Hannah P. Sachs v. Downs Rachlin Martin PLLC and Caryn Waxman, Esq. ( 2017 )

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.
2017 VT 100
No. 2016-394
Hannah P. Sachs Supreme Court
On Appeal from
v. Superior Court, Windsor Unit,
Civil Division
Downs Rachlin Martin PLLC and May Term, 2017
Caryn Waxman, Esq.
John P. Wesley, J.
Katherine Burghardt Kramer of Katherine Burghardt Kramer Law Office LLC, Middlebury,
and James L. Mulligan of Simpson & Mulligan PLLC, Lebanon, New Hampshire, for
Plaintiff-Appellant.
Robert D. Rachlin and Samantha V. Lednicky of Downs Rachlin Martin PLLC, Burlington,
for Defendants-Appellees.
PRESENT: Reiber, C.J., Skoglund, Eaton and Carroll, JJ., and Harris, Supr. J.,
Specially Assigned
¶ 1. SKOGLUND, J. After a bench trial, the trial court concluded that defendant-
attorney’s failure to adequately inform plaintiff Hannah Sachs of the risks of delay in filing a
parentage action “negligently fell short of the standard of reasonably competent legal
representation.” Despite the court’s conclusion that defendant breached her professional duty of
care, the trial court determined that plaintiff failed to demonstrate direct causation or measurable
damages as a result of defendant’s negligent advice. On appeal, plaintiff challenges the court’s
legal conclusions and contends that the court’s factual findings established both causation and
damages. We agree, and so reverse.
¶ 2. Defendant’s negligent advice occurred when plaintiff consulted her about filing
parentage and child support actions in conjunction with plaintiff’s pregnancy, which was the result
of a brief relationship during the summer of 2010. When plaintiff informed the child’s father of
the pregnancy, he expressed his wish not to be involved with plaintiff and the child.
¶ 3. Three months before her daughter’s birth, plaintiff visited the offices of Downs
Rachlin Martin (DRM) and met with defendant. Plaintiff sought information regarding
“establishing parentage, considerations of parental rights and responsibilities, and the
determination of child support.” Defendant advised against filing a paternity action immediately
after the child’s birth. Instead, she recommended waiting at least a year. According to defendant,
delayed filing of a parentage action when the father had had no contact with the child could lessen
any risk of the father seeking primary or joint physical and legal responsibility or a substantial
amount of parent-child contact. Further, she advised, delay in filing would also limit his ability to
use child custody as a negotiation tool to limit child support.
¶ 4. More significant in this case, defendant assured plaintiff that she would receive
child support retroactive to the date of her child’s birth. The court found defendant “did no specific
research to support her opinion as to the retroactivity of child support,” instead relying on her
experience as a family law attorney. Based on defendant’s advice, plaintiff was persuaded to wait
a year from child’s birth before she filed a legal claim. She also arranged to receive, as a loan,
$500 per month from her mother and $500 per month from one of her mother’s friends after the
child was born, to help her support her daughter. Plaintiff expected to repay the loans from her
mother and the friend once the child support obligation was determined.
¶ 5. Plaintiff’s daughter was born on July 12, 2011.
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¶ 6. In June 2012, following through on defendant’s advice to wait one year, plaintiff
again contacted defendant to commence parentage and child support proceedings against the
father. Four months later, in October 2012, defendant filed a parentage action.
¶ 7. At a case manager’s conference in January 2013, the father stipulated that plaintiff
was the sole physical and legal guardian of their daughter. The father agreed to contact his
daughter only at plaintiff’s discretion. Plaintiff was represented at the case manager’s conference
by a colleague of defendant, an associate attorney at DRM.
¶ 8. Either on the same day of the case manager’s conference or some date closely
following the conference, the associate attorney also discussed child support with plaintiff. During
this discussion, the associate informed plaintiff that any child support award would be retroactive
to the date the parentage action was filed, not the date of birth. Plaintiff protested that she had
received different advice from defendant. The associate later followed up with plaintiff and
confirmed that defendant still believed that a child support award would be retroactive to birth.
Defendant reiterated this belief in a March 15, 2013 email to plaintiff, where she indicated that she
was waiting for the court to approve the parentage and parental rights stipulation and stated that
the order should be “finalized before we make any issue of child support.”
¶ 9. Subsequently, several phone conversations took place in March 2013 between
plaintiff and the father, and they agreed to meet at a playground in April 2013. During the
conversation, Plaintiff said that she needed $2000 per month for childcare, and the father approved
of the amount, but there was no discussion of retroactivity to the child’s date of birth. Either in
this conversation or in a later one, the father explained that if plaintiff maintained an amicable
relationship with his family, plaintiff might even receive financial assistance above and beyond
the assistance required for child support, but he warned that contentious litigation would turn his
mother “into a mad dog.”
3
¶ 10. Negotiations between defendant and the father’s attorney revealed that the father
would not agree to pay $2000 per month as plaintiff anticipated. Moreover, even though the parties
ultimately agreed on $1875 per month for child support dating from the child support order, the
father’s attorney disagreed that the father should owe any payment in arrears, either from the date
of the parentage action or the child’s birth.
