Wallschlaeger v. the Hogle Firm ( 2023 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
DAWN WALLSCHLAEGER, Plaintiff/Appellant,
v.
THE HOGLE FIRM, PLC, et al., Defendants/Appellees.
No. 1 CA-CV 22-0511
FILED 4-18-2023
Appeal from the Superior Court in Maricopa County
No. CV2021-010314
The Honorable Sally Schneider Duncan, Judge, Retired
AFFIRMED
COUNSEL
Law Offices of Stewart F. Gross, PLLC, Phoenix
By Stewart F. Gross
Counsel for Plaintiff/Appellant
Bueler Jones, LLP, Chandler
By Gordon S. Bueler
Counsel for Defendants/Appellees
WALLSCHLAEGER v. THE HOGLE FIRM, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Daniel J. Kiley delivered the decision of the Court, in which Presiding
Judge Maria Elena Cruz and Judge James B. Morse Jr. joined.
K I L E Y, Judge:
¶1 Dawn Wallschlaeger appeals from the dismissal of her
professional negligence claim against Michael J. Ward and the Law Offices
of Michael J. Ward, PLC (collectively, “Ward”) arising out of Ward’s
representation of her in a prior suit (the “Underlying Case”) against the
Mesa Public School District (the “District”). Because Wallschlaeger cannot,
as a matter of law, establish that Ward’s actions caused or contributed to
the unsuccessful outcome of the Underlying Case, we hold that the superior
court correctly dismissed her professional negligence claim.
FACTS AND PROCEDURAL HISTORY
¶2 The allegations in the operative complaint, accepted as true
for purposes of this appeal, see Blankenbaker v. Marks, 231 Ariz. 575, 577, ¶ 6
(App. 2013), establish that in September 2018, Wallschlaeger fell and was
injured while on the premises of one of the District’s schools. Shortly
thereafter, Wallschlaeger retained the Hogle Firm, PLC (“Hogle”) to
represent her in a personal injury action against the District. Hogle
prepared a notice of claim and served it on a District employee, Karen
Turner, on March 4, 2019. When Turner notified Hogle that she was not
authorized to accept service on the District’s behalf, Hogle took no action
to cure the defect by serving the appropriate District official.
¶3 Two months later, Hogle filed the Underlying Case. In its
answer, the District denied liability and asserted, as an affirmative defense,
that Wallschlaeger “did not comply with Arizona’s Notice of Claim
statute.”
¶4 Several months later, in December 2019 or January 2020,
Ward associated with Hogle as co-counsel for Wallschlaeger. At
approximately the same time, the superior court administration issued an
order that the Underlying Case would be dismissed without further notice
on or after February 24, 2020 unless one of five events occurred, one of
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Decision of the Court
which was the parties’ filing of a Joint Report and Proposed Scheduling
Order.
¶5 The Underlying Case was administratively dismissed after
the February 24, 2020 deadline passed with none of the five events having
occurred. A few days later, Ward sent an email to the District’s counsel
admitting responsibility for the failure to file the parties’ Joint Report and
Proposed Scheduling Order by the deadline.
¶6 Ward and Hogle filed a motion to reinstate the Underlying
Case. The superior court denied the motion, holding that, while “a credible
argument could be made that at the outset [Wallschlaeger] had a factually
meritorious case,” her failure to comply with A.R.S. § 12-821.01 rendered
the Underlying Case “meritless.”
¶7 Wallschlaeger then brought this action for professional
negligence against Hogle and Ward. Ward moved to dismiss on the
grounds that Wallschlaeger “cannot establish that Ward caused her any
damages” because the Underlying Case “was fatally compromised months
before Ward was ever involved.” Ward explained that the superior court
denied the motion to reinstate the Underlying Case due to Hogle’s failure
to serve the notice of claim on the District in the manner prescribed in A.R.S.
§ 12-821.01, a failure that predated Ward’s involvement in the case.
¶8 In response, Wallschlaeger asserted that the Underlying Case
was dismissed due to Ward’s failure to file timely the Joint Report and
Proposed Scheduling Order. Hogle’s prior noncompliance with A.R.S. § 12-
821.01 was irrelevant, she asserted, because, “[b]y all objective
appearances,” the District “was going to waive the [noncompliance]
defense” anyway.
¶9 The superior court granted Ward’s motion to dismiss and
entered final judgment pursuant to Arizona Rule of Civil Procedure
(“Rule”) 54(b). Wallschlaeger now appeals. We have jurisdiction under
A.R.S. § 12-2101(A)(1).
