Opinion ID: 2487791
Heading Depth: 2
Heading Rank: 1

Heading: The Lanier defendants

Text: Roberts first argues that the circuit court erred in entering a summary judgment in favor of the Lanier defendants. The circuit court did not state the basis for its summary judgment in the Lanier defendants' favor. However, Roberts argues that none of the grounds argued in the Lanier defendants' motion for a summary judgment supports the circuit court's judgment. In their motion, the Lanier defendants argued that Roberts's claims are governed by the Alabama Legal Services Liability Act, § 6-5-570 et seq., Ala.Code 1975 (the ALSLA), and that Roberts had failed to prove a violation of the ALSLA because she had not presented expert testimony as to the alleged breach of the applicable standard of care, nor had she shown that, but for Lanier's actions, the outcome of her case would have been different. The Lanier defendants also argued that Roberts's claims against them were barred by the ALSLA's two-year statute of limitations and that Roberts had not demonstrated that she had suffered any injury as a result of Lanier's actions. We first address whether the ALSLA applies to the claims against the Lanier defendants. Section 6-5-573, Ala.Code 1975, provides: There shall be only one form and cause of action against legal service providers in courts in the State of Alabama and it shall be known as the legal service liability action and shall have the meaning as defined herein. Section 6-5-572(2), Ala.Code 1975, defines a legal service provider as [a]nyone licensed to practice law by the State of Alabama or engaged in the practice of law in the State of Alabama. The term legal service provider includes professional corporations, associations, and partnerships and members of such professional corporations, associations, and partnerships and the persons, firms, or corporations either employed by or performing work or services for the benefit of such professional corporations, associations, and partnerships including, without limitation, law clerks, legal assistants, legal secretaries, investigators, paralegals, and couriers. Section 6-5-572(1), Ala.Code 1975, defines legal service liability action as [a]ny action against a legal service provider in which it is alleged that some injury or damage was caused in whole or in part by the legal service provider's violation of the standard of care applicable to a legal service provider. A legal service liability action embraces all claims for injuries or damage[ ] or wrongful death whether in contract or in tort and whether based on an intentional or unintentional act or omission. A legal services liability action embraces any form of action in which a litigant may seek legal redress for a wrong or an injury and every legal theory of recovery, whether common law or statutory, available to a litigant in a court in the State of Alabama now or in the future. Roberts argues that, pursuant to this Court's rationale in Fogarty v. Parker, Poe, Adams & Bernstein, L.L.P., 961 So.2d 784 (Ala.2006), Lanier was not a legal service provider under the ALSLA because he was not licensed to practice law in Alabama. Therefore, she argues, the ALSLA does not apply to her claims against the Lanier defendants. In response, the Lanier defendants argue that Fogarty is distinguishable and that the ALSLA applies because Lanier was admitted pro hac vice to practice in Alabama. This Court recently addressed similar issues in Wachovia Bank, N.A. v. Jones, Morrison & Womack, P.C., 42 So.3d 667 (Ala.2009). In that case, Wachovia Bank (Wachovia), which was being sued by Neal Greene, filed a third-party complaint against, among others, Jones, Morrison & Womack, P.C. (Jones Morrison), alleging claims under the ALSLA. The trial court entered a summary judgment in favor of Jones Morrison on Wachovia's third-party complaint. The Court of Civil Appeals reversed the judgment and remanded the case to the trial court. SouthTrust Bank v. Jones, Morrison, Womack & Dearing, P.C., 939 So.2d 885 (Ala.Civ.App.2005). On remand, the trial court entered a judgment as a matter of law in Jones Morrison's favor, stating that the Bank had failed to prove by expert testimony the applicable standards of care and that the lawyers had allegedly breached those standards of care. Wachovia, 42 So.3d at 673-74. Wachovia appealed. On appeal, Jones Morrison, among other things, argued that it was not subject to liability under the ALSLA because its attorneys were not licensed to practice in Alabama and, therefore, it was not acting as a `legal service provider' under the circumstances of th[at] case. Wachovia, 42 So.3d at 675. Jones Morrison cited Fogarty in support of its argument. In Wachovia, we discussed our decision in Fogarty, noting that the appellees in that caseParker, Poe, Adams & Bernstein, L.L.P. (Parker Poe)had argued, among other things, that the Fogartys' claims should have been brought under the ALSLA