Title: Cannata v. Wiener

State: vermont

Issuer: Vermont Supreme Court

Document:

Cannata v. Wiener (2000-488); 173 Vt. 528; 789 A.2d 936

[Filed 19-Dec-2001]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2000-488

                             NOVEMBER TERM, 2001

Charles Cannata	                       }	APPEALED FROM:
                                       }
                                       }
     v.	                               }	Chittenden Superior Court
                                       }	
                                       }
Marc E. Wiener	                       }	DOCKET NO. S684-97 CnC

                                                Trial Judge: Helen M. Toor

             In the above-entitled cause, the Clerk will enter:

       Plaintiff Charles Cannata appeals from a decision by the Chittenden
  Superior Court denying  his malpractice claim against attorney Marc Wiener. 
  After a bench trial, the court held that plaintiff  failed to prove that
  advice given by attorney Wiener was the proximate cause of any damage to 
  plaintiff.  We affirm.

       This case arose out of a complicated real estate transaction that
  originated with the purchase of  a building in Burlington, Vermont.  The
  relevant facts, as determined by the trial court, are as  follows.  The
  building was purchased in 1985 by Prime Properties, which was a business
  partnership  of plaintiff and Drew Chace.  That transaction required the
  partnership to give a $50,000 note,  secured by a mortgage, to members of
  the Blanchard family, the previous owners of the property.   Approximately
  one year later, another real estate investor, Steven Gracie, sought to
  purchase the  property from the partnership.  As part of the sale, Gracie
  assumed the $50,000 note that the  partnership owed to the Blanchards. 
  Plaintiff and Chace, however, remained liable on the note by  way of a
  clause in the sale agreement that states that the Blanchards "do not waive
  or release any  claim or right they may have against Drew C. Chace and/or
  Charles P. Cannata, d/b/a Prime  Properties, arising from the . . . note
  and mortgage."  Shortly after this sale, the partnership formally 
  dissolved.

       Several years later, Gracie ran into financial trouble.  Gracie was
  unable to make payments on  the $50,000 note owed to the Blanchards as well
  as on a first mortgage on the property held by  Chittenden Bank, and he
  eventually went bankrupt.  The bank began foreclosure proceedings on the 
  property.  At this point, plaintiff and Chace individually contacted
  attorney Wiener because they  were worried about their financial exposure
  that might result from the foreclosure.  Although at that  time attorney
  Wiener represented Gracie, Wiener had previously represented the
  partnership in the  purchase and sale of the property.  Attorney Wiener
  told them that Gracie did not have any assets,  that hiring an attorney
  would be a waste of money, and that neither had any exposure.  Precisely
  what  attorney Wiener understood plaintiff and Chace to be asking about -
  i.e. whether they were inquiring  about exposure on Chittenden Bank's
  foreclosure action alone, or whether their question included  exposure on
  the $50,000 note - was a matter of intense dispute at trial.  Although the
  trial court 

 

  found that attorney Wiener's advice did not consider the $50,000 debt, this
  determination is not  important to our resolution of the case.  Chittenden
  Bank foreclosed on the property and the  Blanchards sued plaintiff and
  Chace because the $50,000 note was now unsecured and Gracie had  defaulted
  on it.  At that trial, which was appealed to this Court, plaintiff and
  Chace were found  jointly and severally liable on the $50,000 note.  Chace
  subsequently declared bankruptcy and  Cannata paid the Blanchard judgment,
  which amounted to $78,406, including interest.

       The present litigation arose when plaintiff sued attorney Wiener
  alleging that the advice to  plaintiff regarding his exposure was
  negligent.  Plaintiff claims that Wiener's advice to plaintiff and  Chace
  was essentially to "do nothing" in the face of the foreclosure action by
  Chittenden Bank.  This  advice, plaintiff argues, was negligent given the
  liability to which he was eventually exposed on the  $50,000 note.  After a
  two-day bench trial, the court found that plaintiff had failed to
  demonstrate  that any advice given by attorney Wiener was the proximate
  cause of plaintiff's injuries.  Plaintiff  appealed.

       On appeal, plaintiff claims that 1) attorney Wiener had a conflict of
  interest when he gave the  advice because his previous representation of
  the partnership conflicted with his representation of  Gracie; 2) the
  advice given to plaintiff was negligent because plaintiff was thereby led
  to believe he  had no exposure from the assumption agreement; 3) attorney
  Wiener's actions violated ethical  considerations of the Code of
  Professional Responsibility; and that 4) plaintiff's losses were 
  proximately caused by attorney Wiener's advice.  We address only the final
  issue because it is  dispositive of the appeal.

       A claim for legal malpractice resembles any other negligence claim. 
  In order to recover, the   plaintiff must prove not only that the attorney
  was negligent, but also that the negligence was the  proximate cause of the
  plaintiff's injuries.  Powers v. Hayes, __ Vt. __, __,