Legal Malpractice Complaint Was Too Vague, 7th Cir. Says

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By Joan C. Rogers

A client’s malpractice complaint was fatally vague about how the client could have fared better in the underlying case but for its defense lawyer’s alleged blunders, a divided Seventh Circuit panel held Dec. 21 ( West Bend Mut. Ins. Co. v. Schumacher , 7th Cir., No. 14-2731, 12/21/16 ).

The malpractice complaint furnished lots of detail about what the lawyer supposedly did wrong but didn’t plausibly describe a causal link between those missteps and the adverse outcome of the underlying dispute, according to the majority opinion by Judge Kenneth F. Ripple.

Judge David F. Hamilton dissented, saying the majority applied federal pleading standards far too stringently. The complaint contained specific factual allegations showing the company had a solid defense absent the lawyer’s alleged malpractice, he said.

At issue was whether the complaint met the “plausibility” pleading standard announced in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).

The divided decision highlights the challenge of applying this standard to malpractice actions. Malpractice complaints need to include plenty of detail about the merits of the claim or defense that the client accuses the lawyer of mishandling, the decision suggests.

West Bend Mutual Insurance Co. alleged that Paul Schumacher and his firm Roddy, Leahy, Guill & Ziema Ltd. committed malpractice in defending West Bend against a workers’ compensation claim.

The complaint asserted that Schumacher failed to prepare for the hearing, disclosed the defense theory to opposing counsel, and conceded liability without authorization. These breaches compromised West Bend’s ability to defend the claim, West Bend alleged.

No Plausible Description of Causation and Harm

The court said that after Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009), a complaint must have enough factual content to state a plausible claim in order to survive a motion to dismiss.

West Bend didn’t manage to plausibly state the causation and harm elements of a legal malpractice claim under Illinois law even though the company had two chances to amend its complaint, the court found.

The complaint adequately described Shumacher’s duty and breach of duty, but said little about the underlying workers’ compensation claim and West Bend’s defenses to it. Rather, the complaint summarily said the company had “certain factual defenses and a medical causation defense” and alleged that the company lost “valuable factual and legal defenses.”

These conclusory assertions didn’t plausibly describe a lost defense that would have assured West Bend’s success in the workers’ compensation case absent Schumacher’s alleged errors, the court said.

The complaint left the court to speculate as to whether and how West Bend would have prevailed in the underlying case without the alleged breaches, Ripple said.

Judge Richard A. Posner concurred.

Peterson, Johnson & Murray S.C. and Timothy J. Pike, Libertyville, Ill., represented West Bend. Flaherty & Youngerman P.C. represented Schumacher and his firm.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bna.com

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