Rice v. Poppe , 302 Neb. 643 ( 2019 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/31/2019 08:08 AM CDT
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Nebraska Supreme Court A dvance Sheets
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RICE v. POPPE
Cite as 302 Neb. 643Brenda R. R ice, appellant, v. Terrance A. Poppe,
an individual, and Morrow, Poppe, Watermeier
& Lonowski, P.C., a limited liability
organization, appellees.
___ N.W.2d ___
Filed March 22, 2019. No. S-18-701.
1. Judgments: Appeal and Error. In a bench trial of a law action, a trial
court’s factual findings have the effect of a jury verdict and will not be
set aside on appeal unless clearly erroneous.
2 ____: ____. In reviewing a judgment awarded in a bench trial of a law
action, an appellate court does not reweigh evidence, but considers the
evidence in the light most favorable to the successful party and resolves
evidentiary conflicts in favor of the successful party, who is entitled to
every reasonable inference deducible from the evidence.
3. Malpractice: Attorney and Client: Negligence: Proof: Proximate
Cause: Damages. To succeed in a legal malpractice claim, a plaintiff
must ultimately prove three elements: (1) the attorney’s employment, (2)
the attorney’s neglect of a reasonable duty, and (3) that such negligence
resulted in and was the proximate cause of loss to the plaintiff.
4. Malpractice: Attorney and Client. A client cannot recover for mal-
practice (1) when the client failed to follow the attorney’s reasonable
advice, (2) when the client directed the attorney’s actions in a matter
and the attorney acted in accordance with the client’s instruction, and
(3) when the client misrepresented material facts upon which the attor-
ney relied.
5. Malpractice: Negligence: Proximate Cause. A plaintiff’s contributory
negligence is a defense in a malpractice action when it contributed to the
professional’s inability to meet the standard of care and was a proximate
cause of the plaintiff’s injury.
6. Malpractice: Attorney and Client: Negligence: Proximate Cause.
A client’s negligence in a legal malpractice case is sometimes more
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RICE v. POPPE
Cite as 302 Neb. 643relevant to negating the proximate causation element of the claim than
to showing that the plaintiff’s negligence was a contributing cause to the
plaintiff’s injury.
Appeal from the District Court for Lancaster County: James
G. Kube, Judge. Affirmed.
James R. Welsh and Christopher Welsh, of Welsh & Welsh,
P.C., L.L.O., for appellant.
Randall L. Goyette and Christopher M. Schmidt, of Baylor
Evnen, L.L.P., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Funke, Papik, and
Freudenberg, JJ.
Heavican, C.J.
INTRODUCTION
Terrance A. Poppe represented Brenda R. Rice (Rice) in her
divorce from Dale Rice. Rice subsequently filed a malpractice
action against Poppe. Poppe’s motion for summary judgment
was initially granted, but this court reversed.1 A bench trial
was held at which the district court found in Poppe’s favor.
Rice appeals.
FACTUAL BACKGROUND
Rice and her husband, Dale, were divorced in 2011. Poppe
represented Rice in the divorce, while Dale was unrepresented.
Poppe testified that it is his practice, when he first meets with
new clients, to ask them a series of questions about the mar-
riage and the marital estate. Poppe testified that he would
have asked Rice whether there was “‘any life insurance with
any cash surrender value or any life insurance that we need to
deal with.’” Several sheets of notepaper, which Poppe testified
1
Rice v. Poppe, 293 Neb. 467, 881 N.W.2d 162 (2016).
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Cite as 302 Neb. 643were his notes from this meeting, were offered into evidence.
Life insurance was listed in those notes under a heading
entitled “Assets.” A “0” was next to that entry. Poppe testified
that “[z]ero means [the client] told me no, there is no insurance
with cash value or insurance that we need to deal with. . . .
It means there is no life insurance with cash value or no life
insurance that was an issue.”
Poppe further testified that his questions are intended to dis-
cover policies even if they do not have cash value, as he needs
to know about anything that “we need to be concerned with
or deal with.” Poppe testified that there was no doubt in his
mind that he asked about life insurance at this initial meeting.
According to Poppe, he and Rice met several times after the
initial meeting and at no point did Rice mention anything about
any life insurance policies.
Rice also testified about this meeting, indicating that she did
not recall talking about life insurance at the initial meeting or
subsequently. She further testified that she and Dale had a con-
versation about life insurance prior to the entry of the decree
and that it was her intention to keep Dale as her beneficiary.
Rice was not permitted to testify regarding Dale’s intention
as to his policy, but she did testify that it was her belief that
they each “retained right to our policies. To me that meant we
retained the right to keep our beneficiary as well. We could do
whatever we want. . . . We were each other’s beneficiary and
nothing changed with that divorce decree, was our understand-
ing — my understanding.”
