Supreme Court boosts interest calculation on legal-malpractice award

By Eric L. Lewis

Legal-malpractice plaintiffs may recover interest based on the total amount of the lost underlying settlement, without deduction for attorney fees they would have paid the defendant attorney, the Washington Supreme Court recently held in a case of first impression.

In Shoemake v. Ferrer, No. 81812-6 (Feb. 4, 2010), a drunk driver, Joseph Hernandez, struck and injured Andrea Shoemake in 1992. She hired attorney Douglas Ferrer to pursue recovery from the drunk driver and from Shoemake’s underinsured-motorist carrier, State Farm. She agreed to pay Ferrer a 40 percent contingent fee.

Ferrer mishandled Shoemake’s claim. He waited until two days before the statute of limitations ran before suing Hernandez. He failed to file a required confirmation of joinder pleading, and the trial court dismissed the case. Although he persuaded the court to reinstate the case, he failed to show up for the first day of trial and never informed Shoemake of the trial date. The trial court again dismissed the case. Ferrer did not tell Shoemake that the case had been dismissed but told her for several years that the court was too backlogged to consider her lawsuit. In 2005, Shoemake called the court herself and learned of the dismissal.

Shoemake sued Ferrer. Only then did she learn that State Farm had told Ferrer that it was willing to pay Shoemake its $100,000 UIM policy limit, but that Ferrer had never communicated this offer to Shoemake. Shoemake’s new attorney recovered the $100,000 from State Farm, 10 years after she could have received it.

The trial court ultimately awarded Shoemake interest on the $100,000 that she should have recovered 10 years earlier. But the trial court calculated the interest on the $60,000 net recovery, after deducting the 40-percent contingent fee that Ferrer would have received. Shoemake also was awarded attorney fees for the legal-malpractice case based on Ferrer’s breach of fiduciary duty.

Both sides appealed. Shoemake sought a calculation of interest on the $100,000 gross recovery rather than the $60,000 net amount, and Ferrer appealed the award of attorney fees. The Court of Appeals agreed with Shoemake that the interest should have been calculated on the full $100,000 amount that she could have recovered on the underlying claim. The Court of Appeals reversed the award of fees because Washington did not recognize a breach of fiduciary duty as a basis for awarding fees.

Shoemake sought Supreme Court review, which the Court granted on the issue of the interest award only.

The Supreme Court surveyed the conflicting decisions from other states as to whether a legal-malpractice plaintiff may recover the total value of the underlying case, or only the net value after deducting the fees that the plaintiffs would have paid. The majority view supported Shoemake. As one treatise noted, if plaintiffs recovered only the net amount, “the defendant lawyer would in effect be credited with a fee that the lawyer never earned.”

Based on this reasoning, the Court agreed with the Court of Appeals that the interest calculation should be based on the gross recovery amount to make Shoemake whole for the loss of use of the money during the 10 years of delay.

Expert must base opinion on generally accepted scientific theory

By Marc Rosenberg

A medical-malpractice plaintiff must establish causation through expert testimony derived from a theory that is generally accepted in the scientific community, the Washington Court of Appeals recently held.

In Eakins v. Huber, No. 27357-1-III (Feb. 23, 2010), Sheri Eakins required three stents to alleviate blockage in her coronary artery. Dr. Phil Huber implanted the stents, which contained 10 to 14 percent nickel. Eakins is allergic to nickel. After the stents were implanted, Eakins suffered from many symptoms, including a rash at the operation site, episodes of joint pain and swelling, fevers, chills, sweating, elevated blood pressure, itching, and general aching. She saw several doctors, but none could determine what condition she had or what was causing it. None of the doctors attributed her symptoms to the stent implants.

Eakins sued Dr. Huber and his clinic. She alleged that he knew that she was allergic to nickel and that his implantation of stents that contained nickel violated the standard of care and caused her complications. Eakins's medical expert, a cardiothoracic surgeon, testified that Dr. Huber violated the standard of care, which “resulted in injury to Ms. Eakins.”

Dr. Huber moved for summary judgment, seeking dismissal of the action because Ms. Eakins did not possess competent medical evidence establishing that the stents actually caused her symptoms. He argued that there was not sufficient scientific data or peer-reviewed literature indicating general acceptance of Eakins’s causation theory. Dr. Huber based this argument on the longstanding Frye test, established in Frye v. U.S., 293 F. 1013 (1923). Under Frye, evidence derived from a scientific theory or principle is not admissible unless it has achieved general acceptance in the relevant scientific community. Washington courts follow the Frye rule.

In response to Dr. Huber’s motion, Eakins offered a second declaration of Dr. Adams, in which he testified that the U.S. Food & Drug Administration and the stent manufacturers had issued warnings that patients with hypersensitivity to stainless steel could suffer allergic reactions to the stents. Dr. Huber filed another declaration from an allergist and immunologist who testified that his specialty does not generally accept any causal relationship between placement of such stents and the types of systemic reaction that Eakins suffered.

The trial court granted Dr. Huber’s motion based on Eakins’s failure to meet the Frye test. Eakins appealed.

