Court Opinion

ID: 9632236
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:07:32.571862+00
Date Added: 2024-06-11T12:34:31.988749
License: Public Domain

Thompson, A.C.J.
(dissenting) — I agree with the legal principles relied on by the majority. However, I do not agree that they are applicable to the facts in this case. I therefore respectfully dissent.
The Superior Court based its summary dismissal of Mrs. Barr's action against the defendants on its determination that (1) her claims were barred as a matter of law by collateral estoppel, and (2) the guardian ad litem was entitled to witness immunity. I would affirm the summary dismissal of Mrs. Barr's causes of action, but for different reasons.
In my view, Mrs. Barr failed to establish a prima facie case of negligence. Liability for legal malpractice requires proof of four elements:
(a) the existence of an attorney-client relationship; (b) the existence of a duty on the part of the lawyer; (c) failure to perform the duty; and (d) the negligence of the lawyer must have been a proximate cause of the damage to the client.
Martin v. Northwest Wash. Legal Servs., 43 Wn. App. 405, 408, 717 P.2d 779 (1986) (quoting Sherry v. Diercks, 29 Wn. App. 433, 437, 628 P.2d 1336, review denied, 96 Wn.2d 1003 (1981)). See also Stangland v. Brock, 109 Wn.2d 675, 679, 747 P.2d 464 (1987). Evidence of the third element, breach of duty, is lacking here.
The record is clear the attorneys fully advised the Barrs of the available settlement options, and the Barrs indicated in. writing their choice of the options. The Barrs were aware the annuity had only a 5-year guaranty and attorney fees were calculated based upon the present value of the annuity, asstuning a 20-year life expectancy for Mr. Barr. Calculation of attorney fees on a present value basis has been recognized *849by our Supreme Court as an accepted practice. Ravsten v. Department of Labor & Indus., 108 Wn.2d 143, 158, 736 P.2d 265 (1987); Perez v. Pappas, 98 Wn.2d 835, 840, 659 P.2d 475 (1983). The Barrs knew as well as anyone there was no guaranty that Mr. Barr would live for 20 more years. There is nothing in the record which suggests his health was so impaired that it was unreasonable to predict he might live that long. While Mr. Barr was a chronic alcoholic, his physician acknowledged that persons with such a condition often live to old age. The Barrs chose this settlement option in part because of Mr. Barr's alcoholism — it guaranteed a fixed monthly amount which would be available to pay for Mr. Barr's needs. There was justifiable concern that Mr. Barr might squander a lump sum settlement. The Barrs were not misled or misinformed by their counsel. As stated in 2 R. Mallen & J. Smith, Legal Malpractice § 24.36, at 521 (3d ed. 1989), "[a]side from the speculative nature of the contentions, hindsight challenges to recommended settlements have generally been protected as judgment calls." The settlement was and is fair and reasonable.10
Mrs. Barr also failed to establish a prima facie case that the defendants breached any fiduciary duty owed her or her husband when they calculated attorney fees based on the present value of the annuity. Mr. Barr signed a contingent fee agreement with Gerald Day. He agreed to pay as fees a percentage of any amount he received. Three years later, on August 7, 1985, Mrs. Barr signed another agreement with *850Mr. Day agreeing to pay him a percentage of the present value of any structured settlement entered into. In July 1986, Mrs. Barr was appointed Mr. Barr’s guardian and hired Mr. Stamper as an attorney. Mr. Day continued on as associate counsel. There is no evidence as to a separate fee agreement reached between the Barrs and Mr. Stamper until the settlement itself was approved by the court.11 Then the Barrs agreed to pay 30 percent of the settlement in attorney fees, including 30 percent of the present cash value of the annuity.
The law views fee agreements entered into at the inception of the attorney-client relationship differently from fee agreements entered into later:
Because the fiduciary obligations arise only when there is an attorney-client relationship, the attorney is generally free to negotiate the fee with a prospective client. Before the attorney undertakes to represent a client, the obligation of undivided loyalty does not exist and the parties may bargain for the legal services since the parties deal with each other at arm's length. . . .