DISCUSSION
¶10 Dismissal under Rule 12(b)(6) is only appropriate if, as a
matter of law, the plaintiff “would not be entitled to relief under any
interpretation of the facts susceptible to proof.” Coleman v. City of Mesa, 230
Ariz. 352, 356, ¶ 8 (2012).
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Decision of the Court
¶11 To establish a claim for professional negligence against an
attorney, the plaintiff must prove
(1) the existence of an attorney-client relationship which
imposes a duty on the attorney to exercise that degree of
skill, care, and knowledge commonly exercised by
members of the profession, (2) breach of that duty, (3) that
such negligence was a proximate cause of resulting injury,
and (4) the fact and extent of the injury.
Phillips v. Clancy, 152 Ariz. 415, 418 (App. 1986). Causation is thus an
essential element of a legal malpractice claim. See id.¶12 “A defendant’s acts are the proximate cause of a plaintiff’s
injury only if they are a substantial factor in bringing about the harm.”
Grafitti-Valenzuela ex rel. Grafitti v. City of Phoenix, 216 Ariz. 454, 460, ¶ 21
(App. 2007). To establish that an attorney’s negligence in handling litigation
was a proximate cause of injury, the plaintiff must prove that he or she
would have prevailed in the underlying suit “but for the attorney’s
negligence.” Phillips, 152 Ariz. at 418. Hence, causation is necessarily
lacking if the plaintiff had already sustained the complained-of injury
before the defendant attorney committed a negligent act. See Salica v. Tucson
Heart Hosp.—Carondelet, L.L.C., 224 Ariz. 414, 418, ¶ 13 (App. 2010) (“A
‘proximate cause’ is defined as that which, in a natural and continuous
sequence, unbroken by any efficient intervening cause, produces an injury,
and without which the injury would not have occurred.”) (cleaned up); see
also Restatement (Second) of Torts § 432(1) (1965) (stating negligence “is not
a substantial factor in bringing about harm to another if the harm would
have been sustained even if the actor had not been negligent”).
¶13 Under A.R.S. § 12-821.01, “no action may be maintained when
a plaintiff has failed to file a timely, sufficient notice of claim, including all
elements required by law, with a person authorized . . . to accept service for the
defendant agency.” State Comp. Fund v. Superior Ct., 190 Ariz. 371, 376 (App.
1997) (emphasis added). Hogle’s failure to comply with A.R.S. § 12-821.01
thus left Wallschlaeger without a valid claim against the District. See Falcon
ex rel. Sandoval v. Maricopa County, 213 Ariz. 525, 530-31, ¶¶ 30, 35 (2006)
(affirming summary judgment in favor of defendant county because
plaintiffs “did not properly serve” notice of claim on person authorized to
accept service). Because Wallschlaeger’s claim was already barred by A.R.S.
§ 12-821.01 before Ward undertook representation of her, she cannot
establish that the Underlying Case would have been successful “but for”
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Decision of the Court
Ward’s subsequent failure to prevent the administrative dismissal of that
case.
¶14 Wallschlaeger does not dispute that Hogle failed to properly
serve a notice of claim on the District, nor does she deny that Ward joined
the case too late to cure the defective service. She insists, however, that a
“deficient notice of claim is not the death knell to a [p]laintiff’s case.” Noting
that a noncompliance defense may be waived under certain circumstances,
Wallschlaeger argues that the superior court erred by ignoring “the very
real possibility” that the District would have waived its noncompliance
defense in the Underlying Case. She explains that, up until the
administrative dismissal of the Underlying Case, the District hadn’t filed a
motion to dismiss for noncompliance with A.R.S. § 12-821.01 or indicated
that such a motion was forthcoming. Further, she notes that her expert
witness opined that “[h]ad the lawsuit not been dismissed for the failure to
timely file the Joint Report and Scheduling Order . . . the [l]awsuit likely
would have proceeded in the normal course.” Wallschlaeger contends that
the superior court “exceed[ed] [its] authority” by determining that she
“could not prove causation” as a matter of law. Instead, she concludes, a
jury should have been permitted to determine whether the District would
have waived its noncompliance defense, and, if so, whether Ward’s failure
to prevent the administrative dismissal of the Underlying Case was a
proximate cause of the Underlying Case’s unsuccessful outcome.
¶15 Causation cannot be left “to the jury’s speculation,” Salica, 224
Ariz. at 419, ¶ 16, and nothing but speculation supports Wallschlaeger’s
assertion that the District might have waived its noncompliance defense
had the Underlying Case not been administratively dismissed. Clearly, the
District did not overlook the defense. It asserted the defense in its answer
in the Underlying Case. Moreover, in the draft Joint Report that the parties’
attorneys prepared in February 2020, counsel for the District added a
statement that the District “affirmatively asserts that Plaintiff failed to
timely comply with the notice of claim statute.”
