Duane Morris and two former partners achieved a complete defense win in a legal malpractice trial in Colorado brought by a former client who claimed the defendants failed to timely secure a settlement on his behalf.
On June 27, a federal jury in Colorado found against plaintiff Edward Phillips and on behalf of Duane Morris and former partners John C. Herman and Allen L. Greenberg, rejecting Phillips’ legal malpractice, breach of fiduciary duty, fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation and unjust enrichment claims.
The verdict comes less than two months after a federal judge denied the defendants’ motion for summary judgment, declining to extend the doctrine of judgmental immunity to legal malpractice cases.
The underlying case involves a patent infringement action Phillips filed over his patent for “steel shell modules” for prisons.
After Phillips had presented his evidence at trial, the defendant in the underlying patent suit had asked for judgment as a matter of law, on which the judge didn’t rule for nine months.
In March 2006, the jury entered a verdict in Phillips’ favor, for $1.85 million, with a finding that the defendant was liable for willful infringement of the patent, creating the potential for substantially more in damages.
In the months between the motion for judgment as a matter of law and the judge’s ruling on the motion, Phillips retained the Duane Morris lawyers, who worked on negotiating a settlement with the defendant, according to a magistrate judge’s opinion recommending the court deny the defendants’ motion for summary judgment.
Phillips had wanted $10.5 million, according to the opinion, and the defendant initially offered $2 million.
By late December 2006, the parties had reached a tentative settlement of $4 million, according to the opinion. Earlier that month, the patent defendant had asked for a joint request to stay the case for 30 days, which Herman and Greenberg rejected.
Soon after the parties reached their tentative settlement, the judge granted the motion for judgment as a matter of law, finding in favor of the defendant.
Phillips then agreed to drop the case and his rights to enforce the $4 million agreement in exchange for $2.6 million, according to the opinion. He then filed suit against Duane Morris, Greenberg and Herman, arguing that if they had agreed to the 30-day stay of the case, he would have gotten a settlement larger than $2.6 million.
In their pretrial brief, Duane Morris, Herman and Greenberg argued that Phillips had made binding judicial admissions during discovery that he felt his lawyers who handled the patent infringement case before the Duane Morris team entered the case committed malpractice and affected his ability to get a more favorable settlement.
The defendants also focused on the fact that the judge in the underlying patent case, according to her practice standards in place at the time, would not have necessarily granted a stay even if Herman and Greenberg agreed to it, according to their pretrial brief.
U.S. Magistrate Judge Michael J. Watanabe of the District of Colorado rejected in May each of the three arguments for summary judgment jointly filed by the three defendants, including one regarding the stay issue. U.S. District Judge Robert E. Blackburn adopted those recommendations the same month.
The defendants had argued in their motion for summary judgment that Phillips couldn’t prove causation since there are no genuine factual disputes that the judge would not have granted the stay if the parties had asked for it.
Duane Morris argued that stays are generally disfavored in the District of Colorado, the trial judge had denied a stay based on settlement negotiations in 2012, and her “practice standards” indicate that she isn’t inclined to stay cases, according to Watanabe’s opinion.
“The court finds there is a genuine dispute of material fact as to whether [U.S. District Chief] Judge [Marcia] Krieger would have granted the stay,” Watanabe said in rejecting the defendants’ arguments.
Duane Morris and the two attorneys also argued the doctrine of judgmental immunity, although it hasn’t been adopted by Colorado courts, would insulate it from the claim that its lawyers erred in rejecting the opportunity to stay the case.
“Although courts which have adopted the judgmental immunity doctrine describe it in various ways, defendants contend the doctrine stands for the proposition that, as a matter of law, ‘mere errors in judgment or in trial tactics do not subject an attorney to liability for legal malpractice,’” Watanabe said, with a quote from a 1986 Washington state court opinion in Halvorsen v. Ferguson.
Duane Morris and the individual defendants had argued that the way lawyers negotiate settlements would fall within that doctrine, according to the opinion. But, Phillips argued there is no precedent in Colorado case law to support that view. The judge agreed with Phillips, finding “a reluctance by Colorado Court of Appeal courts to extend immunity or reduce the standard of care in legal malpractice cases.”
Herman is now a partner with Robbins Geller Rudman & Dowd in Atlanta and Greenberg is now a partner with Thrasher Liss & Smith in Atlanta. The defendants were represented by Carolyn Fairless of Wheeler Trigg O’Donnell in Denver. Phillips was represented by attorneys at Don, Galleher & Saliman.
Don Galleher attorney Shelley Don and Fairless did not respond to requests for comment.
Duane Morris declined to comment.