I N T H E SUPR EM E C O UR T O F M I SS I SS I PPI NO. 2 0 0 9 - CA- 0 1 5 4 7 - S CT PE G G Y CR I ST, TH ER ESE A ED W AR D S, PAT RICI A GUTHRI

E, J ANE HAM

I LTON, HELEN HEARD, BERT

HA M I XON, J ENNI E PA RKER, J AM ES REED , J

R. , GLEND A RI VER S, PAM ELA R O B IN S O N , K A R EN T H O R N TO N

, V IR G IN IA TOW NSEND, VERA WELLS , M ARY W HI T T I NGTON, L I

NDA W I L L I AMSAN

D P EG GY W I NTERS
v. PAU L KELLY LO YAC ON O A ND E. SCOTT VERHI NE D A T E O F JU D G M E N T : 08/ 20/ 2009 T RI AL J UDGE : HON. KOS T A N. VL AHOS COURT F ROM W HI CH APP EAL ED: W ARREN COUNTY CI RCUI T COURT AT T OR NE YS F OR AP P E L L ANT S : DAVI D L . M I NYAR D TI F F ANY LE I GH K I LP ATRI CK ATT ORNEYS F OR APP EL LE ES : GLE NN G ATE S TAYLOR CH RI S T Y M I CH E L L E S P AR KS NATURE OF THE CAS E: CI VI L - LE GAL M ALP RACTI CE D I SPO SI T I O N : R E V E R SE D A N D R E M A N D E D - 04/ 21/ 2011 M OT I ON F OR RE HE AR I NG F I L E D: M ANDAT E I S S UE D: B E F O R E W A L L E R , C . J. , D I C K I N SO N , P . J. , A N D K I T C H E N S, J. DI CK I NSON, PRES I DI NG J UST I CE, FOR TH E COU RT: ¶1. S ixteen form er cl i ents sued tw o law yers w ho had repr esent ed them i n m ass- t ort l i t i gat i on, cl ai m i ng the l aw yer s had br eac hed thei rf i duciary duty by pr ematur el y s et t l i ng their ca ses in o rde r t o m ax im ize a tt o rne y fee s. R e sp o n d ing to a m o ti o n for su m m ary j udgm ent, the f

or m ercl i ent s pr oduced a w i tnes s
— a mass - t or tl aw yerw hom the def endantOur f irs t re view o f t

his cas e invo lve d a

statut e-o f- limitatio ns issue, and wede ter mine d 1 some of the plainti ffs were time-barred. Se e Channel v. Loyacono , 9 54 So . 2 d 4 15 (Mi ss. 20 07 ). Th e i ns tantcase prese nts the same underlying l egal-malprac ti ce cl ai ms of th e p la inti ffs who se cl ai ms were not time-barre d by Ch an nel . No w k no wn as W ye th, Inc . 2 2 l aw yer s had ass oci at ed, and t hen f i r ed— w ho t es t i f

i ed t hathe had sett l ed numer ous s i m i l ar cas es f orm uch more than the f

or m ercl i ent s r ece i ved. T he l aw yeral s o produc ed a s ett l ement documenthe had pr epar ed, i n part , by us i ng anotherl aw yer ' s m atr i x as a go- by. ¶ 2 . T h e trial ju d g e
— fin d in g th a t th e law y e r’s tes tim o n y a n d m a trix w e re in a d m iss ib le h e a rsa y , a n d th a t th e c lien ts w e re re q u ire d to , b u t co u ld n o t, pr o v e th e y w o u ld h a v e w o n th e ir
c a se s a t tr ia l— g ra n ted su m m a ry ju d g e m e n t. W e h o ld th a t th e c lien ts w e re n o t re q u ire d to p rov e the y co u ld h av e w o n th eir u n d erlying case in o rde r t o p u rsue their bre ac h o f fi d u ciary cl ai m agai ns tt hei rl aw yer s , and thatthe tr i al courterr ed i n excl udi ng the l aw yer ’ s t es t i m ony. FACTS ¶ 3 . A d d iti o n a l fa c ts a n d b a c k g ro u n d o f th is tw e lv e -y e a r-o ld c a se , o n its se c o n d tre k to this C our t , w er e pr evi ous l y r eport ed. 1 ¶4. U po n learning that att orney K ei th M organ w as am assi ng cli ents in l i t i gati on against A m er i can H om e Pr oduct s C orp. ( “A H P”) , att orney E. ScottV erhi ne advi s ed M or gan that 2 he coul d pr oduce s om e cl i ent s . V erhi ne, t ogetherw i th a t t orney Paul K el l y L oyacono, s i gned
u p fifty -fiv e c lien ts w h o c laim e d to h a v e u se d A H P ’s F e n -P h e n p ro d u c t. ¶5. V erhi ne and L oy acono then as s oci at ed M or gan, agr eei ng thathe w oul d r ece i ve s eventy- f