The Court of Appeals affirmed, noting that under Frye, “[w]e do not evaluate whether the scientific theory is correct, but whether it has achieved general acceptance in the relevant scientific community.” The court also noted, “The Frye test recognizes that judges do not have the expertise to assess the validity of a challenged scientific theory and, therefore, they must defer this judgment to the qualified scientists.” The main rationale for the Frye test is that it ensures the reliability of scientific evidence. “If there is a significant dispute between qualified experts as to the validity of scientific evidence, it may not be admitted” into evidence, the court said.

The Court of Appeals then considered in great detail the medical literature on the subject of stents supposedly causing systemic symptoms due to allergy. The court concluded that the literature on which Dr. Adams relied did not establish expert consensus regarding his causation theory. The Court of Appeals, like the trial court, also noted that none of plaintiff’s own treating physicians had concluded based on reasonable medical certainty that the stents were the cause of her symptoms.

Eakins reaffirms the continuing validity of the Frye test, and of evidentiary challenges to questionable expert testimony, in Washington.

Around The Firm

Bradley D. Westphal recently tried Allen v. Jayson, a four-day jury trial in Thurston County. The plaintiff fell from Brad’s client’s third-floor deck after it collapsed. Plaintiff suffered serious injuries and incurred approximately $44,000 in medical expenses. Liability was admitted. Brad’s client offered up to $175,000 in settlement. Plaintiff’s counsel asked the jury to award $250,000. The jury returned a verdict of only $90,000.

David L. Martin and Peter E. Sutherland won summary judgment in Reynolds v. Clark County Fair Assn. The fair had constructed a “water mister,” a simple frame made out of PVC pipe, perforated with small holes to mist water on patrons during hot summer days. The water mister had caused a manhole cover on the concourse to become wet. Plaintiff argued that the wet surface caused her to slip and fall. No one had fallen in the 10 years that the misters had been in use or on any of the more than 40 manhole covers that dot the Fair concourse, which often became wet in the rain. Plaintiff provided expert testimony that the water would pool at these manhole covers. However, the court found that water on a surface does not by itself establish notice of a dangerous condition and that plaintiff failed in her burden to prove that the Fair knew or should have known that this wet surface could pose a danger.

Rebecca S. Izsak and Stefanie L. Peppard were awarded summary judgment in Lake v. Island Hospital. Plaintiff alleged violations of the Uniform Healthcare Information Act, as well as torts of invasion of privacy and outrage for an alleged dissemination of healthcare information to her former boyfriend. Plaintiff’s sole evidence consisted of hearsay and her own conjecture as to the course of events. The court agreed that such “evidence” was not admissible to prove the allegation that there was a dissemination of protected information by hospital staff, and without more, plaintiff had failed in her burden of proof. The court granted summary judgment.

Jeffrey P. Downer and Jennifer R. Porto won a defense jury verdict in Newman v. Costco Wholesale Corp., a two-week personal-injury case. Plaintiff alleged that she slipped and fell on a very large fabric softener spill. Costco denied liability and established on cross-examination of plaintiff's own witnesses that the spill was fresh and had no tracks through it. Jeff and Jennifer offered testimony regarding “door counts” that showed that if the spill were present for any significant length of time, patrons and carts would have caused tracks through the spill. They also presented a large volume of evidence that plaintiff was not a credible witness, including testimony that plaintiff had another personal injury case pending, but failed to disclose it; she withheld information about other, similar injuries; she failed to file tax returns for several years, and the ones she did produce conflicted with those filed with the IRS. Plaintiff’s settlement demand before trial was $614,942, and her lawyer asked the jury to award almost $440,000. After less than an hour of deliberation, the jury returned a defense verdict, 11 to 1, in Costco’s favor.

Jennifer Porto was admitted to practice before the Supreme Court of the United States on June 1, 2009. Ms. Porto took the oath of admission in open court. The Chief Justice of the United States, John G. Roberts, Jr., swore her in. She is now a member of the Bar of the Supreme Court of the United States and an officer of the Court.

Gauri Shrotriya Locker won a motion to dismiss in Paulson v. Feldman, a legal-malpractice action against a public defender. The court held that plaintiff’s improper service of process did not toll the applicable statute of limitations and that as a matter of law his requested relief, dismissal of the criminal charges, could not be awarded.

Sam B. Franklin and Gauri Locker won summary judgment in Elzey v. Strout, a legal-malpractice action. Defendants represented plaintiff’s ex-wife in an action to recover marital assets. After winning a judgment of more than $1.8 million, defendants took action to collect it. Plaintiff then sued defendants, alleging that they breached duties owed to him, even though he was the adverse party. The court agreed with Sam and Gauri that no such duties were owed and dismissed plaintiff’s claims.

Sam Franklin and Rosemary J. Moore successfully defended an appeal from the summary judgment of dismissal awarded in Martin v. Ellis. Martin claimed that the estate administrator had breached her fiduciary duty to the estate beneficiaries. The Superior Court dismissed Martin’s case and awarded attorney fees to the defendant. The Court of Appeals affirmed the dismissal, holding that Martin’s claim was precluded by res judicata, and affirmed the award of attorney fees against the plaintiff and his counsel.