STATE OF MINNESOTA
IN SUPREME COURT
A23-0015
Court of Appeals Moore, III, J. Took no part, Hennesy, Gaïtas, JJ. Craig A. Reichel, et al.,
Appellants,
vs. Filed: September 18, 2024 Office of Appellate Courts Wendland Utz, LTD, et al.,
Respondents.
________________________
Charles A. Bird, Grant M. Borgen, Matthew B. De Jong, Bird, Stevens & Borgen, P.C., Rochester, Minnesota, for appellants.
Kevin P. Hickey, Jessica L. Klander, Peggah Navab, Bassford Remele, P.A., Minneapolis, Minnesota, for respondents.
Duane A. Lillehaug, Maring Williams Law Office, P.C., Detroit Lakes, Minnesota; and
Michael L. Weiner, Yaeger & Weiner, PLC, Roseville, Minnesota, for amicus curiae Minnesota Association for Justice.
William L. Davidson, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Defense Lawyers Association.
Charles E. Jones, Moss & Barnett, P.A., Minneapolis, Minnesota; and
M. Gregory Simpson, Meagher + Geer, PLLP, Minneapolis, Minnesota, for amicus curiae Minnesota Firm Counsel Group.
1 SYLLABUS
1. In an interlocutory appeal from a partial final judgment under Minn. R. Civ.
P. 54.02, the court of appeals lacks jurisdiction to decide claims still pending in the district
court.
2. To satisfy the but-for causation element of a legal malpractice claim
premised on professional negligence, when the appellant is alleging that it incurred
substantial attorney fees to correct the harm caused by a law firm’s negligence in a
litigation matter, the appellant need only show that the alleged harm would not have
occurred but for the law firm’s negligence.
Reversed in part, vacated in part, and remanded.
OPINION
MOORE, III, Justice.
This case comes to us on an interlocutory appeal of a partial final judgment under
Minn. R. Civ. P. 54.02. The parties seek clarification regarding a legal question we have
not previously decided: whether a plaintiff may bring a legal malpractice claim to recover
attorney fees incurred due to the professional negligence of counsel in prior litigation,
despite an ultimately successful outcome in the prior litigation. As a threshold matter, we
must also decide whether the court of appeals had jurisdiction to resolve other legal
malpractice claims that were not decided by the district court or certified as part of the
partial final judgment. We conclude that some of the court of appeals’ legal rulings must
be vacated for lack of appellate jurisdiction because the court of appeals purported to
resolve issues arising from nonappealable orders under Minn. R. Civ. App. P. 103.03. As
2 to the legal malpractice claim over which we do have jurisdiction, because we conclude
that a plaintiff may satisfy the but-for causation element of a professional negligence claim
even when the underlying litigation was ultimately successful, we reverse the court of
appeals’ decision affirming summary judgment on the professional negligence claim of
Reichel Foods, Inc. and remand for further proceedings.
FACTS
Appellant Craig Reichel is a Rochester businessperson who owns several companies
relevant to this case. The largest of these is appellant Reichel Foods, Inc. He also owns
three limited liability companies: appellant Coyote Creek Outdoors, LLC (“Coyote
Creek”), appellant Herdbull Holdings, LLC, and appellant Bullets & Broadheads, LLC
(collectively, “the LLCs”). 1 Here, appellants advance legal malpractice claims arising
from the legal representation provided in a litigation matter by the respondents: the law
firm Wendland Utz, LTD, and one of its former lawyers, Jerrie Hayes (collectively,
“Wendland Utz”) in a litigation matter. Although the representation yielded an ultimately
favorable outcome, Reichel alleges that Wendland Utz failed to provide a competent
defense, and as a result, the favorable outcome came only after incurring substantial
attorney fees and costs to correct the law firm’s negligence.
The facts of this case are disputed, and the procedural history is complicated.
Because we are reviewing the district court’s grant of summary judgment to Wendland
1 This opinion uses “Reichel” to refer to all the appellants collectively and “Reichel Foods” to refer to Reichel Foods, Inc. specifically.
3 Utz, we state the facts in the light most favorable to Reichel, the nonmoving party. See
Franklin v. Evans, 992 N.W.2d 379, 384 (Minn. 2023) (explaining that in reviewing a grant
of summary judgment, we view the evidence in the light most favorable to the nonmoving
party and resolve all doubts and factual inferences against the moving party).
The Underlying Litigation
In March 2013, Craig Reichel’s brother, Bryan Reichel, filed a lawsuit in Olmsted
County District Court against Craig 2 and the LLCs. Reichel Foods was not sued as a
defendant but allegedly paid a large amount of the defendants’ legal fees. The lawsuit
claimed that Bryan owned an equity interest in Coyote Creek, which had allegedly
breached its fiduciary duties to Bryan. Bryan’s own company, Reichel Investments, L.P.,
had made a series of payments to Coyote Creek totaling $186,000. The parties disputed
whether the payments were related to a loan from Coyote Creek or an investment in Coyote
Creek.
Craig had a longstanding relationship with the Rochester law firm Wendland Utz,
LTD, which assigned one of its litigators, Jerrie Hayes, to defend Craig and the LLCs in
connection with Bryan’s lawsuit (Craig had not previously worked with Hayes). But as
the district court in the legal malpractice case aptly observed, while discovery proceeded
in the case, “the litigation began to unravel.”