Based upon his discussion with Rice, Poppe prepared a draft
property settlement agreement. According to Rice, she went
“back and forth to [Poppe’s] office several times” about the
agreement, and she made several suggestions that were incor-
porated into the final agreement.
The decree was entered on August 8, 2011. As relevant, the
decree included a property settlement agreement with the fol-
lowing provisions. Paragraph VI provided in part:
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Cite as 302 Neb. 643STOCKS, BANK ACCOUNTS, LIFE INSURANCE
POLICICES [sic], PENSION PLANS AND
RETIREMENT PLANS
[Rice] shall be awarded all interest in all pension
plans, stocks, retirement accounts, 401(k), IRA, life
insurance policy and checking or savings account in
[Rice’s] name, free from any claim of [Dale]. [Dale]
shall be awarded all interest in any pension plans, stocks,
retirement accounts, 401(k), IRA, life insurance policy
and checking or savings account in [Dale’s] name, free
from any claim of [Rice].
Paragraph IX provided:
PROPERTY PROVISIONS AND SETTLEMENT OF
PROPERTY RIGHTS OF PARTIES
It is expressly understood by and between the parties
hereto that the provisions of this agreement relating to
the property and liabilities of each, set aside and allocate
to each party his or her respective portions of the proper-
ties belonging to the parties and of the liabilities of the
parties at the date hereto; and each party acknowledges
that the properties set aside to him or her, less the liabili-
ties so allocated to him or her, will be in full, complete
and final settlement, release and discharge, as between
themselves, of all rights, claims, interests and obligations
of each party in and to the said properties and the same
in their entirety constitute a full, fair and equitable divi-
sion and the partition of their respective rights, claims
and interests in and to the said properties of every kind
and nature.
And, in relevant part, paragraph X provided:
WAIVER AND RELEASE OF MARITAL RIGHTS
....
(b) In consideration of the provisions of this agree-
ment, [Rice] waives and relinquishes any and all interest
or rights of any kind, character, or nature whatsoever,
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Cite as 302 Neb. 643including but not limited to all rights to elective share,
homestead allowance, exempt property, and family allow-
ance in the property of [Dale], and renounces all benefits
which would otherwise pass to [Rice] from [Dale] by
intestate succession or by virtue of the provisions of any
Will executed before this Settlement Agreement which
she, as wife, or as widow, or otherwise, has had, now
has, or might hereafter have against [Dale], or, in the
event of his death, as an heir at law, surviving spouse, or
otherwise. [Rice] also waives and relinquishes any and
all interest, present and future, in any and all property,
real, personal, or otherwise, now owned by [Dale] or
hereafter acquired, and including all property set aside
for him in this agreement, it being the intention of the
parties that this agreement shall be a full, final, and
complete settlement of all matters in dispute between the
parties hereto.
Rice testified that Poppe did not go through the property set-
tlement agreement with her prior to the hearing during which
it was entered.
About a week after the divorce decree was entered, Dale
died. Rice made a claim for the death benefits under life
insurance policies owned by Dale. Dale’s children from his
first marriage challenged her right to the benefits. This court
affirmed the district court’s finding that Rice had waived her
beneficiary interest in the policies by the property settlement
agreement, and accordingly concluded that Rice was not enti-
tled to the death benefits.2
Rice sued Poppe for legal malpractice, alleging that he
did not advise her that the property settlement agreement
waived her interest in Dale’s life insurance policies. The dis-
trict court granted Poppe’s motion for summary judgment,
but we reversed, concluding that Poppe had not established a
2
Rice v. Webb, 287 Neb. 712, 844 N.W.2d 290 (2014).
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Cite as 302 Neb. 643prima facie case for which he was entitled to judgment as a
matter of law.3
Upon remand, a bench trial was held. Rice and Poppe testi-
fied as to the factual background of the case. Each also called
an expert. Rice offered the deposition of Lyle J. Koenig, who
testified that Poppe did not meet the applicable standard of
care when he included the “boilerplate” language regarding life
insurance, when it was his belief that there was no life insur-
ance in the marital estate. Poppe offered the testimony of John
Ballew, who testified to the contrary; it was his opinion that
Poppe had complied with the applicable standard of care in his
representation of Rice.
The district court found in favor of Poppe. Rice appealed.
ASSIGNMENTS OF ERROR
Rice assigns, renumbered, that the district court erred in (1)
holding that Rice’s failure to provide information about the
life insurance policies and their beneficiary designations to
Poppe was a misrepresentation that broke the causal chain of
the legal malpractice claim and (2) finding that Rice’s expert
testified that Poppe failed to meet the applicable standard of
care only by failing to explain the effect of the inclusion of life
insurance in paragraph VI of the decree, and not by failing to
explain the effect of the waiver and relinquishment language in
paragraphs IX and X(b).