i ve per centof

t he at t orney f

ees gener at ed by the f

i f ty- f i ve cl i ent s . W hen M or gan f i l ed s ui t , nei therL oyacono norV erhi ne s i gned the compl ai ntas att orneys of r ecor d.3

¶6. A f

t err oughl y a yea r , M or gan and hi s l aw f i r m eng aged A H P i n s ett l ement negot i at i ons conce rni ng hundr eds of thei rcl i ent s , i ncl udi ng the f i f ty- f i ve pr ovi ded by L oyacono a nd V erhi ne. Shor t l y ther eaf t er , L oyacono a nd V erhi ne cont act ed A H P and began
s ecr et l y negot i at i ng a s ett l ementof thei rf i f ty- f i ve cl i ent s ’ cas es . O f

the f i f ty- f i ve or i gi nal cl i ent s , thi r ty- f

our( i ncl udi ng appel l ant s ) acc ept ed s ett l eme nt of f er s obt ai ned di r ect l y by L oyacono a nd V erhi ne. U nderthese set t l ement s , L oyacono a nd V erhi ne r ece i ved onehu nd red percentof the att orney fees. ¶7. M or gan deve l oped a “ s ett l ementm atr i x” w hi ch cl as s i f i ed hi s cl i ent s i nt o thi r t een gr aduat ed l evel s bas ed on i nj ury type and s ever i ty. A $39- m i l l i on s ett l ementw as r eac hed
w i th A H P. O f

t he t w enty- one cl i ent s t hatdi d notacc epts ett l ement s negot i at ed by Loyacono and V erhi ne, s om e w er e partof the s ett l ementne got i at ed b y M organ e t a l. A c c o rd in g to M o rg a n ’s s w o rn tes tim o n y a n d h is m a trix , the p lain tiffs th a t d id a c c e p t th e se ttl e m e n ts negot i at ed by Loyacono and V erhi ne w oul d have r ece i ved l ar geraw ar ds had t hey r emai ned partof the M or gan s ett l ementgr oup. ¶ 8 . T h e p lain tiffs th a t d id a c c e p t th e o ffe rs n e g o tiate d b y L o y a c o n o a n d V e rh in e filed su it agai ns tthem al l egi ng, among ot herthi ngs , br eac h of f i duci ary dut y i n the manneri n w hi ch they con du ct ed the sett l em ent nego t i at i on s and ap po rt i on ed the proceed s. ¶9. Fol l ow i ng di s covery, L oyacono a nd V erhi ne moved i n li m i ne to ex clud e M o rga n ’s
s ett l ementm atr i x and any t es t i m ony fr om M or gan abouthi s sett l ementnegot i at i ons on t he groun ds t hat i tw as hearsay and lacked supp ort i ng d ocu m ents . L oy acon o and V erhi ne als o m o v ed for su m m ary jud g m en t on all the c lai m s, a rg u in g in relev an t part th at th e p lai n ti ffs had no tprodu ced an y ev i den ce tha tthey w ou l d h ave suc ceede d in the u nd erl ying caseEm ph asi s o rig inal. 3 4 agai ns tA H P, w hi ch Loyacono and V erhi ne ar gued w as ess enti al t o any l egal
- m al pr act i ce cl ai m . T hey al s o ar gued thatthe exc l us i on of the M or gan s et t l ementm atr i x and r el at ed t es t i m ony m eantt hatt he pl ai nt i f f s no l ongerhad an y proof of damages , anotheres s ent i al
e lem e n t. ¶ 1 0 . T h e trial c o u rt a g re e d , fi n d in g th a t M o rg a n ’s m a trix a n d tes tim o n y “ w e re b a se d , to a degr ee, on anothera t t orney’ s mat r i x” and w er e “i nadmi s s i bl e on the gr ounds of hear s ay, l ack of any s uppor t i ng document at i on, the f ai l ure t o des i gnat e M or gan as an expe r t , and speculat i on . ” T he co urtthen grant ed the d efendan t s’ m oti on forsum m ary j ud gm ent because