In October 2013, the district court in the underlying lawsuit issued a temporary
2 Because the two brothers share the same last name, we refer to them by their first names here.
4 restraining order against the defendants to preserve and maintain evidence after Bryan
alleged that they “lost or destroyed all relevant email communications and refused to
provide access to electronically stored information.” Next, Bryan sought an order for
contempt premised upon Hayes’s alleged failure “to timely answer and fully respond” to
Bryan’s written discovery. At a hearing on the contempt motion, Hayes was not allowed
to argue against the motion because she had not previously submitted a written
memorandum responding to it. The district court granted the motion from the bench and
ordered Wendland Utz and Hayes to pay $12,133 to Bryan’s lawyers within five days.
Despite this adverse ruling, in an email to Craig later that day, Hayes described the hearing
as “pretty uneventful.”
Less than a week later, the district court granted another motion by Bryan for a
preliminary injunction, finding that the defendants had “lost, secreted or hidden relevant
electronically stored information” and had “failed and refused to provide truthful, complete
or accurate answers to discovery.” It appointed a receiver to manage the LLCs and gave
the receiver authority to “take custody, control and possession of all the funds, property,
premises, leases, and other assets” under the control of Craig’s businesses.
By December 2013, another Wendland Utz attorney had taken over the case. The
new attorney advised Craig to have the LLCs file for bankruptcy under the representation
of the Twin Cities law firm Larkin Hoffman Daly & Lindgren Ltd. The new strategy was
to litigate the proceedings in a fresh forum because Craig’s new attorney “felt that it was
pretty unlikely” that Craig would succeed on any further discretionary rulings and that
“bridges had been burned” with the district court judge. Craig took the advice, and the
5 LLCs filed petitions in bankruptcy court, seeking reorganization under Chapter 11.
Bryan’s district court lawsuit was stayed pending the approval of the bankruptcy plan.
The bankruptcy court eventually confirmed the bankruptcy plan and found that
Craig was the sole owner of the LLCs. Because the bankruptcy court’s findings effectively
nullified Bryan’s claim of ownership interest in Coyote Creek, Bryan stipulated to the
dismissal of the district court claims against the LLCs, but the claims against Craig himself
remained. 3 Craig moved for summary judgment on the remaining claims against him,
which the district court granted. The court of appeals upheld the district court’s decision.
Reichel Invs., L.P. v. Reichel, No. A15-1724, 2016 WL 3884552, at *9 (Minn. App. July
18, 2016), rev. denied (Minn. Sept. 28, 2016).
The Legal Malpractice Lawsuit
In November 2018, the appellants in this case—Craig, Reichel Foods, and the
LLCs—filed a lawsuit in Olmsted County District Court against Wendland Utz. The
lawsuit alleged three claims based on different theories of legal malpractice: (1) breach of
contract, (2) professional negligence (styled “professional malpractice”), and (3) breach of
fiduciary duty. 4 Reichel’s theory of the case was that Wendland Utz was negligent in
3 Craig also made a $200,000 settlement payment in exchange for the assignment of an alter ego claim possessed by Bryan’s own bankruptcy trustee. 4 Reichel also asserted six other claims: unjust enrichment, negligent supervision, respondeat superior, fraudulent misrepresentation by Wendland Utz, fraudulent misrepresentation by Hayes, and fraudulent nondisclosure. Because these claims are not at issue in this court, we do not address the treatment of these claims by the district court or the court of appeals.
6 defending the underlying litigation, and this negligence resulted in Reichel incurring
substantial attorney fees and costs to correct the negligence, despite the ultimate success of
the case. According to Reichel’s expert affidavit, the additional litigation expenses totaled
over $940,000.
In June 2021, Wendland Utz filed a motion for partial summary judgment, seeking
dismissal of several of the claims brought by Reichel Foods, including the professional
negligence claim. Wendland Utz alleged that Reichel Foods lacked standing to sue for
legal malpractice and that all of Reichel Foods’ claims failed as a matter of law. 5 For
purposes of summary judgment, Wendland Utz did not dispute its negligence.
As relevant to this appeal, the district court determined that Wendland Utz was
nonetheless entitled to summary judgment on Reichel Foods’ professional negligence
5 The district court ruled that there was “a genuine issue of material fact as to Reichel Foods’ standing to sue for legal malpractice, as there is a genuine issue of material fact on the existence of an attorney-client relationship” between Reichel Foods and Wendland Utz. Accordingly, the district court denied summary judgment on that basis. Additionally, in a footnote, the district court acknowledged that Wendland Utz had argued that all the claims brought by Reichel Foods should be dismissed. Wendland Utz asserted: “All of Reichel Foods, Inc.’s purported claims against the Firm and Hayes flow from their defense of the actual Defendants in the underlying Olmsted County case. Those claims independently fail as well.” But the district court stressed that Wendland Utz had not addressed the other claims in its briefing, and Wendland Utz had not made an alternative argument in light of the district court’s ruling that “Reichel Foods may have been a client of [Wendland Utz] in the course of the litigation.” Because the district court was “loathe to create or assume the arguments of the parties,” the district court stated that it “does not reach these other pled counts as part of its Order, and they remain pending” against Wendland Utz. Wendland Utz does not challenge the district court’s determination that there was a genuine issue of material fact as to Reichel Foods’ standing or the district court’s pronouncement that Reichel Foods’ other claims remained pending. Consequently, these issues are not before us. 7 claim. The district court concluded that Minnesota law required Reichel Foods to
demonstrate that, but for the law firm’s conduct, Reichel Foods would have been successful
in the defense of the underlying action. See Guzick v. Kimball, 869 N.W.2d 42, 47 (Minn.
