Justice KITTREDGE:
This is a legal malpractice action in which the trial court granted summary judgment to the law firm of Moore & Van Allen, PLLC and attorney W. Howell Morrison (Respondents). We certified the appeal of Harris Teeter, Inc. pursuant to Rule 204(b), SCACR. We affirm.
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Rule 56(c), SCRCP; see also Hancock v. Mid-South Mgmt. Co., Inc., 381 S.C. 326, 330, 673 S.E.2d 801, 803 (2009) ("[I]n cases applying the preponderance of the evidence burden of proof, the non-moving party is only required to submit a mere scintilla of evidence in order to withstand a motion for summary judgment."); David v. McLeod Reg'l Med. Ctr., 367 S.C. 242, 247, 626 S.E.2d 1, 3 (2006) ("In determining whether any triable issues of fact exist, the court must view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the non-moving party."). Having carefully reviewed the record under the appropriate standard, we find Respondents are entitled to judgment as a matter of law.
This claim arises from Respondents' representation of Harris Teeter in an arbitration proceeding concerning a lease dispute.
In 1979, Harris Teeter leased property to operate a supermarket on East Bay Street in Charleston, South Carolina. The lease term was twenty-five years with five renewal options of five years each. The lease required Harris Teeter to pay base rent to the property owner in the amount of $14,074 a month, or $176,448 annually, as well as percentage rent if Harris Teeter's net sales exceeded $16,400,000 annually. The 1979 lease was considered an under-market lease and thus favorable to Harris Teeter.
In 2001, East Bay Venture, LLC (EBV) purchased the property and became Harris Teeter's landlord. A dispute over lease terms promptly surfaced involving the following lease provisions, which required Harris Teeter to: (1) insure the property for its "insurable value" with responsible insurance companies authorized to do business in South Carolina and (2) pay "all costs and expenses of every kind and nature whatsoever relating to the demised premises . . . except rent interruption insurance, which shall be carried by the Landlord."
After acquiring the property, Marcus Durlach, III, acting on behalf of EBV, met with officers from Harris Teeter regarding these lease provisions, specifically Harris Teeter's responsibility, if any, for certain insurance and environmental costs associated with EBV's purchase of the property. Following the meeting, Harris Teeter contacted an attorney in North Carolina it used for lease matters.
Over the next year, Durlach attempted to contact Harris Teeter numerous times on behalf of EBV seeking reimbursement for the expenses, but Durlach's communications were largely ignored. Durlach eventually wrote Harris Teeter on November 11, 2002, formally demanding reimbursement for the costs. Harris Teeter forwarded the letter to its North Carolina attorney, but Harris Teeter did not respond to EBV's demand.
On December 3, 2002, Durlach sent Harris Teeter a letter declaring it in default under the lease.
Following termination of the lease, Harris Teeter discharged that law firm and retained its third law firm, Respondents.
Respondents undertook efforts to rescind the lease termination; however, EBV's stance in negotiations was firm. EBV was unwilling to rescind the lease termination without concessions, most notably a substantial increase in base rent. Harris Teeter maintained the position throughout that EBV's posture was merely a pretext for EBV's desire to renegotiate the lease terms with Harris Teeter—for an increase in rent to reflect what EBV believed to be the true market value of the lease. Harris Teeter rejected EBV's April 28, 2003, offer of an increase to $300,000 in annual base rent.
On May 13, 2003, Harris Teeter, through Respondents, paid EBV the disputed expenses under protest "reserving all rights for reimbursement as determined in the arbitration proceeding under the Lease." Respondents continued negotiations with EBV, but EBV refused to rescind the lease termination absent a substantial increase in the base rent. On June 20, 2003, EBV made its final offer: a new fifteen-year lease, with an annual base rent of $475,000 for the first five years, $500,000 annually for the second five-year period, and $625,000 annually for the final five-year period. Keith Rudemiller, Harris Teeter's vice president for real estate, forwarded EBV's offer to Harris Teeter president Fred Morganthall. In a handwritten note accompanying the EBV offer, Rudemiller declared the offer "RIDICULOUS." Harris Teeter rejected the offer.