“ P lain tiffs w e re re q u ire d to m a k e o u t a p rim a fa c ie c a se th a t, i f P lain tiffs h a d n o t en ter e d in to the s e t t l e ment s a ti s s ue , t he y w ou l d ha ve pr e va i l e d on t he i run de r l yi ng c l a i ms a ga i ns tA H P, and they w oul d have be en aw ar ded a m onet ary s um gr eat erthan the s ett l ement s negot i at ed b y D e fe n d a n ts .” 3 ¶11 . T he p l ai nti ff

s appea l ed, present i ng tw o is sues: 1 . W h e th e r a le g a l-m a lp ra c tice c laim b a se d o n a b re a c h -o f-fid u c iar y -d u ty theory r equi r es pr oof

of success and a l ar geraw ar d i n the under l yi ng act i on; and 2. W hether the t r i al court abus ed i t s di s cr et i on i n excl udi ng t he M organ s ett l ementmat r i x and al l of M or gan’ s t es t i m ony r el at i ng t o s ett l ement neg oti at i on s. A N A L Y S IS 1. W hether a L ega l -M

alpra ct i ce C laim B ased o n a B reach-of- F i du ci ary-D uty Theo ry R equi r es P r oof

of Succe s s and a Large rA w ar d i n the U nder l yi ng A ct i on .Mis s. R. Civ. P. 56 (c) . 4 Du ckwo rth v. Wa rren , 10 So. 3d 43 3, 436–37 (Miss. 2009) (internal citations and 5 qu otatio ns of

cas es o mitt ed). Hag gerty v. Foster , 8 38 So . 2 d 9 48 , 9 58 (Mi ss. 20 02 ). 6 Id. (quoting In re Es tat

e o f Mask , 7 03 So . 2 d 8 52 , 8 59 (Mi ss. 19 97 ); Terra in En ter s. , I nc . 7 v. Mo ck bee , 654 So. 2d 1122, 1131 (Miss. 1995)) . Se e a lso M. R. E. 10 3(a). Wil bo ur n v . S ten nett, Wil

kin so n & Wa rd, 6 87 So . 2 d 1 20 5, 12 15 (Mi ss. 19 96 ). 8 5 ¶12. I n r evi ew i ng a tr i al court ' s gr antordeni al of s um m ary j udgm ent , the w el l
- es t abl i s hed st and ard of r eview i s de novo . S um m ary j ud gm en t i s app ropri at e w here “the p l eadings, dep osi t i on s, answ ers t o int err og at ori es and a dm i ssi on s on fi l e, t og et her w i th the af fi dav i t s, if a n y , sh o w th a t th e re is n o g e n u in e iss u e a s to a n y m a ter ial fa c t an d th a t th e m o v in g p a rty i s ent i t l ed to a j ud gm ent as a m at t er of l aw . ” T he evidence m ustbe v i ew ed in the li gh tm ost