2015). The district court determined that “the record is inadequate to support a genuine
issue of material fact as to the element of but-for causation” because Reichel was successful
in the defense of the underlying action as “measured by the ultimate outcome of the
litigation.” The district court therefore granted summary judgment against Reichel Foods
as to its professional negligence claim. The district court also granted summary judgment
against Reichel Foods on the claims of unjust enrichment, misrepresentation, and
nondisclosure. The district court did “not reach” Reichel Foods’ other claims of legal
malpractice—based on theories of breach of contract and breach of fiduciary duty—noting
that Wendland Utz had not addressed these claims in its briefing.
In June 2022, Wendland Utz brought a second motion for summary judgment. With
respect to the legal malpractice claims at issue here, Wendland Utz challenged Reichel’s
claims for breach of contract and breach of fiduciary duty, as well as the professional
negligence claims advanced by Craig Reichel and the LLCs. On these claims, Wendland
Utz repeated its previously successful argument that but-for causation cannot be proven if
the underlying litigation had a successful outcome.
Before the district court had ruled on this new summary judgment motion, Reichel
moved for partial final judgment under Minn. R. Civ. P. 54.02 on the claims the district
court had dismissed in the first summary judgment ruling. Over the opposition of
Wendland Utz, the district court granted the motion and issued an amended order,
8 reasoning that clarification was needed on “an issue of first impression in Minnesota courts:
Whether a lawyer who negligently thrusts a client into other or ongoing ‘same-case’
litigation (not merely a transactional matter) is entitled to recover the legal fees as damages
even though the ultimate result is ‘successful.’ ” Finding “no just reason for delay”
regarding that question, the district court expressly directed “immediate entry of judgment”
and dismissed with prejudice the professional negligence count of the complaint as to
Reichel Foods. The district court specified that “Reichel Foods still has claims pending,”
including the claims for breach of contract and breach of fiduciary duty against Wendland
Utz. The district court explicitly reserved judgment on the other pending motions,
including Wendland Utz’s June 2022 motion for summary judgment. As a result, when
partial final judgment was entered, the district court had resolved only the professional
negligence, unjust enrichment, misrepresentation, and nondisclosure claims brought by
Reichel Foods and had not resolved any of the claims brought by Craig or the LLCs
(including the professional negligence claims brought by those parties).
The Interlocutory Appeal
Reichel appealed the partial final judgment to the court of appeals under Minn. R.
Civ. App. P. 103.03(a), including the district court’s summary judgment dismissal of
Reichel Foods’ professional negligence claim. Wendland Utz filed a notice of related
appeal under Minn. R. Civ. App. P. 103.02, subd. 2, asking the court of appeals to
“revers[e] that portion of the partial summary judgment order that fails to address and
dismiss the alternative theories of legal malpractice (breach of contract and breach of
fiduciary [duty]).” After questioning jurisdiction and receiving briefing from the parties,
9 the court of appeals issued a special term order accepting jurisdiction over the appeal,
ruling that the district court did not abuse its discretion in certifying the judgment for
immediate appeal. Reichel v. Wendland Utz, No. A23-0015, Order at 5 (Minn. App. filed
Jan. 24, 2023).
On the merits, the court of appeals affirmed in part, reversed in part, and remanded.
Reichel v. Wendland Utz, LTD, No. A23-0015, 2023 WL 5838837 (Minn. App. Sept. 11,
2023). The court of appeals agreed with the district court that a professional negligence
suit premised on a litigation matter requires “the loss or destruction of a cause of action”
that would have otherwise been successful. Id. at *4. The court of appeals therefore
affirmed the dismissal of Reichel Foods’ professional negligence claim. Id. at *1. In
addition, as relevant here, the court of appeals concluded that the district court erred in
denying summary judgment on Reichel’s claims for breach of contract and breach of
fiduciary duty. Id. at *6.
Reichel filed a petition for further review. We granted review on issues relating to
the legal malpractice claims but directed the parties to “address the basis or bases for
appellate jurisdiction” over the following claims:
(1) the breach-of-fiduciary-duty and breach-of-contract claims brought by petitioner Reichel Foods; and (2) the professional malpractice, breach-of- contract, and breach-of-fiduciary duty claims brought by petitioners Craig Reichel, Coyote Creek Outdoors, LLC, Herdbull Holdings, LLC, and Bullets & Broadheads, LLC.
Reichel v. Wendland Utz, LTD, A23-0015, Order at 2 (Minn. filed Dec. 19, 2023). We
further stated, “[i]f appellate jurisdiction is lacking over any of these claims brought by any
of these petitioners, the parties are further directed to address whether the court of appeals’
10 decision appearing to resolve these claims should be vacated.” Id.
ANALYSIS
At issue here is the legal viability of Reichel’s legal malpractice claims. Legal
malpractice claims may be based on “multiple legal theories,” including “professional
negligence, breach of fiduciary duty, and breach of contract.” Mittelstaedt v. Henney, 969
N.W.2d 634, 639 (Minn. 2022) (stressing, however, that these are “distinct claims,” and
they do not share “identical elements”). Reichel brought legal malpractice claims against
Wendland Utz under all three theories, focusing on the actions and inactions of Hayes that
allegedly caused Reichel to incur inordinate fees over the course of the litigation.
We first address the jurisdictional issue raised by the court of appeals’ consideration
and determination of the legal malpractice claims upon which the district court never ruled.
