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SJC-12287
KIRIBATI SEAFOOD COMPANY, LLC, & another1 vs. DECHERT LLP.
Suffolk. April 6, 2017. - October 11, 2017.
Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, Budd, & Cypher, JJ.2
Attorney at Law, Malpractice, Negligence. Negligence, Attorney at law, Proximate cause. Proximate Cause. Damages, Mitigation.
Civil action commenced in the Superior Court Department on July 1, 2013.
The case was heard by Kenneth W. Salinger, J., on motions for summary judgment.
The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.
Megan C. Deluhery (John R. Neeleman, of Washington, also present) for Kiribati Seafood Company, LLC. Denis M. King (Richard M. Zielinski also present) for the defendant.
1 Olympic Packer, LLC. 2 Justice Hines participated in the deliberation on this case prior to her retirement. 2
GANTS, C.J. The issue on appeal is whether, in a legal
malpractice action, a court's error of law constitutes a
superseding cause that bars recovery to the plaintiff client
even where the defendant attorney was negligent for failing to
prevent or mitigate the legal error. The plaintiff, Kiribati
Seafood Company, LLC (Kiribati), brought a legal malpractice
claim against its former law firm, Dechert LLP (Dechert).
Kiribati alleged that Dechert negligently failed to provide a
French appellate court with the evidence the court deemed
necessary for Kiribati to prevail on a claim, which resulted in
the court's denial of the claim. A judge of the Superior Court
granted summary judgment to Dechert and denied partial summary
judgment to Kiribati. The judge determined that the French
appellate court committed an error of law in requiring this
evidence and that, even if Dechert were negligent in failing to
provide the evidence to the court, Kiribati could not recover
damages for Dechert's negligence because the court's legal error
was a superseding cause of the adverse decision. We conclude
that an error of law under these circumstances is a concurrent,
not a superseding, proximate cause and that the judge therefore
erred in granting summary judgment to Dechert and denying
partial summary judgment to Kiribati.
Background. Because this is an appeal from an allowance of
summary judgment, we set forth the undisputed material facts. 3
Kiribati purchased a fishing vessel known as the Madee (ship),
and chartered it to Olympic Packer, LLC, and Dojin Co., Ltd.,
for the purpose of fishing for tuna in the Pacific Ocean.3 After
sustaining damage to its rudder, the ship was placed in a dry
dock in the Autonomous Port of Papeete (port) in Tahiti to
undergo repairs. When the dry dock collapsed, the ship
sustained damages so severe that it was deemed a "constructive
total loss" by Kiribati's "port risk" insurer, Certain
Underwriters of Lloyd's of London (Lloyd's). Kiribati retained
two attorneys in the Paris office of the law firm Coudert
Brothers LLP (Coudert) to file a lawsuit for damages against the
port in the Commercial Court of Papeete (commercial court).
When these two attorneys left Coudert to join Dechert, Kiribati
continued to retain them and transferred the representation to
Dechert.
Lloyd's paid Kiribati $1,763,803.71 on its insurance claim
regarding the loss of the ship, which compensated Kiribati for
some, but not all, of its losses. As a result of its payment,
Lloyd's had a right of subrogation to recover that amount from
the port. In April, 2004, Lloyd's and Kiribati entered into a
written agreement jointly to prosecute Kiribati's litigation in
3 Kiribati Seafood Company, LLC, and Olympic Packer, LLC, are limited liability companies organized in the State of Washington. Dechert LLP is a law firm organized as a limited liability partnership that is registered in Pennsylvania but has offices around the world, including in Boston. 4
the commercial court, where Kiribati sought to recover its
losses that were not compensated by Lloyd's, and where Lloyd's
sought to recover through subrogation the amount it paid to
Kiribati. As part of the agreement, Lloyd's agreed to pay half
of the attorney's fees and costs associated with this
litigation.
The agreement between Kiribati and Lloyd's jointly to
prosecute the suit against the port did not end Kiribati's
financial disputes with Lloyd's. Kiribati contended that it was
paying substantially more than its fifty per cent share of the
legal fees in the litigation and that Lloyd's was failing to pay
its equal share. Kiribati also claimed that Lloyd's had failed
to pay it in full for the "sue and labor" and mitigation
expenses it was entitled to under its policy. To settle these
and other disputes, in December, 2004, Kiribati and Lloyd's
entered into a new agreement in which Kiribati released Lloyd's
from all outstanding claims, including its claims for unpaid
attorney's fees and "sue and labor" and mitigation expenses. In
return, Lloyd's assigned its subrogation claim to Kiribati.