¶ 11. Given the father’s attorney’s stance, defendant finally researched the law governing
child support arrears to confirm her position.1 At this point, defendant discovered that she had
provided incorrect advice to plaintiff regarding retroactive child support. Instead, in a letter to
plaintiff acknowledging her error, defendant explained that no definitive law authorized arrears
back to a child’s birth and the date of retroactivity was generally at the trial court’s discretion. In
practice, moreover, “courts use the date of filing as opposed to the date of birth.” After receiving
this letter, plaintiff told her mother’s friend, “This is devastating news . . . . I can hardly see straight
[sic] I’m so angry and upset.”
¶ 12. Subsequently, in a letter to the father’s attorney, defendant acknowledged that her
research revealed that she had been mistaken about the date of retroactivity. In the same letter,
defendant also wrote: “Without a doubt, had the rules on retroactivity of support been more clear,
[plaintiff] would have filed a parentage action as soon as [her daughter] was born.”
¶ 13. After further negotiations, the parties finally reached a stipulated child support
agreement, which was approved as a Child Support Order on June 28, 2013. The agreement
required the father to pay $1875 monthly to plaintiff beginning on July 1, 2013 and one lump sum
payment for arrears. The arrears went back only so far as the filing of parentage action—$1625
was for child support, and $250 was for medical care. The agreement considered the father’s gift
1
Defendant originally billed plaintiff for this research; however, in response to complaints
from plaintiff’s mother’s friend—who was funding plaintiff’s legal fees along with the monthly
$500 loan—defendant removed the fee for research from the bill.
4
income from family members, although this income was unpredictable and unreliable. Two
worksheets computing calculations based on the Vermont Child Support Guidelines were included
in the agreement. The first worksheet considered the father’s trust income in child support
calculation. In that scenario, the guidline child support would be $1060 per month. The second
worksheet considered trust income and gift income in its calculation. There, the guildine child
support would be $1562 per month.
¶ 14. After using the lump sum of arrears to partially repay the loans made by her mother
and her mother’s friend, plaintiff still owes $15,000 on the loans they made to support plaintiff
and her daughter and to pay plaintiff’s legal fees.
¶ 15. Plaintiff filed legal malpractice and breach of contract claims against defendant in
the Vermont Superior Court, Windsor Unit, Civil Division. Following a bench trial, the court
concluded that “by failing to adequately give Plaintiff an explanation of the risk that, by following
[defendant’s] recommended strategy of delay, Plaintiff quite conceivably might be unable to
establish retroactive child support, [defendant] negligently fell short of the standard of reasonably
competent legal representation.” However, the court determined that plaintiff failed to prove the
negligent representation was a “cause-in-fact” of plaintiff’s injury and that the evidence was
“equivocal” as to whether plaintiff would have decided to file immediately had she been aware of
the risk. It also found insufficient evidence for nonspeculative monetary damages.
¶ 16. On appeal, plaintiff claims that defendant provided negligent advice, that plaintiff
relied on it to her detriment, and that she suffered nonspeculative damages. Defendant claims that
even if she breached her duty of care, plaintiff has not shown any causal connection between the
alleged negligence and her injury.
¶ 17. To establish legal malpractice, a plaintiff must prove that (1) the attorney owed a
professional duty of care to the client; (2) the attorney breached the duty; (3) the attorney’s act was
a proximate cause of the client’s injury; (4) and that the client suffered damages as a result of the
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injury. See Brown v. Kelly, 140 Vt. 336, 338, 437 A.2d 1103, 1104 (1981). There is no challenge
to the court’s conclusion that defendant breached her duty of care. Therefore, we address only the
two remaining elements of proximate cause and damages. We review the court’s legal conclusions
de novo, and the court’s factual findings for clear error. Benson v. Hodgdon, 2010 VT 11, ¶ 10,
187 Vt. 607, 992 A.2d 1053 (2010) (mem.).
I. Causation
¶ 18. The trial court concluded that plaintiff failed to prove causation because she did not
demonstrate that she would have filed immediately if defendant had correctly informed her of the
financial risk in delayed filing. We disagree. Based on factual findings made by the trial court,
we conclude that plaintiff met her burden to prove that, but for defendant’s negligence advice, she
would not have delayed filing.2
¶ 19. In Vermont, to demonstrate causation for a legal malpractice claim, a plaintiff must
show that the attorney’s “negligence was the proximate cause of the plaintiff’s injury.” Estate of
Fleming v. Nicholson, 168 Vt. 495, 497, 724 A.2d 1026, 1028 (1998). Proximate cause requires
a plaintiff to demonstrate by a preponderance of the evidence that the attorney’s act was a cause-
in-fact of the plaintiff’s injury.3 Knott v. Pratt, 158 Vt. 334, 336, 609 A.2d 232, 233 (1992)
2
To be clear, we do not hold that the trial court’s factual findings were clearly erroneous.
