MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2016 ME 144 Docket: Pen-15-305 Argued: April 5, 2016 Decided: September 20, 2016
Panel: SAUFLEY, C.J., and ALEXANDER, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
FRANK PAWLENDZIO et al.
v.
JON HADDOW
JABAR, J.
[¶1] Frank and Beverly Pawlendzio appeal from an order of the
Superior Court (Penobscot County, Anderson, J.) granting summary judgment
in favor of Jon Haddow on the Pawlendzios’ claim alleging attorney
malpractice. Because the record does not present a legally cognizable claim of
legal malpractice, we affirm.
I. FACTS
[¶2] For fifteen years, Frank Pawlendzio owned and operated Oak
Ridge Builders, Inc., a home construction company. Oak Ridge was in business
until 2007, when it filed for bankruptcy. Jon Haddow provided legal advice in
connection with the bankruptcy proceedings. There is no suggestion that 2
Haddow was negligent in providing advice regarding the corporate
bankruptcy in 2007.
[¶3] While the corporate bankruptcy was pending, Frank decided to
build a house in his individual capacity on a parcel of property that he owned
with the intent to sell the house (“spec house”) upon completion. Haddow
again provided Frank with legal advice concerning the venture. To finance the
project, Frank obtained funding from three people: $110,000 from a longtime
friend, Howard Martin; $57,500 from his elderly father-in-law, Edward King,
whose accounts were controlled by Frank’s wife, Beverly; and $4,000 from his
brother, Stan Pawlendzio. At the time they were made, all three loans were
unsecured.
[¶4] When the house was substantially completed but before it was
sold, Frank learned that he continued to owe a significant amount of money to
Oak Ridge’s creditors because he had personally guaranteed some debts that
were not subject to discharge in the corporate bankruptcy.
[¶5] Frank consulted Haddow about filing for personal bankruptcy, and
because he understood from conversations with Haddow that he could
protect his unsecured creditors with mortgages, Frank asked Haddow to
prepare after-the-fact mortgages for the three personal lenders. Pursuant to 3
these discussions, Haddow prepared the mortgages. The Pawlendzios
subsequently filed for bankruptcy in December 2008, and sold the spec house
shortly thereafter. Haddow represented the Pawlendzios in the personal
bankruptcy proceeding.
[¶6] The after-the-fact mortgages did not, however, protect the
personal lenders’ interest as contemplated. At the conclusion of the
bankruptcy proceedings, the bankruptcy estate distributed $500 each to King
and Frank, and $105,000 to Martin. Although the bankruptcy estate repaid
the majority of the funds Martin loaned to Frank, the Pawlendzios made
monthly payments to him to make up the difference because they believed
that he had a viable claim against them and because they wanted to salvage
their friendship with Martin.
[¶7] Following the Pawlendzios’ personal bankruptcy proceedings, on
July 11, 2012, they filed a complaint against Haddow in the Superior Court
asserting claims of legal malpractice and seeking damages for economic loss
and extreme emotional distress. In their complaint, the Pawlendzios alleged
that after learning of his substantial personal debt obligations, Frank
requested that Haddow protect the investments of the three personal lenders
and that Haddow was negligent in failing to do so by means of the after-the- 4
fact mortgages or otherwise. As damages, the Pawlendzios asserted that,
although their debts were discharged in bankruptcy, they had a moral
obligation to repay the remainder of the debts owed to their friend, Martin,
and the accounts controlled by Beverly. The Pawlendzios also asserted that
Haddow’s alleged failure to protect the interests of the originally unsecured
creditors has caused them emotional distress.
[¶8] Haddow subsequently moved for summary judgment, and, on
May 26, 2015, the court entered an order granting summary judgment in his
favor. The Pawlendzios timely appealed.
II. DISCUSSION
[¶9] We review a grant of summary judgment de novo, considering the
evidence in the light “most favorable to the nonprevailing party to determine
whether the parties’ statements of material facts and the record evidence to
which the statements refer demonstrate that there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law.”
Rainey v. Langen, 2010 ME 56, ¶ 23, 998 A.2d 342 (quoting Beal v. Allstate Ins.
Co., 2010 ME 20, ¶ 11, 989 A.2d 733).
[¶10] To prove attorney malpractice, a plaintiff must show (1) a breach
by the defendant of the duty owed to the plaintiff to conform to a certain 5
standard of conduct; and (2) that the breach of that duty proximately caused
an injury or loss to the plaintiff. See Steeves v. Bernstein, Shur, Sawyer &
Nelson, P.C., 1998 ME 210, ¶ 12, 718 A.2d 186.
[¶11] Professional negligence, in the context of a legal malpractice
action, is the failure to use such skill, prudence and diligence as is reasonable
according to the standards of ordinarily competent lawyers performing
similar services under like conditions. Sohn v. Bernstein, 279 A.2d 529, 532
(Me. 1971).
