Law Firm Not Liable to Adverse Party for Groundless Suit

• Pages: 25-25
• Date: 01 July 2022
• Author: John M. McNichols
• Subject Matter: Civil Law

The employees, however, still have their

individual actions, though it is a sepa-

rate type of relief,” he adds.

Dustin L. Craw ford, Atlanta, GA,

cochair of the Litig ation Section’s

Employment Litigation Subcom mittee

of the Civil Rights Li tigation

Committe e, also believes thi s case

highlights protections available to

employees from mandatory arbitra-

tion provisions and c lass waivers.

Crawford notes, “ PAGA is intended

to level the playing f‌ield s o that even

when employers have mandatory arbi-

trations and clas s waivers, there is still

a regulatory enf orcement mechanism

that the employer mu st be aware of.”

Law Firm Not Liable

to Adverse Party for

Groundless Suit

By John M. Mc Nichols, Litig ation

News Associa te Editor

A lawyer who f‌iles suit solely to earn

legal fees is not liable to the adverse

party even if the suit is groundless.

According to the Supreme Court of

Kentucky, a lawyer’s desire to earn fees

is not an improper purpose sucient to

sustain a claim for wrongful use of civil

proceedings against an attorney who

represented the adversary in a prior lit-

igation. The high court also held that a

negligence claim would not lie because

an attorney owes no duty of care to an

adverse party. ABA Litigation Section’s

leaders view the decision in Seiller

Waterman, LLC v. RLB Properties as

consistent with existing legal principles

and expect that other high courts will

come to similar conclusions if pre-

sented with the same issue.

The conf‌lict began when RLB

Properties engaged Skyshield Roof

and Restoration to repair damage to

a building that RLB owned in down-

town Louisville. When one of RLB’s

tenants sued Skyshield for def‌icient

repairs, Skyshield f‌iled a third-party

claim against RLB and a mechanic’s

lien against RLB’s building, alleg-

ing outstanding charges for its repair

work. RLB moved to dissolve the lien

and counterclaimed against Skyshield,

ultimately obtaining a $3 million

judgment plus attorney fees when

Skyshield defaulted.

RLB thereafter sued Skyshield’s

law f‌irm, Seiller Waterman LLC, and

several of its attorneys for, among

other things, wrongful use of civil pro-

ceedings, sometimes referred to as a

malicious prosecution claim, and neg-

ligence. RLB alleged that both the lien

and the third-party claim were base-

less and that the law f‌irm f‌iled them

merely to advance its client’s interest

and obtain fees for itself. On the law

f‌irm’s motion, the trial court dismissed

all of the claims as either legally def‌i-

cient or barred by the statute of limi-

tations. In so holding, the trial court

observed that RLB’s claim for wrongful

use of civil proceedings failed to allege

an improper purpose and that its neg-

ligence claim failed because, as an

adversary in litigation, RLB was not in

the class of non-clients to whom a law-

yer owes a duty of care. The Kentucky

Court of Appeals agreed with the legal

def‌iciency analysis, but reversed the

portion of the decision resting on stat-

ute of limitations.

Both the law f‌irm and RLB peti-

tioned the Supreme Court of Kentucky

for review, and the high court rein-

stated the trial court’s ruling in full.

The Supreme Court held that the trial

court properly dismissed RLB’s claim

for wrongful use of civil proceed-

ings because RLB failed to allege

an improper purpose. Citing both

the Restatement of Torts and the

Restatement of the Law Governing

Lawyers, the court ruled that the

law f‌irm’s desire for fees was not an

“improper purpose,” even if the f‌irm

had “act[ed] without probable cause

to believe the client’s claim will suc-

ceed.” While the suit against RLB was

eventually deemed meritless, the court

concluded that a “lack of probable

cause alone cannot support a legally

sucient inference that the attorney

acted with an improper purpose” and

that “[i]ndependent evidence of malice

is required.”

The Supreme Court of Kentucky

also ruled that the trial court properly

dismissed the negligence claim against

Seiller Waterman because no duty of

care f‌lowed from the law f‌irm to its cli-

ent’s adversary.

Litigation Section leaders agree

that caution should be exercised when

counseling a client who wants to sue

opposing counsel from prior litigation.

Although a baseless lawsuit can be

frustrating, parties still have recourse

beyond f‌iling suit. “If a client wants

to sue the opposing counsel, I would

remind them of the attorney’s ethical

duties and the possibility of sanctions.

That avenue still exists, even if civil lia-

bility is out of reach,” observes Tiany

Rowe, Washington, DC, cochair of the

Section’s Professional Liability Litigation

Committee. Moreover, Section leaders

note, the standard to bring a wrong-

ful use of civil process action is high. To

identify a sucient motive, “you would

have to see some kind of personal ani-

mosity as the driving force behind the

litigation, like using the burden of liti-

gation to punish someone, perhaps for

pre-existing personal reasons,” com-

ments Michael S. LeBo, Newport

Beach, CA, cochair of the Professional

Liability Litigation Committee.

Section lead ers also agree with the

high court ’s ruling that no duty f‌lows

from an attorney to the at torney’s cli-

ent’s adversa ry. “This part of the opin-

ion rests on the ver y basic idea that

if you don’t requi re a duty of care as

an element of the c laim, you will have

essentially limitless liability,” observes

Rowe. Moreover, “if an adver se party

could bring this cl aim, it would be a

serious impos ition on an attorney’s abil-

ity to provide zealous a dvocacy to a

client,” she add s. This does not mean,

however, that attorneys never have

duties to non-cl ients. “Attorneys may

have duties to person s other than the

client. It’s ju st it’s quite a stretch from

there to say that you could h ave a duty

of care to an adverse pa rty, particularly

in the litigation contex t where you are

duty-bound to wo rk against that par-

ty’s interests ,” observes LeBo.

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