In January, 2008, the commercial court issued a judgment in
favor of Kiribati and against the port. As part of the
judgment, the court found that the assignment of the subrogation
claim was "signed abroad" by "two foreign registered entities"
without any specific agreement that French law would apply, so 5
the validity of the assignment could not be determined under
French law. The court concluded that it was "valid" under
"foreign law," and therefore awarded Kiribati the full amount of
the subrogation claim assigned to it by Lloyd's -- approximately
$1.76 million. The port appealed from the decision to the Court
of Appeals of Papeete (court of appeals).
Tahitian courts are part of the French legal system. A
judgment by the commercial court may be appealed from as of
right to the court of appeals, which will review the decision de
novo and consider new evidence offered by the parties to
supplement the record. A decision by the court of appeals is
appealable from as of right to the Cour de cassation in Paris,
which is the French Supreme Court, but that court will review
decisions only for errors of law.
In its first appellate decision, issued in April, 2010, the
court of appeals affirmed much of the judgment of the commercial
court, but it deferred decision regarding its enforcement of the
assignment of the subrogation claim. It did not challenge the
validity of the assignment under foreign law but noted that the
"enforceability" of the assignment in a French court of law
against a French defendant must be determined according to
French law, which forbids "double compensation of the same
damages." Where the port claimed that Kiribati was seeking "a
double compensation for the damages and accordingly an unjust 6
enrichment," the court of appeals decided to defer any decision
regarding this claim for compensation to allow Kiribati to prove
the amount paid in consideration for the assignment by showing
the "actual price of the transfer."
After the first appellate decision, a Dechert attorney,
Xavier Nyssen, advised Dennis Moran, an attorney in another law
firm who was acting essentially as Kiribati's general counsel,
that he needed evidence of the consideration paid by Kiribati
for the assignment to address the court of appeals's concern
about double compensation. Moran on two separate occasions
provided various documents to Dechert, including (1) a 2004
letter from Moran to Lloyd's counsel demanding payment of
Lloyd's equal share of Coudert's legal fees, with attached
payment records that demonstrated that Kiribati had paid far
more of the attorney's fees than did Lloyd's despite the
provision in the settlement agreement that payment of the fees
be shared equally; (2) the December, 2004, agreement between
Kiribati and Lloyd's that included a release by Kiribati of all
further claims on its Lloyd's policy; (3) correspondence
identifying the various claims against Lloyd's that Kiribati had
released; and (4) an unsworn written statement by a Lloyd's
representative that declared that "[t]he subrogation rights were
assigned for valuable consideration, the amount of which is
privileged." 7
In support of its brief, Dechert submitted to the court of
appeals as evidence only the 2004 letter from Moran, without any
of the supporting documentation regarding legal fees, and the
unsworn written statement by the Lloyd's representative, without
the policyholder's release or the correspondence identifying the
released claims. After the port in its response noted that
Kiribati had provided no proof of having paid attorney's fees
that Lloyd's was obligated to pay, another Kiribati attorney
(who was not associated with Dechert) caused Nyssen again to be
sent the documents that Moran had earlier provided and informed
Nyssen that he needed to submit the attorney's fee payment
records and the policyholder release in order to demonstrate the
payment of consideration for the assignment. Dechert did not
further supplement the record by providing these documents to
the court of appeals.
In May, 2011, the court of appeals in its final decision
reduced the amount of Kiribati's award by the amount of the
assigned subrogated claim because Kiribati had failed to meet
its burden to provide evidence of the "financial compensation"
it paid for the assignment, explaining that "double recovery for
the same damage must be avoided." The court specifically noted
that Kiribati had failed to provide any evidence that it had
paid attorney's fees that Lloyd's was obligated to pay, or that
it had released Lloyd's from legal claims that Kiribati 8
otherwise could have brought in a court of law.
In June, 2011, Kiribati was in receivership, so Nyssen sent
an electronic mail message to its receiver informing him that
the court of appeals decision could be challenged before the
Cour de cassation, but only as to errors of law. Nyssen wrote,
"As for Kiribati's subrogation interest acquired from . . .
Lloyd's, there may be grounds to call into question its
decision, although we would need the opinion of a lawyer
registered with the Cour de cassation to take [a] position."