[¶12] To prove professional negligence, the plaintiff must present
expert testimony “to establish the appropriate standard of care and whether
an attorney breached that standard of care, except when the breach or lack
thereof is so obvious that it may be determined by a court as a matter of law
or is within the ordinary knowledge of laymen.” Kurtz & Perry, P.A. v. Emerson,
2010 ME 107, ¶ 26, 8 A.3d 677 (citing Pitt v. Frawley, 1999 ME 5, ¶ 9, 722 A.2d
358).
[¶13] Here, the Pawlendzios allege that Haddow breached a duty owed
to them when he failed to protect the loans made by the three personal
lenders in connection with the building of the spec house. The Pawlendzios
failed, however, to present any expert’s opinion establishing either the 6
standard of care of an “ordinarily competent lawyer” or how Haddow’s
conduct deviated from that standard. Although the Pawlendzios complain
that Haddow should have done more to protect the three creditors, they do
not proffer any expert testimony within their statement of material facts to
establish what Haddow, in the exercise of his duty, should have done to
protect the loans made to Frank by his family and friends.
[¶14] In reviewing a motion for summary judgment, our inquiry is
limited to the statement of material facts and the references to the record
contained therein. Although we will view the facts in the light most favorable
to the Pawlendzios, to defeat a defendant’s motion for summary judgment, a
plaintiff must present evidence sufficient to generate a prima facie case of a
legally cognizable claim. Lougee Conservancy v. CitiMortgage, Inc., 2012 ME
103 ¶ 12, 48 A.3d 774. Thus, it is not enough for the Pawlendzios to simply
allege, as they did here, that Haddow owed them a duty; Haddow concedes
that he did. Rather, the Pawlendzios had the burden of producing expert-
based evidence that Haddow in fact breached that duty.
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2016 ME 144 Docket: Pen-15-305 Argued: April 5, 2016 Decided: September 20, 2016
Panel: SAUFLEY, C.J., and ALEXANDER, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
FRANK PAWLENDZIO et al.
v.
JON HADDOW
JABAR, J.
[¶1] Frank and Beverly Pawlendzio appeal from an order of the
Superior Court (Penobscot County, Anderson, J.) granting summary judgment
in favor of Jon Haddow on the Pawlendzios’ claim alleging attorney
malpractice. Because the record does not present a legally cognizable claim of
legal malpractice, we affirm.
I. FACTS
[¶2] For fifteen years, Frank Pawlendzio owned and operated Oak
Ridge Builders, Inc., a home construction company. Oak Ridge was in business
until 2007, when it filed for bankruptcy. Jon Haddow provided legal advice in
connection with the bankruptcy proceedings. There is no suggestion that 2
Haddow was negligent in providing advice regarding the corporate
bankruptcy in 2007.
[¶3] While the corporate bankruptcy was pending, Frank decided to
build a house in his individual capacity on a parcel of property that he owned
with the intent to sell the house (“spec house”) upon completion. Haddow
again provided Frank with legal advice concerning the venture. To finance the
project, Frank obtained funding from three people: $110,000 from a longtime
friend, Howard Martin; $57,500 from his elderly father-in-law, Edward King,
whose accounts were controlled by Frank’s wife, Beverly; and $4,000 from his
brother, Stan Pawlendzio. At the time they were made, all three loans were
unsecured.
[¶4] When the house was substantially completed but before it was
sold, Frank learned that he continued to owe a significant amount of money to
Oak Ridge’s creditors because he had personally guaranteed some debts that
were not subject to discharge in the corporate bankruptcy.
[¶5] Frank consulted Haddow about filing for personal bankruptcy, and
because he understood from conversations with Haddow that he could
protect his unsecured creditors with mortgages, Frank asked Haddow to
prepare after-the-fact mortgages for the three personal lenders. Pursuant to 3
these discussions, Haddow prepared the mortgages. The Pawlendzios
subsequently filed for bankruptcy in December 2008, and sold the spec house
shortly thereafter. Haddow represented the Pawlendzios in the personal
bankruptcy proceeding.
[¶6] The after-the-fact mortgages did not, however, protect the
personal lenders’ interest as contemplated. At the conclusion of the
bankruptcy proceedings, the bankruptcy estate distributed $500 each to King
and Frank, and $105,000 to Martin. Although the bankruptcy estate repaid
the majority of the funds Martin loaned to Frank, the Pawlendzios made
monthly payments to him to make up the difference because they believed
that he had a viable claim against them and because they wanted to salvage
their friendship with Martin.
