“Case within a Case” Legal Malpractice Claims Proving Collectibility, 0919 COBJ, Vol. 48, No. 8 Pg. 54

Position:Vol. 48, 8 [Page 54]

48 Colo.Law. 54

“Case within a Case” Legal Malpractice Claims Proving Collectibility

Vol. 48, No. 8 [Page 54]

Colorado Lawyer

September, 2019

August, 2019



This article discusses the Colorado Supreme Court's recent decision in LeHouillier v. Gallegos, where it held that a client-plaintiff hears the burden of proving collectibility in a legal malpractice claim.

Collectibility is a critical element in a legal malpractice claim premised on an attorney's alleged mishandling of an underlying case. Under Colorado law, a client-plaintiff must prove that he or she would have prevailed in the underlying case had it been handled properly, and the "question of whether the judgment in the underlying case would have been collectible" must be resolved.[1] For example, suppose a plaintiff sustained serious damages in an automobile accident where liability was not disputed and his or her attorney's mishandling of the case resulted in a pretrial dismissal in favor of the defendant. If that defendant was uninsured and had no assets against which to collect a judgment, the attorney's malpractice would not be actionable because the underlying damages were uncollectible.

For over 90 years, who bore the burden of proving or disproving collectibility remained an open question: Was it an element of a plaintiff's case-in-chief, or was it an affirmative defense to be proved by an attorney-defendant? The Colorado Supreme Court recently decided this issue in LeHouillier v. Gallegos, holding that a client-plaintiff bears the burden of proving collectibility.2 This holding lends clarity to the evaluation and litigation of legal malpractice claims.

This article discusses the Court of Appeals and Supreme Court opinions issued in LeHouillier. It concludes with lessons learned from this significant case.

The Basics of Legal Malpractice Claims

The crux of a legal malpractice claim premised on an attorney's professional negligence is that the "attorney breached his or her professional duty of care in a way that proximately injured a client."3 To prevail on this type of claim, a plaintiff must establish that (1) the attorney owed a plaintiff a duty of care; (2) the attorney breached that duty; and (3) the attorney proximately caused damage to the plaintiff.4 To prove causation, a plaintiff must prove that he or she "should have been successful in the underlying action if the attorney had performed properly."5Courts refer to this requirement as the "case within a case."6

Collectibility has long been essential to a legal malpractice claim.7Until LeHouillier, however, who bore the burden of proving or disproving collectibility remained open in Colorado. Plaintiffs argued it was an affirmative defense, meaning the defending attorney had to prove that the underlying claim was not collectible. Defendants, in turn, argued it was a sub-element of causation and, accordingly, the plaintiff had the burden to prove collectibility.

LeHouillier Goes to Trial

LeHouillier arose from allegations of medical malpractice and eventually became a legal malpractice lawsuit where collectibility was a central issue.

In 2006, Dr. Steven Hughes, a radiologist, performed a brain MRI on Delia Gallegos.8 According to Gallegos, Dr. Hughes "failed to detect an obvious brain tumor" on the MRI.9 Three years later, Gallegos had another MRI through a different doctor, who spotted the tumor.10During the time between the two MRIs, the tumor had grown three times larger.11

Had Dr. Hughes discovered the tumor in 2006, Gallegos "could have undergone noninvasive radiosurgery" to treat it; this treatment was cheaper and less invasive than her ultimate treatment.12 Because of the delay in discovering the tumor, radiosurgery was no longer a treatment option and Gallegos instead had to undergo three craniotomies "to remove as much of the tumor as possible."[13]The craniotomies "damaged Gallegos's vision, hearing, and memory."14

Gallegos ultimately retained an attorney, Patric LeHouillier, to sue Dr. Hughes for medical malpractice.15LeHouillier investigated the case but decided not to proceed with a lawsuit because, in his view, it did not make economic sense.16 Whether he informed Gallegos of his decision is disputed.17LeHouillier claimed that he had informed Gallegos "of his decision in a meeting, adding that he would no longer represent her."[18]However, he "did not keep any written records to memorialize what had been discussed" with Gallegos at the meeting, nor did he "send [her] a letter to inform her that he was no longer her attorney."19 The statute of l imitations for Gallegos's medical malpractice claim against Dr. Hughes eventually ran.20

Gallegos then filed a legal malpractice lawsuit against LeHouillier, alleging that he negligently failed to pursue her medical malpractice claim against Dr. Hughes.21 In a case like LeHouillier, where the "client claims that her attorney's malpractice prevented her from prevailing in a lawsuit[,]" a plaintiff "must prove that but for the attorney's negligence, she would have won a favorable judgment against the underlying defendant" to satisfy the case-within-a-case requirement.22 In addition, "proving the case within a case in an attorney malpractice suit includes resolving the question of whether the judgment in the underlying case would have been collectible."23

Gallegos's lawsuit against LeHouillier proceeded to trial. After Gallegos rested her case-in-chief, LeHouillier moved for a directed verdict, arguing that Gallegos "bore the burden of proving that any judgment against Dr. Hughes would have been collectible, and that she had not carried her burden."24 The trial court agreed with LeHouillier in part, finding that Gallegos bore the burden of proving collectibility, but ruling that she had provided sufficient evidence to present the issue to the jury.25

The collectibility evidence Gallegos presented during the directed verdict argument consisted of a 2010 letter LeHouillier sent to Dr. Hughes and circumstantial inferences argued by Gallegos's counsel.26 In the letter, LeHouillier urged Dr. Hughes to contact his professional liability insurer.27 Gallegos's counsel argued that "because Dr. Hughes never responded that he lacked insurance, it could reasonably be inferred from his silence that he did carry professional liability insurance."28 Gallegos's counsel also argued that because a Colorado statute required practicing doctors to maintain professional liability insurance, "Dr. Hughes must have carried insurance[.]"[29]

The trial court found this evidence sufficient and the case went forward.30 The jury ultimately found that Dr. Hughes had been negligent and concluded "that LeHouillier and his firm had breached their professional duty of care by not pursuing the case against Dr. Hughes."31 The jury "found that Gallegos suffered over SI.6 million in present and future damages," and the trial court later reduced the jury's verdict to a judgment against LeHouillier for $727,727.86.32

After the trial, LeHouillier again raised the collectibility issue, this time through a motion for judgment notwithstanding the verdict, arguing that Gallegos "presented no evidence indicating that any judgment obtained in the medical malpractice action would have been collectible" against Dr. Hughes.33The trial court denied the motion, finding that Gallegos had presented sufficient evidence to prove collectibility.34

LeHouillier Enters the Court of Appeals

LeHouillier appealed to the Colorado Court of Appeals, arguing that the judgment against him should be reversed "because collectibility is an element that a plaintiff must prove in a legal malpractice case" and Gallegos did not prove that any underlying judgment against Dr. Hughes would have been collectible.35 The Court agreed with LeHouillier in part, concluding "that the record does not contain sufficient evidence that the judgment was collectible."36However, it agreed with Gallegos on the primary issue, finding that collectibility was an affirmative defense for which LeHouillier bore the burden of proof.37 It also found that the trial court should have required LeHouillier to raise collectibility as an affirmative defense and prove that any underlying judgment Gallegos would have received would not have been collectible.38

The Court of Appeals' analysis focused on a 1927 Supreme Court opinion, Lawson v. Sigfrid, which it described as a "strange case" and a source of "mystery" on one of the primary issues before it—that is, who has the burden of proving collectibility.39 Lawson arose from a dispute over an unpaid debt.40 In 1919, the creditor hired an attorney to sue the debtor.41 Four years later, the creditor and her attorney...

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