because, according to Parker Poe, it was engaged in the practice of law in Alabama. We went on to state: In rejecting Parker Poe's argument that it was `engaged in the practice of law in the State of Alabama,' this Court stated: `Furthermore, it appears that the ALSLA applies only to attorneys who are licensed to practice law in Alabama. Parker Poe argues that it was engaged in the practice of law in the State of Alabama and, thus, falls under the second prong of the ALSLA's definition of a legal-service provider. However, this Court has expressly stated that [t]he plain language of § 6-5-572(2), as well as that of the other portions of the ALSLA, clearly indicates that the Legislature intended for the ALSLA to apply only to lawyers and to entities that are composed of members who are licensed to practice law within the State of Alabama. Alabama Educ. Ass'n v. Nelson, 770 So.2d 1057, 1059 (Ala.2000) (emphasis added). `According to the complaint, Jones and Baron[, two attorneys employed by Parker Poe,] were not licensed to practice law within the State of Alabama, and Parker Poe does not dispute this allegation. Thus, the ALSLA would not apply to the claims against Parker Poe, and the ALSLA could not be the Fogartys' exclusive remedy. . . .' 961 So.2d at 789. We disagree with Jones Morrison's contention that under ... Fogarty it cannot be held liable under the ALSLA because none of its attorneys were licensed to practice law within the State of Alabama. First, unlike ... Parker Poe in Fogarty, Jones Morrison does not dispute that it was providing legal services to the Bank in the present case. . . . Second, to provide those legal services to the Bank, Jones Morrison in the present case agreed to perform work or servicessuch as relaying information between [Stokes, Clinton, Fleming & Sherling ('Stokes Clinton')] and the Bank regarding the legal action to collect the debtfor the benefit of the Stokes Clinton firm in its rendering of legal services to the Bank. Stokes Clinton, as noted, is a legal-service provider under the ALSLA. Thus, unlike Fogarty, in the present case an attorney-client relationship existed between Jones Morrison and the Bank, and in offering legal services to the Bank, Jones Morrison sought the assistance of Stokes Clinton and agreed to perform work for the benefit of Stokes Clinton, itself a `legal-service provider' under the ALSLA. Consequently, the question presented in this casewhether the ALSLA applies to claims against an attorney not licensed in Alabama who, in conjunction with an attorney licensed to practice in Alabama, performs legal services in Alabama for a clientwas not at issue in Fogarty . . . . Thus, to the extent that language in Fogarty . . . suggests that the ALSLA could not apply in such a scenario, that language was unnecessary to the holding[ ] in Fogarty . . . and is not controlling here. Wachovia, 42 So.3d at 677-78. We went on to conclude: Stokes Clinton is a `legal service provider' under § 6-5-572(2) of the ALSLA because it is a `professional corporation[ ], association[ ], [or] partnership[ ]' that is `licensed to practice law by the State of Alabama or engaged in the practice of law in the State of Alabama.' In view of its arrangement with the Stokes Clinton firm, Jones Morrison meets that part of the definition of a 'legal service provider' that includes `the persons, firms, or corporations either employed by or performing work or services for the benefit of such professional corporations, associations, and partnerships including, without limitation, law clerks, legal assistants, legal secretaries, investigators, paralegals, and couriers' (emphasis added). The Bank's above-stated claims against Jones Morrison arise out of the attorney-client relationship that existed between Jones Morrison and the Bank and out of Jones Morrison's provision of legal services to the Bank. Thus, the ALSLA governs the Bank's claims against Jones Morrison. Wachovia, 42 So.3d at 678-79 (footnote omitted). The position of the Lanier defendants in this case is very similar to the position of Jones Morrison in Wachovia. It is undisputed that Roberts's claims against [the Lanier defendants] arise out of the attorney-client relationship that existed between [the Lanier defendants] and [Roberts] and out of [the Lanier defendants'] provision of legal services to [Roberts]. Wachovia, 42 So.3d at 678. Moreover, Lanier associated Stallings to assist him in representing Roberts. Stallings is licensed to practice law in Alabama and is, therefore, a legal-service provider under the ALSLA. Lanier's billing statements, which are undisputed, show that, until his withdrawal in March 2007, Lanier worked with Stallings in representing Roberts on the pending criminal charge. The statements indicate that, among other things, Lanier performed legal research, participated in preparations for the preliminary hearing in the district court on the noncapital-murder charge, and