Title: Gregory v. Hawkins
Citation: N/A
Docket Number: 951272
State: Virginia
Issuer: Virginia Supreme Court
Date: April 19, 1996

Present:  All the Justices 
 
C. LINWOOD GREGORY 
 
OPINION BY JUSTICE LAWRENCE L. KOONTZ, JR. 
v.  Record No. 951272                  April 19, 1996 
 
MILDRED M. HAWKINS 
 
 
FROM THE CIRCUIT COURT OF NEW KENT COUNTY 
 
Fred W. Bateman, Judge 
 
 
In this appeal of a judgment for attorney malpractice, the 
dispositive issue is whether the client proved that the 
attorney's conduct was a proximate cause of the client's loss.   
 The issue arises from the following pertinent facts which are 
recited in the light most favorable to the client, the prevailing 
party at trial. 
 
Mildred M. Hawkins (Hawkins) was the owner of a motel in New 
Kent County.  In December 1984, Hawkins secured a contract to 
sell the business and its attendant property to Wesley and Norma 
Wilson (the Wilsons).  After the contract was negotiated and 
signed, Hawkins retained C. Linwood Gregory (Gregory), an 
attorney, to advise and assist her in concluding the sale. 
 
On February 20, 1985, the Wilsons indicated that they 
intended to default on the contract unless Hawkins agreed to a 
revision of its terms.  They alleged that Hawkins had 
misrepresented the financial and physical condition of the 
business.  Gregory advised Hawkins of the terms of a proposed 
addendum to the contract, which reduced the selling price and 
interest rate provided for in the original agreement.  On the 
basis of Gregory's advice, Hawkins agreed to the reductions. 
 
On February 21, 1985, Gregory prepared and presented to 
Hawkins an indemnity agreement related to the sale of the 
business.  The agreement provided that for a period of five years 
after the sale Hawkins would "hold harmless the Wilsons from and 
against any and all cost, expense, liability, damage or other 
deficiency resulting from any misrepresentations by [Hawkins]."  
 Gregory testified that it was his custom to have such agreements 
available "in other closings of this nature."  There was no 
indication that the Wilsons ever requested such an agreement.  
However, Gregory mailed the agreement to the Wilsons. 
 
Hawkins testified that she questioned Gregory about the 
indemnity agreement when he presented it to her.  She testified 
that Gregory indicated it was not a part of the contract and  
that it just made her responsible for any "operational debts" she 
might have.  She further testified that Gregory told her he had 
forgotten to have her sign the agreement earlier and that he only 
wanted to put it in his file in case he ever needed it. 
 
The Wilsons subsequently sued Hawkins (the Wilson suit), 
alleging that she had misrepresented the condition of the 
business and its attendant property.  The Wilsons alleged 
alternative theories of liability, relying both upon fraud and 
the indemnity agreement.  Judgment was ultimately rendered for 
Hawkins on the ground that the statute of limitations had run on 
the claim of fraud and that the indemnity agreement did not 
provide for a recovery for innocent misstatements of fact under a 
theory of constructive fraud, but only for actual fraud, which 
was not supported by the evidence.  Hawkins testified that she 
expended over $18,000 defending the Wilson suit, but presented no 
expert or other evidence relating the costs incurred as to each 
of the individual theories of liability. 
 
On March 31, 1994, Hawkins instituted the present action 
against Gregory by a two-count motion for judgment.  Hawkins 
alleged in her first count that Gregory had committed legal 
malpractice in advising her to sign the addendum to the contract. 
 In the second count, styled as "Fraud and Misrepresentation," 
Hawkins detailed the circumstances surrounding the signing of the 
indemnity agreement, alleging that "Gregory intentionally 
misrepresented an existing material fact, to wit, that the 
document which he asked plaintiff to sign was in fact an 
indemnity agreement . . . ." 
 
At the conclusion of Hawkins' case-in-chief in a bench 
trial, Gregory moved to strike the evidence on various grounds, 
including Hawkins's failure to present expert testimony on the 
standard of care owed by an attorney under the facts presented 
and the failure to present evidence that the breach of that 
standard proximately caused the damages for which recovery was 
sought.  After hearing argument on the motion, the trial judge 
ruled:  "I'm going to strike the evidence as to the malpractice 
charge and fraud charge. . . . [E]xclusive, however, of the 
indemnity situation." 
 
Gregory then proceeded with his case, presenting expert 
testimony that his actions conformed to the applicable standard 
of care in reviewing and advising Hawkins concerning the 
indemnity agreement.  The expert further testified that it was 
"within the standard of care to also offer a business 
recommendation for purposes of making the deal work." 
 
In rendering judgment for Hawkins, some confusion arose over 
the basis of the trial court's prior ruling on the motion to 
strike and the basis for its final judgment.  Consistent with 
their differing views, counsel for both parties prepared draft 
judgment orders at the direction of the trial court.  At the 
hearing on the proposed orders, the trial court stated that the 
pleading of the second count, however nominated, alleged "that 
[Gregory's] conduct was misconduct in the strongest sense of that 
term . . . ."  In ruling that expert testimony was not required 
to establish Gregory's duty of care, the trial court stated that 
"it's so self-evident that it doesn't need a qualification by a 
standard.  In other words, misconduct is misconduct here or 
wherever insofar as professionalism is concerned." 
 
