In its opinion filed on January 28, 2019, the Supreme Court of the State of Colorado (“Colorado Supreme Court” ) held that in a legal Malpractice action based on the defendant attorney’s alleged failure to timely file the plaintiff’s underlying medical malpractice case before the statute of limitations had expired, “[b]ecause the collectibility of the underlying judgment is essential to the causation and damages elements of a client’s negligence claim against an attorney, we hold that the client-plaintiff bears the burden of proving that the lost judgment in the underlying case was collectible.”

The Underlying Facts

The plaintiff had to undergo three cranial surgeries in 2009 after her radiologist failed to detect an obvious brain tumor on an MRI scan three years earlier. Had the radiologist discovered the tumor in 2006, the plaintiff could have had it treated with less expensive and less invasive radiosurgery. The three highly invasive cranial surgeries the plaintiff required damaged her vision, hearing, and memory.

The plaintiff retained the defendant Colorado medical malpractice attorney to sue the radiologist for medical malpractice. The defendant attorney later decided not to proceed with the Colorado medical malpractice lawsuit, concluding it did not make economic sense. The plaintiff and the defendant attorney disagreed, however, over whether the defendant attorney actually informed the plaintiff of his decision (there was no written documentation regarding the alleged conversation during which the defendant attorney claims he advised the plaintiff that he would not further pursue her medical malpractice claim against the radiologist). In any event, the statute of limitations lapsed on the medical negligence claims the plaintiff could have brought against the radiologist.

The plaintiff then sued the defendant attorney for Legal Malpractice, alleging that his negligence prevented her from successfully suing the radiologist for medical malpractice. The Colorado jury that heard the legal malpractice case determined that the radiologist had committed medical malpractice by failing to diagnose the plaintiff’s brain tumor in 2006. It also found that the defendant attorney and his law firm had breached their professional duty of care by not pursuing the case against the radiologist, and that the plaintiff had suffered over $1.6 million in present and future damages.

After trial, the defendant attorney moved for judgment notwithstanding the verdict, emphasizing that without any evidence on collectibility, the elements of causation and damages were left to speculation. The trial court denied the motion, concluding that the plaintiff had provided sufficient evidence for the jury to decide whether the judgment against the radiologist was collectible. The defendant attorney filed an appeal.

The lower Colorado appellate court agreed that there was no evidence at trial to show that the underlying judgment was collectible, but in a 2-to-1 majority opinion, held that the burden should not fall on the client-plaintiff. Instead, it concluded that collectibility should be an affirmative defense for the attorney-defendant to raise and prove.

Colorado Supreme Court Opinion

A legal malpractice claim founded on professional negligence asserts that an attorney breached his or her professional duty of care in a way that proximately injured a client. The client must prove that “but for” the attorney’s negligence, she would have won a favorable judgment against the underlying defendant (referred to as the requirement to prove the “case within a case”). If the plaintiff could not have collected on the underlying judgment, she could not be said to have suffered any loss from the attorney’s breach of duty: “Thus, it has long been clear that proving the case within a case in an attorney malpractice suit includes resolving the question of whether the judgment in the underlying case would have been collectible.” However, the Colorado Supreme Court had not previously expressly clarified which party — the client-plaintiff or the attorney-defendant — bears the burden of establishing that the judgment in the underlying suit would or would not have been collectible.

The Colorado Supreme Court held: “Because the collectibility of the underlying judgment is essential to the causation and damages elements of a client’s professional negligence claim against her attorney, we now expressly hold that the client-plaintiff bears the burden to prove that the underlying judgment was collectible … a majority of courts that have addressed this issue have recognized that placing the burden to prove collectibility on the client-plaintiff better aligns with the tort law paradigm by requiring a plaintiff to prove all elements of a negligence claim.” With regard to requiring collectibility to be raised as an affirmative defense, the Colorado Supreme Court stated: “casting collectibility as an affirmative defense is not logically sound. Treating collectibility as an affirmative defense to be raised and proved by the attorney disregards the tort paradigm by ignoring the link between the causation and damages elements that a malpractice plaintiff must prove as part of her prima facie case.”

The Colorado Supreme Court further stated: “Requiring a client-plaintiff to establish collectibility ensures that the client will not reap a windfall by recovering more from the attorney defendant than the client could ever have recovered from the hypothetical defendant in the underlying case” and “placing the burden with the attorney-defendant to prove uncollectibility forces the attorney to “prov[e] a negative,” which is a much more onerous burden than requiring the client-plaintiff to prove collectibility.”

Nonetheless, in the legal malpractice case it was deciding, the Colorado Supreme Court held: “However, given the absence of a clear statement from this court regarding the plaintiff’s burden to prove collectibility at the time of trial, and given that the issue was not raised in this case until after [the plaintiff] had presented her case-in-chief, we reverse the judgment of the court of appeals and remand the case for a new trial.”

Source LeHouillier v. Gallegos, 2019 CO 8.

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