[But o]nce the attorney-client relationship is established, any modification of the fee arrangement becomes subject to the fiduciary obligations [including the duty of full disclosure] . . . The courts have generally given particular attention and scrutiny to fee contracts made or altered during the attorney-client relationship.
(Footnotes omitted.) 1 R. Mallen & J. Smith, Legal Malpractice § 11.22, at 692-94 (3d ed. 1989). In Perez, the court cited the foregoing treatise and stated at page 840:
Oftentimes, structured settlements do not readily lend themselves to the usual course of calculating fees pursuant to contingent fee agreements. Therefore, when a structured settlement is reached the attorney and client may have to reconsider and discuss the calculation of fees.
(Italics mine.)
Here, a structured settlement became the best option, making it necessary to determine how the fee amount should *851be computed. That was done. Based on the undisputed facts, I would hold the agreement was open, aboveboard, disclosed to the guardian ad litem, and approved by the court.
The court's concern in Perez as to violation, of a fiduciary duty was directed toward the fact counsel did not reduce the annuity settlement to present value, but took a fee on the entire projected payment. That did not occur in this case.
While there were other methods for computing the attorney fee, the fact one method of computation now seems more beneficial to Mrs. Barr does not alone establish a breach of a fiduciary duty. Mrs. Barr did not offer any affidavits or expert testimony to establish that the fee arrangement or the method of reaching the agreement breached any standard of care. As the court stated in Hansen v. Wightman, 14 Wn. App. 78, 92, 538 P.2d 1238 (1975): "The standard of care required of attorneys does not impose special or different attention to duty because the relationship between attorney and client is a fiduciary one. The care exercised must still be reasonable."
I would also affirm the dismissal of Mrs. Barr's negligence action against Steven Stocker, the guardian ad litem. As with Mr. Stamper and Mr. Day, there is no evidence Mr. Stocker breached the standard of care. Alternatively, it appears Mr. Stocker is entitled to judicial immunity from liability arising from his investigation of the reasonableness of the settlement on behalf of the court. See Collins ex rel. Collins v. Tabet, 111 N.M. 391, 395, 806 P.2d 40, 44 (1991), which held:
[A] guardian ad litem, appointed in connection with court approval of a settlement involving a minor, is absolutely immune from liability for his or her actions taken pursuant to the appointment, provided that the appointment contemplates investigation on behalf of the court into the fairness and reasonableness of the settlement in its effect on the minor.
This same rationale was applied in Bader v. State, 43 Wn. App. 223, 226, 716 P.2d 925 (1986). The majority finds an issue of fact as to whether Mr. Stocker rendered professional services on behalf of the Barrs. But I see nothing in the record suggesting he acted as an advocate for Mr. Barr in *852the litigation itself. He reported fully to the court. Nothing was hidden. No actual or constructive fraud was demonstrated or alleged by Mrs. Barr.
This settlement was reached after foil disclosure. As noted by the judge at the settlement hearing, it was a good settlement. It remains a good settlement. Mrs. Barr's allegations of wrongdoing do not raise issues of fact sufficient to reopen the entire settlement and attorney fee agreement. I would affirm.
Review granted at 122 Wn.2d 1016 (1993).

The only viable issue that seems to exist involves that portion of the attorney fee applicable to "maintenance and cure". Plaintiff contends such payments generally are made as a matter of right. On the other hand, Mr. Day states that at one point Crowley Maritime attempted to discontinue the payments based on an argument that Mr. Barr had recovered from his injuries and his remaining disabilities were the result of his alcoholism. Mr. Day contends his services insured the continuation of the payments and, therefore, they are subject to fees. The fact the Barrs are not legally entitled to an attorney fee award from Crowley Maritime for legal fees they incurred in collecting maintenance and cure, see Ober v. Penrod Drilling Co., 726 F.2d 1035 (5th Cir. 1984), cited by the majority, does not mean they are relieved from personal responsibility for paying their own attorney. Also, it is clear from the fee agreement the Barrs agreed to pay a fee on any amount recovered.

Since Mr. Day and Mr. Stamper continued to work together, both could continue to rely on the agreements reached between the Barrs and Mr. Day.