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American International Adjustment Co. v. Galvin

June 20, 1996




Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 92 C 160 Andrew P. Rodovich, Magistrate Judge.

Before POSNER, Chief Judge, BAUER, and DIANE P. WOOD, Circuit Judges.

BAUER, Circuit Judge.



Frank J. Galvin, Jr. and his law firm ("Galvin") appeal a legal malpractice judgment entered after a jury trial. Actually, Galvin appeals the final judgment as well as certain summary judgments entered by the district court prior to trial. The appellee and crossappellant, American International Adjustment Company ("AIAC"), appeals the district court's order of remittitur which reduced the damage award from $1,250,000 to $1,000,000. To summarize our conclusions in advance: we reverse the judgment entered against Galvin and remand for a new trial. However, we affirm the district court's elimination of contributory negligence as a defense to AIAC's legal malpractice claim. Given these conclusions, AIAC's cross-appeal is moot.


This diversity, legal malpractice action arose out of a personal injury lawsuit. In 1989, a Tri-State Transport Company truck ran into Virginia Dickinson's car, seriously injuring Ms. Dickinson. Ms. Dickinson never left the hospital and died of a pulmonary embolism a month after the accident. Prior to her death, she filed suit against TriState, which retained Galvin as legal counsel. *fn1 Dickinson's two-count complaint raised alternative claims, seeking damages under both the Indiana survival statute, Ind. Code 34-1-1-1, and the Indiana wrongful death statute, Ind. Code 34-1-1-2. Under Indiana law, Tri-State could be liable under either statute but not both. If the victim had died from the accident, the case was for wrongful death. If the victim died from unrelated causes, the case was a survival action. The distinction is important because each statute allows for different recoveries. In a case governed by the survival statute, Ms. Dickinson's estate could receive full damages including pain and suffering. Under the wrongful death statute, the estate could recover only Ms. Dickinson's medical and funeral expenses plus any other pecuniary or other loss suffered by her survivors.

As any attorney would recognize from the above description, one significant pre-trial task for Galvin would be to ascertain the cause of death in the hopes of limiting his client's exposure. Most critically, if there were no evidence that Ms. Dickinson died from a cause other than Tri-State's negligence, then the case would be a wrongful death action and evidence of her pain and suffering would be inadmissible at trial.

This distinction became especially important to AIAC and Galvin because there was little doubt about Tri-State's liability. The trial would focus on damages, and the plaintiff had made a "day-in-the-life" video of Ms. Dickinson's last day and intended to offer it as evidence to show her pain and suffering. The full length video consisted primarily of Ms. Dickinson sleeping, but the version edited for trial focused on her periods of intense suffering. Galvin estimated prior to trial that if the case proceeded to the jury as a survival action, i.e. if the jury saw the videotape, the verdict would be around $2.5 million. If, however, it were solely a wrongful death case, the verdict would be closer to $850,000.

Normally, a defense attorney in Galvin's position would utilize various discovery tools to pin down the cause of death. Galvin might have served requests for admission and/or interrogatories on his opposing counsel, or deposed the treating physicians. Instead, on the eve of trial, he filed a "Motion in Limine" asking the district court to force the plaintiff to choose between the mutually exclusive theories of survival and wrongful death. Plaintiff's counsel responded that the cause of death was a question of fact that was for the jury. The district court pressed the plaintiff's lawyer about which theory the plaintiff would be pursuing at trial. The lawyer responded, "I haven't interviewed Dr. Walsh in depth, and I haven't interviewed Dr. Kaufman in depth as to the [cause of death] and until they testify under oath, I honestly don't know what they're going to say." Possibly sensing a lack of candor in that response, the district court instructed plaintiff's counsel to report back the next day about what testimony he would present as to the cause of death. The next day however, the district court did not revisit its concerns because it ruled that it had no authority to force the plaintiff to elect one theory over the other.

Prior to trial, the district court opined that the case could be settled for $853,000. AIAC refused to budge from its last offer of $700,000, and the case proceeded to trial. At trial, the plaintiff introduced the edited videotape -- the fifteen worst minutes of Virginia Dickinson's last day. At the close of the plaintiff's case, Galvin moved for a directed verdict on the survival claim. Plaintiff's counsel acknowledged that he had not presented any competent medical testimony or expert testimony showing the cause of death to be anything but the accident, and the district court granted Galvin's directed verdict motion. The case went to the jury solely on the wrongful death count. However, Galvin did not ask the district court for a jury instruction precluding the jury's consideration of the videotape. The jury returned a verdict for the plaintiff in the amount of $2.6 million. The parties settled for $2.3 million with post-trial motions pending. This legal malpractice suit followed.