Because the court of appeals lacked jurisdiction to resolve those claims, we vacate those
parts of the court of appeals’ opinion. After resolving the jurisdictional issue, we next
address a narrow question of first impression as to the sole claim over which there is
appellate jurisdiction: whether the but-for causation element of a professional negligence
claim arising from legal representation in a litigation matter requires an unsuccessful result
in the underlying litigation. Because we conclude that Reichel is not categorically barred
from asserting a professional negligence theory of relief in a legal malpractice claim merely
because there was ultimately a successful result in the underlying litigation, we reverse the
decision of the court of appeals affirming summary judgment on Reichel Foods’
professional negligence claim and remand to the district court for further proceedings
consistent with this opinion.
11 I.
We begin with the threshold issue of jurisdiction. “A challenge to appellate
jurisdiction may be raised at any time and cannot be waived or forfeited.” In re Polaris,
Inc., 967 N.W.2d 397, 405 (Minn. 2021). We review matters of appellate jurisdiction de
novo. Id.
This is an interlocutory appeal, meaning that the district court has not issued a final
judgment that resolves all claims brought by all parties. See City of Elk River v. Bolton &
Menk, Inc., 2 N.W.3d 173, 177 (Minn. 2024). “Generally, interlocutory appeals are
disfavored and, ordinarily, only ‘final judgments’ are appealable.” Gordon v. Microsoft
Corp., 645 N.W.2d 393, 398 (Minn. 2002). Interlocutory appeals are disfavored because
they “may cause disruption, delay, and expense for litigants; they also burden appellate
courts by requiring immediate consideration of issues which may become moot or
irrelevant by the end of trial.” Emme v. C.O.M.B., Inc., 418 N.W.2d 176, 179 (Minn. 1988).
Our discussion of jurisdiction is limited to Reichel’s legal malpractice claims, which
were the only issues on which we granted review. The district court resolved only one of
the legal malpractice claims brought by one of the parties: the professional negligence
claim brought by Reichel Foods. The district court did not reach the breach-of-contract
and breach-of-fiduciary-duty claims brought by Reichel Foods in Wendland Utz’s first
summary judgment motion, and the district court reserved ruling on the remaining legal
malpractice claims raised in Wendland Utz’s second summary judgment motion. At the
time of this appeal, those claims remain pending in the district court.
12 Rule 103.03 of the Minnesota Rules of Civil Appellate Procedure is “the touchstone
for most questions of appealability.” 3 Erica A. Holzer & Katherine S. Barrett Wiik,
Minnesota Practice—Appellate Rules Ann. § 103.5 (2024 ed.). Rule 103.03 sets out
specific categories of appealable orders and judgments. One of those categories includes
an exception to our general rule disfavoring interlocutory appeals: “a partial judgment
entered pursuant to Minn. R. Civ. P. 54.02.” Minn. R. Civ. App. P. 103.03(a). “A party
may appeal from a partial judgment entered pursuant to Rule 54.02 if an action involves
‘multiple claims for relief or multiple parties,’ the district court makes ‘an express
determination that there is no just reason for delay,’ and the district court expressly directs
the entry of a final judgment.” Elk River, 2 N.W.3d at 177. We recently explained that
“ ‘Rule 54.02 is intended to reduce piecemeal appeals by limiting appeals from judgments
that resolve only part of the litigation,’ and ‘to liberalize the appellate process for parties
who might be prejudiced by waiting to appeal a decision where other claims or liabilities
are yet to be decided.’ ” Id. (quoting T.A. Schifsky & Sons, Inc., 773 N.W.2d 783, 787
(Minn. 2009)).
In this case, the district court made an express determination that there was no just
reason for delay and directed the entry of a final judgment pursuant to Rule 54.02, but only
as to the professional negligence claim brought by Reichel Foods. Nonetheless, the court
of appeals not only affirmed the summary judgment dismissal of the professional
negligence claim brought by Reichel Foods but also purported to resolve the other legal
malpractice claims. The court of appeals addressed the legal malpractice claims in terms
of the “appellants”—seemingly referring not only to Reichel Foods but also to Craig
13 Reichel and the LLCs. The court of appeals ruled that “the district court did not err in
dismissing appellants’ legal malpractice claim because appellants failed to show ‘but for’
causation,” but the district court did err “in denying summary judgment on appellants’
remaining claims that involve a showing of ‘but-for’ causation.” Reichel, 2023 WL
5838837, at *1.
We conclude that the court of appeals had jurisdiction over only the professional
negligence claim brought by Reichel Foods, which was the only legal malpractice claim
the district court resolved on summary judgment and the only claim for which the district
court stated that there was no just reason for delay and expressly directed the immediate
entry of judgment pursuant to Rule 54.02. Rule 54.02 permits the district court to direct
entry of a partial final judgment, and Minn. R. Civ. App. P. 103.03(a) provides for an
immediate appeal only of the issues and claims resolved in the partial final judgment. Rule
103.03(a) provides no basis for an appeal of the other legal malpractice claims brought by
Reichel Foods or the legal malpractice claims brought by Craig Reichel and the LLCs.