4 f avor abl e t o the party agai ns tw hom the mot i on has been made. 5 ¶13. R ev iew o f a tri al c o u rt’s su p p re ss io n o f ev iden ce is r ev iew ed u n d er a n ab u se-o fdi s cr et i on s t andar d. E ven w her e an a bus e of di s cr et i on on an evi dent i ary i s s ue i s f ound, 6 “this C o u rt‘w il l no t rev erse u n less the e rror ad v erse ly affec ts a su b stan ti al ri g h t of a p arty.’” 7 A cli ent ’ s breach- of

- f i duci ary- duty c l ai m agai nst an at t orney does not r e q u ire p r o o f th a t th e c lien t w o u ld h a v e w o n a t tr ia l. ¶14. I ti s true – and w el l es t abl i s hed – thata pl ai nt i f f i n a negl ige nc e - bas edm al pr act i ce a c tio n m u st e sta b lish p ro x im a te c a u se b y th e s o -c a lled “ trial-w ith in -a -tria l” tes t. T h a t is to
s ay, the cl i ent“musts how that , butf or[ hi s ] att orney' s negl i gence , he w oul d have be en s ucce ssf ul i n the pr os ecut i on ordef ens e of the under l yi ng act i on. ” B utw e have never 8
r equi r ed a l egal
- m al pr act i ce pl ai nt i f f a l l egi ng br eac h of

f i duci ary duty t o es t abl i s h that , but f orthe br eac h, the pl ai nt i f f w oul d have w on the under l ying ca s e. R ather , the pr oof ofSi ng let on v. St eg all, 580 So. 2d 1242, 1245 (Miss. 1991). 9 See, e.g., Lane , 873 So. 2d 92, 99 (Miss. 2004) ( “[W ]hen the cl aim is for breach of the 10 stand ard of co nd uc t [ i.e . b rea cho f fi du ciary duty] , wec on cludeth at l ack of expe rt t estimony s ho uld no t preclud e th e is su e f

rom be inghe ard

bya jury. ”). See, e.g., Lane , 873 So. 2d at 98 (“legal m alpract ice m ay be a violat ion of the standar d of 11 care . . . or the br each of a fiduciary duty”) (cit ingHa rtf ord Ac c. & In dem. Co. v. Foster , 528 So. 2d 25 5, 28 4 (M iss . 1 98 8) ( Prath er, J. , diss entin g)) . Foster , 528 So. 2d at 28 4– 85 (citi ng Hickox v. Hol leman , 5 02 So . 2 d 6 26 , 6 34 (Mi ss. 12 19 87 ); Hu tch in so n v

. S mit h , 41 7 So . 2 d 9 26 (Mi ss. 19 82 ); Th ompso n v . E rvi ng 's H atcherie s, In c. , 18 6 S o. 2d

75 6 (M iss . 1 96 6)) . 6 pr oxi m at e ca us e i n s uch ca s es i s “t o be t ai l or ed t o the i nj ury the cl i entcl ai m s and the r emedy he el ect s . ” T hi s m eans thatexpertt es t i m ony i s notal w ays nece s s ary.

9 1 0 ¶15. T he l aw r ecogni zes a cl eardi s t i nct i on bet w een al l egat i ons of l egal m al pr act i ce bas ed on negl i gence (s om et i m es cal l ed a br eac h of the st andar d of ca r e) and t hos e bas ed on br eac h
o f fid u c iar y d u ty (so m e tim e s c a lled a b re a c h o f th e sta n d a rd o f c o n d u c t). W h e n a leg a l- 11
m al pract i ce cl ai m is b ased on an all egati on of breach of f i du ci ary duty, the p l ai nti ff m ust es t abl i s h ( 1) the exi s t ence of an att orney- cl i entr el at i ons hi p; ( 2) the ac t s cons t i tut i ng a vi ol at i on of

the att orney’ s fi duci ary dut y; (3) thatthe br eac h pr oxi m at el y caus ed the i nj ur y; and ( 4) the f

actand ext entof

the i nj ury. 12 ¶16. T his d i cho t om y i s con si st ent w i th the di f f er i ng char act er s of