AIAC raised nine specific instances of alleged malpractice, the most significant of which was that Galvin failed to ascertain the cause of death prior to trial. AIAC contended that had Galvin done so, he could have obtained summary judgment on the survival claim and kept from the jury all evidence of pain and suffering, especially the videotape. The magistrate judge presiding over the malpractice trial granted partial summary judgment for AIAC, ruling that Galvin had breached his standard of care as a matter of law by failing to ascertain the cause of death. The judge permitted the causation and damages aspect of this claim to go to the jury. The court also allowed AIAC's other allegations, including Galvin's failure to object to the plaintiff's opening statement and closing argument and Galvin's stipulation to the fact that TriState had 126 traffic accidents within a two-year period, to go to the jury. Finally, the magistrate judge precluded Galvin from presenting the defenses of incurred risk and contributory negligence. The jury returned a general verdict for AIAC of $1.25 million, which the court reduced to $1 million.


We review the district court's grant of summary judgment de novo, taking the record in the light most favorable to the non-movant. Harris v. City of Marion, Ind., 79 F.3d 56, 58 (7th Cir. 1996). Summary judgment is appropriate where there are no genuine disputes of material fact and where the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. Although summary judgment is an effective tool for district courts to manage their caseload, they must avoid the temptation to use summary judgment "as an abbreviated trial." Door Systems, Inc. v. Pro-Line Door Systems, Inc., 83 F.3d 169, 172 (7th Cir. 1996).

To prove legal malpractice under Indiana law, a plaintiff must show: (1) employment of the attorney, (2) the attorney's failure to exercise ordinary skill and knowledge, and (3) damages to the plaintiff proximately resulting from that failure. Hacker v. Holland, 570 N.E.2d 951, 955 (Ind. App. 1 Dist. 1991). In a typical legal malpractice case, the plaintiff must prove that "as a result of the lawyer's incompetence . . . the client . . . lost his case or paid a larger judgment than would have been awarded had the defendant performed competently." Transcraft v. Galvin, Stalmack, Kirschner, & Clark, 39 F.3d 812, 815 (7th Cir. 1994), cert. denied, 115 S. Ct. 1990 (1995). There are two components to evaluating Galvin's performance. First, whether he committed legal error is undoubtedly a question of law. 4 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice, sec. 32.11 at 183 (4th ed. 1996). Next, whether that error amounted to negligence is normally a question of fact to be decided by the jury (or judge as fact finder). Id. With those introductory matters out of the way, we turn to the substance of this case.

A. Tort vs. Contract

We give short shrift to AIAC's initial argument that we should affirm because Galvin failed to challenge the breach of contract judgment entered by the district court. While it is true that AIAC's complaint raised both tort and contract claims, these claims were identical. Given that the alleged "breach" complained of is the failure to adhere to the appropriate standard of care, there is no difference between the tort and breach of contract claims. Thus, courts have held repeatedly that legal malpractice claims are governed by tort principles regardless of whether they are brought as a tort, a breach of contract, or both. *fn2 See, e.g., Shideler v. Dwyer, 417 N.E.2d 281, 285-88 (Ind. 1981); Keystone Distribution Park v. Kennerk, Dumas, Burke, Backs, Long & Salin, 461 N.E.2d 749, 751 (Ind. App. 1984); FDIC v. Clark, 768 F.Supp. 1402, 1410-11 (D.Colo. 1989), aff'd 978 F.2d 1541 (10th Cir. 1992); 1 Mallen & Smith, Legal Malpractice, secs. 8.1, 8.6.

B. Partial Summary Judgment on Liability

The main issue on appeal is not whether Galvin performed poorly, but whether the district court correctly ruled that Galvin's conduct was malpractice as a matter of law. We conclude that the deposition testimony of Galvin's expert witness and the behavior of Dickinson's counsel taken together created a factual dispute about whether Galvin's conduct fell below the applicable standard of care.

There is no question that the best method of ascertaining the cause of death would have been some discovery tool -- requests for admissions, interrogatories, or depositions. Instead, Galvin filed a motion in limine on the eve of trial seeking to force the plaintiff's counsel to state what the plaintiff's evidence would show on this vital fact. The central question, therefore, is whether Galvin's method of ascertaining the cause of death was negligent as a matter of law.

Galvin's motion essentially sought to force the plaintiff to elect a remedy. However, Fed. R. Civ. P. 8(e)(2) abolished the doctrine of election of remedies in federal court. See Olympia Hotels Corp. v. Johnson Wax Development Corp., 908 F.2d 1363, 1371 (7th Cir. 1990). Thus, it seems that Galvin's motion was doomed to failure. If so, maybe that means that filing such a motion automatically would fall below the applicable standard of care. We think not.

First, the gambit almost worked. At the hearing on the motion in limine, the district court instructed the plaintiff's counsel:

I want you to find out today from all your evidence . . . whether or not there is going to be testimony over and above what you have indicated already, that the cause of death was related to [] causes other than this accident, i.e. the main area would be of course this possibility of malpractice that you have mentioned. And I want you to advise me of that tomorrow morning when we start . . . . I would be very concerned with ...

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