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Hammel v. McCulloch
Citations: 441 P.3d 617; 296 Or. App. 843Docket: A163891
Court: Court of Appeals of Oregon; April 3, 2019; Oregon; State Appellate Court
A legal malpractice case arose from a Tri-Met bus incident in Portland, where five pedestrians, including plaintiffs Ryan and Jamie Hammel, were struck. They allege that their attorneys, Mark McCulloch and the law firm Powers McCulloch Bennett, LLP, were negligent for not pursuing claims against additional entities related to their personal injury case. The trial court granted summary judgment in favor of the defendants, stating that the plaintiffs failed to prove the elements of "causation" and "damages" necessary for their legal malpractice claim. On appeal, the court reversed this decision, determining that the trial court did not adequately consider whether genuine issues of material fact existed. The incident involved fatalities and injuries, with other claimants filing wrongful death and personal injury lawsuits against Tri-Met and the bus manufacturer, New Flyer, along with the manufacturers of a side-view mirror. After hiring the defendants, the plaintiffs pursued claims solely against Tri-Met and later replaced them with attorney Michelle Burrows, after which the statute of limitations expired on claims against the bus's manufacturers. The plaintiffs’ lawsuits were subsequently consolidated. Rosco entered a global settlement totaling $225,000 with three products-liability claimants, distributing $75,000 to each. Hadley settled separately for $100,000 with each claimant. Tri-Met and New Flyer each paid $2 million to settle claims, with the distribution of these funds determined by the claimants and their attorneys. The distribution from Tri-Met allocated $603,911 to the Estate of Jenee Hammel, $546,939 to Gittings, $524,150 to the Estate of Danielle Sale, and $325,000 to plaintiffs. Conversely, New Flyer’s $2 million was distributed as $721,089 to the Estate of Jenee Hammel, $653,061 to Gittings, and $625,850 to the Estate of Danielle Sale, with plaintiffs receiving no portion of New Flyer’s settlement. Plaintiffs contended that New Flyer's payment was a direct duplication of Tri-Met's distribution rather than a new negotiation, and they did not partake in the settlements from New Flyer, Rosco, or Hadley due to a lack of claims filed against those entities. Following the settlements, plaintiffs pursued a legal malpractice claim against their attorneys, alleging negligence in failing to file claims against New Flyer, Rosco, and Hadley, which they believed would have resulted in additional funds. Defendants moved for summary judgment, asserting that plaintiffs could not demonstrate harm or causation, as there was no evidence they would have received greater settlements if claims had been filed. In response, plaintiffs argued it was probable that had claims been filed against New Flyer, they would have received a similar distribution to that from Tri-Met, asserting their agreed-upon share of 16.25% would have extended to settlements from Rosco and Hadley as well. Plaintiffs opposed defendants' summary judgment motion by presenting two declarations: one from Burrows, who took over as plaintiffs' attorney, and another from Gores, representing the estate of Jenee Hammel. The trial court granted the defendants’ motion, concluding that the key issue was whether the behavior of payors and those dividing settlement funds would have changed if defendants had pursued claims against specific products liability defendants. The court found that the declarations did not provide a valid basis for such conclusions, as they offered speculative insights rather than admissible evidence directly from the affected parties. On appeal, plaintiffs argued that the record allowed an inference that they would have received the same settlement from New Flyer as from Tri-Met, and potentially more from Rosco and Hadley. However, defendants contended that plaintiffs failed to provide admissible evidence showing that these entities would have offered higher settlement amounts had claims been asserted against them. Additionally, defendants moved to strike specific paragraphs of both declarations, including one from Burrows that described the settlement distribution, asserting it was merely a duplication of the existing negotiations without plaintiffs' involvement. Gores asserts that plaintiffs were not involved in the distribution of three settlements totaling $2,325,000 from New Flyer, Rosco, and Hadley, due to their attorney, Mark McCulloch, not filing claims against these entities. The trial court did not explicitly rule on the defendants' motions to strike but expressed skepticism about the foundation of statements in the declarations concerning how settlement fund distribution might have differed had claims been pursued. The court deemed the motivations and behaviors described as hearsay, incompetent, or speculative. On appeal, plaintiffs argue that the trial court overlooked the Gores and Burrows declarations when deciding on defendants' summary judgment motion. Defendants maintain that both declarations lacked foundation, were inadmissible, and contained purely speculative statements regarding settlement negotiations. Under ORCP 47 D, declarations opposing summary judgment must be based on personal knowledge and admissible facts. However, explicit statements of personal knowledge are not required if the affidavit's overall content allows a reasonable person to infer such knowledge. It is determined that Burrows, who was involved in settlement discussions, had the requisite personal knowledge to testify about fund distribution. Similarly, Gores, representing one of the claimants, had personal knowledge of why plaintiffs did not participate in the settlements. Thus, both declarations were deemed admissible in addressing the defendants' motion for summary judgment. An action for legal malpractice is characterized as a specific type of negligence that arises from a special relationship, imposing a duty that extends beyond the typical obligation to avoid foreseeable harm. To succeed in a legal malpractice claim, a plaintiff must demonstrate four elements: (1) a duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) measurable harm to the plaintiff, and (4) causation linking the breach to the harm. Under Oregon law, causation typically involves "but-for" causation, meaning the plaintiff must show that the harm would not have occurred without the defendant's negligence. In the context of legal malpractice, this requires proving that the outcome would have differed had the attorney acted competently. Causation can be established through circumstantial evidence, expert testimony, or common knowledge. In this case, the evidence allows a reasonable juror to conclude that the defendants' failure to pursue claims against New Flyer caused harm to the plaintiffs. Key facts include the uncertainty of settlement fund distributions at the time of the agreement, the plaintiffs receiving 16.25% of the Tri-Met settlement but none from New Flyer, and that the distribution of New Flyer funds was a mere repetition of the Tri-Met negotiations without the plaintiffs' involvement. A juror could reasonably infer that, had the defendants sued New Flyer, the plaintiffs would have received a similar percentage of those settlement funds. Multiple reasonable inferences may arise from established facts, allowing the jury discretion in determining which inference to accept. Defendants' failure to pursue claims against Hadley and Rosco parallels their inaction regarding New Flyer. Evidence indicates that all claimants against Hadley in the April 2010 Tri-Met accident received a $100,000 settlement, regardless of the nature of their claims. Plaintiffs, who were injured in the accident, did not sue Hadley and thus did not participate in this settlement. A reasonable juror could infer that had defendants sued Hadley, plaintiffs would have also received a $100,000 settlement, highlighting a potential causation of harm due to the failure to sue. Similarly, for Rosco, every claimant involved in the April 2010 accident participated in a $225,000 global settlement, sharing the proceeds irrespective of whether their claims were for injury or death. Since plaintiffs did not sue Rosco, they were excluded from this settlement. A reasonable juror might conclude that had defendants pursued claims against Rosco, plaintiffs would have received their share of the settlement funds. Defendants' arguments against these inferences, including reliance on the burden of proof in legal malpractice cases and claims regarding the necessity of evidence from products-liability claimants, were found unpersuasive. The plaintiffs provided sufficient evidence to establish a genuine issue of material fact regarding causation and harm, leading to the conclusion that the trial court incorrectly granted summary judgment. The decision was reversed and remanded, with references to applicable procedural rules reflecting the 2015 version of ORCP 47.