thes e tw o theo ri es. B eca us e att orneys ar e af f or ded a de gr ee of

pr of es s i onal aut on om y, p roof of s ucce s s i n t he under l yi ng cas e i s an appr opr i at e t es tf orpr oxi m at e ca us e i n a negl i gence - bas ed ac t i on b e c a u se it en su re s th a t atto rn e y s a re o n ly h e ld p ro fe ss io n a lly liab le w h e re th e ir fa ilu re s to adher e t o the s t andar d of car e actual l y i m pact ed t he pl ai nt i f f’ s i nt er es t s i n the ca s e. B utanTh e p lainti ff -appe llants co nc ed e that s um m ary judgm ent w as prope rlygranted a s to t he ir 13 ne gli ge nc e-b ase d c laim s. 7 a tto rn e y ’s b re a c h o f h is fid u c iar y d u ties to h is c lien t m a y c a u se in ju ry to th e c lien t en tirely
s epar at e f

r om the mer i t s of

the under l yi ng cas e. ¶ 1 7 . To i l l u s tr a t e , s u p p o s e a l a wy e rr e c e i v e s a c l i e n t ’ s s e t t l e me n tc h e c k i n a d o u b t f u l c l a i m, butpr ocr as t i nat es negot i at i ng t he che ck. M eanw hi l e, the def endantf i l es bankrupt cy, t he ch ec k is no lon g er g o o d , an d the c li en t r ec eive s n o thing . It is n o d e fen se to the c li en t’ s l aw s ui tagai ns tt he procr as t i nat i ng l aw yerthatthe cl i entcan notpr ove thathe w oul d have
w on a ttr i al be caus e the under l yi ng c l ai m w as doubt f ul . T he s ame i s true here. T he f i duci ary- duty cl ai m s agai ns tL oyacono and V erhi ne survi ve, even abs enta s how i ng thatt he pl a i nt i f f s w ou l d h a ve w on the un de r l yi ng Fe n- Phe n l a w s ui ta ga i ns tA H P. M or ga n’ s t e s t i m ony was not he ar s ay , and was s uf f i c i e nt t o e s t abl i s h a genui n e is sue of

m at eri al f

act as t o w het her t he cl i ent s w oul d have re ce ived a larg er settlem en t. ¶18. T he def

endant
- att orneys ar gue i n the al t ernat i ve thats um m ary j udgm entw as pr oper becaus e the pl ai nt i ff

s’ on l y p roof of

dam ages— K ei th M organ’s sett l em ent m at ri x an d rel at ed t es t i m ony— i s i nadmi s s i bl e. B uteven i f w e agr eed thatthe tr i al courtpr oper l y excl uded the
m atr i x, i tw as notthe onl y pr obat i ve evi dence of damages . I n hi s depos i t i on, M or gan t es t i f i ed r egar di ng the amount s a ctual l y r ece i ved by hi s cl i ent s f r om A H P. T hi s t es t i m ony w as notan out - of

- courts t at ement , and w as s uf f i ci entt o c r eat e a f

actual que s t i on f

orthe j ur y. ¶19. B eca us e the s t andar d appl i ed by the tr i al c our tw as ove r l y r es tr i ct i ve, w e r ever s e the gr antof s um m ary j udgm entas t o the f i duci ary- duty cl ai m s and r emand t he mat t ert o the tr i al
courtf ora rul i ng on the s um m ary- j udgm entm ot i on appl yi ng the pr opers t andar d. 13M. R. E. 80 1(c ). 14 8 2. W hetherthe Tr i alC our tE r r ed i n E xcludi ng Kei th Mor

