Ang v. Martin

118 Wash. App. 553
Court of Appeals of Washington·Decided September 23, 2003·No. No. 28389-1-II·Published·Cited by 19 cases

Opinion

Seinfeld, J.

Jessy A. and Editha A. Ang sued their former attorneys, Michael G. Martin and Richard Hansen, for legal malpractice and violations of the Consumer Protection Act. The allegations arose out of Martin and Hansen’s representation of the Angs on federal charges that had resulted in an acquittal. In this case, the trial court dismissed the legal malpractice action after the Angs failed to prove that they were innocent of the charged federal crime. Holding that proof of actual innocence is an essential element of legal malpractice for deficient conduct in a criminal trial, and finding no reversible error, we affirm.

FACTS

Dr. Jessy Ang, a psychiatrist, and his wife Editha own Evergreen Medical Panel, which evaluates injured workers for the Washington State Department of Labor and Industries (L&I). A federal investigation of financial wrongdoing led to the execution of a search warrant for Jessy Ang’s office.

[556]*556During the search, an Internal Revenue Service (IRS) agent discovered copies of the Angs’ tax returns and income statements for the mid-1980s to the early 1990s. There were two copies for each year, one was a set filed with the IRS and the other was a set that had been furnished to banks for loan applications. The IRS copies reported significantly lower adjusted gross income figures than those listed on the bank copies.

Faced with possible federal prosecution, Jessy Ang hired Richard Hansen to represent him for a flat fee of $225,000. And Editha Ang hired Michael Martin for a flat fee of $100,000.

A grand jury indicted the Angs on 18 counts, including conspiracy, bank fraud, false statements, and tax fraud. Martin and Hansen arranged a plea agreement with the federal prosecutor, Assistant United States Attorney Steve Schroeder. But the Angs rejected Martin and Hansen’s proposed plea agreement and instead they proceeded to trial.

After the United States presented its case, Schroeder offered the Angs another plea agreement, which they reluctantly accepted. As a result of the plea, at least in part, L&I revoked Evergreen Medical Panel’s qualified provider status.

The Angs contacted attorney Monte Hester for a second opinion as to whether they should have pleaded guilty. Hester reviewed the trial transcript and concluded that the plea offered them no material benefit over going to trial.

The Angs terminated Martin and Hansen, hired Hester and Keith McFie to represent them, and withdrew their guilty plea. They waived their right to a jury trial, proceeded before the federal trial court, and were acquitted.

The Angs sued Martin and Hansen for legal malpractice and violations of the Consumer Protection Act (CPA), chapter 19.36 RCW. They also argued, apparently under their CPA claim, that the terms of Martin’s fee agreement with Editha were unsettled. In addition to other damages, the [557]*557Angs sought disgorgement of the fees that they had paid to Martin and Hansen. The trial court dismissed the CPA claim and denied the request for disgorgement without sending those questions to the-jury. It allowed the legal malpractice claim to proceed.

At trial, Editha Aug’s brother Benjamin Almeda testified about a conversation he had with Hansen in the courthouse parking lot after the Angs pleaded guilty. Almeda testified that he told Hansen that he overheard the federal trial jury say they would not have found Jessy Ang guilty.

Later, Schroeder testified that several jurors told him they believed the Angs were guilty. Over the Angs’ hearsay objection, the trial court admitted Schroeder’s testimony but gave the jury a limiting instruction.

The trial court ruled that the Angs needed to prove to the jury by a preponderance of the evidence that they were not guilty of the federal crimes charged in order to prevail on their legal malpractice claim. But after Martin and Hansen presented evidence of their guilt, including the seized tax returns and income statements, the jury found that the Angs had failed to prove their innocence, and the trial court subsequently dismissed their legal malpractice claim.

The Angs appeal, arguing that (1) the trial court erred by submitting the question of their innocence to the jury because the acquittal conclusively established innocence, (2) Schroeder’s testimony was inadmissible hearsay and prejudicial to their case, (3) the trial court improperly advised the jury to disregard the instructions on the verdict form, and (4) the trial court erred by declining to have the jury determine the terms of Martin’s fee agreement and the disgorgement issue.

DISCUSSION

I. Proof of Innocence

The Angs claim that the trial court erred by submitting the question of their innocence to the jury. They argue that proof they had been acquitted at their criminal trial proved, [558]*558as a matter of law, their innocence in the malpractice action.

To succeed on a claim of legal malpractice allegedly occurring in a criminal trial, a plaintiff must prove “at a civil trial that he or she is innocent of the charged crime” and must do so by a preponderance of the evidence. Falkner v. Foshaug, 108 Wn. App. 113, 119, 29 P.3d 771 (2001) (emphasis added). We hold that this requires the plaintiff to prove innocence in fact and not merely to present evidence of the government’s inability to prove guilt.

There are sound policy reasons for the proof of innocence requirement, namely

prohibiting] criminals from benefiting from their own bad acts, maintaining] respect for our criminal justice system’s procedural protections, removing] the harmful chilling effect on the defense bar, preventing] suits from criminals who “may be guilty, [but] could have gotten a better deal,” and preventing] a flood of nuisance litigation.

Falkner, 108 Wn. App. at 123-24 (citation omitted). Proof of innocence in fact more appropriately furthers these policies. And the Angs’ acquittal on the criminal charges did not prove their innocence in fact, “it merely prove [d] the existence of a reasonable doubt as to [their] guilt.” United States v. One Assortment of 89 Firearms, 465 U.S. 354, 104 S. Ct. 1099, 79 L. Ed. 2d 361 (1984).

In 89 Firearms, a jury apparently accepted the defendant’s entrapment defense and acquitted the defendant of charges that he knowingly dealt in firearms without a license. 465 U.S. at 355-56. In the government’s subsequent civil action for forfeiture of the seized firearms, the defendant asserted the defenses of collateral estoppel and res judicata. 89 Firearms, 465 U.S. at 356. The district court rejected the defenses and ordered forfeiture. The United States Supreme Court agreed, reasoning that

the jury verdict in the criminal action did not negate the possibility that a preponderance of the evidence could show that Mulcahey was engaged in an unlicensed firearms business. [559]*559Mulcahey’s acquittal on charges brought under [18 U.S.C.] § 922(a)(1) therefore does not estop the Government from proving in a civil proceeding that the firearms should be forfeited pursuant to [18 U.S.C.] § 924(d).

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Ang v. Martin, 118 Wash. App. 553 (Wash. Ct. App. 2003).

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