See Adams v. Adams, 2005 VT 4, ¶ 10, 177 Vt. 448, 869 A.2d 124 (2005) (“We will not disturb
the trial court’s factual findings unless they are clearly erroneous, even if the record contains
inconsistencies or substantial evidence to the contrary.”). We do not disagree with the sufficiency
of the court’s factual findings in any respect. Rather, we conclude that those findings lead
inescapably to the legal conclusion that plaintiff established causation by a preponderance of the
evidence. Collins v. Thomas, 2007 VT 92, ¶ 8, 182 Vt. 250, 938 A.2d 1208 (2007) (noting
causation “may be decided as a matter of law where the proof is so clear that reasonable minds
cannot draw different conclusions or where all reasonable minds would construe the facts and
circumstances one way”). Moreover, as discussed below, we conclude that the court did not apply
the correct legal standard for causation. Infra, ¶ 27; see also Adams, 2005 VT 4, ¶ 10 (“Our review
of the court’s legal determinations . . . is nondeferential and plenary.”).
3
In the specialized field of legal malpractice, this Court has “emphasized that an element
of proximate cause in lawyer malpractice actions is ‘cause-in-fact.’ ” Roberts v. Chimileski, 2003
VT 10, ¶ 15, 175 Vt. 480, 820 A.2d 995 (2003) (mem.) (quotation omitted); See also Knott, 158
6
(addressing plaintiff’s burden to prove that “but for” defendant’s negligent conduct, plaintiff would
have prevailed). That is, a plaintiff must prove it is more likely than not that, but for the attorney’s
negligent conduct, the plaintiff would not have been harmed. Id.; see also Restatement (Second)
of Torts § 433B cmt. a (1965).
¶ 20. Generally, to establish cause-in-fact a plaintiff should rely on expert testimony;
however, in cases “[w]here a professional’s lack of care is so apparent that only common
knowledge and experience are needed to comprehend it, expert testimony is not required to assist
the trier of fact in finding the elements of negligence.” Estate of Fleming, 168 Vt. at 497-98, 724
A.2d at 1028. This is particularly true where the negligence is based on an attorney’s failure to
inform a client of important information. Id. at 498, 724 A.2d at 1028.
¶ 21. The trial court made the following dispositive findings. First, the court found that,
“based on consideration of [defendant’s] advice, [plaintiff] decided that she would delay filing an
action for parentage.” Similarly, the court found that plaintiff signed a retainer agreement with
defendant in the fall of 2011, and, again relying on defendant’s advice, waited until 2012 before
authorizing defendant to file the parentage action. Anticipating this year without child support
payments, plaintiff made arrangements to support her daughter with loans from her mother and
Vt. at 336, 609 A.2d at 233 (“The issue here is whether defendant’s negligence, if any, was the
‘cause-in-fact’ of plaintiff’s damages.”); Brown, 140 Vt. at 338, 437 A.2d at 1104 (“The plaintiff-
client must show that the attorney’s negligence was the proximate cause of the injury of which he
complains. Therefore, plaintiff bore the burden of showing that defendant’s negligence was the
cause-in-fact of his damages.” (citation omitted)). To the degree that this Court has merged the
proximate cause inquiry with the cause-in-fact inquiry for legal malpractice claims, we note that
the meshing of the two inquiries does not extend outside of attorney malpractice. See, e.g.,
Thomas, 2007 VT 92, ¶ 8 (“[C]ausation requires both “but-for” and proximate causation.”);
Roberts v. State, 147 Vt. 160, 163, 514 A.2d 694, 695 (1986) (“Without the limitations of
proximate cause, the scope of liability for a defendant’s negligence may be extended almost
infinitely by ever-expanding causal links; proximate cause is the law's method of limiting such
liability.”). Moreover, in this case, plaintiff clearly established both but-for causation and that
“defendant’s negligence was legally sufficient to result in liability.” Thomas, 2007 VT 92, ¶ 8
(quotation omitted).
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her mother’s friend; according to the trial court, these loans were provided with the understanding
that the money would be repaid once the child support obligation was determined. All of these
findings established a clear causal link between the delayed filing and defendant’s advice and,
further, showed that plaintiff expected the child support to be retroactive because of defendant’s
advice.
¶ 22. In addition to the steps plaintiff took after relying on defendant’s advice,
defendant’s own admission demonstrates that plaintiff would have filed earlier if she had been
properly informed of the law. In a letter to the father’s attorney, defendant acknowledged that
“[w]ithout a doubt, had the rules on retroactivity of support been more clear, [plaintiff] would have
filed a parentage action as soon as [her daughter] was born.” Although defendant sent the letter
during negotiations, the letter does not provide any reason to suggest that defendant’s admission
was merely a negotiating tactic. In the letter, defendant admitted her error and requested sympathy
for plaintiff’s financial burden, specifically mentioning the loans plaintiff accrued during the
fifteen months prior to the parentage action. Defendant’s understanding of the plaintiff’s position
on child support further supports the conclusion that plaintiff would not have delayed filing but
for defendant’s negligent advice.