gan’s M atr i x and Tes t i m ony. ¶20. T he tr i al courtrul ed i n l i m i ne t hatthe s ett l ementm atr i x pr epar ed by K ei th M or gan, al ong w i th a l l “ r el at ed t es t i m ony” w as i nadmi s s i bl e hea r s ay, i nas m uch as i tw as part l y bas ed
on a s i m i l armat r i x pr epar ed by a nothera t t orney. T he courtal s o appar ent l y cons i der ed the
m at r i x an d r e l a t e d t e s t i mony t o be o pi ni on e vi de nc e wi thi n the s c op e o f M . R. E. 7 02 , and rul ed thatsi nce M organ w as not desi g n ated a s an exp ert , he co uld not gi ve such op i nions. T h e p lai n ti ffs argu e tha t th e e x clud ed ev iden ce w as fa ct, n o t op inio n , an d that M o rga n ’s t es t i m ony w as bas ed on per s onal know l edge a nd ther ef or e nothear s ay. ¶21. H ear s ay i s an out - of
- courts t at ementof

f er ed t o pr ove the t ruth of the mat t eras s ert ed. 14 So f oran out - of

- courtst at ementt o be admi s s i bl e, i tm us tei therbe of f er ed f ors om e other pr operpurpos e, orf

al l i nt o one of

t he enumer at ed exc ept i ons t o the gene r al hear s ay rul e. For the purpos es of

anal ys i s , the w r i t t en mat r i x i s cons i der ed s epar at el y f r om M or gan’ s r el at ed t es t i m ony. A . A d m iss ib ili ty o f th e M o r g a n S e ttle m e n t M a tr ix ¶22. T he M or gan M atr i x i s obvi ous l y an out - of
- courts t at ement . The documents how s t he th irtee n c las sific a tio n s a n d co rre sp o n d in g se ttl e m e n t am o u n ts th a t M o rg a n u se d to d istrib u te the $39- m i l l i on paymentr ece i ved f r om A H P. T her ef

ore, if of f er ed f orthe purpos e of
e sta b lish in g th e f

a c t o f th o se c las sific a tio n s a n d se ttl e m e n t am o u n ts, it w o u ld c e rta in ly
cons t i tut e hea r s ay. T he pl ai nti ff -appe l l ant s di d notar gue i n the tr i al court

— nordo t hey
ar gue on appe al

— thatthe M or gan M atr i x neverthel es s f al l s i nt o one of

the hea r s ay ex ce pti on s that w ou l d all ow t he m at ri x to be ad m i t t ed int o ev i den ce, so i ti s not nece ssaryM.R.E. 702. 15 9 t o cont i nue the i nqui r y. T he tr i al j udge di d notabus e hi s di s cr et i on i n rul i ng thatthe M or gan M atr i x w as hear s ay and ther ef or e i nadmi s s i bl e as evi dence . ¶23. W e emphas i ze thatt hi s hol di ng i s l i m i t ed s ol el y t o the i s s ue of the admi s s i bi l i ty of

t he M or gan M atr i x as evi dence . W e of f erno opi ni on as t o the admi s s i bi l i ty of the mat r i x f

