Opinion ID: 2225006
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Heading: In a lawyer malpractice case the plaintiff must demonstrate:

Text: 1. the existence of an attorney-client relationship giving rise to a duty; 2. that the attorney, either by an act or a failure to act, violated or breached that duty; 3. that the attorney's breach of duty proximately caused injury to the client; and 4. that the client sustained actual injury, loss, or damage. Burke v. Roberson, 417 N.W.2d 209, 211 (Iowa 1987). There is no question concerning the existence of the attorney-client relationship. Donohue raises his defense against the other three elements, contending there was not substantial evidence to support the trial court's findings of negligence, proximate cause or damages. II. The trial court found Donohue negligent by reason of each of the claimed breaches of duty. Substantial evidence supported the trial court's factual findings on George's first negligence claim against Donohue. Because Donohue inserted the hold harmless clause into the dissolution agreement by mistake, and in violation of instructions, he was negligent. The second claim is based on a violation of the code of professional ethics for lawyers. It is clear that the code of professional responsibility sets the standard for an attorney's conduct in any transaction in which his professional judgment may be exercised. Cornell v. Wunschel, 408 N.W.2d 369, 377 (Iowa 1987). It is also clear that the code does establish a specific standard regarding conflicts of interest. The district court found Donohue breached three rules: (1) DR4-101(B) (lawyer shall not knowingly use a confidence or a secret of a client to the disadvantage of the client); (2) DR5-105(C) (lawyer shall not continue multiple employment if the exercise of that lawyer's independent professional judgment in behalf of a client will be or is likely to be adversely affected by the representation of another client); and (3) DR7-101(A)(3) (a lawyer shall not intentionally prejudice or damage a client during the course of a professional relationship). There is substantial evidence to support these findings. Donohue represented both parties even after the dispute became obvious. There is testimony that Donohue questioned George about his activities and then used the information as a basis for the suit against George. Finally, Donohue sued George at a time when Donohue represented George as the sole owner of the partnership. George established both claims regarding Donohue's negligence. III. The proximate cause requirements in legal malpractice suits are the same as in other tort actions. Black Hawk Bldg. Sys. v. Law Firm, 428 N.W.2d 288, 290 (Iowa 1988). To establish proximate cause two things must be shown: (1) the harm would not have occurred had the actor not been negligent, and (2) the negligence was a substantial factor in bringing about the plaintiff's harm. Pedersen v. Kuhr, 201 N.W.2d 711, 713 (Iowa 1972). The trial court found that Donohue's negligence in inserting the hold harmless clause proximately caused George to pay for legal expenses to defend the estate's suit against him. Ample evidence supports this finding. Both the answers to the interrogatories filed by James' estate and the opening statement of the estate's counsel at trial show that the estate's claims against George were predicated, in substantial part, on the hold harmless agreement. The trial court also found that Donohue's violation of the professional ethics canons was the proximate cause of other damages. We think this finding also finds substantial support in the record. It is difficult, if not impossible, to conceive that, if Donohue had not been counsel for the estate, he would have recommended to George that he pay back the commissions. Donohue's advice was clearly a substantial factor, indeed a decisive factor, in George's surrender of the commission he had earned and his failure to collect additional commissions to which he was entitled. IV. In a legal malpractice action the general measure of damages is the amount of loss actually sustained as a proximate result of the conduct of the attorney. Pickens, Barnes & Abernathy v. Heasley, 328 N.W.2d 524, 525 (Iowa 1983). It is not clear that the allowance for George's attorney fees was limited to the defense of the estate's claims against him. It might have also included fees for prosecuting his own suit. Hence the court of appeals remanded the case for a redetermination. We agree that the allowance should be so limited and that a remand is appropriate to determine the correct fee. With regard to George's second claim the trial court awarded $28,368 in compensatory damages. We find this amount to be inaccurate. George collected accounts totaling $1,137,697. The six percent commission due him from the dissolved business partnership was $68,262. Of this amount he collected $47,500 from the business account. Without the complication of the $7606 he was advised to pay to James' estate, the business would owe George an additional $20,762. Of course the business funds from which this amount was due were owned one-half by George and one-half by James' estate. Hence George is entitled to recover only one-half of the $20,762, or $10,381, plus the $7606 which was improperly paid directly to James' estate. Upon remand judgment on this claim should be entered in the total amount of $17,987.