Nyssen wrote that he "would not recommend challenging the
decision" because of the cost and duration of the appeal, which
he estimated at one to two years, and because an appeal by
Kiribati may cause the defendants to challenge the entirety of
the court of appeals ruling, which might result in a suspension
of its enforcement. The receiver later filed in the
receivership action a motion for authorization to waive an
appeal in the Tahiti litigation, attaching to his declaration a
letter from an attorney for Kiribati stating that "Kiribati's
shareholders will follow Dechert's advice and not appeal the
Tahiti litigation outcome." The court approved the receiver's
request for authorization to waive the appeal.
In July, 2013, Kiribati commenced this action in the
Superior Court of Massachusetts against Dechert, alleging, among
other claims, that Dechert was professionally negligent in its 9
prosecution of the assigned subrogation claim because it failed
to present evidence the court of appeals had requested and that
Dechert had in its possession, resulting in a loss to Kiribati
of approximately $1.76 million.4 Dechert moved for summary
judgment as to all of the remaining claims; Kiribati cross-moved
for partial summary judgment on its legal malpractice claim.
In support of their motions, both parties submitted
affidavits from their respective chosen experts on issues of
French law. Dechert moved to strike the affidavit submitted by
Kiribati's expert, claiming that it failed to show that his
education, training, and experience qualifies him to provide
expert testimony on any aspect of French law. The motion judge
granted the motion, finding that Kiribati's expert had "never
practiced as a lawyer in France . . . and [did] not identif[y]
any other education, training, experience, or familiarity in or
with the topics he addresses in his expert reports." Kiribati
did not challenge the qualifications of Dechert's expert, a
practicing French lawyer, and the judge credited portions of the
affidavit he submitted in support of Dechert's motion regarding
the content of French law.
In granting Dechert's motion for summary judgment, the
judge noted that the content of foreign law is a question of law
to be decided by the court. He determined that the court of
4 None of Kiribati's other claims is at issue on appeal. 10
appeals had committed judicial error under French law in
disallowing recovery of the $1.76 million assigned subrogation
claim for lack of proof that it was not an impermissible double
recovery. The judge also determined that, regardless of whether
Dechert was negligent in its handling of the appeal and
regardless of whether the court's error of law was foreseeable,
Dechert could not be found liable because the error of law by
the court of appeals underlying the resulting adverse ruling was
"a superseding cause that breaks the chain of causation flowing
from [Dechert's alleged negligence]" and "that relieves Dechert
of any negligence in its representation of Kiribati before that
court."5 Kiribati appealed, and we transferred the case to this
court on our own motion.
Discussion. Our review of a motion judge's decision on
summary judgment is de novo, because we examine the same record
and decide the same questions of law. See Global NAPs, Inc. v.
Awiszus, 457 Mass. 489, 499 n.16 (2010); Leavitt v. Mizner, 404
Mass. 81, 88 (1989); Mass. R. Civ. P. 56 (c), as amended, 436
Mass. 1404 (2002).
The central issue in this case is the relationship between
5 In a separate order, the judge granted Dechert's motion for costs as the prevailing party, and awarded $76,130.13 to compensate Dechert for the cost of obtaining deposition transcripts and "accurate English translations of key documents in [the] case" and for its attorney's travel to three depositions. 11
attorney malpractice and judicial error, more specifically, the
circumstances under which an attorney should be relieved of
liability for professional negligence where the attorney's
negligent act or omission precedes judicial error.
Attorneys who enter into attorney-client relationships owe
their clients "an obligation to exercise a reasonable degree of
care and skill in the performance of [their] legal duties."
Global NAPs, Inc., 457 Mass. at 500, quoting Pongonis v. Saab,
396 Mass. 1005, 1005 (1985). "To prevail on a claim of
negligence by an attorney, a client must demonstrate that the
attorney failed to exercise reasonable care and skill in
handling the matter for which the attorney was retained . . . ;
that the client has incurred a loss; and that the attorney's
negligence is the proximate cause of the loss . . . ." Global
NAPs, Inc., supra, quoting Colucci v. Rosen, Goldberg, Slavet,
Levenson & Wekstein, P.C., 25 Mass. App. Ct. 107, 111 (1985).