or otherpurpos es , s uch as thos e cont empl at ed by the exc ept i ons l i s t ed underM . R . E . 803. B. A dm i s s i bi l i t y o f M or ga n’ s Tes t i m ony R e ga r di ng Se t t l e m e nt ¶24. U nl i ke the m atr i x, M or gan’ s i n- court t es t i m ony about how he handl ed the s ett l ement
w a s n o t he a rsa y sin c e itw a s n o t an o u t-o f-c o u rt state m e n t. A lth o u g h M o rg a n sta ted in h is dep os i t i on tha the de vi s e d h i s matr i x, i n p a r t , by r e f e rr i ng t o a s i mi l a rmatr i x p r e pa r e d by anotheratt orney, the mer e exi s t ence of the documentw oul d notpr eventM or gan f r om t est i fyi ng abo ut how he p ers on al l y d et erm i ned the set t l em ent values of each of hi s cl i ents ’
cas es and the amount s of hi s pr evi ous s ett l ement s . B as ed on the ar gum ent s pr es ent ed att r i al and her e, M or gan’ s depos i t i on t es t i m ony w as noti nadmi s s i bl e hea r s ay. ¶ 2 5 . T h e q u e stio n th e n is w h e th e r M o rg a n n e e d e d to b e q u a lified a s a n e x p e rt to o ffe r h is t es t i m ony. U nderourrul es , expertw i tnes s es m ay of f eropi ni on t es t i m ony w her e “s ci ent i f i c, t echni cal , orothers peci al i zed know l edge w i l l as s i s tthe tr i erof f actt o under st and t he
e v id e n c e o r t o d e te rm in e a fa c t in is s u e . . . .” 15 ¶26. T ypi cal l y, an expe r tw i tnes s i s an “out s i der ” t o the ca s e w ho eval uat es t he evi dence i n an att empt t o expl ai n i tt o the j ury. B ef or e expe r t s m ay del i veropi ni ons t o the j ur y, expert s m us tbe vett ed by the courtand mu stsat i s f y cert ai n cr i t er i a. B y contr as t , a f actM.R.E. 601. 16 M.R.E. 602. 17 10 w i t nes s may b e vi r tua l l y a ny c ompe t e ntpe r s on w ho s e t e s t i mony i s ba s e d o n p e r s on al 16 know l edge. M or gan w as n otqual i f i ed as an expe r tw i tnes s , buthi s t es t i m ony w as bas ed 17 on per s onal know l edge. I n ot herw or ds , M or gan’ s prof f er ed t es t i m ony w as a mat t erof f act
ra th e r th a n o p in io n , an d th e trial c o u rt e rre d in e x c lu d in g it. ¶27. T he def

endant s ar gue ( and the tr i al cour tfound) t hatM or gan’ s es t i m at i on of the val ue of hi s cl i ent s ’ cl ai m s w as “s pecul at i ve” op i nion t es t i m ony thatm ay onl y be of f er ed by an expertw i t ness unde rM . R . E . 702. B utthe pl ai nt i f f s w er e notof

f er i ng M or gan’ s t es t i m ony t o es t abl i s h hi s opi ni on of t he val ue of

t hei rcl ai m s . R ather , i tw as bei ng of f er ed t o s how how M or gan i n f

actdi s tr i but ed the s ett l ementm oney t o hi s c l i ent s . W hi l e thos e dec i s i ons m ay have be en bas ed on M or gan’ s opi ni ons atthe t i m e, the dec i s i on- m aki ng pr oces s and the
re su ltan t m a trix w a s, a n d is, a m a tter o f fa c t. ¶28 . F rom th e v an tage po i nt of tri al , M organ’s pastset t l em ent- neg oti at i on process i s a m att erof f actw i thi n M or gan’ s pe r s onal know l edge and the rul es pr ovi de no r eas on w hy he sh o u ld n o t be a ll o w ed t o t esti fy ab o u t it . T h ere fore , i t w as n o t h ea rsay n o r w as itn ec essa ry to q u ali fy M o rga n as a n ex p ert be fore h e c o u ld testi fy a b o u t th e m att er. ¶29. B uteven i f

M or gan’ s t es t i m ony di d c ons t i tut e opi ni on r atherthan f act , ourrul es al l ow l ay opi ni on t es t i m ony of thi s natur e. U nderR ul e 701, a l ay w i tnes s m ay of f eropi ni on t es t i m ony thati s “ ( a) r at i onal l y bas ed on the per cept i on of the w i tnes s , ( b) hel pf

ul t o the cl ear under s t andi ng of

the t es t i m ony ort he det erm i nat i on of a f acti n i s s ue, and ( c) notbas ed on sci enti fi c, t echn i cal , or ot her speci al i zed k no w l edg e w i thin the scop e of R ule 702.” O f theseEm ph asi s in ori gin al. 18 Em ph asi s in ori gin al. 19 11 three r equ i r ement s , the f i r s ttw o ar e ea s i l y s at i s f