Wendland Utz makes no argument that an alternative basis for appellate jurisdiction
exists under Minn. R. Civ. App. P. 103.03. As noted, the district court did not even rule
on the other legal malpractice claims. In the first summary judgment order, the district
court specifically stated that it was not reaching Reichel Foods’ claims for breach of
contract and breach of fiduciary duty. And the district court specifically reserved ruling
on the second summary judgment motion. The district court made clear that the other legal
malpractice claims remain pending in the district court. Moreover, even if the district court
had denied summary judgment on the other legal malpractice claims, as the court of appeals
14 suggested, an order denying summary judgment is not an appealable order under Rule
103.03 and generally is not otherwise immediately appealable. See McCullough & Sons,
Inc. v. City of Vadnais Heights, 883 N.W.2d 580, 585–86 (Minn. 2016).
Wendland Utz relies primarily on Minn. R. Civ. App. P. 103.04 to establish
appellate jurisdiction over these other claims, which provides, in relevant part:
The appellate courts may reverse, affirm or modify the judgment or order appealed from or take any other action as the interest of justice may require. On appeal from or review of an order the appellate courts may review any order affecting the order from which the appeal is taken and on appeal from a judgment may review any order involving the merits or affecting the judgment. They may review any other matter as the interest of justice may require.
Wendland Utz describes Rule 103.04 “as a flexible exception to the general constraints of
appellate jurisdiction.”
We reject the reliance of Wendland Utz on Rule 103.04. Rule 103.04 governs the
scope of appellate review, not whether an appellate court has jurisdiction in the first
instance. Cf. Nw. State Bank v. Foss, 177 N.W.2d 292, 294 (Minn. 1970) (“An appeal from
a judgment entitles the appellant to appellate review, the scope of which is determined by
the proceedings prior to the entry of judgment.” (emphasis added)). Therefore, in an
interlocutory appeal, Rule 103.04 does not provide a basis for appellate jurisdiction over
other nonappealable orders. In other words, a party cannot use Rule 103.04 to expand an
interlocutory appeal beyond the claims the district court certified under Rule 54.02, which
would essentially allow an interlocutory appeal of a partial final judgment to be converted
15 into a piecemeal appeal of any nonfinal order. 6
We conclude that the court of appeals lacked jurisdiction to consider Reichel’s
claims for breach of contract and breach of fiduciary duty, as well as the professional
negligence claims of appellants other than Reichel Foods. Vacatur is proper when the court
of appeals lacked jurisdiction. See Howard v. Svoboda, 890 N.W.2d 111, 116 (Minn.
2017). Accordingly, we vacate the rulings of the court of appeals on all of the legal
malpractice claims, with the exception of the professional negligence claim brought by
Reichel Foods.
II.
We now proceed to the substantive issue on which we granted review—whether
Minnesota law allows the recovery of attorney fees as damages in a legal malpractice claim
premised on professional negligence when they are incurred to “correct” a lawyer’s
negligence, even though the client was ultimately successful in the underlying litigation.
Because of our ruling on the jurisdiction issue, we consider only the professional
negligence claim of Reichel Foods.
6 Wendland Utz filed a notice of related appeal in the court of appeals under Minn. R. Civ. App. P. 103.02, subd. 2. For the same reasons, we conclude that Rule 103.02, subdivision 2, does not provide an independent basis for appellate jurisdiction. Rather, that rule enables a party, once another party has filed a notice of appeal, to “seek review of a judgment or order in the same action.” Id. (emphasis added). In an interlocutory appeal of a partial final judgment under Rule 54.02, the court of appeals must consider whether the related order is independently appealable under Rule 103.03. See Minn. R. Civ. App. P. 103.03(a) (allowing for the court of appeals to hear an appeal “from a final judgment, or from a partial judgment entered pursuant to Minn. R. Civ. P. 54.02”).
16 We review a district court’s grant of summary judgment de novo. Mittelstaedt, 969
N.W.2d at 638. Legal conclusions concerning the elements of legal malpractice are
likewise subject to de novo review. See Jerry’s Enters., Inc. v. Larkin, Hoffman, Daly &
Lindgren, Ltd., 711 N.W.2d 811, 819 (Minn. 2006). Here, a careful examination of the
policies undergirding our legal malpractice jurisprudence leads us to conclude that a
successful outcome in the underlying litigation is not an absolute bar to liability for legal
malpractice under a professional negligence theory.
A.
To prevail on a professional negligence claim in a litigation matter, a legal
malpractice plaintiff “traditionally must show”: (1) the existence of an attorney-client
relationship, (2) acts constituting negligence, (3) that such acts were the proximate cause
of the plaintiff’s damages, and (4) that “but for defendant’s conduct, the plaintiff would
have been successful in the prosecution or defense of the action.” Jerry’s, 711 N.W.2d at
816. We have explained that the fourth element—but-for causation—may be satisfied if a
plaintiff demonstrates “a winable [sic] case-within-a-case” in the underlying litigation.
Rouse v. Dunkley & Bennett, P.A., 520 N.W.2d 406, 409 (Minn. 1994) (citation omitted)
(internal quotation marks omitted).
Because Wendland Utz did not dispute its negligence for purposes of summary
judgment and because the district court dismissed Reichel Foods’ professional negligence
claim solely on the ground of but-for causation, we do not address the merits of the
professional negligence claim. Rather, we focus on the district court’s ruling that Reichel
Foods could not sustain a professional negligence claim as a matter of law because the
17 underlying litigation was ultimately resolved in Reichel’s favor.
