Opinion ID: 1926086
Heading Depth: 1
Heading Rank: 3

Heading: Phase Two: Breezevale v. GDC

Text: In October 1994, Breezevale filed suit against GDC in the District of Columbia Superior Court for legal malpractice in its handling of the Firestone litigation. Breezevale basically contended that GDC had abandoned its client upon learning of the impending damaging deposition testimony, even though adequate investigation would have revealed that the employee was lying. According to Breezevale, GDC thus violated the legal standard of care and irreparably damaged Breezevale's suit against Firestone. Breezevale initially argued both that GDC's malpractice prevented a better settlement and that it prevented Breezevale from prevailing at trial. However, the trial court ultimately ruled that the better settlement theory was too speculative and instructed the jury only on the trial theory. [4] Under the trial theory, Breezevale sought damages in the amount it would have hypothetically been awarded had its case against Firestone gone to trial in Ohio. Thus, the actual jury in the malpractice case against GDC also acted as a hypothetical jury hearing the Ohio case against Firestone. See Thomas v. Bethea, 351 Md. 513, 718 A.2d 1187, 1197 (1998) (`this is the accepted and traditional means of resolving the issues involved in the underlying proceeding in a legal malpractice action' and `avoids speculation by requiring the plaintiff to bear that burden of producing evidence that would have been required in the underlying action') (quoting RONALD E. MALLEN & JEFFREY M. SMITH, LEGAL MALPRACTICE § 14.3, at 237-38 (4th ed.1996 and Supp.1998)); see also Niosi v. Aiello, 69 A.2d 57, 60 (1949). Both sides presented expert testimony on the legal standard of care. Although both experts agreed that the employee's deposition would have eventually gone forward, Breezevale's expert testified that GDC breached the standard of care by (1) failing to inform Breezevale promptly of the employee's expected testimony; (2) failing to advise the employee immediately that GDC could no longer act as her attorney since she now had a conflict of interest with Breezevale and that she should obtain separate counsel; (3) failing to postpone the deposition so that GDC could (a) recommend settlement immediately, (b) investigate and be prepared to discredit the employee at the eventual deposition, and/or (c) investigate and recommend withdrawal of any forged documents and amendment of any related interrogatories; and (4) advising Breezevale to settle without first informing it that GDC had developed a personal conflict of interest to the extent it was worried about its own liability as a conduit of the documents. After seven weeks of trial, the jury awarded Breezevale $3,430,000 by way of a special verdict form. Specifically, the jury found that GDC had breached the standard of care in its representation of Breezevale and thereby proximately caused damage to Breezevale's case against Firestone. The jury further found that forgeries did occur with the participation of one or more Breezevale executives, but that such forgeries did not play[ ] a substantial part in damaging Breezevale's lawsuit against Firestone and that Breezevale still would have won $1,500,000 on its 1988 Iraq claim for breach of contract and fraud, $730,000 on its 1989 Iraq claim for breach of contract (but not fraud), and $1,200,000 on its Nigeria claim based on promissory estoppel. Notwithstanding the verdict, the trial court entered judgment as a matter of law in favor of GDC. It based its decision on three grounds. First, in light of the factual finding of forgery, the court found no evidence to support the jury's conclusion that GDC's malpractice proximately caused Breezevale's loss. The court reasoned that delaying the deposition would only have postponed subsequent events, not avoided them. Second, in light of the finding of forgery, the court concluded that Breezevale's own actions had proximately caused their losses and that Breezevale was therefore necessarily contributorily negligent. Third, the court found no evidence to support the jury's findings on damages. In the alternative, in a single sentence, the court granted a new trial on the ground that the verdict was against the clear weight of the evidence. Just when Breezevale may have thought things could get no worse, they did. After trial and its ruling granting judgment as a matter of law, the court considered GDC's equitable counterclaim for bad faith litigation from the bench. Consistent with the jury's factual finding of forgery by a preponderance of the evidence, see Lewis v. Sears Roebuck & Co., 845 F.2d 624, 629-30 (6th Cir.1988) (stating that trial court considering equitable claim with common factual issue as legal claim decided by jury should not make contrary or inconsistent finding), the trial court found by clear and convincing evidence that forgery had occurred with the participation of one or more Breezevale executives. Concluding that it was difficult to imagine a clearer case of bad faith litigation, the court ordered Breezevale to pay GDC a total of $5,356,633, including $4,061,353 for GDC's fees and costs in litigating the malpractice action, $1,000,000 in punitive damages, and $295,280 in unpaid legal fees from the original Firestone litigation.