The dispute proceeded to arbitration. Respondent Howell Morrison of Moore & Van Allen represented Harris Teeter at the arbitration. The parties agreed to select Lanneau Lambert as the arbitrator. There were two issues before the arbitrator. The first issue was whether Harris Teeter defaulted under the lease by failing to reimburse EBV for the costs associated in complying with the terms of the voluntary cleanup contract (VCC)
Harris Teeter fired Respondents and hired another law firm to file a motion for reconsideration. While the reconsideration motion was pending, Harris Teeter and EBV settled the matter by agreeing to new lease terms, most notably a substantial increase in rent.
Thereafter, Harris Teeter filed a complaint against Respondents, alleging causes of action for professional negligence, breach of contract, and breach of fiduciary duty. The circuit court granted summary judgment in favor of Respondents with respect to all claims, only three of which Harris Teeter has pursued on appeal: the claims that Respondents committed malpractice by failing to (1) introduce any evidence in regards to two Kiriakides
In order to prevail in a cause of action for legal malpractice, the plaintiff must prove: (1) the existence of an attorney-client relationship; (2) a breach of duty by the attorney; (3) damage to the client; and (4) proximate cause of the client's damages by the breach. Rydde v. Morris, 381 S.C. 643, 646, 675 S.E.2d 431, 433 (2009). "In South Carolina, attorneys are required to render services with the degree of skill, care, knowledge, and judgment usually possessed and exercised by members of the profession," Holy Loch Distribs., Inc. v. Hitchcock, 340 S.C. 20, 26, 531 S.E.2d 282, 285 (2000), and "[t]he standard to be applied in determining legal malpractice issues is statewide," Smith v. Haynsworth, Marion, McKay & Geurard, 322 S.C. 433, 437-38, 472 S.E.2d 612, 614 (1996). Finally, generally, a plaintiff in a legal malpractice action must establish this standard of care by expert testimony. Id. at 435, 472 S.E.2d at 613.
We summarily dispose of two of Harris Teeter's claims: (1) Respondents failed to advise Harris Teeter of the risk of lease termination; and (2) Respondents failed to settle the case prior to arbitration.
The record flatly refutes any suggestion that Respondents failed to advise Harris Teeter of the risk of lease termination. On the contrary, the record demonstrates that Respondents
On May 8, 2003, Respondents informed Julia Passmore, Harris Teeter's leased property manager, that Harris Teeter's legal position was not necessarily a "slam dunk." Respondents wanted to know if Harris Teeter was comfortable with the risk of "dispossession from the property." Respondents further warned Passmore "about the whims of arbitrators— and the consequences of termination." In Passmore's deposition, she acknowledged that Respondents were emphasizing "[t]hat we could lose the lease."
When Respondents candidly advised Harris Teeter of the realities of litigation and the prospect of losing the lease, Passmore accused Respondents of "sound[ing] wishey washey" in a May 14, 2003, email. There is no evidence to suggest Respondents failed to advise Harris Teeter of the risk of lease termination; instead, the record demonstrates precisely the opposite. In any event, the lease had been terminated by EBV before Respondents' representation of Harris Teeter.
The record also negates Harris Teeter's claim that Respondents failed to settle the case prior to arbitration. Instead, the record shows that Harris Teeter had no interest in settling. For example, Respondents provided Passmore a copy of the Kiriakides opinion. Passmore forwarded the Kiriakides opinion to Rudemiller. Passmore's handwritten note to Rudemiller stated "[t]his is a S.C. Supreme Court Case that our attorneys think is relevant in our East Bay situation." And, when, prior to arbitration, Respondents relayed EBV's final settlement offer to Harris Teeter's Rudemiller, he declared the offer "RIDICULOUS."
Furthermore, even Harris Teeter's primary expert, Mark Levick, opined that Harris Teeter's legal position was strong and the dispute should have proceeded to arbitration. The suggestion that there is evidence of malpractice for failing to settle the case prior to arbitration borders on frivolity.
We turn to Harris Teeter's remaining claim that Respondents committed malpractice by failing to introduce any evidence in regards to two of the Kiriakides factors. Kiriakides, 312 S.C. 271, 440 S.E.2d 364. Kiriakides is the controlling case in South Carolina for determining whether a tenant materially breached the terms of his lease agreement with a landlord so as to justify termination of the lease.
