$850K Malpractice Verdict in the Case of the Missing Expert Report

Legal Malpractice Expert Report

The New Jersey Law Journal reported that a Passaic County jury awarded $850,000 to the plaintiff in a legal malpractice case whose attorney failed to obtain an expert report.

Underlying Case

Plaintiff Aref Abuhadba hired Thomas Doerr of Berman Sauter Record & Jardim in December, 2010, to sue various contractors who allegedly designed and built a retaining wall on his property that cracked and bulged right after it was completed, and had to be shored up. The wall was intended to facilitate construction of a residence on a mountaintop lot in Totowa, NJ.

Doerr filed suit on Abuhadba’s behalf in March 2011, but allegedly failed to take any steps to secure expert reports by the agreed-on deadline, or for months afterward.

That led to the court granting defendants’ motion for summary judgment.

Abuhadba’s effort to vacate the summary judgment failed.

Firm Disbands

Berman Sauter shut down after Abuhadba lost his case, but before he sued it.

The firm is also a party to another malpractice suit—Berman, Sauter, Record & Jardim v. Robinson. That suit began as a fee dispute, but one of the defendants filed a counterclaim alleging that Sauter negligently handled a real estate matter.

The case achieved notoriety in legal circles, due to a dispute over whether the same judge could preside over it at both the trial court and appellate levels. The NJ Supreme Court ruled that he wasn’t precluded from doing so. The case is scheduled for a retrial on May 1.

Malpractice Claim

Abuhadba filed a malpractice suit against Attorney Doerr and the Berman Sauter firm, after it had disbanded.

Their defense was that an expert repeatedly promised to produce his report, but failed to do so. However, Doerr claimed all his interactions with the expert were by phone, so there was no correspondence to support that claim.

The jury obviously didn’t believe the firm’s defense. The $850,000 it awarded Abuhadba is the amount that he stood to recover in the legal malpractice case, according to his attorney, and he’ll seek interest and a fee award, pursuant to Saffer v. Willoughbywhich permits fee shifting in legal malpractice cases.

The verdict was covered by Berman Sauter’s malpractice insurance policy.

Analysis

This appears to be an open-and-shut case of legal malpractice, so why was it tried, i.e., why was ‘good money thrown after bad’ defending an apparently unwinnable case?

Since the firm’s malpractice insurer paid the verdict, it also provided a defense. So why didn’t the defense counsel it retained evaluate the case early on as unwinnable, and recommend that it be settled?

Alternatively, if that did happen, and the insurer agreed, but the firm refused to consent a settlement, which is required by all legal malpractice policies, then why didn’t the insurer cite the “hammer clause”, whereby if a firm refuses to agree to a settlement recommended by the insurer, it must pay out-of-pocket any indemnity + defense costs over that amount that the insurer incurs.

It’s unlikely that if Berman Sauter’s insurer did send it a “hammer clause” letter, that the firm, which as noted, had already disbanded, would’ve withheld its consent to a settlement.

By allowing the case to be tried, the insurer and the firm may both be exposed to a fee shifting award (the insurer’s exposure depends on how much, if anything, is left on the per claim limit of the firm’s malpractice policy, after payment of the verdict and defense counsel’s fees).

Most importantly, why didn’t the attorney either retain an expert or tell the plaintiff that he couldn’t find one, and then withdraw from the case?

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About Curtis Cooper

Curtis Cooper is principal of Lawyers Insurance Group, a legal malpractice insurance brokerage that aggressively comparison shops on attorneys' behalf to find them the best terms available in the market. Contact him by phone: (202) 802-6415, or email: ccooper “at” lawyersinsurer.com.