.   

 
 
[¶32]   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.  

 
 
[¶33]   The plaintiffs try to make Mr. 
Duddy's claims more palatable than the typical case where one attorney is 
seeking to recover from his negligent co-counsel by arguing Mr. Duddy is only 
seeking an offset for Mr. Wooster against Mr. Horn's contingent fee deduction 
rather than an independent award to himself.   Certainly, that stance addresses 
some of the concerns about the attorneys' fidelity to the client.  However, when viewed objectively, it is 
clear that this argument attempts to accomplish the same result we just rejected 
in answering the first question, i.e. disallowing the deduction of part of the 
contingent fee from the malpractice award.  
Furthermore, it would not prevent unseemly squabbling between attorneys 
that could erode the public's confidence in the legal system as feared by the Beck court.  

 
 
[¶34]   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 interests of feuding attorneys.  Consequently, we answer the second 
certified question in the negative. 

 
 
CONCLUSION

 
 
[¶35]   
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.  

 
 
FOOTNOTES

 
 

1In an 
anomalous result, New 
Jersey courts have allowed the client to recover his 
full damages without a reduction for the fee the negligent attorney would have 
been entitled to and his attorney's fees from the malpractice action as 
consequential damages of the malpractice.  
See, e.g., Distefano v. Greenstone, 815 A.2d 496, 
497-98 (N.J. Ct. App. 2003); Saffer v. 
Willoughby, 670 A.2d 527, 534 (N.J. 1996).

  

2While 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.

 
 

3In 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, 2002 WY 83, ¶ 41, 
47 P.3d 206, 218-19 (Wyo. 2002).   
"Punitive damages are not intended to compensate the plaintiff; instead, 
punitive damages are awarded to punish the defendant and deter others from such 
conduct in the future."   
Id. at ¶ 40, 47 P.3d  at 
218.

  

4The 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, 579 P.2d 426 (Wyo. 
1978) (holding that the contingent fee agreement signed by the attorney and his 
client in a divorce case was invalid, but the attorney was entitled to payment, 
under a quantum meruit theory, for 
the reasonable value of his services).

 

5The 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 Benard, 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.

     

6Although 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, 834 F.2d  at 
1109.

 
 

7The 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:

 
 
            
* * * *

 
 
(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.

 
 

8Interestingly, 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; ½ of which is 
$325,000.

 
 
Mazon, 144 P.3d  at 1170, n 
2.

  

BURKE, Justice, 
dissenting.

 
 
[¶36]   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.

 
 
[¶37]   As noted by the majority, the issue 
presented 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, 834 F.2d 1105 (1st Cir. 1987), which serves as the lynchpin of 
the majority's analysis, is illustrative.  

 
 
[¶38]   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 calculating 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 attorney.  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 cry 
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 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 plaintiff's award would have 
been."  406 N.Y.S.2d  at 169. 

 
 
There is another 
important line of demarcation 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 response 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 meruit 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., 834 F.2d  at 1112-13 (emphasis in 
original).

 
 
[¶39]   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.9  As one court 
noted:

 
 
We conclude that a 
reduction of the client's recovery should not be allowed in this case 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, "[t]he 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 553, 556). 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, 
at 556, 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 notwithstanding 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; Teichner v. W & J Holsteins, 64 N.Y.2d 977, 979; Demov, Morris, Levin & Shein v. Glantz, supra; 
Crowley v. Wolf, 281 N.Y. 59, 64-65; Martin v. Camp, 219 N.Y. 170, 
176). 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, 
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, supra; Crowley v. Wolf, 281 
N.Y., at 65, supra). 
"Th[is] 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, 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 
results 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, 76 N.Y.2d 38, 43-44, 
555 N.E.2d 611, 613-14 (N.Y. 1990).  
This analysis is more consistent with Wyoming precedent, for we have previously 
recognized that the unique nature of the attorney-client relationship justifies 
divergence from typical contract rules.  
In Enos v. Keating, 39 Wyo. 
217, 236, 237, 271 P. 6, 12, 13 (1928), for example, we recognized that a client 
may discharge an attorney at any time without cause, and while the attorney 
cannot sue for breach of contract, he can recover in quantum meruit.  See also Morfeld v. Andrews, 579 P.2d 426, 432 
(Wyo. 1978) 
("[N]otwithstanding that Andrews could not claim under the contingent-fee 
contract he still has a right to recover upon quantum meruit.").

 
 
[¶40]   In addition to Moores, the 
majority relies upon three other cases from different jurisdictions allowing the 
deduction.  All are 
problematic.  Childs, 69 A.D. 160, 74 N.Y.S. 643, was 
a 1902 New York appellate division decision 
that has been specifically rejected in two more recent New York appellate 
decisions.  See Andrews v. Cain, 62 A.D.2d 612, 613, 
406 N.Y.S.2d 168, 169 (N.Y. App. Div. 1978); Campagnola v. Mulholland, Minion & 
Roe, 148 A.D.2d 155, 158, 543 N.Y.S.2d 516, 518 (N.Y. App. Div. 1989), aff'd, 76 N.Y.2d 38, 555 N.E.2d 611 
(N.Y. 1990). 