In Kiriakides, we held, "a lease may not be forfeited for a trivial or technical breach even when the parties have specifically agreed that `any breach' gives rise to the right of termination." Id. at 275, 440 S.E.2d at 366. Instead, we stated, "to justify forfeiture, the breach must be material, serious, or substantial." Id. In order to determine whether the breach was material, we announced the following five factor test:
Id. at 276, 440 S.E.2d at 366-67 (citing Restatement (Second) of Contracts § 241 (1981)).
Harris Teeter argues Respondents breached their standard of care by failing to present evidence with regards to the following two Kiriakides factors: (1) the extent to which the injured party will be deprived of the benefit he reasonably expected; and (2) the extent to which the party failing to perform or offer to perform will suffer forfeiture. Id., 440 S.E.2d at 366. We disagree.
Respondents presented Kiriakides to the arbitrator, but made a tactical decision to focus on the materiality of the breach and not the precise extent of the cost of lease forfeiture to Harris Teeter.
Even if Harris Teeter had produced a scintilla of evidence that Respondents breached the standard of care by not fully presenting all of the Kiriakides factors to the arbitrator, Harris Teeter's claim would fail for lack of proximate cause. The claim fails for lack of proximate cause because, regardless of the source of the arbitrator's knowledge, he was fully aware of the Kiriakides decision. In his written ruling, the arbitrator cited and considered all Kiriakides factors. Of particular concern to Harris Teeter was the factor dealing with "the extent to which a party failing to perform will suffer forfeiture." The following excerpt from the arbitrator's decision lays to rest any suggestion that he failed to consider the consequences of lease forfeiture:
(Emphasis added).
Harris Teeter relied on the deposition testimony of two experts, Levick and Charles Scarminach, to defeat summary judgment. Even if we were to accept Harris Teeter's argument that Levick and Scarminach were qualified to render an expert opinion, we agree with the trial court that their deposition testimony failed to present evidence of a breach of the standard of care or a genuine issue of material fact regarding proximate cause. Harris Teeter apparently recognized the clear insufficiency of the Scarminach and Levick testimony, for it submitted post-deposition affidavits in an attempt to rescue its malpractice claims. The trial court properly characterized these post-deposition affidavits as "sham" affidavits. See Cothran v. Brown, 357 S.C. 210, 218, 592 S.E.2d 629, 633 (2004) (setting forth six considerations a court may use to determine if a post-deposition affidavit is a "sham affidavit").
Scarminach concluded that the Respondents had breached the standard of care—despite failing to establish the standard of care in his deposition. The correct standard of care is "the degree of skill, care, knowledge, and judgment usually possessed and exercised by members of the profession." Holy Loch Distribs., 340 S.C. at 26, 531 S.E.2d at 285. Scarminach, however, did not testify as to this standard. Instead, when asked about the definition of standard of care upon which he relied to form his opinion, Scarminach replied, "It's my standard." He later clarified by stating that his standard was that "of someone reading this at the end of the case," or "that of a businessman's lawyer." Neither of these additional statements accurately presents the proper standard of care. Thus, Scarminach's conclusory statement that Respondents breached the standard of care does not create a genuine issue of material fact.
Furthermore, Scarminach did not testify that the Respondents' action satisfied the causation in fact requirement of proximate cause. Oliver v. S.C. Dep't of Highways & Pub. Transp., 309 S.C. 313, 316, 422 S.E.2d 128, 130 (1992) (stating that proximate cause requires proof of causation in fact and legal cause); id. (stating that causation in fact is proved by showing that plaintiff's injury would not have occurred "but for" defendant's negligence). When asked if the case would
Levick, on the other hand, testified the standard of care is a determination of what a "reasonably competent lawyer [would] do given the facts and situations they were handed." This generic statement is true in the abstract, as it can be applied to any professional negligence claim. Yet this circular opinion, when combined with Levick's deposition testimony, does not create a genuine issue of fact as to a breach of the standard of care. Levick's statement merely begs the question and adds nothing to the analysis of the substantive legal malpractice claim.