¶ 23. Likewise, although child custody and parental rights concerned plaintiff, the court’s
findings demonstrate that she was equally concerned about monetary support. When defendant
recommended delaying the parentage action, the court found that plaintiff specifically inquired
about the implication that the delay would have on the child support determination. Plaintiff also
testified that she was unable to financially support both herself and her child. That is why she
sought assistance from her mother and her mother’s friend until the father’s child support
arrangement was determined.
¶ 24. Finally, plaintiff’s negative emotional reaction when she discovered defendant’s
incorrect advice was unequivocal. When defendant forwarded an email to plaintiff explaining the
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correct law regarding retroactivity, plaintiff found the news “devastating” and claimed, “I can
hardly see straight [sic] I’m so angry and upset.” In addition, plaintiff testified that she was “very
upset” and “had some panic” when defendant’s associate attorney told her that child support would
be retroactive only to the date that plaintiff initiated action. Although not conclusive, coupled with
the other findings described above, this evidence strongly supports plaintiff’s claim that, but for
defendant’s negligent advice, plaintiff would not have delayed the parentage filing.
¶ 25. Our case law demonstrates that the court’s factual findings easily establish, by a
preponderance of the evidence, that defendant’s negligent advice was the cause-in-fact of
plaintiff’s injury. For example, in Estate of Fleming, the plaintiff alleged damages resulting from
the attorney’s failure to disclose a subdivision violation found during a title search. 168 Vt. at 496,
724 A.2d at 1027. We held that the attorney proximately caused the plaintiff’s injury when the
attorney failed to disclose information necessary for an informed decision-making. Id. at 499, 724
A.2d at 1029. Specifically, we noted that the attorney was the source of information for the
plaintiff and that, absent this information, the plaintiff necessarily misapprehended his legal
position. Id. In other words, the plaintiff’s necessary reliance on the attorney’s expertise was
sufficient to establish causation. See also Powers v. Hayes, 172 Vt. 535, 536, 776 A.2d 374, 376
(2001) (mem.) (concluding that circumstantial evidence regarding client’s intent was sufficient to
demonstrate “a genuine issue of material fact with respect to causation”). In this case, not only
did plaintiff necessarily rely on defendant’s advice regarding the filing date, but defendant also
acknowledged that plaintiff would have immediately filed but for her advice. This is sufficient to
demonstrate causation-in-fact.
¶ 26. Defendant’s arguments to the contrary are based on an alternative theory of
causation and are not persuasive. She suggests that plaintiff would have delayed filing even if she
had been given the correct advice. For example, defendant speculates that the father would have
become belligerent if the parentage action had been filed immediately and claims that, because
9
defendant’s advice avoided the possibility of a contentious custody battle, plaintiff would have
delayed filing. This argument is not supported by the findings, which indicate that, when plaintiff
communicated her pregnancy to the father, he expressed his desire to avoid interactions with both
plaintiff and their child. The only indication of contentious behavior was the father’s tangential
statement that litigation could turn his mother into a “mad dog”—a statement he made after the
parentage action was filed and child custody had been settled. These findings show indifference,
rather than bellicosity. Similarly, the trial court’s conclusion that plaintiff’s primary goal was
custody of her child is not supported by the findings; at most, the findings demonstrate equal goals
of custody and child support. Finally, defendant claims, and the court found, that her letter to the
father’s attorney reflected a negotiating strategy, “not an admission directly establishing that
[defendant] would have deviated from her advice to delay litigation.” This may have been
defendant’s hidden intent, but the language of the letter plainly states that plaintiff would have
filed had she been given correct advice. And this conclusion is sufficiently supported by the other
factual findings described above.
¶ 27. More importantly, the alternate theory of causation advanced by defendant and
apparently adopted by the trial court is not the standard for determining causation-in-fact. See
Knott, 158 Vt. at 336, 609 A.2d at 233 (addressing plaintiff’s burden to prove that “but for”
defendant’s negligent conduct, plaintiff would have prevailed). The trial court concluded that
“[p]laintiff has not demonstrated that she likely would have made any different decision, even if
properly advised of the risks of losing support.” This was not a correct statement of the law.
Plaintiff merely needed to prove by a preponderance of the evidence that but for defendant’s
negligence, plaintiff would not have suffered harm. Id. That is a standard plaintiff satisfied here.
II. Damages
¶ 28. In addition to concluding that plaintiff did not establish causation, the trial court
determined that plaintiff failed to demonstrate any nonspeculative monetary damages. Plaintiff
10
argues that the court erred in this conclusion and claims on appeal that she is entitled to the
attorney’s fees she expended in pursuing this malpractice claim. We conclude plaintiff proved
measurable damages caused by defendant’s negligent advice and, as a result, we remand for the
court to calculate the amount of damages. We decline to award attorney’s fees.
A. Direct Damages
¶ 29. In a legal malpractice action, all damages proximately caused by an attorney’s
negligence constitute the measure of damages.4 Bloomer v. Gibson, 2006 VT 104, ¶ 27, 180 Vt.