The professional negligence theory of legal malpractice has developed as an
outgrowth of our case law dealing with ordinary negligence. See Hill v. Okay Constr. Co.,
252 N.W.2d 107, 118 (Minn. 1977) (analogizing the duty of an attorney in representing a
client to the duty of reasonable care in an ordinary negligence case). 7 Proving an “ordinary
negligence claim” requires a plaintiff to establish four essential elements: “(1) the existence
of a duty of care, (2) a breach of that duty, (3) an injury, and (4) the breach of the duty
being the proximate cause of the injury.” Gradjelick v. Hance, 646 N.W.2d 225, 234
(Minn. 2002). The connection between the two kinds of negligence claims (ordinary and
professional) is apparent when comparing the elements of ordinary negligence to the
elements of professional negligence. To prevail in a legal malpractice action, a plaintiff
must show: (1) that an attorney client relationship existed (2) that defendant acted
negligently or in breach of contract (3) that such acts were the proximate cause of damages
incurred by the client, and (4) but for the attorney’s conduct, the individual would not have
incurred the damages. Compare, e.g., Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d
686, 688 (Minn. 1980), with Gradjelick, 646 N.W.2d at 234.
7 The standard of representation by which an attorney must abide has long been discussed in terms of negligence. See, e.g., Pitt v. Yalden, 4 Burr. 2060, 2061–62, 98 Eng. Rep. 74, 75 (K.B. 1767) (“It does not appear to me, that they were grossly negligent, or grossly ignorant, or intentionally blamable: they were country attornies; and might not, and probably did not know that this point was settled here above.”).
18 The primary difference between our articulation of the ordinary negligence elements
and the elements of professional negligence in a legal malpractice context is that but-for
causation is not a discrete element under ordinary negligence, but rather is subsumed into
the element of proximate cause. “But-for causation,” therefore, “is still necessary” for
proximate causation in an ordinary negligence case “because if the harm would have
occurred even without the negligent act, the act could not have been a [proximate cause]
in bringing about the harm.” George v. Est. of Baker, 724 N.W.2d 1, 11 (Minn. 2006). By
contrast, our professional negligence jurisprudence has maintained but-for causation as a
distinct element and has traditionally described that requirement in terms of whether a
party, but for the attorney’s negligence, “would have been successful” in the underlying
litigation. Togstad, 291 N.W.2d at 688.
In developing our case law regarding professional negligence, we have examined
various settings in which an attorney’s negligence might cause harm. First, we have
considered the typical malpractice scenario, when an attorney’s alleged negligence in
failing to file an action on behalf of the plaintiff “permit[ed] the statute of limitations to
operate against [the] plaintiff’s claim.” Christy v. Saliterman, 179 N.W.2d 288, 293 (Minn.
1970); see also Admiral Merchants Motor Freight, Inc. v. O’Connor & Hannan, 494
N.W.2d 261, 264–65 (Minn. 1992) (involving a situation when a defendant was found
liable because certain defenses were, in the view of the defendant, negligently forfeited).
In such cases, we have held that the client had the burden of proving that, but for the
attorney’s negligence, the client would have been successful in the prosecution or defense
of the action. Christy, 179 N.W.2d at 294. This “case-within-a-case” language acts as a
19 descriptor of the but-for causation element that is unique to malpractice claims alleging
that the attorney’s negligence resulted in the loss or damage to a client’s cause of action
that “could have been won at trial.” Rouse, 520 N.W.2d at 409 (citation omitted) (internal
quotation marks omitted) (emphasis omitted). “Once it has been established . . . that [the]
plaintiff has sustained damages by reason of the attorney’s negligence . . . , the right to
recover is established.” Christy, 179 N.W.2d at 294.
But when the attorney’s alleged negligence results in damages in a transactional
matter, we have articulated the but-for causation element differently. In Jerry’s
Enterprises, Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd., for example, we stated what
appears to be an alternative rule: “[I]n an action for legal malpractice arising out of
representation in transactional matters,” a plaintiff may establish but-for causation by
showing that “but for [the] defendant’s conduct, the plaintiff would have obtained a more
favorable result in the underlying transaction than the result obtained.” 711 N.W.2d 811,
819 (Minn. 2006) (emphasis added). We observed that, previously, we had “formulated”
the but-for causation element in a way that applied logically to traditional malpractice cases
in litigation matters “in which the alleged injury was damage to or loss of a cause of action
belonging to the plaintiff.” Id. But because the alleged negligence in Jerry’s arose out of
a transactional representation that did not affect the plaintiff’s cause of action, we
concluded that the plaintiff did not need to prove that it “would have been successful in the
prosecution or defense” of an underlying litigation matter. Id. (citation omitted) (internal
quotation marks omitted).
20 However, we have never squarely addressed how the but-for causation element
applies when, even though the litigation ended successfully, the attorney’s negligence in
conducting the litigation nevertheless saddled the client with unnecessary or unreasonable
costs. We now proceed to answer this question.
B.
The two sides to this dispute read our case law quite differently. Wendland Utz
argues that Jerry’s demonstrates an intent by this court to separate malpractice cases along
sharp categorical lines. According to Wendland Utz, when an attorney has represented a
client in a transactional matter, the “more favorable result” standard from Jerry’s applies,
711 N.W.2d at 819; however, when the attorney has represented the client in litigation, the
“case-within-a-case” analysis controls, Rouse, 520 N.W.2d at 406. Reichel asks us instead
to draw the line “between loss or damage to a claim and everything else.” In
Reichel’s view, the Jerry’s standard applies not only in transactional cases, but whenever
the alleged harm is something other than the loss of or damage to a cause of action or
defense.