Levick's deposition testimony reveals the basis of this legal malpractice claim—a bad result. Levick was questioned concerning the basis of his opinion of Respondents' malpractice. Instead, Levick embarked on an unsolicited and unfounded attack against the arbitrator and his integrity. Levick stated that if the arbitrator were "fair, ... there is not a way in the world that [he] could have come up with this decision." Levick further stated, "I don't think [the arbitrator] had a clue" and "what [Respondents] didn't communicate was who they were dealing with as an arbitrator."
When asked if Harris Teeter would have "won ... before the arbitrator . . . if the case had been handled in some different fashion[,]" Levick acknowledged, "Obviously, it's speculation." We agree. But Levick's "speculation" admission forms only part of our reasoning for concluding that his testimony is not sufficient to survive summary judgment. Like the excellent trial judge, we have carefully reviewed the entirety of Levick's testimony. Levick speaks only in generalities when he opines the case was not "properly presented." Levick's generalities fall woefully short of our admissibility standards for experts in professional negligence cases. Therefore, we agree with the trial court that neither expert
Because Harris Teeter's malpractice claim seeks to establish the element of a breach of the standard of care through the arbitrator's adverse ruling, we address the relationship between a "bad result" and a professional malpractice claim. Harris Teeter lost in arbitration—and that bad result forms the core of Harris Teeter's malpractice allegation. Of course, any professional negligence claim involves a bad result. We reject as a matter of law any suggestion that a bad result is evidence of the breach of the standard of care. To do so would change the landscape of our malpractice law, for all professionals. We adhere to the principle that the exercise of a professional's judgment (and accompanying acts and omissions) must be considered at the time the professional service is rendered and not through the lens of hindsight.
In rejecting a hindsight analysis, the trial court found Respondents' actions were protected under the judgmental immunity rule, which has not been formally adopted in South Carolina. The judgmental immunity rule provides that "there can be no liability for acts and omissions by an attorney in the conduct of litigation which are based on an honest exercise of professional judgment." Woodruff v. Tomlin, 616 F.2d 924, 930 (6th Cir.1980). In referring to the judgmental immunity rule as "a sound rule," the Woodruff court observed that "[o]therwise every losing litigant would be able to sue his attorney if he could find another attorney who was willing to second guess the decisions of the first attorney with the advantage of hindsight." Id. In assessing liability, a court should never measure a professional's performance through the lens of hindsight. Although an attorney may be liable for damages to a client for failure to act with a reasonable degree of skill and care, "[t]his does not mean, however, that an attorney acts as an insurer of the outcome of a case." Crosby v. Jones, 705 So.2d 1356, 1358 (Fla.1998).
Respondents made an informed judgment in their approach to the arbitration hearing. Respondents made a tactical and strategic decision to focus on whether Harris Teeter actually
Morrison made a judgment call concerning the presentation of the Kiriakides factors—a judgment call that was not unreasonable as a matter of law. Because the judgment call was reasonable as a matter of law (and consequently no question of fact is presented), there is no viable claim of malpractice. Morrison's judgment call falls squarely in the category of a "professional judgment made with reasonable care and skill." Biomet Inc. v. Finnegan Henderson LLP, 967 A.2d 662, 666.
Although the judgmental immunity rule correctly highlights the rejection of a hindsight analysis, Respondents' entitlement to summary judgment does not depend on our adoption of the rule. We therefore leave the question of adoption of the judgmental immunity rule for another day.
The practice of law is not an exact science. The practice of law involves the exercise of judgment based on the circumstances known and reasonably ascertainable at the time the judgment is rendered. "[A] lawyer shall exercise independent professional judgment and render candid advice." Rule 2.1, RPC, Rule 407, SCACR. The Rules of Professional Conduct are replete with the recognition that a lawyer cannot
In retrospect, should Respondents have presented precise financial data to the arbitrator concerning the substantial boon of the under-market lease to Harris Teeter? Perhaps. But hindsight is not the measuring stick. A case can always be tried "better." Respondents made a considered judgment to focus on the merits of the alleged breach and particularly its materiality. As noted, that judgment call was not unreasonable as a matter of law. And as the arbitrator acknowledged, lease forfeiture was a "drastic remedy," as all understood that EBV wanted a new lease with market based rent and Harris Teeter wanted to preserve the 1979 lease.
