B. Method of Determining Damages

• Library: South Carolina Damages (SCBar) (2009 Ed.)

B. Method of Determining Damages

South Carolina law is scant on the issue of exactly how to determine damages in an attorney malpractice action. As one court stated: "An exact rule for determining the amount of such damages is difficult and must to some extent depend upon the facts of each case."² often, the cases consider proximate cause and damages as one element instead of two separate elements.

1. Attorney Negligence in Prosecuting or Defending a Claim: The Case-Within-a-Case Method

One of the ways to determine damages, especially in the situation where an attorney has committed malpractice in prosecuting or defending a claim, is use of the case-within-a-case or trial-within-a-trial method.³ The case-within-a-case method may be the only method of determining proximate cause and damages in a malpractice case that is the result of negligent acts during litigation.

While South Carolina courts have not provided decisive opinions on the method, other jurisdictions have addressed the issue. One California court has identified the case-within-a-case method as a tool in which both causation and damages can be demonstrated.⁴ In the case-within-a-case method, the plaintiff basically litigates the underlying case before the malpractice jury, as it would have been tried absent the negligence or malpractice of the attorney. The plaintiff must submit, at the malpractice trial, the evidence of damages in the underlying action.⁵ For example, if the malpractice took place in the context of a personal injury case, the plaintiff must present evidence of his or her injuries (such as physician testimony, medical bills, loss of wages, etc.), as well as evidence of the defendant's malpractice. The malpractice defendant may then be able to challenge the evidence of injury.⁶

The case-within-a-case method is appropriate when dealing with malpractice in the form of errors in litigation, such as evidence or witnesses not submitted at trial. Generally, "[a] malpractice plaintiff is not required to prove what outcome a particular fact-finder in the underlying case. ..would have reached."⁷ Instead, the plaintiff simply submits the underlying case to the malpractice jury, and that jury substitutes its own judgment to the facts of the underlying case. However, in the case-within-a-case method, the plaintiff usually has the burden of proof. For example, in a case in which the attorney failed to file within the statute of limitations, the plaintiff must show that if the action had been commenced, he or she would have prevailed, rather than the attorney shouldering the burden of proving that the claim was not valid.⁸

While South Carolina courts have not clearly addressed the case-within-a-case method, it is obvious that such a method has been approved. In Floyd v. Kosko,⁹ the court considered whether the defendant attorney was negligent in not perfecting an appeal of an order which refused to vacate a default judgment. The court held that, in order for the plaintiff to be successful, he would have to show that an appeal would have been successful. In that case, the trial court examined the merits of the appeal to determine if it would have been successful. The Court of Appeals held:

In the instant case, the trial court properly put itself in the position of the appellate court and determined, based on the testimony of the process server, that there was evidence to support Judge Cobb's finding of service on Floyd.¹⁰

Therefore, in the context of a legal malpractice based on the failure to appeal, the trial court considered the merits of the appeal, or, in other words, used the case-within-a-case method.

In an unpublished opinion, Briggs v. Cochran,¹¹ the Fourth Circuit found that a "trial within a trial" could establish the damages in a legal malpractice claim. The Fourth Circuit stated that, the jury, using this method, "determines [whether] the claim was meritorious, [and] it then decides the damages."¹² One California court noted that although the case-within-a-case method had been critiqued as

result[ing] in a confusion of two distinct questions, causation and injury. . [T]he fact that the "case within a case" method may be utilized to establish that malpractice caused the loss of a case and that a lost recovery constitutes the damages simply means that several elements are proven by one process, not that there is a confusion of them.¹³

In determining the appropriate measure of damages, some courts have also made the distinction as to whether the plaintiff in the malpractice action was a plaintiff or defendant in the underlying matter.

Specifically, in the context of legal malpractice in the prosecution of a client's cause, resulting in dismissal of the client's complaint, the measure of damages is ordinarily the amount that the client would have received but for [the] attorney's negligence, and is generally shown by .evidence establishing [liability] and worth of the claim that was irredeemably lost.¹⁴

on the other hand:

the measure of damages for legal malpractice in the defense of client's cause is ordinarily fixed at the amount of the adverse judgment, or that portion thereof, that would not have been obtained against the client but for the attorney's negligence.¹⁵

The court in Carbis Sales, Inc. v. Eisenberg,¹⁶ noted that while a "suit within a suit" was the most common way to proceed in a legal malpractice case, there were other alternatives such as expert testimony as to what would have transpired at the original trial absent the malpractice.¹⁷ The court also noted that "[a] flexible approach [was] particularly warranted" in cases in which the aggrieved client had been a defendant in the original matter because it might be "'awkward and impracticable' for the plaintiff to proceed 'with direct proofs, as though he [or she] were the erstwhile claimant.'"¹⁸

2. Expert Testimony

The case-within-a-case method is confusing, and therefore some trial courts favor alternatives. one method is the use of expert testimony. Expert testimony to establish damages has been used in cases of all types. In Billups v. Leliuga,¹⁹ a treating chiropractor was allowed to testify as an expert as to the damages the plaintiff sustained in a car accident. In Weaver v. Lentz,²⁰ an economic expert's testimony established the amount of the loss of...