SCHMIDT BAGEL CREATIONS, INC., and UNPUBLISHED
ELIOT CHARLIP, September 21, 1999
Plaintiffs-Appellants,
v No. 206602
Oakland Circuit Court
MICHAEL ALAN SCHWARTZ and FIEGER, LC No. 97-544829 NM
FIEGER & SCHWARTZ, P.C.,
Defendants-Appellees.
_______________________________________________
Before: Doctoroff, P.J., and Markman and J.B. Sullivan*, JJ.
PER CURIAM.
Plaintiffs appeal as of right from the trial court's order granting
defendants' motion for summary disposition pursuant to MCR 2.116(C)(8) in
this legal malpractice action. We affirm.
Plaintiffs argue that the trial court erred in granting summary
disposition in favor of defendants pursuant to MCR 2.116(C)(8). We
disagree. A motion for summary disposition under MCR 2.116(C)(8) tests the
legal sufficiency of a claim by the pleadings alone.1 Smith v Stolberg, 231
Mich App 256, 258; 586 NW2d 103 (1998). This Court reviews de novo a trial
court's decision under MCR 2.116(C)(8) to determine whether the claim is so
clearly unenforceable as a matter of law that no factual development could
establish the claim and justify recovery. Id. All factual allegations in
support of the claim are accepted as true, as well as any reasonable
inferences or conclusions that can be drawn from the facts. Id.
A plaintiff in a legal malpractice action has the burden of proving 1)
the existence of an attorney-client relationship, 2) negligence in the
legal representation of the plaintiff, 3) that the negligence was the
proximate cause of an injury, and 4) the fact and extent of the injury
alleged. Charles Reinhart Co v Winiemko, 444 Mich 579, 585-586; 513 NW2d
773 (1994). In some cases, a plaintiff must show that, but for the
attorney's negligence, the client would have completely prevailed in the
underlying lawsuit. Id. at 586. However, where the allegation is that the
verdict against the plaintiff was greater than what would have been
returned absent the defendant's negligence, a plaintiff need only show that
he would have obtained a better result but for the defendant's negligence.
Schlumm v O'Hagan, 173 Mich App 345, 359-360; 433 NW2d
________________________
* Former Court of Appeals judge, sitting on the Court of Appeals by
assignment.
_______________________________
839 (1988); Basic Food Industries, Inc v Grant, 107 Mich App 685, 693-694;
310 NW2d 26 (1981).
Here, plaintiffs claimed that, but for defendants' negligence in
failing to advise them that they could avoid arbitration and instead
litigate the underlying claim in circuit court, they would have pursued the
litigation in circuit court and would have prevailed or at least obtained a
more favorable result. However, the decision of the arbitration panel
against Charlip is binding under the doctrine of collateral estoppel, Cole
v West Side Auto Employees Federal Credit Union, 229 Mich App 639, 647; 583
NW2d 226 (1998), and precludes plaintiffs from relitigating the issue of
Charlip's liability on the underlying claim, see Alterman v Provizer,
Eisenberg, Lichtenstein & Pearlman, PC, 195 Mich App 422; 491 NW2d 868
(1992). Therefore, plaintiffs are unable to show either that they would
have completely prevailed if the underlying claims were litigated in
circuit court, or that at least a more favorable verdict would have been
obtained in circuit court. Accordingly, plaintiffs cannot show that
defendants' negligence was the proximate cause of their injury. Thus, the
trial court properly granted summary disposition in favor of defendants
pursuant to MCR 2.116(C)(8).2
Affirmed.
/s/ Martin M. Doctoroff
/s/ Stephen J. Markman
1 We note that the trial court incorrectly stated that plaintiffs were
required to present evidence to defeat defendants' motion for summary
disposition pursuant to MCR 2.116(C)(8). Despite the court's erroneous
statement, it correctly determined that summary disposition was appropriate
under MCR 2.116(C)(8). We will not reverse where the trial court reached
the right result for the wrong reason. Lane v KinderCare Learning Centers,
Inc, 231 Mich App 689, 697; 588 NW2d 715 (1998).