reviewed various motions and other paperwork prepared by Stallings. The question presented in this case, as in Wachovia, is whether the ALSLA applies to claims against an attorney not licensed in Alabama who, in conjunction with an attorney licensed to practice in Alabama, performs legal services in Alabama for a client. Wachovia, 42 So.3d at 677-78. As we noted in Wachovia, this question was not at issue in Fogarty,  and, [t]hus, to the extent that language in Fogarty . . . suggests that the ALSLA could not apply in such a scenario, that language was unnecessary to the holding[ ] in Fogarty . . . and is not controlling here. 42 So.3d at 678. We conclude that Lanier, like Jones Morrison in Wachovia, meets that part of the definition of a `legal service provider' that includes `the persons, firms, or corporations either employed by or performing work or services for the benefit of ' a legal-service provider under the ALSLA. Wachovia, 42 So.3d at 678. Therefore, the ALSLA governs Roberts's claims against the Lanier defendants. [6] Having determined that the ALSLA applies to the claims against the Lanier defendants, we now address whether the Lanier defendants were entitled to a summary judgment on those claims. In her second amended complaint, Roberts sought a judgment declaring that, among other things, the nonrefundable-retainer language in the contract was unconscionable and that Lanier had engaged in the unauthorized practice of law; she also alleged that Lanier had breached his duty of care to Roberts in: (a) misrepresenting to Roberts that he was qualified to represent her in the State of Alabama on the pending criminal charge; (b) deceiving Roberts into executing a `non-refundable retainer' employment contract under the pretense that such an agreement was valid and lawful; [(c)] misrepresenting to Roberts that under no circumstance, even if he were terminated, would Roberts be entitled to a refund of fees because the retainer of $50,000 was `non-refundable'; and [(d)] converting funds belonging to Roberts, in the approximate sum of $50,000.00, to his own personal use. Roberts argues that the circuit court erred in dismissing her request for a judgment declaring whether the non-refundable retainer language in the contract was unconscionable and against Alabama public policy and whether Lanier had engaged in the unlawful practice of law in Alabama. [7] The first issue is moot in light of the Lanier defendants' concessions that the nonrefundable retainer language is prohibited under Alabama law and that the contract was unenforceable as written. The second issuewhether Lanier's actions constituted the unauthorized practice of lawis barred by the statute of limitations in the ALSLA. [8] Section 6-5-574(a), Ala.Code 1975, provides, in pertinent part: All legal service liability actions against a legal service provider must be commenced within two years after the act or omission or failure giving rise to the claim, and not afterwards; provided, that if the cause of action is not discovered and could not reasonably have been discovered within such period, then the action may be commenced within six months from the date of such discovery or the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier. . . . The act or omission giving rise to Roberts's request for a judicial declaration that Lanier had engaged in the unauthorized practice of law occurred upon the execution of the contract in April 2006, and Roberts says that she learned on April 27, 2006, that Lanier was not licensed to practice law in Alabama. However, Roberts did not file the present action until February 2009, well after the two-year statute of limitations had expired. For these reasons, we affirm the circuit court's judgment in the Lanier defendants' favor with regard to the request for a declaratory judgment. Roberts's claim that Lanier breached the standard of care by misrepresenting to her that he was qualified to represent her in Alabama on the noncapital-murder charge is also barred by the ALSLA's statute of limitations. This alleged misrepresentation took place in April 2006 when the contract was executed. By her own admission, Roberts knew by May 2006 that Lanier was not licensed to practice law in Alabama, that Lanier had associated Stallings as local counsel, and that she would have to execute a separate fee agreement with Stallings. Thus, the two-year statute of limitations had expired before February 2009 with respect to this claim, and we affirm the circuit court's summary judgment in the Lanier defendants' favor as to this claim. The Lanier defendants argued in their summary-judgment motion that Roberts's remaining claimsthat Lanier deceived her into executing the invalid contract, that he misrepresented to Roberts that she would not be entitled to any refund of the retainer fee if she terminated his employment, and that he converted Roberts's funds for his personal usewere also barred by the statute