STANDARD OF REVIEW
[1,2] In a bench trial of a law action, a trial court’s factual
findings have the effect of a jury verdict and will not be set
aside on appeal unless clearly erroneous.4 In reviewing a judg-
ment awarded in a bench trial of a law action, an appellate
court does not reweigh evidence, but considers the evidence
3
See Rice v. Poppe, supra note 1.
4
Home Pride Foods v. Johnson, 262 Neb. 701, 634 N.W.2d 774 (2001).
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Cite as 302 Neb. 643in the light most favorable to the successful party and resolves
evidentiary conflicts in favor of the successful party, who
is entitled to every reasonable inference deducible from
the evidence.5
ANALYSIS
[3] To succeed in a legal malpractice claim, a plaintiff must
ultimately prove three elements: (1) the attorney’s employ-
ment, (2) the attorney’s neglect of a reasonable duty, and (3)
that such negligence resulted in and was the proximate cause
of loss to the plaintiff.6
Rice first assigns that the district court erred in concluding
that her failure to provide Poppe with information regarding
her and Dale’s life insurance policies broke the causal chain
and prevented her from sustaining her burden for legal mal-
practice. The district court relied on Balames v. Ginn 7 to sup-
port its conclusion.
[4] In Balames, we discussed the “role that a client’s negli-
gence or contributory negligence plays in a legal malpractice
case.”8 We have held that a client cannot recover for malprac-
tice (1) when the client failed to follow the attorney’s reason-
able advice, (2) when the client directed the attorney’s actions
in a matter and the attorney acted in accordance with the cli-
ent’s instruction, and (3) when the client mispresented material
facts upon which the attorney relied.9
[5,6] But in Balames, we added to this list, noting that “a
plaintiff’s contributory negligence is a defense in a malprac-
tice action when it contributed to the professional’s inability
to meet the standard of care and was a proximate cause of the
5
Mays v. Midnight Dreams, 300 Neb. 485, 915 N.W.2d 71 (2018).
6
Rice v. Poppe, supra note 1.
7
Balames v. Ginn, 290 Neb. 682, 861 N.W.2d 684 (2015).
8
Id. at 694, 861 N.W.2d at 695.
9
Balamas v. Ginn, supra note 7.
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Cite as 302 Neb. 643plaintiff’s injury.”10 And, relying on a legal malpractice trea-
tise, we further noted that “[f]requently, a client’s negligence
in a legal malpractice case is more relevant to negating the
proximate causation element of the claim than to showing that
the plaintiff’s negligence was a contributing cause to the plain-
tiff’s injury.”11
When the record is considered in this light, there was suf-
ficient evidence presented at trial to support the district court’s
finding. Rice testified that Poppe did not ask about life insur-
ance; Poppe testified that he did. In addition, Poppe offered
notes of his first meeting with Rice, indicating that he inquired
about life insurance. The district court’s finding as to this issue
effectively negates Rice’s claim as to causation—the prop-
erty settlement agreement in the decree waived Rice’s right
to Dale’s life insurance, because she did not inform Poppe
about that life insurance so that he could properly include it in
the decree.
Nor is there merit in a more general argument that the dis-
trict court erred by finding for Poppe. While Rice highlights
Koenig’s testimony, she fails to account for the testimony of
Poppe’s expert, Ballew, who testified that Poppe’s conduct
did not fall below the applicable standard of care. Our stan-
dard of review is deferential; we review for clear error and
consider the evidence in a light most favorable to the success-
ful party.
In this instance, the parties offered conflicting testimony
regarding whether Poppe’s conduct fell below the applicable
standard of care. The district court found for Poppe and,
in doing so, found Ballew to be more persuasive. Ballew
testified that Poppe’s actions in gathering information and
drafting and advising Rice regarding the property settlement
agreement were proper. Ballew further opined that not only
10
Id. at 697, 861 N.W.2d at 696-97.
11
Id. at 698, 861 N.W.2d at 697.
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Cite as 302 Neb. 643was it proper to include the so-called “boilerplate” language
which Rice complains of, but that it was “essential,” and
that those provisions were ubiquitous. Ballew further testi-
fied that he would not have gone “line-by-line” through the
waiver provisions.
Because we conclude that the district court did not err in
concluding that Poppe did not breach any duty owed to Rice,
and further that Rice could not show that, even assuming a
breach of duty, that Poppe’s action were the proximate cause
of her injury, we need not address Rice’s second assignment
of error.
There is no merit to Rice’s appeal. We affirm.
CONCLUSION
The decision of the district court is affirmed.
A ffirmed.
Stacy, J., not participating.