397, 912 A.2d 424; see also Langlois v. Town of Proctor, 2014 VT 130, ¶ 45, 198 Vt. 137, 113
A.3d 44 (2014) (stating standard for tort damages is “that such damages are the direct, necessary,
and probable result of defendant’s negligent act”). But an attorney is not liable if the damages are
too remote or too speculative. 3 R. Mallen, Legal Malpractice § 21:7 (2017 ed.). “The test of
whether damages are remote or speculative has nothing to do with the difficulty in calculating the
amount but concerns the more basic question of whether there are any damages, which focuses on
the fact of damages, rather than the amount.” Id.; see also Carbone v. Tierney, 864 A.2d 308, 317
(N.H. 2004) (noting that in legal malpractice cases “damages [cannot] be calculated with
mathematical certainty, and the method used to compute damages need not be more than an
approximation”); Capital Garage Co. v. Powell, 98 Vt. 303, 313, 127 A. 375, 379 (1925) (“In tort
actions, damages are necessarily a matter of judgment largely; they are to be estimated from facts
and circumstances, in many cases, and in such cases substantial damages may be awarded, though
there is no evidence specifically directed to their amount.”).
4
We note that the plaintiff seeks purely monetary damages as part of a tort action and that
“[p]urely economic losses may be recoverable in professional services cases because the parties
have a special relationship, which creates a duty of care independent of contract obligations.”
EBWS, LLC v. Britly Corp., 2007 VT 37, ¶ 31, 181 Vt. 513, 928 A.2d 497.
11
¶ 30. Here, because Vermont law requires that some child support be paid by the
noncustodial parent, see 15 V.S.A. § 656(b), plaintiff would have been guaranteed some measure
of child support from the date of the parentage action. Thus, as a direct result of defendant’s
negligent advice to delay filing, plaintiff did not receive fifteen months of child support, from July
2011 to October 2012, nor could she retroactively recover the child support. After applying the
appropriate legal standard, it is plain that plaintiff is entitled to damages for the fifteen months
without child support.
¶ 31. Despite this clear causal link between defendant’s negligence and the damages
suffered, the trial court relied on two faulty assumptions when it found that the alleged damages
were speculative. First, the court stated that plaintiff submitted no evidence to support an award
of $1875 per month from the date of her child’s birth; that is, the evidence did not establish that
the monthly payment for the first fifteen months would have been the same child support amount
that the father and plaintiff stipulated to after negotiations between their attorneys. Instead, the
court noted that the father submitted two financial affidavits that resulted in two different child
support calculations under Vermont’s child support guidelines. One of the affidavits considered
the father’s family gift income, while the other did not. Either with the gift income or without the
income, the father’s child support obligation calculated from the affidavits would have been less
than $1875 per month. Because these amounts were lower than the stipulated amount and because
the father could have contested the inclusion of gift income, the court concluded that the father’s
income could not be determined in the absence of the stipulation and that, as a result, any award
was speculative.
¶ 32. We are not persuaded by this analysis because it ignores the causal link between
negligence and damages. The potential of a lesser or different amount than the $1875 monthly
payment does not mean that the damages did not occur or that they were speculative. R. Mallen,
supra, § 21:7 (noting whether damages are speculative “focuses on the fact of damages, rather than
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the amount”). Nor was plaintiff required to prove that the child support payments for the first
fifteen months would have been equal to $1875 per month. All that is required is that the damages
be caused by the attorney’s negligent conduct. Gibson, 2006 VT 104, ¶ 27; R. Mallen, supra,
§ 21:8.
¶ 33. Similarly, the trial court’s second assumption is flawed. The trial court determined
that the damages were speculative because—summed up over the entire length of the child support
obligation—the $1875 monthly payment effectively made up for the fifteen months of missing
child support. In making this argument, the court again relied on the two hypothetical child support
awards calculated from the father’s financial affidavits. In comparison to those amounts, the court
concluded that, based on the $1875 monthly payment, plaintiff would receive more total child
support over the length of the child support obligation than she would have received based on
either amount calculated from the father’s financial affidavits, even if the child support payments
would have begun at the child’s birth.
¶ 34. Like the trial court’s other analysis, this claim errs because it focuses on the
subsequent stipulation, not on the harm directly caused by defendant. Gibson, 2006 VT 104, ¶ 27.
The court’s suggestion that, over the length of the child support obligation, the $1875 monthly
award will adequately compensate for the fifteen months without child support completely ignores
the direct monetary costs plaintiff accrued caring for her daughter as an infant, costs that she
covered by obtaining personal loans that she cannot repay. Moreover, the court’s calculations
based on the length of the child support obligation involve pure speculation. Child support is
flexible by nature and may be modified at any time upon a showing of a “real, substantial, and
unanticipated changes in circumstances” or without such a showing if the child support order has
not been modified for three years. See 15 V.S.A.§ 660(a)(1). As a result, the court’s comparison
of the total child support payments over the length of the obligation period rested on variable
grounds.
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¶ 35. Although we conclude that plaintiff is legally entitled to those damages caused by
defendant’s negligent advice, we remand for the court to calculate the damages. See Vincent v.