We agree with Reichel. Although the dispute in Jerry’s happened to stem from
representation in a transactional matter, the reason we gave for articulating a different
standard of but-for causation was the absence of “damage to or loss of a cause of action,”
Jerry’s, 711 N.W.2d at 819, not that the underlying representation was related to a
transactional matter. The upshot, then, is that the nature of what must be proven to establish
but-for causation is entirely dependent upon the nature of the harm alleged. When the harm
involves the negligent loss of a client’s claim or defense, a showing that the claim or
21 defense would have been otherwise successful is necessary.
Accordingly, we hold that in a professional negligence claim such as that presented
here, when the plaintiff alleges some type of harm other than the negligent loss of a claim
or defense in litigation, the case-within-a-case methodology is inapplicable, and the
plaintiff must rather demonstrate that the alleged harm would not have occurred absent the
defendant’s negligence. The manner in which “the fourth element in a legal malpractice
action has, in the past, been formulated,” id., is just that—a formulation, which must be
adapted to the contours of the particular circumstances necessary to prove but-for causation
in any professional negligence claim. The case-within-a-case formulation of but-for
causation, which still applies when a legal claim is lost or damaged, is inapplicable here,
when the alleged harm occurred despite a legal victory.
Our conclusion as to the nature of the but-for causation element of professional
negligence is supported by several authorities we find persuasive. Most recently, the
United States Eighth Circuit Court of Appeals concluded that, under Arkansas law, a
malpractice plaintiff need only show that an attorney’s negligence “led, in a natural and
continuous sequence, to the extra fees” the plaintiff paid. Gerber Prods. Co. v. Mitchell
Williams Selig Gates & Woodyard, PLLC, 28 F.4th 870, 872 (8th Cir. 2022) (citation
omitted) (internal quotation marks omitted). There, the court found that “[t]here is no case
within a case,” when the plaintiff claimed that the harm stemmed from the legal fees
incurred during the litigation to regain attorney-client privilege, which had been
negligently waived. Id. The underlying litigation in Gerber had not yet gone to trial when
the malpractice suit was filed, “so there was no way [the plaintiff] could show that the
22 result in the underlying action would have been different.” Id. at 871 (citation omitted)
(internal quotation marks omitted). Instead, the court applied a traditional causation
analysis, reasoning that “[i]t makes sense that proving a case-within-a-case is not a hard-
and-fast requirement because an attorney’s negligence can result in injuries other than a
loss in court.” Id. at 873.
To support its rationale, the Gerber court included a review of state court cases that
weigh strongly in favor of adopting the ordinary negligence approach to malpractice
causation. Id. at 873 n.1. These cases support our holding, too. In Krahn v. Kinney, for
example, the Ohio Supreme Court concluded that attorney fees incurred to rectify an
attorney’s failure to appear at a hearing could be recovered in a malpractice action,
regardless of whether the ultimate decision was decided in the client’s favor. 538 N.E.2d
1058, 1061–62 (Ohio 1989). The highest courts in Alaska, California, and New York have
also issued decisions favorable to Reichel’s approach. See Gefre v. Davis Wright
Tremaine, LLP, 306 P.3d 1264, 1281 (Alaska 2013) (holding that “a legal malpractice
plaintiff may recover as actual damages the attorney fees incurred as a result of the
defendant’s malpractice, so long as the plaintiff can demonstrate she would not have
incurred the fees in the absence of the defendant’s negligence” (citation omitted) (internal
quotation marks omitted)); Jordache Enters., Inc. v. Brobeck, Phleger & Harrison, 958
P.2d 1062, 1071 (Cal. 1998) (“There is no requirement that an adjudication or settlement
must first confirm a causal nexus between the attorney’s error and the asserted injury.”);
Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 867 N.E.2d 385, 443 (N.Y. 2007) (“A
plaintiff’s damages may include litigation expenses incurred in an attempt to avoid,
23 minimize, or reduce the damage caused by the attorney’s wrongful conduct.” (citation
omitted) (internal quotation marks omitted)).
Finally, the Third Restatement of the Law Governing Lawyers supports our
conclusion. Section 53, comment b, of that treatise states, in relevant part:
The plaintiff in a previous civil action may recover without proving the results of a trial if the party claims damages other than the loss of judgment. For example, a lawyer who negligently discloses a client’s trade secret during litigation might be liable for harm to the client’s business caused by the disclosure.
Restatement (Third) of the Law Governing Lawyers § 53 cmt. b (Am. Law Inst. 2000)
(emphasis added); see also Suder v. Whiteford, Taylor & Preston, LLP, 992 A.2d 413, 421
(Md. 2010) (citing comment b favorably in holding that “when the plaintiff is damaged in
a way other than receipt of a less favorable judgment, the trial-within-a-trial approach is
not necessary to prove malpractice”). Therefore, given the weight of our case law and the
case law of other jurisdictions, we conclude that the case-within-a-case formulation of the
but-for causation element is not a bright-line rule that applies in every instance of alleged
negligence in litigation matters.
C.
Lastly, we are unpersuaded by the policy argument, advanced by Wendland Utz and
amici Minnesota Firm Counsel Group and Minnesota Defense Lawyers Association, that
our holding today will open the floodgates to a wave of unmeritorious professional
negligence claims against lawyers. We find unwarranted the assertions of amici that the
straightforward application of the but-for causation element for professional negligence
claims will hold attorneys ultimately liable merely because their clients’ cases “could have
24 been litigated more cheaply.”