of limitations. However, Roberts argues that the[se] claims have been timely filed under the `saving provision' contained in § 6-5-574. Roberts's brief, at 53-54. As noted previously, the two-year statute of limitations in § 6-5-574(a) generally begins to run at the time of the act, omission, or failure giving rise to the claim. As with the prior claims, the acts or omissions underlying the remaining claims occurred in April and May 2006, more than two years before Roberts filed suit. Roberts and Lanier executed the contract on April 21, 2006. A few days later, Lanier withdrew $50,000 from Roberts's bank accounts and, according to Lanier's deposition testimony, deposited the money in the firm's bank account. According to Roberts, Lanier told her on May 1, 2006, that, even if she terminated his representation, she would not entitled to a refund of any part of the $50,000, which he said was a nonrefundable retainer. However, § 6-5-574(a) also provides that if the cause of action is not discovered and could not reasonably have been discovered within [the two-year limitations period], then the action may be commenced within six months from the date of such discovery or the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier. Roberts argues that she learned for the first time on February 15, 2009, that the nonrefundable retainer language of the contract was unlawful in Alabama and that Lanier's reliance on that language in refusing to refund to her any of the retainer was improper. She filed her original complaint three days later. Roberts also argues that she had no reason to know of the misconduct committed by Lanier nor could the misconduct reasonably have been discovered prior to [February 15, 2009]. Roberts's brief, at 54-55. We have found no evidence indicating that Roberts was aware that the nonrefundable-retainer language was unenforceable before February 15, 2009. Of course, when a party actually discovered or should have discovered an alleged misrepresentation is generally a question for the jury. See Jones v. Alfa Mut. Ins. Co., 1 So.3d 23, 31 (Ala.2008). Therefore, it appears that the remaining claims may fall within the savings provision of § 6-5-574(a) and are not barred by the statute of limitations as a matter of law. The Lanier defendants argue that through the exercise of ordinary diligence Roberts could have discovered these remaining claims before the statute of limitations expired. They argue that Roberts could have questioned Stallings, the district attorney, or the circuit court about Lanier's alleged statements regarding the effect of the nonrefundable-retainer language in the contract. However, the Lanier defendants have not directed this Court to any evidence indicating that Roberts had, before February 15, 2009, any reason to doubt Lanier's alleged representations that the nonrefundable-retainer language in the contract was valid and that, because of that language, she would not be entitled to a refund if she terminated his employment. We cannot agree that the exercise of ordinary diligence requires a client to seek independent verification of representations made by his or her attorney regarding the validity or meaning of terms in an attorney-client employment contract. [9] The Lanier defendants also argue that Roberts did not present substantial evidence showing that she is entitled to the benefit of the provision of § 6-5-574(a) that allows an otherwise untimely action to be filed six months from the date of discovery. However, the record contains an affidavit in which Roberts states, in pertinent part: Because I saw no need of having two attorneys on my case and incurring double the expense associated with two attorneys, coupled with the fact that I felt Lanier had deceived me into retaining his services, on or about May 1, 2006, during a meeting with Lanier at the Cherokee County Jail, I terminated Lanier and requested a refund of the $50,000 previously taken by Lanier as his `non-refundable' retainer. In response, Lanier told me that based on the `non-refundable' retainer language of his employment contract that I was not entitled to a refund of any fees. Lanier further explained that I might as well let him continue working on my case since I would not be receiving a refund of any fees even if he was terminated. I accepted Lanier's representations as I had no reason to believe there was anything improper about the `non-refundable' retainer language of Lanier's employment contract at that time, or that Lanier was prohibited from retaining the `non-refundable' retainer despite his termination. Based on Lanier's representations, I agreed Lanier could continue on my case until such time as his billable hours equaled $50,000, or I was indicted for capital murder, whichever occurred first. .... But for the fraudulent representations of Lanier, I would not have paid Lanier a $50,000 `non-refundable' retainer, nor would I have permitted him to continue