Here, Respondents candidly warned Harris Teeter of the risk of lease termination, even to the point of Harris Teeter characterizing Respondents' legal candor as "wishey washey." Harris Teeter's flippant disregard of Respondents' candid warning mirrored its longstanding disregard of EBV's inquiries and requests to honor the lease. Harris Teeter went into arbitration with its eyes wide open regarding the risk. Respondents exercised independent and reasonable professional judgment in choosing what they deemed a proper strategy in representing Harris Teeter's interest before an arbitrator highly skilled and knowledgeable in commercial real estate matters. Because Respondents' judgment was not unreasonable as a matter of law, the trial court properly dismissed this malpractice claim.
We affirm the grant of summary judgment to Respondents.
TOAL, C.J., BEATTY, J., and Acting Justice JAMES E. MOORE, concur. HEARN, J., concurring in part and dissenting in part in a separate opinion.
Justice HEARN:
Respectfully, I concur in part and dissent in part. I fully concur in the majority opinion to the extent that it affirms the circuit court's grant of summary judgment in favor of Respondents on the grounds they committed malpractice by failing to advise Harris Teeter of the risk of lease termination and by failing to settle the case before arbitration. However, I part company with the majority and would reverse the circuit court's grant of summary judgment as to Harris Teeter's allegations that Respondents committed malpractice by failing to introduce any evidence in regards to the two Kiriakides factors.
The single issue presented is whether Harris Teeter has presented sufficient evidence to survive summary judgment; I express no opinion as to what the outcome of this case would be after a trial on the merits. Faithful to my understanding of the principles governing review of an order granting summary judgment, as recently enunciated by this Court, my focus is only on whether Harris Teeter has presented a mere scintilla of evidence in support of its allegations of malpractice. See Hancock v. Mid-S. Mgmt. Co., 381 S.C. 326, 330, 673 S.E.2d 801, 803 (2009) ("[I]n cases applying the preponderance of the evidence burden of proof, the non-moving party is only required to submit a mere scintilla of evidence in order to withstand a motion for summary judgment."). This standard requires merely "the slightest amount of relevant evidence" on an issue to warrant denial of summary judgment. Black's Law Dictionary 635 (3d pocket ed.2006). If this indeed is the
As the majority correctly recognizes, Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 440 S.E.2d 364 (1994), is the controlling case in South Carolina to determine whether a tenant materially breached the terms of his lease agreement with a landlord so as to justify termination of the lease. In Kiriakides, we held, "a lease may not be forfeited for a trivial or technical breach even when the parties have specifically agreed that `any breach' gives rise to the right of termination." 312 S.C. at 275, 440 S.E.2d at 366. Instead, we stated, "to justify forfeiture, the breach must be material, serious, or substantial." Id. In order to determine whether the breach was material, we announced the following five factor test:
Id. at 275-76, 440 S.E.2d at 366-67 (citing Restatement (Second) of Contracts § 241 (1981)).
During Levick's deposition, he testified that Respondents breached their standard of care by failing to introduce any evidence during the arbitration in regards to the two Kiriakides factors.
The majority relies exclusively on Respondents' pre-hearing memorandum and comments made by Respondents during opening and closing arguments to support its conclusion that Respondents fully presented Kiriakides to the arbitrator.
In order to demonstrate proximate cause, a plaintiff must show he most probably would have been successful in the underlying suit if the attorney had not committed the alleged malpractice. Summer v. Carpenter, 328 S.C. 36, 42, 492 S.E.2d 55, 58 (1997). This Court in Baughman v. American Telephone & Telegraph Co. succinctly stated the "most probably" rule as follows:
306 S.C. 101, 111, 410 S.E.2d 537, 543 (1991). But, "[i]n determining whether particular evidence meets this test it is not necessary that the expert actually use the words `most probably.'" Id.