2 Summary disposition was also properly granted in favor of defendants with
respect to plaintiff Schmidt Bagel Creations, Inc., because Schmidt Bagel
was not a party to the underlying arbitration proceeding and did not incur
any legally enforceable liability as a result of defendants' alleged
malpractice.
-2-
STATE OF MICHIGAN
COURT OF APPEALS
______________________________________________
SCHMIDT BAGEL CREATIONS, INC., and UNPUBLISHED
ELIOT CHARLIP, September 21, 1999
Plaintiff-Appellants,
v No. 206602
Oakland Circuit Court
MICHAEL ALAN SCHWARTZ and FIEGER, LC No. 97-544829 NM
FIEGER & SCHWARTZ, P.C.,
Defendant-Appellees.
_______________________________________________
Before: Doctoroff, P.J., and Markman and J.B. Sullivan*, JJ.
SULLIVAN, J. (Concurring in part and dissenting in part.)
While I agree with footnote 2, in which the majority determines that
Schmidt Bagel was not a party to the underlying arbitration proceeding, I
dissent from the majority's conclusion that plaintiff Charlip failed to
state a claim for legal malpractice.
Collateral estoppel precludes relitigation of an issue in a
subsequent, different cause of action "between the same parties" when the
prior proceeding culminated in a valid final judgment and the issue was
actually and necessarily determined in the prior proceeding. Cole v West
Side Auto Credit Union, 229 Mich App 639, 647; 583 NW2d 226 (1998), quoting
from Porter v Royal Oak, 214 Mich App 478, 485; 542 NW2d 905 (1995)
(emphasis in Cole, supra). The "factual findings made by an arbitrator
after a proper arbitration proceeding are conclusive in a later-filed civil
suit between the same parties. . ." Cole, supra (emphasis added).
A legal malpractice action and the litigation from which it arose are
distinct. Coleman v Gurwin, 443 Mich 59, 66; 503 NW2d 435 (1993). In the
instant suit for legal malpractice, Charlip is suing Schwartz and his law
firm. In the underlying suit, Charlip was being sued by then-plaintiff
Ehrmann in a suit involving a business transaction. Since the parties are
not the same, collateral estoppel does not apply.
The issue in the instant malpractice case is whether plaintiff would
have fared better had he had the opportunity to have a jury trial rather
than the arbitration, i.e., whether he can "establish that, absent the ...
omission complained of [here, the failure of counsel to advise him that the
common law arbitration agreement could have been revoked by either party at
any time
-1-
prior to the issuance of the arbitration award], the . . . judgment
suffered [would have been] avoided." Coleman, supra, at 64 (citations
omitted). I disagree with the majority's finding that plaintiff cannot show
whether he would have fared better, and whether therefore the defendants'
negligence was the proximate cause of his injury.
In his "suit within a suit," id., plaintiff can present evidence to
the jury, including Ehrmann's testimony, and the jury will be instructed to
determine what damages they would have awarded and to whom in the
underlying lawsuit. That amount will then be compared to the result of the
arbitration, which was an award of $165,000 against plaintiff. If the jury
determines that they would have awarded less against plaintiff than the
result of the arbitration, the difference is the amount of plaintiff's
damages in the instant malpractice case. If, on the other hand, the jury
determines that they would have awarded more against plaintiff than the
amount of the arbitration, then plaintiff has no damages, and cannot prove
either element three, proximate cause, or element four, the fact and extent
of the injury. Coleman, supra, at 63.
Alterman v Provizer, Eisenberg, Lichtenstein & Pearlman, PC, 195 Mich
App 422; 491 NW2d 868 (1992), and the cases cited therein, cited by the
majority, are factually distinguishable from the instant case, and do not
compel a different result.
I would reverse.
/s/ Joseph B. Sullivan
-2-
|