¶16 Wallschlaeger contends that, although the District asserted
the noncompliance defense in its answer in the Underlying Case, it could
still have “waive[d] the defense by subsequent conduct.”
¶17 A noncompliance defense may be waived if “the defendant
has taken substantial action to litigate the merits of the claim.” City of
Phoenix v. Fields, 219 Ariz. 568, 575, ¶ 30 (2009) (cleaned up). In Fields, for
example, the court found that the city waived its noncompliance defense by
engaging in discovery and motion practice unrelated to the notice of claim
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Decision of the Court
issue for four years before finally asserting the noncompliance defense in a
motion for summary judgment. Id. at ¶ 31. Similarly, in Jones v. Cochise
County, 218 Ariz. 372 (App. 2008), the court found that the county waived
its noncompliance defense by failing to assert the defense in its answer and
by “actively litigat[ing] the case” on its merits, “including [by] engaging in
discovery and participating in depositions.” Id. at 378, 381, ¶¶ 21, 29.
¶18 Here, however, the record does not indicate that the District
engaged in any discovery or motion practice on the merits of
Wallschlaeger’s claim. On the contrary, the record indicates that, prior to
the administrative dismissal of the Underlying Case, the District engaged
in no litigation activity other than filing its answer (in which it asserted the
noncompliance defense) and participating in the preparation of the parties’
Joint Report and Proposed Scheduling Order (in which, again, the District
asserted its noncompliance defense). The District cannot be said to have
actively litigated the Underlying Case so as to waive its noncompliance
defense.
¶19 The mere possibility that, had the Underlying Case not been
dismissed, the District might have subsequently waived its noncompliance
defense by engaging in litigation on the merits of Wallschlaeger’s claim is
too speculative to establish that her claim was viable at the time of the
administrative dismissal. See Grafitti-Valenzuela, 216 Ariz. at 460, ¶ 21 (“The
mere possibility of causation is not enough.”); see also Cecala v. Newman, 532
F. Supp. 2d 1118, 1137 (D. Ariz. 2007) (“Determining what ‘could have’ or
‘might have’ been decided in the underlying action is speculative and . . .
not sufficient for sustaining causation[.]”) (cleaned up).
¶20 Even if the Underlying Case had not been dismissed and the
District proceeded to waive its case-dispositive affirmative defense, any
recovery Wallschlaeger received in the Underlying Case would have been
a windfall. See Slovensky v. Friedman, 49 Cal. Rptr. 3d 60, 63, 67 (Cal. Ct. App.
2006) (affirming summary judgment in favor of defendant attorneys where
“the statute of limitations had run on” Slovensky’s claim “before she
consulted defendants,” and so she could not establish she was harmed by
the purportedly insufficient settlement because “she was not legally
entitled to recover anything at all”). Because “the issue in [a] malpractice
case is what the outcome should have been if the issue had been properly
presented,” Cecala, 532 F. Supp. 2d at 1136, Wallschlaeger’s loss of a chance
to recover a windfall in the Underlying Case does not state a valid claim for
legal malpractice, see Slovensky, 49 Cal. Rptr. 3d at 67 (“Because plaintiff’s
claim was time-barred on the day she filed it, . . . the settlement [her
attorneys] obtained for her was a windfall” and her attorneys’ “alleged
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malpractice did not damage her.”); see also Sobieski v. Am. Standard Ins. Co.
of Wis., 240 Ariz. 531, 536, ¶ 17 (App. 2016) (“A damage award . . . must be
based on more than mere speculation or conjecture.”) (cleaned up).
¶21 Arizona courts treat the notice of claim statute as “analogous
to a statute of limitations.” Pritchard v. State, 163 Ariz. 427, 433 (1990). The
analogy is apt here; in considering Ward’s liability for Wallschlaeger’s lack
of success in the Underlying Case, we find instructive case law addressing
an attorney’s liability for professional negligence in handling a claim barred
by a limitations statute.
¶22 A limitations defense, like a noncompliance defense, is an
affirmative defense that may be waived if not timely asserted. See Osuna v.
Wal-Mart Stores, Inc., 214 Ariz. 286, 290, ¶ 11 n.4 (App. 2007) (“The statute
of limitations . . . is not jurisdictional. Thus, if a party fails to raise it as an
affirmative defense, it is waived.”).