Rather, we observe that in most cases, the most significant bulwark against
unmeritorious malpractice claims exists in the plaintiff’s burden to show negligence—a
breach of the applicable duty of care. “An attorney who acts in good faith and in an honest
belief that his advice and acts are well founded . . . is not answerable for a mere error of
judgment.” Meagher v. Kavli, 97 N.W.2d 370, 375 (Minn. 1959) (citation omitted)
(internal quotation marks omitted). Still, “a professional must use reasonable care to obtain
the information needed to exercise his or her professional judgment, and failure to use such
reasonable care would be negligence, even if done in good faith.” Wartnick v. Moss &
Barnett, 490 N.W.2d 108, 113 (Minn. 1992). Thus, it is this standard of care, and not the
but-for causation element, that shields members of the legal profession from liability for
losses incurred from good-faith representation. 8
We recognize that the question of whether a lawyer acted “with some level of
reasonable care” will often be a fact issue that may be more difficult to resolve in pretrial
motion practice. See Canada ex rel. Landy v. McCarthy, 567 N.W.2d 496, 505 (Minn.
8 As another court has described:
[An attorney] is answerable in damages for any loss to his client which proximately results from a want of that degree of knowledge and skill ordinarily possessed by others of his profession similarly situated, or from the omission to use reasonable care and diligence, or from the failure to exercise in good faith his best judgment in attending to the litigation committed to his care.
Hodges v. Carter, 80 S.E.2d 144, 146 (N.C. 1954), cited in Meagher, 97 N.W.2d at 375 n.8.
25 1997) (“The question of negligence is ordinarily a question of fact and not susceptible to
summary adjudication.”). But, in the same vein, when facts are alleged that raise a genuine
issue of material fact about whether an attorney’s actions were reasonable, it would be
inappropriate to dismiss them artificially using the bright-line rule proposed by Wendland
Utz. 9 We reiterate our prior statements that “[p]ublic policy considerations do not favor
protecting [negligent] attorneys from trial,” and the “contention that [an ordinary
negligence] standard would create unlimited liability for lawyers is simply untrue; it would
subject them to trial, but not necessarily to ultimate liability.” Rouse, 520 N.W.2d at 410.
The sole fact that a litigation matter resolved favorably “should not force a
heightened burden of proof upon a client” whose attorney acted negligently. Id.; see also
Malpractice, Law of Law Firms § 10:2 (2d ed. 2024) (stating that “[t]he general theory of
the damages is to make the client whole, putting the client in the same position she would
have been in but for the malpractice”). And it would be illogical if the traditional concept
of but-for causation employed ubiquitously throughout our negligence jurisprudence were
simply “replaced by a rule of thumb based on whether the malpractice plaintiff has
succeeded” in demonstrating the merits of the underlying claim. Krahn, 538 N.E.2d at
1062.
9 Nevertheless, attorneys still enjoy some procedural insulation against suit through the statutory requirement that plaintiffs provide at the pleading stage an expert affidavit supporting the elements of malpractice. See Minn. Stat. § 544.42, subds. 2–3 (2022) (requiring that, when expert testimony is to be used, the expert must attest that “the defendant deviated from the applicable standard of care and by that action caused injury to the plaintiff”).
26 * * *
Given that the case-within-a case approach is not a hard-and-fast requirement that
mandates dismissal when the alleged injury is not loss or damage to a claim or defense, the
district court erred by granting summary judgment based upon the inability of Reichel
Foods to demonstrate that, but for the law firm’s conduct, Reichel would have been
successful in the defense of the action. When, as here, the question is only whether, as a
matter of law, a plaintiff can bring a professional negligence claim when the plaintiff was
ultimately successful in the underlying litigation matter, we conclude that the ordinary rules
of negligence favor the ability to sue (sustaining and actually proving that claim being
another matter).
Wendland Utz argues that we should not allow “an open-ended, unlimited theory of
recovery of legal fees,” and amicus curiae Minnesota Firm Counsel Group urges us to
impose strict limitations on the recovery of corrective attorney fees. Because this case
comes to us on an interlocutory appeal of a partial final judgment as to one element of one
legal malpractice claim against one defendant, however, it would be premature for us to
say more about how the litigation should proceed on remand. This appeal concerns an
extremely narrow legal issue—whether the case-within-a-case element is an absolute
requirement for a professional negligence claim arising out of a litigation matter.
Wendland Utz did not move for summary judgment on the ground that there is no genuine
issue of material fact as to its negligence. And the district court ruled that there is a genuine
issue of material fact on the element of an attorney-client relationship.
27 Given these limitations on our holding, we therefore decline to elaborate on the
future contours of the but-for causation element as applied to the facts of this particular
case. See Cruz-Guzman v. State, 998 N.W.2d 262, 276 (Minn. 2023) (stating that, when
the district court will resolve a claim “on remand with the benefit of a full evidentiary
record, it would be premature for us to express our views on this issue”); State ex rel. Smith
v. Haveland, 25 N.W.2d 474, 476–77 (Minn. 1946) (explaining that principles of
justiciability prevent us from issuing an advisory opinion that articulates “what the law
would be upon a hypothetical state of facts”). We therefore remand to the district court for
further proceedings, which will require the development of the record related to the alleged
negligence and other elements of the claims here.
CONCLUSION
For the foregoing reasons, we reverse in part and vacate in part the decision of the
court of appeals and remand to the district court for further proceedings consistent with this
opinion.
HENNESY and GAÏTAS, JJ., not having been members of this court at the time of
submission, took no part in the consideration or decision of this case.