Massachusetts’ highest court has revived a legal malpractice suit against Dechert, ruling that the firm could have done more to prevent a French court’s legal error.
Kiribati Seafood Co. alleged that Dechert negligently failed to provide an appellate court in Tahiti—an island territory in French Polynesia—with evidence that the Tahitian court deemed necessary for Kiribati’s claim.
A Superior Court judge in Massachusetts had granted summary judgment to Dechert, ruling that the Tahitian court erred under French law in denying Kiribati’s claim. Even if Dechert was negligent in its failure to file the evidence, the court’s error superseded, the Superior Court said.
But the Supreme Judicial Court disagreed, stating in an opinion filed Wednesday that the Tahitian court’s error was a concurrent, not superseding, cause of Kiribati’s claim being denied.
“Where an attorney makes a reasonable and correct argument of law and loses because of judicial error that was not foreseeable, the attorney cannot be found negligent for failing to prevent or mitigate that legal error,” Chief Justice Ralph Gants wrote. “But where the judicial error is foreseeable, such as where a judge or an appellate court has indicated an intention to rule in a manner that the attorney believes to be an error of law, then an attorney has an obligation to take reasonable and prudent steps to prevent or mitigate that error.”
The Dechert lawyers had worked with Kiribati on litigation related to a damaged fishing vessel, including a subrogation claim, and a claim against the Port of Papeete in Tahiti where the damage occurred. When a lower court ruled against the court and awarded $1.76 million to Kiribati, the port appealed and alleged unjust enrichment, as Kiribati was already assigned a $1.76 million subrogation claim. The first Tahitian appellate court deferred a decision on that claim, giving Kiribati time to prove that it had paid consideration for the assignment.
Once the first appellate decision came down, Dechert partner Xavier Nyssen, a past co-chair of the firm’s international dispute resolution practice, requested evidence from Kiribati’s general counsel, who provided four documents to show the consideration paid. But Dechert only submitted one of the four documents, Gants’ opinion said. One of the documents left out, according to the opinion, was proof that Kiribati paid attorney fees that its insurer was supposed to pay.
In May 2011, the Tahitian court of appeals issued a final decision, reducing the amount of Kiribati’s award by $1.76 million.
“The court specifically noted that Kiribati had failed to provide any evidence that it had paid attorney fees that Lloyd’s was obligated to pay, or that it had released Lloyd’s from legal claims that Kiribati otherwise could have brought in a court of law,” Gants wrote.
In July 2013, Kiribati sued Dechert alleging professional negligence, and sought to recover the $1.76 million subrogation claim it was denied. According to Gants’ opinion, Dechert argued that Kiribati should have prevailed even without the proof of consideration.
“The fundamental flaw in this argument is that a plaintiff’s loss need not have only one proximate cause; there can be multiple concurrent proximate causes,” Gants wrote.
A lawyer for Kiribati, John Neeleman, a commercial litigation partner at Kilpatrick Townsend & Stockton who joined the firm in June from Lane Powell in Seattle, said he was not surprised by the Supreme Judicial Court’s ruling. He said the case will go back to the trial court level, but he feels that the Supreme Judicial Court’s ruling “adjudicates the entire case.”
“We were actually very surprised at the trial court’s ruling,” he said. “It’s not good public policy.”
Megan Deluhery of Boston-based Todd & Weld, who also represents Kiribati in the dispute, said she expects the Massachusetts court’s decision to be cited in future malpractice cases.
“The message to practitioners is clear, your duties do not end if a judge or court makes a mistake of law,” she said. “The prudent practitioner will adapt and make the best case for its client that it can.”
A spokeswoman for Dechert, which is being represented by Goulston & Storrs, declined to comment on the matter.
Lizzy McLellan writes about the Pennsylvania legal community and the business of law at firms of all sizes. Contact her at email@example.com. On Twitter: @LizzyMcLellTLI