In the final order entered April 12, 1995, the trial court 
"entered judgment against [Gregory] with respect to the 
allegations of misrepresentation set forth in Count II and 
awarded [Hawkins] compensatory damages in the amount of $9,100.00 
for attorney's fees and $1,275.00 in costs expended in the 
defense of [the Wilson suit] filed against plaintiff based on an 
indemnity agreement alleged in Count II of the motion for 
judgment."  We awarded Gregory this appeal.
*
 
To sustain her claim for legal malpractice, Hawkins was 
                     
     
*Because of our view that the issue of proximate cause of 
the damages asserted by Hawkins is dispositive in this case, we 
will assume that the trial court properly exercised its 
discretion to reform the pleading of Count II to conform with the 
evidence.  Code § 8.01-377.  The trial court clearly dismissed 
the allegation of fraud.  
required to plead and prove that an attorney-client relationship 
existed between her and Gregory which gave rise to a duty, that 
Gregory neglected or breached that duty, and that the neglect or 
breach was a proximate cause of her claimed damages.  Allied 
Productions v. Duesterdick, 217 Va. 763, 764-65, 232 S.E.2d 774, 
775 (1977).  Each of these elements is necessary to establish a 
prima facie case of legal malpractice, a mere allegation of 
negligence or breach of a duty being insufficient to support an 
action for legal malpractice.  Campbell v. Bettius, 244 Va. 347, 
352, 421 S.E.2d 433, 436 (1992)("the client must prove that the 
attorney's negligence proximately caused the damages claimed"); 
Duvall, Blackburn, Hale & Downey v. Siddiqui, 243 Va. 494, 497, 
416 S.E.2d 448, 450 (1992)(client must show "damages claimed were 
proximately caused by the attorney's negligence").  
 
We will assume, without deciding, that expert testimony was 
not required to establish the existence of the duty and the 
breach.  Compare Seaward International, Inc. v. Price Waterhouse, 
239 Va. 585, 592, 391 S.E.2d 283, 287 (1990)(expert testimony 
required to establish all three elements of liability for 
malpractice except where they fall within the common knowledge of 
the trier of fact) with Beverly Enterprises v. Nichols, 247 Va. 
264, 267, 441 S.E.2d 1, 3 (1994)(expert testimony not required 
where "the alleged act of negligence clearly lies within the 
range of the jury's common knowledge and experience").  
Nonetheless, we hold that the record fails to establish, by 
evidence, expert or otherwise, the necessary element of proximate 
causation of the damages claimed. 
 
Our recent decision in Hazel & Thomas v. Yavari, 251 Va. 
162, 465 S.E.2d 812 (1996), is dispositive of the proximate 
causation issue in this appeal.  There, we held that the question 
of proximate causation in an attorney malpractice case, as in any 
negligence action, is subject to an initial determination of law 
before becoming an issue to be decided by the trier of fact.  Id. 
at 166, 465 S.E.2d at 815.  We said that if "the evidence is such 
that reasonable minds could not differ as to the outcome, the 
issue of proximate cause should be decided by the court, not the 
jury."  Id.  In a bench trial, the court is not divested of its 
role as determiner of law even though it also acts as trier of 
fact. 
 
In Hazel & Thomas, the issue was whether one party to a 
contract would have agreed to certain provisions which the 
attorneys representing Yavari failed to negotiate.  We held that 
absent evidence that the terms would have been agreed to by the 
other party, or that Yavari would not have accepted the contract 
without the provisions, the evidence did not, as a matter of law, 
sustain a finding of proximate causation.  251 Va. at 166-67, 465 
S.E.2d at 815. 
 
In this case, Hawkins sought damages to compensate her for 
"expend[ing] large sums of money defending [the Wilson suit]."  
The record clearly establishes that, while the Wilsons relied on 
the indemnity agreement as an alternate basis for alleging 
Hawkins' liability, they also alleged actual fraud.  Because the 
indemnity agreement did no more than establish her liability for 
actual fraud, the predicate for her having to defend against the 
allegations by the Wilsons was not the agreement, but her 
underlying acts.   
 
The five-year term of the agreement had the practical effect 
of extending the statute of limitations on the fraud claim, but 
this does not alter the fact that the basis for bringing the suit 
was independent of the agreement itself.  Nothing in the record 
establishes that the existence of the agreement was the 
instigating factor of the Wilson suit or increased the cost of 
defending the suit.  In short, nothing in the record establishes 
that absent the indemnity agreement the Wilsons would not have 
filed their suit against Hawkins. 
 
Under the rationale of Hazel & Thomas, we hold that Hawkins' 
evidence failed as a matter of law to establish that Gregory's 
conduct was a proximate cause of the loss sustained by Hawkins.  
Accordingly, we will reverse the judgment of the circuit court 
and enter final judgment for Gregory. 
 
Reversed and final judgment.