To survive summary judgment, the evidence presented must amount to more than mere speculation and conjecture. McKnight v. S.C. Dep't of Corrs., 385 S.C. 380, 390, 684 S.E.2d 566, 571 (Ct.App.2009). The expert must therefore state this opinion with reasonable certainty. See Ellis v. Oliver, 323 S.C. 121, 125, 473 S.E.2d 793, 795 (1996). However, in evaluating a motion for summary judgment, we must not weigh the credibility of the witnesses and the testimony. Anderson v. The Augusta Chronicle, 355 S.C. 461, 475, 585 S.E.2d 506, 513 (Ct.App.2003). Thus, if the expert's testimony facially meets these criteria, it will be sufficient to defeat summary judgment.
During his deposition, Levick testified as follows:
Then, in another point in his deposition, the following colloquy occurred:
(emphasis added).
Levick's first statement clearly satisfies the most probably requirement. As a result, I would hold that Harris Teeter has presented sufficient evidence to survive summary judgment with respect to its allegation that Respondents committed malpractice by failing to introduce any evidence in regards to the two Kiriakides factors.
Admittedly, Levick's second statement is more problematic because he began by stating, "[o]bviously it's speculation." In the circuit court's view, Levick's introductory statement rendered his entire opinion on the issue of proximate cause as nothing more than mere conjecture or speculation. I disagree with this interpretation of the statement. In reading Levick's
In Baughman, this Court stated expert testimony is sufficient to establish proximate cause so long as the testimony is such "as to judicially impress" that the opinion represents the expert's professional judgment as to the most likely among possible outcomes. 306 S.C. at 111, 410 S.E.2d at 543 (internal quotation omitted). Mindful of Baughman and our standard of review, I would find Levick testified that the result of the proceeding most probably would have been different if Respondents had not breached their duty of care to Harris Teeter.
I concur in the majority's decision to not adopt the judgmental immunity rule at this time. Under the judgmental immunity rule, strategic decisions made by an attorney in good faith and in conformity with the standard of care cannot be the basis of a legal malpractice claim. Biomet Inc. v. Finnegan Henderson LLP, 967 A.2d 662, 666 (D.C.2009). If Respondents did not breach their standard of care as a matter of law, then an additional rule insulating them from liability is unnecessary. While I agree that we should not adopt this rule under the facts before us, it would be my view that we should never adopt it.
The core of this rule is nothing more than a tautology; it has always been clear that so long as an attorney exercises a reasonable degree of skill and care he will not suffer liability. Adopting a separate rule that restates that cardinal principle of our malpractice jurisprudence and denominates it an "immunity" certainly is de trop. See Sun Valley Potatoes, Inc. v. Rosholt, Robertson & Tucker, 133 Idaho 1, 5, 981 P.2d 236 (1999) ("Rather than being a rule which grants some type of `immunity' to attorneys, it appears to be nothing more than a recognition that if an attorney's actions could under no circumstances be held to be negligent, then a court may rule as a matter of law that there is no liability."). Indeed, if this rule is in fact different from our general rules concerning attorney malpractice, then it would inherently sanction some conduct that would otherwise be negligent. To the extent the judgmental immunity rule restates the general rule that attorneys must comply with the standard of care, I would not adopt it as it is superfluous; to the extent that it offers any more protection to attorneys, I cannot join in the sanctioning of unprofessional and negligent conduct under the guise of "good faith" and "professional judgment."
Every malpractice case is, by its very nature, "Monday morning quarter-backing," and I wholeheartedly agree with the majority's statement that "[t]he practice of law is not an exact science." I also agree we grant attorneys a wide degree of discretion in how they prepare and try their cases. Indeed, clients are compensating attorneys for that very exercise of discretion. However, the issue of whether Respondents committed legal malpractice is not before the Court; that question must wait for another day. Rather, today we are called upon to determine solely whether Harris Teeter has met its burden in opposing summary judgment. I would hold that Harris Teeter adduced at least a mere scintilla of evidence sufficient to survive summary judgment. I want to reiterate that in so doing, I pass no judgment on the merits of either side of this case or Levick's credibility. Rather, I would faithfully adhere to the principles established by this Court as to the role we play on review of summary judgment orders. Accordingly, I would reverse and remand for a trial on the merits of Harris Teeter's claim regarding the two Kiriakides factors.
