Professional Liability - Winter 2004/2005

Contents

Ninth Circuit En Banc Panel Rejects Finding of "Per Se" Inexcusable Neglect for Reliance on Paralegal - By Lori Blitstien

Expert Testimony Required to Explain Impact of Alleged Malpractice to Jury - By Mike Pipkin

Trio of Cases Address Attorney Duty to Third Parties in Estate-Planning Context - By Lori Blitstien

Lawsuit Against Attorney for Breach of Duty of Loyalty Not a SLAPP - By Lori Blitstien

Successor Fiduciary Has Standing to Bring Malpractice Claim Against Attorney Hired by Predecessor - By Lori Blitstien

Duty of Class Counsel to Class Members Extends Beyond Certified Claims - By Lori Blitstien

Many practitioners breathed a sigh of relief when the Ninth Circuit, sitting en banc, struck down a panel's earlier finding that an attorney's delegation of calendaring responsibilities to a paralegal constituted "per se" inexcusible neglect. Plus: Texas Supreme Court requires expert testimony to explain how a lawyer's alleged missteps and failures at trial caused a worse result than the client otherwise would have received, and California courts offer guidance as to when an attorney providing testamentary legal services may be held liable to a third party.

Ninth Circuit En Banc Panel Rejects Finding of "Per Se" Inexcusable Neglect for Reliance on Paralegal

Pincay v. Andrews, 2004 U.S. App. LEXIS 23822 (9th Cir., Nov. 15, 2004)

After missing the 30-day deadline for filing a notice of appeal for his client, counsel sought an extension of time to file the notice by claiming excusable neglect. The attorney explained that he relied on his paralegal to calendar deadlines, and on this occasion his paralegal erroneously calendared the notice under a 60-day deadline. The district court judge found excusable neglect, and granted the extension, but a three-judge panel of the Ninth Circuit Court of Appeal reversed and dismissed the appeal, holding the attorney's reliance on a paralegal was inexcusable per se. The Ninth Circuit then voted to rehear the case en banc to consider whether the creation of a per se rule is consistent with the four-part balancing test set forth by the U.S. Supreme Court in Pioneer Investment Services Co. v. Brunswick Associated Ltd. Partnership, 507 U.S. 380 (1993) (balancing prejudice, length of delay, reason for delay, and good faith).

A majority of the en banc panel affirmed the district court's finding of excusable neglect. Reflecting on the "modern world of legal practice," the majority opinion acknowledged than the delegation of repetitive legal tasks to paralegals has become a necessary fixture in the struggle to control legal costs. Even though the court recognized that the filing deadline was unambiguous, and that the matter was within the control of the attorney, the court concluded that an attorney's carelessness may be excusable when considered within the context of the particular case.

In this case, the district court's findings reflected an application of the Pioneer test. After noting that the district court's ruling was being reviewed for abuse of discretion, and further noting that the district court was in a better position that the Ninth Circuit panel to evaluate contextual factors such as the attorney's quality of representation during the life of the case and the propensity of the opposing party to capitalize on petty mistakes, the majority concluded that district court did not abuse its discretion.

Judge Kozinski, joined by Judges Rymer and McKeown, dissented. Kozinski opined that, even under Pioneer, the standard is not mere neglect - it is "excusable neglect" - and thus the neglectful party must present a sufficient excuse. In Kozinski's view, the only explanation provided for the neglect here was that "the lawyer didn't bother to read the rule; instead, he relied on what a calendaring clerk told him." Kozinski concluded that "While delegation may be a necessity in modern practice, it can't be a lever for ratcheting down the standard for professional competence."

Judge Berzon separately concurred, joining the majority opinion in full and disagreeing with the dissent on two points: First, that the dissent relied too heavily on the third Pioneer factor, the reason for delay, instead of viewing it as only one of four factors weighed. Second, that the "something" to make the neglect excusable was the complete misfiring of a well conceived...