DeVries, 2013 VT 34, ¶¶ 6, 8, 193 Vt. 574, 72 A.3d 886 (noting that issue of calculating damages
was question of fact for jury as factfinder). We note that the court has several options for
computing damages, including the stipulated child support order of $1875 per month, the two other
child support orders based on the father’s financial affidavits (either with or without his family gift
income), or the loan amount accrued from her mother and her mother’s friend. Of course, whatever
total the trial court arrives at, it must be supported by the evidence and it must make plaintiff whole
for the period she did not receive child support payments. See Kramer v. Chabot, 152 Vt. 53, 55,
564 A.2d 292, 293 (1989) (“In a tort action, compensation is provided so as to restore the person
damaged, as nearly as possible, to the position he or she would have occupied had no wrong been
committed.”).
B. Attorney’s Fees
¶ 36. In addition to damages, plaintiff seeks attorney’s fees she spent pursuing her
malpractice action against defendant. We conclude that the American Rule prevails in this case,
and therefore, each party bears its own attorney’s fees.
¶ 37. In Southwick v. City of Rutland, we stated that “[w]hen addressing a question of
attorney’s fees, Vermont adheres to what is called the American Rule: parties must bear their own
[attorney’s] fees absent a statutory or contractual exception.” 2011 VT 105, ¶ 5, 190 Vt. 324, 30
A.3d 1298 (quotation omitted). “Our standard for departing from this rule is demanding.”
Knappmiller v. Bove, 2012 VT 38, ¶ 4, 191 Vt. 629, 48 A.3d 607 (mem.). At the most basic level,
the attorney’s fees must be caused by the malpractice. Gibson, 2006 VT 104, ¶ 27.
¶ 38. In this case, plaintiff appears to raise two different theories for recovering the fees
spent in prosecuting her malpractice claim against defendant: direct damages and consequential
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damages.5 Because plaintiff did not incur the fees while prosecuting her rights or interests against
a third party, neither theory justifies a departure from the American Rule.
¶ 39. Under the direct damage theory of attorney’s fees, damages may be recoverable if
the client hires another lawyer to correct the consequence of the former lawyer’s negligence. R.
Mallen, supra, § 21:12; see Britly Corp., 2007 VT 37, ¶ 8, (noting that in contract law “[d]irect
damages are for losses that naturally and usually flow from the breach itself, and it is not necessary
that the parties actually considered these damages.” (quotation omitted)).
¶ 40. We have never expressly categorized attorney’s fees as recoverable direct damages.
In Gibson, while considering whether the fees paid to the negligent attorney could be awarded as
direct damages, we distinguished between two categories of attorney’s fees: those incurred “to
correct the adverse consequences of [the attorney’s] malpractice,” which “might be recoverable
because they were caused by the wrongful act or omission,” and those fees incurred when the
attorney took some action that provided plaintiff with some value. 2006 VT 104, ¶ 27 (quotation
omitted). Ultimately, we concluded that the attorney’s fees fell under the second category because
5
We have previously noted the distinction between direct and consequential damages in
the context of contract law. See, e.g., Britly Corp., 2007 VT 37, ¶ 8 (defining direct and
consequential damages). As described above, legal malpractice sounds in tort law and we
normally strive to maintain the separation between tort and contract damages. See Springfield
Hydroelectric Co., 172 Vt. at 316, 779 A.2d at 71 (“We have been careful to maintain a dividing
line between contract and tort theories of recovery.”). But we have also analyzed the recovery of
attorney’s fees in the context of a legal malpractice claim, although such damages are generally
associated with contract law. See Gibson, 2006 VT 104, ¶ 25 (“Although plaintiff raised tort
claims to establish liability, he sought only the return of the fee paid to defendant, damages
normally associated with breach of contract.”). In short, in the specialized context of legal
malpractice claims, analyzing damage theories imported from contract law can help to clarify our
analysis, particularly where the damages sought are purely economic. See Britly Corp., 2007 VT
37, ¶ 31 (“Purely economic losses may be recoverable in professional services cases because the
parties have a special relationship, which creates a duty of care independent of contract
obligations.”); Hydro Investors, Inc. v. Trafalgar Power Inc., 227 F.3d 8, 18 (2d Cir. 2000) (“[T]he
better course is to recognize that the [economic loss] rule allows . . . recovery in the limited class
of cases involving liability for the violation of a professional duty. To hold otherwise would in
effect bar recovery in many types of malpractice actions.”).
15
the client received some value from the attorney’s work irrespective of the malpractice; therefore,
the attorney’s malpractice was not the cause of the fees the client paid to him. Id. ¶¶ 27, 29.
¶ 41. Plaintiff seizes on the first category of attorney’s fees described in Gibson and
argues that she undertook this suit and subsequent appeal solely to correct the adverse
consequences of defendant’s malpractice. Id. ¶ 27. But plaintiff’s argument ignores a key factual
distinction: Gibson involved the fees paid to the malpracticing attorney, not the subsequent
attorney, as in this case.