"Expert testimony is generally necessary to establish that an
attorney failed to meet the standard of care owed in the
particular circumstances." Global NAPs, Inc., supra, citing
Pongonis, supra. But "such testimony is not essential where
'the claimed malpractice is so gross or obvious that laymen can
rely on their common knowledge to recognize or infer
negligence,' or where an attorney disobeys the lawful
instructions of his client and a loss ensues for which the 12
attorney is responsible." Global NAPs, Inc., supra, quoting
Pongonis, supra.
As to the element of proximate cause, a client must
demonstrate that it "probably would have obtained a better
result had the attorney exercised adequate skill and care."
Global NAPs, Inc., 457 Mass. at 500, quoting Fishman v. Brooks,
396 Mass. 643, 647 (1986). Generally, the question of what the
probable outcome would have been had the attorney acted
reasonably is determined by a "trial within a trial," in which a
new trier of fact decides both whether the attorney was
negligent and what the outcome of the litigation would have been
in the absence of negligence. Fishman, supra. The new trier of
fact does not attempt subjectively to determine what the earlier
trier of fact would have done; neither the judge nor the jurors
at the earlier trial may testify at the new trial as to what
they would have done under different circumstances. See id.
(jury evaluate consequences of attorney negligence objectively).
Rather, the new trier of fact makes an independent determination
as to what reasonably would have been the outcome of the earlier
trial in the absence of negligence, based on the applicable law
and the evidence presented at the new trial. See 4 R.E. Mallen,
Legal Malpractice § 33:8, at 677 (2017 ed.), citing Cecala v.
Newman, 532 F. Supp. 2d 1118, 1136 (D. Ariz. 2007) (trier of
fact determines "what the result 'should have been'"); Justice 13
v. Carter, 972 F.2d 951, 956–957 (8th Cir. 1992); Phillips v.
Clancy, 152 Ariz. 415, 418 (1986); Lombardo v. Huysentruyt, 91
Cal. App. 4th 656, 670-671 (2001); Harline v. Barker, 912 P.2d
433, 441 (Utah 1996).
Proximate cause in an attorney malpractice case is more
complicated where the defendant attorney contends that the
adverse outcome was the product of the court's legal error.
Judges, being human, sometimes err as to the law.
"Theoretically, it is always foreseeable that a judge might err
in some manner; however, it is not typically foreseeable on what
issues a judge will err and on what issues a judge will rule
correctly." Stanfield v. Neubaum, 494 S.W.3d 90, 100 (Tex.
2016). Where an attorney makes a reasonable and correct
argument of law and loses because of judicial error that was not
foreseeable, the attorney cannot be found negligent for failing
to prevent or mitigate that legal error. See Correia v. Fagan,
452 Mass. 120, 127 (2008) (liability for professional negligence
dependent on showing loss was "reasonably foreseeable" [citation
omitted]).
But where the judicial error is foreseeable, such as where
a judge or an appellate court has indicated an intention to rule
in a manner that the attorney believes to be an error of law,
then an attorney has an obligation to take reasonable and
prudent steps to prevent or mitigate that error. See Skinner v. 14
Stone, Raskin & Israel, 724 F.2d 264, 265-266 (2d Cir. 1983);
Stanfield, 494 S.W.3d at 100. Where the legal error will
certainly doom the client's case, the attorney has few options
but to provide additional argument or briefing in an attempt to
demonstrate to the court the error of its foreseeable ruling of
law. But where the client can still prevail on the facts even
if the court errs as to the law, the attorney is negligent where
he or she fails to take reasonable steps to demonstrate to the
court why the client still wins under the court's erroneous, but
foreseeable, view of the law. For instance, where a judge in a
medical malpractice case has provided counsel with the
instruction the judge intends to give to the jury regarding a
physician's duty to obtain a patient's informed consent for a
medical procedure, and where the physician's attorney fails to
persuade the judge that the instruction is an error of law
because it overstates a physician's duty, and where the
physician has evidence in his or her possession that would prove
that the physician complied with the duty erroneously described
by the judge, the physician's attorney would be negligent if he
or she failed to offer that evidence at trial. Stated simply,
where an attorney will foreseeably lose on the law but can still
win on the facts, an attorney is negligent if he or she forgoes
the opportunity to win on the facts. See, e.g., Skinner, supra
(summary judgment for attorneys reversed in legal malpractice 15
action where attorneys knew of impending judicial error and
failed to take preemptive steps); Lombardo, 91 Cal. App. 4th at
667-668 (client subjected to "unnecessary risk" where there was
"abundant evidence" that attorney could have foreseen judicial
error and failed to take "all reasonable steps" to mitigate
impact); Temple Hoyne Buell Found. v. Holland & Hart, 851 P.2d
192, 198–199 (Colo. App. 1992) (obligation to anticipate
"reasonably foreseeable risks" includes taking reasonably
objective steps to avoid impact of foreseeable legal error).6
To be clear, this does not suggest that an attorney has an
obligation under the duty of reasonable care to argue an error
of law. But where a court has indicated that it has a different
view of the law from that of the attorney, and where the client
can prevail on the facts even under that different view, an
attorney is negligent if he or she forfeits that opportunity by
failing to argue in the alternative.