i ed. M or gan’ s s ett l ement - negoti at i on process is c lea rly b a se d o n M o rg a n ’s p e rc e p tio n a n d w a s h e lp fu l to th e d e ter m in a tio n o f a f a c t in i s s ue— i ndeed, the tr i al courtes s ent i al l y rul ed thatthe pl ai nt i f f s had no ca s e w i thouti t . T he ques t i on then turns on w hetherM or gan’ s opi ni ons w er e “ba s ed on s ci ent i f i c, t echni cal , or otherspeci al i zed k no w l edg e” usua l l y reserved forexp ert s. ¶30. O n thi s poi nt , the def endant s act ual l y m ake the s tr onges tar gum enti n f avorof t he
a d m iss ib ili ty o f M o rg a n ’s te stim o n y . T h e y o b se rv e th a t “M o rg a n h a s a d m itt e d th a t he w as the per s on w ho exer ci s ed his dis cr et i on t o deci de h ow m uch of A H P’ s bl ock/ l um p s um se ttl e m e n t m o n ies w o u ld b e a llo c a ted to a g iv e n c lien t o f h is.” A n d late r: 18 Ate a c h p o i n ti n [ th e p r o c e s s o f c r e a t i n g h i s s e t t l e me n tma tr i x ] , M o r g a n c a me up w i th his opi ni ons o n , e. g. , h o w m an y injury classifica ti o n leve ls th ere sh o u ld b e , w h a t sh o u ld b e th e c riter ia f o r e a c h lev e l, w h ich o f h is c lien ts fe ll i nt o w hi ch l evel , and w hatdi d he t hi nk w as t he val ue orw or th of a cl ai m that f el l w i thi n a gi ven l evel , and how m uch money he w as goi ng t o al l ocat e t o a g iv e n lev e l an d a c lien t in th a t lev e l. 19 ¶31. T he def

endant s furtherem phas i ze thatM or gan devi s ed hi s m atr i x w i thout cons ul t i ng a n y m e d ic a l e x p e rt s . ¶32. O bvi ous l y, an opi ni on as arbi tr ary as the def endant s s ugges t w oul d never s at i s f y t he stric t re q u ire m e n ts o f e x p e rt w itn e ss e s u n d e r R u le 7 0 2 a n d o u r c a se law . A n d th is is p re c ise ly
w hy R ule 701 ap pli es. A s l on g as t he op i nion is n ot based on the k i nd of t echn i cal exp ert i se re q u ire d b y R u le 7 0 2 , a la y w itn e ss m a y o ffe r o p in io n tes tim o n y if th e o th e r p a rts o f th e ru le
ar e met , as t hey ar e her e. Si nce M or gan’ s di s cr et i onary di s bur s ementof the s ett l ementf

unds12

to h is c lien ts d id n o t im p lica te th e k in d o f sp e c ializ e d k n o w led g e im p lica ted b y R u le 7 0 2 , to the ext enthi s t es t i m ony c ons t i tut es opi ni on, i tw as a dm i s s i bl e underRul e 701. T her ef or e, t he tr i a l c ou r te r r e d i n e xc l ud i ng M or ga n’ s t e s t i mony r e ga r di ng ho w he de vi s e d the set t l em ent m at ri x an d h ow he d i sbursed the set t l em ent f un ds t o h i s cl i ents . CO NC L US I ON ¶33. T he tr i al courterr ed i n appl yi ng a negl i gence s t andar d t o the pl ai nt i f f s ’ cl ai m s of br eac h of f i duci ary duty, and s um m ary j udgm enti s r ever s ed and r emanded as t o the br eac hof
- f i duci ary- duty cl ai m s . T he evidenti ary rul i ng i s r ever s ed t o the ext enti texcl uded M or gan’ s i n- courtt es t i m ony r egar di ng the s ett l ementnegot i at i on and paymentpr oces s he
e m p lo y e d . T h e c a se is re m a n d e d to th e trial c o u rt fo r fu rth e r p ro c e e d in g s c o n sis ten t w ith th is opi ni on. ¶34. RE VE RS ED AND RE M ANDE D. W A LL ER , C . J. , C A R LSO N , P. J. , R A N D O LP H , LA M A R , K I TC H EN S, CH AN DL E R A ND P I E RC E , J J . , CO NC UR . KI NG , J . , NO T P AR T I CI P AT I NG .