¶ 42. In articulating Gibson categories, moreover, we relied on Ramp v. St. Paul Fire &
Marine Ins. Co., a Louisiana Supreme Court case stating that “attorney’s fees incurred by the
plaintiffs in eliminating or in mitigating the damage caused them by the negligence of the
defendants are their total damage.” 269 So. 2d 239, 246 (La. 1972). In Ramp, after the clients
relied on an attorney’s incorrect advice that they had lost certain succession rights, the clients
discovered that they did in fact possess the rights in question and pursued these succession rights
through multiple stages of litigation against third parties. The court concluded that the cost of this
litigation could be recovered as direct damages. Id. at 244 (“The risk of the expenditure of sums
of money for costs of litigation, including attorney’s fees, directly flowed from the breach of the
duty owed by the attorneys to these plaintiffs.”).
¶ 43. Plainly, the factual circumstances in Ramp are not analogous to this case. Ramp
did not involve a suit to recover fees paid to litigate the malpractice; instead, the fees recovered
were those used to prosecute the clients’ succession rights against third parties. Thus, Ramp stands
for the principle that attorney’s fees incurred to mitigate the damage caused by negligence may be
recoverable if the malpractice causes the client to pursue his or her rights against a third party. Id.
at 246; see also Bourne v. Lajoie, 149 Vt. 45, 53, 540 A.2d 359, 364 (1987) (allowing recovery of
attorney’s fees “incurred in bringing the reformation action to recover title to the land”). This
limitation makes sense; otherwise, a client dissatisfied with an attorney’s work would only need
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to hire a new attorney and incur new fees to generate proof of damages for a legal malpractice
claim. In this case, because the attorney’s fees sought in this case did not result from litigation
against a third party, we do not believe the framework governing direct damages outlined in Ramp
and Gibson applies to this case.
¶ 44. Plaintiff’s claim that the fees paid to litigate this case should be recoverable under
a theory of consequential damages fails for the same reason. “Consequential damages are
compensation for those additional injuries that are a proximate result of the attorney’s negligence
or otherwise wrongful conduct, which do not flow directly from or concern the objective of the
retention.” R. Mallen, supra, § 21:1; see also Britly Corp., 2007 VT 37, ¶ 8 (“Special or
consequential damages must pass the tests of causation, certainty and foreseeability, and, in
addition, be reasonably supposed to have been in the contemplation of both parties at the time they
made the contract.” (quotation omitted)). On the surface, then, a theory of consequential damages
would seem more apt in this case because the attorney’s fees at issue do not concern the central
purpose of defendant’s retention.
¶ 45. In the context of consequential damages, however, “[t]he prevailing rule is that a
plaintiff cannot recover attorneys’ fees incurred in prosecuting the malpractice action” unless the
plaintiff demonstrates some sort of bad faith on the part of the negligent attorney. R. Mallen,
supra, § 21:24; Banker v. Nighswander, Martin & Mitchell, 37 F.3d 866, 873 (2d Cir. 1994)
(“Absent bad faith on the part of the adverse party, we see no basis under New Hampshire law for
an award of attorney’s fees to the successful litigant in a legal malpractice action.”). The case
cited by plaintiff illustrates this point. In Baker v. Dorfman, the Second Circuit approved an award
of attorney’s fees incurred as part of an appeals process that was necessary to correct the harm
done by the attorney’s malpractice. 239 F.3d 415, 426 (2d Cir. 2000). In doing so, the court noted
that “[l]egal fees sought as part of a malpractice cause of action are recoverable if the fees were
not merely an incident of the litigation but, instead, constituted consequential damages of the
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malpractice.” Id. (quotation omitted). Again, this is logical because a client could prove damages
for a legal malpractice claim merely by hiring a new attorney and incurring new fees. See
Lorenzetti v. Jolles, 120 F. Supp. 2d 181, 190 (D. Conn. 2000) (concluding client could recover
only those attorney’s fees related to pursuing his underlying claim “and not the legal malpractice
portion of the case”). Here, no bad faith exists and plaintiff did not pursue this action against a
third party, so we decline to award attorney’s fees.
Reversed and remanded for calculation of damages.
FOR THE COURT:
Associate Justice
¶ 46. CARROLL, J., dissenting. I agree with the majority that the trial court did not
use the correct legal standard for causation. However, the court applied a standard more deferential
to plaintiff and the factual findings made by the trial court support the conclusion that plaintiff
failed to prove by a preponderance of the evidence that she would have filed her parentage
complaint sooner if she had been given accurate advice concerning child support. For this reason,
I respectfully dissent.
¶ 47. Plaintiff was required to prove that defendant’s negligence was the proximate cause
of her injuries. Brown v. Kelly, 140 Vt. 336, 338, 437 A.2d 1103, 1104 (1981). In order to prevail,
plaintiff needed to demonstrate, by a preponderance of the evidence, that she would have filed her
parentage complaint sooner “but for” defendant’s negligence. Knott v. Pratt, 158 Vt. 334, 336,
609 A.2d 232, 233 (1992). The trial court recognized that plaintiff was required to show that
defendant’s negligence was a cause-in-fact of some injury capable of being measured by monetary
damages. However, rather than analyzing whether plaintiff demonstrated that “but for” the
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negligence she would have filed sooner, the trial court concluded that plaintiff had not shown that
she “likely” would have made a different decision. I agree with the majority that this is not the
applicable causation standard but, by employing the “likely” measurement, the trial court held
plaintiff to a lower standard in proving causation. Ante, ¶ 27. Stated simply, if the trial court
concluded plaintiff failed to show she “likely” would have chosen a different path, it necessarily
would have concluded that she failed to make the more stringent “but for” connection. Because
the evidence supports the conclusion that plaintiff failed to meet her burden under the “but for”
analysis, the trial court’s application of the more permissive standard is of no moment.