Dechert contends that, where a court rules against a client
based on a foreseeable error of law, the client's attorney
6 The adage penned by Carl Sandburg, attributed to "a battered barrister," comes to mind: "If the law is against you, talk about the evidence . . . . If the evidence is against you, talk about the law . . . . [A]nd . . . if the law and the evidence are both against you, then pound on the table and yell like hell." C. Sandburg, The People, Yes, in The Complete Poems of Carl Sandburg 551 (1969). We discourage attorneys from following the advice in the third sentence, but an attorney may be negligent if he or she fails to follow the advice in the first two sentences. 16
cannot be liable for failing to take reasonable steps to prevent
or mitigate the consequences of that error by offering evidence
that would enable the client to prevail even under the court's
erroneous view of the law, because in such circumstances a
court's legal error will always be the proximate cause of the
adverse judicial decision. It claims that, in the trial within
a trial that occurs in a legal malpractice case, the new trier
of fact must apply the correct law, and the judge's error of
law, not the attorney's negligence, will always be revealed as
the proximate cause of the adverse result. In the context of
this case, Dechert argues that a new, reasonable trier of fact,
correctly applying French law, must conclude that Kiribati
should have prevailed without proof of the consideration paid
for the assignment, and therefore any negligence in failing to
provide that proof cannot be the proximate cause of the lost
$1.76 million.
The fundamental flaw in this argument is that a plaintiff's
loss need not have only one proximate cause; there can be
multiple concurrent proximate causes. See, e.g., Mullins v.
Pine Manor College, 389 Mass. 47, 58, 62-63 (1983) (injury to
rape victim caused both by assailant and by college's negligent
security); Skinner, 724 F.2d at 266 ("there [can be] several
proximate or efficient causes of an injury"); Stanfield, 494
S.W.3d at 97 (same). See also Matsuyama v. Birnbaum, 452 Mass. 17
1, 30 (2008) ("'substantial contributing factor' test is useful
in cases in which damage has multiple causes"). Assuming for
the sake of argument that the court of appeals truly made an
error of law, a reasonable finder of fact would conclude that
there were two independent proximate causes of Kiribati's loss:
Dechert's negligence in failing to furnish the court with proof
of the consideration paid for the assignment, and the court's
error of law in concluding that the assigned subrogation claim
was not enforceable under French law absent a demonstration that
it would not result in "double compensation."
Nor is this flaw cured in the circumstances of this case
by characterizing the judicial error as the superseding cause.
A superseding cause in legal malpractice "(1) must have occurred
after the original negligence; (2) cannot [be] the consequence
of the attorney's negligence; (3) created a result that would
not otherwise have followed from the original negligence; and
(4) was not reasonably foreseeable." 1 R.E. Mallen, Legal
Malpractice § 8:25, at 1049 (2017 ed.). Where the intervening
cause meets all four criteria, the intervening cause is a new
and independent cause that breaks the chain of causation,
becoming a superseding cause that relieves the defendant of
liability for the original negligence. See Kent v.
