Collectibility

The Massachusetts Appeals Court reversed the grant of summary judgment to a defendant law firm in a legal malpractice case

This is an action for legal malpractice. Plaintiff Halawi Investment Trust, S.A.L. (HIT), a Lebanese joint stock organization, hired the defendants, Attorney James T. Bacon, Attorney Carlo Cellai, and their respective law firms (collectively, the defendants), to recover approximately $1.2 million in funds held by Boston Merchant Financial, Ltd. (Boston Merchant). After Boston Merchant refused to return the funds, the defendants initiated arbitration proceedings, which were later dismissed because they were not timely filed. HIT then filed this legal malpractice action in the Superior Court, claiming that the defendants were negligent in failing to timely initiate arbitration proceedings. A judge allowed the defendants’ motion for summary judgment as to certain of the claims, based on the conclusion that the plaintiff had failed to establish that Boston Merchant would have been able to satisfy a judgment for damages in any amount, and the plaintiff appealed from a separate and final judgment of dismissal of those claims entered pursuant to Mass. R. Civ. P. 54 (b), 365 Mass. 820 (1974).4 The narrow issue on appeal is whether the evidence relating to collectibility was admissible and, if so, whether it was sufficient to survive a motion for summary judgment. Answering both questions in the affirmative, we reverse the entry of summary judgment.

Required proof

The requirement of proof of collectibility is “derive[d] from the requirement that the plaintiff demonstrate that the attorney’s negligence caused him a loss, ‘that he probably would have obtained a better result had the attorney exercised adequate skill and care'”

…To survive a motion for summary judgment, HIT must have produced evidence that it could have collected “something” from Boston Merchant. See Poly, 423 Mass. at 148. In other words, HIT was not required to show that Boston Merchant had the funds to pay the entire $1.2 million judgment, only that Boston Merchant could have paid some portion of it. We conclude that it did so.

Toehold

In short, HIT has provided admissible opinion testimony about Boston Merchant’s ability to pay a judgment based on the deposition testimony of Belogour and as such the grant of summary judgment was error. While the evidence is admittedly thin, as noted in Shimer, 59 Mass. App. Ct. at 314, even thin evidence is sufficient to defeat summary judgment. “A toehold, however, is enough to survive a motion for summary judgment.” Id., quoting Marr Equip. Corp. v. I.T.O. Corp. of New England, 14 Mass. App. Ct. 231, 235 (1982). Here, HIT has produced such a toehold, which is sufficient to defeat summary judgment.

(Mike Frisch)