[¶7] Following the Pawlendzios’ personal bankruptcy proceedings, on
July 11, 2012, they filed a complaint against Haddow in the Superior Court
asserting claims of legal malpractice and seeking damages for economic loss
and extreme emotional distress. In their complaint, the Pawlendzios alleged
that after learning of his substantial personal debt obligations, Frank
requested that Haddow protect the investments of the three personal lenders
and that Haddow was negligent in failing to do so by means of the after-the- 4
fact mortgages or otherwise. As damages, the Pawlendzios asserted that,
although their debts were discharged in bankruptcy, they had a moral
obligation to repay the remainder of the debts owed to their friend, Martin,
and the accounts controlled by Beverly. The Pawlendzios also asserted that
Haddow’s alleged failure to protect the interests of the originally unsecured
creditors has caused them emotional distress.
[¶8] Haddow subsequently moved for summary judgment, and, on
May 26, 2015, the court entered an order granting summary judgment in his
favor. The Pawlendzios timely appealed.
II. DISCUSSION
[¶9] We review a grant of summary judgment de novo, considering the
evidence in the light “most favorable to the nonprevailing party to determine
whether the parties’ statements of material facts and the record evidence to
which the statements refer demonstrate that there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law.”
Rainey v. Langen, 2010 ME 56, ¶ 23, 998 A.2d 342 (quoting Beal v. Allstate Ins.
Co., 2010 ME 20, ¶ 11, 989 A.2d 733).
[¶10] To prove attorney malpractice, a plaintiff must show (1) a breach
by the defendant of the duty owed to the plaintiff to conform to a certain 5
standard of conduct; and (2) that the breach of that duty proximately caused
an injury or loss to the plaintiff. See Steeves v. Bernstein, Shur, Sawyer &
Nelson, P.C., 1998 ME 210, ¶ 12, 718 A.2d 186.
[¶11] Professional negligence, in the context of a legal malpractice
action, is the failure to use such skill, prudence and diligence as is reasonable
according to the standards of ordinarily competent lawyers performing
similar services under like conditions. Sohn v. Bernstein, 279 A.2d 529, 532
(Me. 1971).
[¶12] To prove professional negligence, the plaintiff must present
expert testimony “to establish the appropriate standard of care and whether
an attorney breached that standard of care, except when the breach or lack
thereof is so obvious that it may be determined by a court as a matter of law
or is within the ordinary knowledge of laymen.” Kurtz & Perry, P.A. v. Emerson,
2010 ME 107, ¶ 26, 8 A.3d 677 (citing Pitt v. Frawley, 1999 ME 5, ¶ 9, 722 A.2d
358).
[¶13] Here, the Pawlendzios allege that Haddow breached a duty owed
to them when he failed to protect the loans made by the three personal
lenders in connection with the building of the spec house. The Pawlendzios
failed, however, to present any expert’s opinion establishing either the 6
standard of care of an “ordinarily competent lawyer” or how Haddow’s
conduct deviated from that standard. Although the Pawlendzios complain
that Haddow should have done more to protect the three creditors, they do
not proffer any expert testimony within their statement of material facts to
establish what Haddow, in the exercise of his duty, should have done to
protect the loans made to Frank by his family and friends.
[¶14] In reviewing a motion for summary judgment, our inquiry is
limited to the statement of material facts and the references to the record
contained therein. Although we will view the facts in the light most favorable
to the Pawlendzios, to defeat a defendant’s motion for summary judgment, a
plaintiff must present evidence sufficient to generate a prima facie case of a
legally cognizable claim. Lougee Conservancy v. CitiMortgage, Inc., 2012 ME
103 ¶ 12, 48 A.3d 774. Thus, it is not enough for the Pawlendzios to simply
allege, as they did here, that Haddow owed them a duty; Haddow concedes
that he did. Rather, the Pawlendzios had the burden of producing expert-
based evidence that Haddow in fact breached that duty.
[¶15] The Pawlendzios base their claims on the fact that the loans made
to them by friends and relatives lost their protected status as a result of the
bankruptcy proceedings, contrary to Haddow’s advice. The Pawlendzios’ 7
statement of material fact #36 references their expert’s opinion that Haddow
should have advised Frank that creditors from his earlier corporate
bankruptcy could potentially assert claims against him because he personally
guaranteed some of the corporation’s debts. There is no reference by the
expert, however, to what specifically Haddow should have done or failed to do
in connection with the Pawlendzios’ personal bankruptcy to protect the loans
of the three personal lenders. Further, there is no other proffered expert
evidence in the Pawlendzios’ statement of material facts establishing a causal
link between Haddow’s alleged breach of duty and the Pawlendzios’ injury.
For these reasons, we affirm.
The entry is:
Judgment affirmed.
On the briefs:
Jed Davis, Esq., and Aglaia Davis, Esq., Jim Mitchel and Jed Davis, P.A., Augusta, for appellants Frank and Beverly Pawlendzio
James M. Bowie, Esq., Thompson & Bowie, LLP, Portland, for appellee Jon Haddow
At oral argument:
Jed Davis, Esq., for appellants Frank and Beverly Pawlendzio
James M. Bowie, Esq., for appellee Jon Haddow
Penobscot County Superior Court docket number CV-2012-104 FOR CLERK REFERENCE ONLY