¶ 48. The majority highlights that plaintiff relied on defendant’s advice in making
decisions about her case. Ante, ¶ 21. I wholeheartedly agree. But the advice consisted of more
than counseling about child support. The court relied on defendant’s testimony in reaching the
conclusion that plaintiff was motivated against litigating the issues for fear it would cause a rift
between her and the child’s paternal grandparents who were in a position to help support the child
financially. The court’s findings support a conclusion that plaintiff was not only concerned about
child support, but was equally, if not more, concerned about custody and controlling the child’s
contact with her father. The court reasoned that “[defendant’s] advice to plaintiff with respect to
the timing of litigation was entirely appropriate to her client’s primary objectives of retaining as
much control as possible over potentially volatile issues in determining parental rights and
responsibilities.” At the trial, both plaintiff and defendant testified to plaintiff’s motivations in
delaying her parentage filing. Their testimony was inconsistent. However, on this pivotal issue,
the trial court was in the best position to make a credibility determination, which, by inference,
resulted in the court giving more weight to defendant’s testimony in reaching its conclusions. See
Benson v. Hodgdon, 2010 VT 11, ¶¶ 10-12, 187 Vt. 607, 992 A.2d 1053 (holding trial court is in
unique position to assess witness credibility and weight of evidence).
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¶ 49. Looking beyond the trial court’s specific factual findings, there is additional
evidence in the record that supports a conclusion that plaintiff was motivated by more than the
timing of child support when she made the decision to delay filing her parentage case. When
defendant informed plaintiff that there were important strategic advantages in remaining out of
court for at least a year and that threats to contest custody are sometimes made as negotiating ploys
to limit child support, plaintiff felt that this was a “terrifying prospect.” Plaintiff also testified that
a delay in filing would allow her to “enjoy the time with [her] daughter and bond with her and
have that time together without contentious litigation at the forefront of it all.” She described this
as a “win/win” situation. The record supports a conclusion that plaintiff failed to demonstrate that
“but for” the erroneous advice concerning child support, she would have filed her parentage
complaint sooner.
¶ 50. The majority concludes that the court’s findings “lead inescapably” to the
conclusion that plaintiff established causation by a preponderance of the evidence. Ante, ¶ 18 n.2.
It cites Collins v. Thomas for the proposition that causation “may be decided as a matter of law
where the proof is so clear that reasonable minds cannot draw different conclusions or where all
reasonable minds would construe the facts and circumstances one way.” 2007 VT 92, ¶ 8, 182 Vt.
250, 938 A.2d 1208 (quotation omitted). In Collins, we reviewed a trial court decision granting
summary judgment for the defendant in a wrongful death action based upon undisputed facts. We
concluded that the trial court did not err in rejecting the plaintiff’s argument that but for defendant’s
conduct in driving an uninspected and defective truck, the death would not have occurred. Id. ¶ 9
(citing Wilkins v. Lamoille Cty. Mental Health Servs., Inc., 2005 VT 121, ¶ 10, 179 Vt. 107, 889
A.2d 245 for proposition that “a defendant cannot be considered a cause of the plaintiff’s injury if
the injury would probably have occurred without the defendant’s unreasonable conduct”
(quotation omitted)).
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¶ 51. In contrast, the trial court here was required to reach a conclusion by weighing the
findings—findings with which neither the majority nor the parties take issue. But the majority
construes the facts and circumstances differently than the trial court and effectively assigns more
weight to plaintiff’s testimony in coming to its decision. Granted, our review in this case is de
novo, but we must still uphold the trial court’s conclusions that address mixed questions of law
and fact so long as the court applied the correct legal standard and the conclusions are supported
by the findings. Cf. Mahoney v. Tara, LLC, 2014 VT 90, ¶ 7, 197 Vt. 412, 107 A.3d 887
(clarifying that this Court reviews only pure questions of law de novo). The fact that the trial court
in this instance decided the causation issue using a standard that was more deferential to plaintiff,
and by doing so essentially ruled out a “but for” showing, should not result in assigning more
weight to evidence that the trial court was in the best position to assess.
¶ 52. In summary, the trial court’s findings and the record as a whole support the
conclusion that plaintiff failed to demonstrate that “but for” defendant’s negligence, she would
have filed her parentage complaint sooner. The trial court’s application of a standard more
deferential to plaintiff does not change, but supports, this result.
¶ 53. I am hereby authorized to state that Judge Harris joins this dissent.
Associate Justice
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