¶23 Numerous courts have nonetheless held as a matter of law
that an attorney cannot be liable for malpractice for failing to file suit on a
time-barred claim if the attorney was not retained until after expiration of
the limitations period. Bartlett v. Hugo & Pollack, LLP, No.
503CV0384NAMGJD, 2005 WL 1458245, at *3 (N.D.N.Y. June 16, 2005)
(mem. decision) (“It is a well-established principle of law that an attorney
who fails to file a claim as to which the statute of limitations had expired
before the client hired the attorney is not liable for legal malpractice.”); see
also Guy v. Brown, 67 So. 3d 704, 707 (La. Ct. App. 2011) (affirming dismissal
of legal malpractice claim against attorney who was not retained until after
limitations period had expired because “[t]he defendants cannot be held
liable for claims that prescribed [i.e., became time-barred] prior to their
representation of the plaintiffs”); Lefebvre v. James, 697 So. 2d 918, 920 (Fla.
Dist. Ct. App. 1997) (holding that trial court erred in denying defendant
attorney’s motion for directed verdict in legal malpractice case that was
based on attorney’s failure to seek leave to amend complaint to add new
cause of action, where new cause of action “would have been barred by the
statute of limitations” anyway).
¶24 We are aware of no case holding that an attorney who was not
retained until after the limitations period had run could still be liable for
subsequent professional negligence on the theory that, had the attorney
filed the time-barred claim, the defendant might have waived its limitations
defense. On the contrary, courts that have addressed this issue have found
causation lacking as a matter of law if the plaintiff’s claim was already time-
barred before the attorney was retained. See McCluskey v. Womack, 470
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Decision of the Court
N.W.2d 443, 447 (Mich. Ct. App. 1991) (affirming dismissal of malpractice
claim brought by plaintiffs who “did not retain defendant [attorney] until
after the limitation period applicable to their underlying claim had
expired,” reasoning that “regardless of what specific acts or omissions were
alleged . . . [plaintiffs’] legal malpractice claim must fail, because they
cannot prove their alleged damages were caused by defendant.”).
¶25 Just as the mere possibility a limitations defense could be
waived is an insufficient basis on which to impose liability on an attorney
for failing to assert successfully a time-barred claim, the mere possibility
that the District might have waived its noncompliance defense is an
insufficient basis on which to impose liability on Ward. See Cecala, 532 F.
Supp. 2d at 1137 (stating that in legal malpractice suits, the appropriate
arbiter must “determine what the result should have been, not what it could
have been”) (cleaned up).
¶26 Wallschlaeger argues that dismissing her claim against Ward
due to Hogle’s prior case-dispositive error would be tantamount to finding
Ward “immune from any punishment for negligent conduct.” According to
Wallschlaeger, allowing “incoming attorneys [to] negligently handle a
case” without consequence “just because their predecessor counsel made
mistakes” is “bad public policy.”
¶27 Professionals who assume responsibility for a case after it has
been mishandled are, of course, accountable for their own actionable
negligence. See Barmat v. John & Jane Doe Partners A-D, 165 Ariz. 205, 211
(App. 1990) (“Regardless of the conduct of [former attorney and law firm],”
successor counsel’s actions were “the superseding proximate cause of”
harm to plaintiff); see also Holland v. Thacher, 245 Cal. Rptr. 247, 250 (Cal. Ct.
App. 1988) (reasoning that a “successor attorney’s responsibility for the
[plaintiff] client’s injury” may reduce the exposure of the former attorney
in a malpractice case “through application of comparative fault
principles”). To be actionable, however, the professional’s negligence must
have caused or substantially contributed to the plaintiff’s damages. Phillips,
152 Ariz. at 418. A negligent act by an attorney after a case-dispositive error
by prior counsel cannot be said to have caused or contributed to the
plaintiff’s loss. See McCluskey, 470 N.W.2d at 447; see also Lifshitz v. Brady,
748 N.Y.S.2d 605, 606 (N.Y. App. Div. 2002) (holding that attorney could not
be liable for malpractice when “he was not retained by the plaintiff until
after expiration of the statute of limitations” on the underlying claim).
Therefore, Ward cannot be the cause of Wallschlaeger’s injuries in the
Underlying Case, and Wallschlaeger’s claim against Ward is not actionable.
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WALLSCHLAEGER v. THE HOGLE FIRM, et al.
Decision of the Court
CONCLUSION
¶28 For the foregoing reasons, we affirm the superior court’s
judgment dismissing Wallschlaeger’s professional negligence claim against
Ward.
AMY M. WOOD • Clerk of the Court
FILED: AA
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