on my case after terminating him and demanding a refund of the $50,000 `non-refundable' retainer. As the Lanier defendants note, substantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved. West v. Founders Life Assur. Co. of Florida, 547 So.2d 870, 871 (Ala.1989). Roberts's affidavit testimony is sufficient to meet this standard as to the remaining claims. The Lanier defendants also argued that they were entitled to a summary judgment because Roberts had failed to present expert testimony that Lanier had breached the applicable standard of care. [10] Roberts argues that her remaining claims fall within the common sense exception to the general rule requiring expert testimony in a legal malpractice action. Roberts's brief, at 50. This Court has stated that an exception to the general requirement that a plaintiff present expert testimony in support of a legal-malpractice claim occurs where a legal-service provider's want of skill or lack of care is so apparent as to be understood by a layperson and requires only common knowledge and experience to understand it. Valentine v. Watters, 896 So.2d 385, 394 (Ala.2004). Roberts argues: [T]he jury will decide whether Lanier breached the applicable standard of care in: (a) deceiving Roberts into executing a `non-refundable retainer' employment contract under the pretense that such an agreement was valid and lawful; (b) misrepresenting to Roberts that under no circumstance, even if he were terminated, would Roberts be entitled to a refund of fees because the retainer of $50,000 was `non-refundable'; and (c) converting funds belonging to Roberts, in the approximate sum of $50,000.00, to his own personal use. None of these issues requires scientific, technical, or other specialized knowledge in order for the trier of fact to determine whether the applicable standard of care was breached. A layperson utilizing common knowledge and experience can certainly make this determination. Roberts's brief, at 52. We agree. It is undisputed that contractual provisions for non-refundable retainers are unenforceable in Alabama and that the Lanier defendants were not entitled to keep any unearned fees. It is also undisputed that Lanier withdrew $50,000 from Roberts's accounts and has not refunded any of that fee even though, according to Roberts, she attempted to terminate Lanier's employment soon after it began. If the jury finds that Lanier misrepresented to Roberts that the nonrefundable-retainer language was valid and that she was not entitled to a refund of any of the retainer, it could, using common knowledge and experience, determine that such misrepresentations and Lanier's retention of the retainer constituted a breach of the applicable standard of care. Therefore, we conclude that Roberts was not required to provide expert testimony as to the remaining claims against the Lanier defendants. See Valentine, supra. The Lanier defendants also argued in their summary-judgment motion (1) that Roberts had failed to prove that but for the alleged violation of the standard of care by the defendant, the plaintiff would have achieved a better result, or different outcome in her case; and (2) that Roberts had failed to show that she had suffered any injury as a result of the alleged misconduct. We find these arguments to be without merit as well. First, Roberts has not alleged that Lanier's conduct with regard to the underlying criminal matter itself fell below the standard of care. Instead, her claims are related to his conduct with regard to the terms of, and the fees charged for, Lanier's employment under the contract. Therefore, the outcome of the underlying criminal case is irrelevant to the question of wrongdoing in this action. Second, Roberts's affidavit testimony indicates that [b]ut for the fraudulent representations of Lanier, [she] would not have paid Lanier a $50,000 `non-refundable' retainer, nor would [she] have permitted him to continue on [her] case after terminating him and demanding a refund of the $50,000 `non-refundable' retainer. This testimony is sufficient to create a question of fact as to whether Roberts suffered damage as a result of Lanier's alleged misconduct. `The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law.' Alabama Elec. Coop. v. Bailey's Constr. Co., 950 So.2d 280, 283 (Ala.2006) (quoting Capital Alliance Ins. Co. v. Thorough-Clean, Inc., 639 So.2d 1349, 1350 (Ala.1994)). For the foregoing reasons, we hold that the circuit court erred in entering a summary judgment in favor of the Lanier defendants on Roberts's claims (1) that Lanier misrepresented to her that the contract as written was valid and enforceable; (2) that Lanier misrepresented to Roberts that she was not entitled to any refund of the retainer; and (3) that Lanier converted Roberts's funds to his personal use. As to those claims, we reverse the circuit court's judgment and remand the case for further proceedings consistent with this opinion.