 

[¶41]   Sitton, 385 F.2d 869, is a 1967 Sixth Circuit 
decision applying Tennessee law.  The Sitton court did not directly address 
the deductibility issue, but only referenced a jury instruction allowing the 
deduction based upon the terms of the contract.  In 1985, the Tennessee Supreme Court 
directly addressed deductibility of contingent fees in a legal malpractice 
action, and rejected the deduction:  

 
 
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 malpractice award. See, e.g., Childs v. Comstock, 69 App. Div. 160, 74 N.Y.S. 643, 649 (1902); McGlone v. 
Lacey, 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'd 385 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, 
695 S.W.2d 526, 527 (Tenn. 1985).

 

[¶42]   McGlone, 288 F. Supp. 662, is a decision from 
the federal district court in South Dakota granting summary judgment to the 
defendant attorney because plaintiff failed to establish the existence of the 
attorney-client relationship.  In 
dicta, the court recognized deductibility based solely upon Sitton.  Because Sitton has been rejected, McGlone retains little persuasive 
value.  

 
 
[¶43]   Most courts that have considered 
the issue have denied the deduction under the specific facts presented, but 
leave open the possibility that the deduction should be allowed on a quantum meruit basis.10  As indicated previously, Moores is, in 
essence a quantum meruit case.  The $90,000 settlement offer was 
directly attributable to the efforts of the attorney.  The deduction was allowed in the full 
amount of the 1/3 fee percentage specified in the agreement because the attorney 
had earned the fee.  The sole 
justification provided by the majority for rejecting a quantum meruit approach to determine an 
appropriate deduction is that it would be "complicated."  While complicated factual issues are 
conceivable, no factual complications exist in many cases.  The Moores court had 
no difficulty allowing the deduction because it had been earned.  Where the attorney has not performed any 
work that has benefited the client, such as missing a statute of limitations 
deadline, the courts do not have any difficulty rejecting the deduction.  The mere possibility of complicated 
factual scenarios in some cases provides no justification for allowing the 
deduction in its entirety in all cases.

 
 
[¶44]   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:

 
 
In Foster v. Duggin (1985), Tenn., 695 S.W.2d 526, 
the court denied a deduction for attorney's fees where the defendant attorney 
had failed to file the plaintiffs' claim prior to expiration of the statute of 
limitations. However, the court limited its holding to "the facts of this case." 
Id. at 527. The 
court ruled that while in an appropriate case the attorney may be entitled to 
credit for fees incurred on behalf of the client and which ultimately benefited 
the client, the record in that case was silent as to any benefit incurring to 
the plaintiffs from the actions of the attorney. Id.

 
 
Also, in Strauss v. Fost (1986), N.J.Super.A.D., 
213 N.J. Super. 239, 517 A.2d 143, the court declined to establish a "hard and 
fast rule" that in no case can a negligent attorney be entitled to any portion 
of his legal fees. Id. at 145. "We 
can envision cases where on a quantum 
meruit basis the efforts of a defendant attorney may have so benefited a 
plaintiff or other circumstances exist that it would be unfair to deny all or 
part of the offset." Id. The court 
thus set forth a general rule that a negligent attorney is precluded from 
recovering his attorney's fees but held that courts should determine on a 
case-by-case basis whether to apply the general rule or relax the rule and 
permit deduction for attorney's fees where the interests of justice so dictate. 
Id. See also Campagnola v. Mulholland (1990), 76 N.Y.2d 38, 555 N.E.2d 611, 556 N.Y.S.2d 239 (ruling it "especially appropriate 
to deny credit for a fee where, as here, the defendant attorneys performed 
absolutely no services in connection with the disputed claim" and that "in 
these circumstances" the attorney was precluded from claiming credit for an 
unearned fee). Cf. Moores v. 
Greenberg, 834 F.2d 1105 (1st Cir. 1987) (allowing deduction for attorney's 
fees where counsel's efforts produced the rejected settlement offer upon which 
the legal malpractice action was based).

 
 

Schultheis v. 
Franke, 
658 N.E.2d 932, 940 (Ind. Ct. App. 1995).  

 
 
[¶45]   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 supporting 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.11  In the instant case, however, the 
certified question does not include any facts indicating that Mr. Wooster 
benefited in any fashion from Mr. Horn's efforts.  Accordingly, I would answer "No" to the 
first certified question.

 
 
FOOTNOTES

 
 

9Indeed, 
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.

 
 

10The 
exception appears to be Carbone v. 
Tierney, 864 A.2d 308, 319-20 (N.H. 2004), where the New Hampshire Supreme 
Court specifically rejected the quantum 
meruit approach in favor of a rule of law that would not allow the 
contingent fee deduction in any legal malpractice case regardless of the work 
performed by the attorney or the benefit received by the 
client.

 
 

11As 
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. 

 
 
555 N.E.2d  at 616 (Kaye, J., concurring).