Can’t Buy Me Love (Or A Malpractice Cause Of Action)
The Iowa Supreme Court has held that a creditor cannot prosecute a legal malpractice action against the debtor’s attorney
The narrow question presented in this appeal is whether judgment creditors can levy on their judgment debtor, obtain the judgment debtor’s chose in action for legal malpractice against the attorney representing the judgment debtor in the litigation giving rise to the judgment, and prosecute the claim for legal malpractice against the attorney as the successors in interest to their judgment debtor. For the reasons expressed below, we conclude the judgment creditors cannot prosecute the legal malpractice claim as successors in interest to their former litigation adversary.
The debtor was convicted of crimes
The facts of this case are not disputed. In 2013, James Hohenshell’s stepdaughter invited some of her girlfriends to the Hohenshell home for a party. One of the girls was thirteen-year-old J.G. Hohenshell provided alcohol to J.G. and the other girls. After J.G. became intoxicated and sick, Hohenshell carried J.G. to his bedroom and forcibly raped her. In November 2014, Hohenshell pleaded guilty to one count of committing lascivious acts with a minor and five counts of providing alcohol to a minor and was sentenced to incarceration. “At the guilty-plea proceeding, Hohenshell entered his plea with a smirk on his face and a chuckle.” Gray v. Hohenshell, No. 17–1100, 2019 WL 325015, at *2 (Iowa Ct. App. Jan. 23, 2019)
Civil litigation followed
The parties tried the issue of damages to a jury. The jury awarded compensatory damages to J.G. in the amount of $50 million, loss of consortium damages to each parent in the amount of $1 million, and punitive damages in the amount of $75 million. The total verdict was $127 million.
It would be fair to say [attorney] Oliver did not vigorously defend the suit. The Grays offered to settle the suit for a confession of judgment in the amount of $2 million or for an amount “well into the six figure range” that included evidence of an ability to pay.
The court describes the lack of vigor in detail.
Defendant secured new counsel and appealed
While the appeal from the Grays’ suit against Hohenshell was pending, the Grays caused to be issued a writ of execution on the $127 million judgment against Hohenshell.
Then
The Grays purchased this right for $5000 at the sheriff’s sale. At the time the Grays executed on their judgment and purchased Hohenshell’s claims against Oliver, Hohenshell had not asserted any claim for legal malpractice against Oliver, nor has he ever, according to the record.
In November 2017, while the Grays were still defending the $127 million judgment against Hohenshell on appeal, they filed this malpractice claim against Oliver as successors in interest to Hohenshell.
This appeal involved summary judgment of the malpractice claim
The relevant cases identify a surfeit of reasons for concluding a claim for legal malpractice is not subject to assignment and prosecution by an assignee: (1) assignment divests the client of the decision to sue; (2) assignment imperils the sanctity of the attorney–client relationship; (3) assignment erodes the attorney–client privilege; (4) assignment compromises zealous advocacy and the duty of loyalty; (5) assignment degrades the legal profession and the public’s confidence in the court system by sanctioning an abrupt and shameless shifting of positions; (6) assignment restricts access to legal services by the poor or indigent; and (7) assignment creates a commercial market for legal malpractice claims.
These reasons apply with greater force where, as here, the assignment was involuntary and the claim arises out of the litigation in which the parties were adverse.
Policy
Given the uniquely personal nature of the claim, we conclude a chose in action for legal malpractice does not encompass the right for another to prosecute the claim as a successor in interest to the holder of the right where the successor obtained the chose in action through involuntary assignment. To conclude otherwise would allow the assignee to destroy the essential element of this peculiar species of property—the client’s right to prosecute or forego a claim of legal malpractice.
Justice Appel specially concurred
I do not completely agree with the majority’s analysis of the main issue in the case. For the second (integrity of the legal process), fourth (duty of loyalty), fifth (public confidence), and sixth (access to legal services) reasons listed in the majority opinion, I have reluctantly but firmly come to the conclusion that the transfer of a cause of action to a litigation adversary should not be permitted. I agree with the majority’s discussion of these specific points.
The majority opinion, however, offers not only the compelling rationale against the transfer of legal malpractice claims, which in my view pose unique problems, but piles on with further rationales that are not moored to the specific issue. It utilizes spill-over rationales—reasons one (only client determines malpractice), three (attorney–client privilege), and seven (commercial market)—that extend well beyond the specific context presented in this case and flood the legal plain off in the horizon. I view the second, fourth, fifth, and sixth reasons presented by the majority as wholly adequate to decide the issue before us.
(Mike Frisch)