Commonwealth, 437 Mass. 312, 321 (2002) (intervening event that
is "superseding cause of the harm" breaks chain of factual 18
causation); Mullins, 389 Mass. at 62 (superseding cause severs
chain of proximate causation); Stanfield, 494 S.W.3d at 97
(superseding cause is new and independent cause that intervenes
between original wrong and final injury and "thus destroys any
causal connection between the defendant's negligence and the
plaintiff's harm, precluding the plaintiff from establishing the
defendant's negligence as a proximate cause"). But where the
intervening cause (here, the court's alleged error of law) is
reasonably foreseeable and the attorney could have taken
reasonable steps to prevent or mitigate the anticipated harm,
the intervening cause is a "concurring cause" that leaves the
causal link between the defendant's negligence and the
plaintiff's harm unbroken. See Mullins, supra at 62-63
(criminal act of third party is not superseding cause that
excuses negligent security precautions "if such act was, or
should have been, foreseen"); Stanfield, supra at 100 ("if the
judicial error alleged to have been a new and independent cause
is reasonably foreseeable at the time of the defendant's alleged
negligence, the error is a concurring cause as opposed to a new
and independent, or superseding, cause"). Because an attorney's
failure to prevent or mitigate an error of law can be negligent
only where it is foreseeable that the court would commit the
error, and because an intervening cause cannot be a superseding
cause where the error was foreseeable, a judicial error cannot 19
be a superseding cause where an attorney is negligent for
failing to take reasonable steps to prevent or mitigate the
judicial error or resulting harm.
Therefore, in determining proximate cause in a legal
malpractice action where there is an alleged error of law, the
trier of fact in the "trial within a trial" must determine
whether the court that foreseeably made the error of law would
nonetheless have ruled in the client's favor had the attorney
taken reasonable steps to prevent or mitigate the error of law.
The standard remains objective, not subjective; the trier of
fact is not attempting to predict what the judge or judges who
made the error of law would have done, but is making its own
determination whether an attorney's reasonable efforts would
probably have prevented or mitigated the error such that the
client would have prevailed. In the context of this case, where
the court of appeals ruled against Kiribati because Dechert
failed to submit the evidence it had been furnished that would
have proved Kiribati's disproportionate payment of attorney's
fees and its release of valuable claims against Lloyd's,
Dechert's failure to provide the court with this evidence may be
found to be the concurrent proximate cause of the court's
adverse decision. The judge therefore erred in ruling that
Kiribati cannot prevail in proving the element of causation.
Because the judge rested his allowance of Dechert's motion 20
for summary judgment on his finding of superseding causation,
the judge did not reach the issue of negligence. Inasmuch as
our review is de novo and Kiribati moved for summary judgment on
that issue, we do reach it. Where it is undisputed that the
court of appeals deferred its decision regarding the assigned
subrogation claim to allow Kiribati to prove the amount paid in
consideration for the assignment by showing the "actual price of
the transfer," and where it was plainly foreseeable from its
first appellate decision that it would not enforce the
assignment without such proof, and where Dechert had the
documentation in its possession that would have demonstrated
that there was substantial consideration for the assignment, we
conclude that Dechert's failure to furnish the court of appeals
with the documentation was so plainly negligent that no expert
testimony is needed to establish it.7 To prevail on its assigned
subrogation claim, Kiribati needed the French court both to
declare the assignment of the subrogation claim valid as a
matter of law and to enforce it. It was perfectly reasonable
7 We reach this conclusion regardless of whether French or Massachusetts law supplies the applicable standard of care. Both Dechert's expert, whose testimony the judge credited with respect to applicable principles of French law, and Kiribati's expert submitted affidavits in which they concluded that French lawyers have an obligation to act with reasonable diligence on behalf of their clients, a duty similar to that required under Massachusetts law. See Pongonis v. Saab, 396 Mass. 1005, 1005 (1985) ("An attorney owes his client an obligation to exercise a reasonable degree of care and skill . . ."). 21
for Dechert to argue that enforcement under French law follows
inevitably from validity, and that it need not prove that
Kiribati paid substantial consideration for the assignment. But
where Dechert possessed the documentation that would have
enabled Kiribati to prevail on its assigned subrogation claim
even if the court of appeals concluded that proof of
consideration was needed to avoid "a double compensation for the
damages and accordingly an unjust enrichment," it was plainly
unreasonable for Dechert to fail to argue in the alternative and
provide the court with this documentation. Dechert may have
believed that the court of appeals was wrong as a matter of law,
but Dechert could have enabled Kiribati to win on its claim even
if the court of appeals persisted in requiring what Dechert
contended was an unnecessary factual showing to justify
enforcement. In short, Dechert may reasonably have believed
that the question was solely one of law and not of fact, but
where it had in its possession the evidence that would have
enabled Kiribati to demonstrate that Kiribati would not be
unjustly enriched if the court were to enforce the assignment,
Dechert's failure to provide the court with that evidence was
unreasonable.
We have considered and rejected Dechert's contention that
it was barred by a confidentiality provision in the second
settlement agreement from providing the agreement to the court 22
of appeals without Lloyd's approval, which Lloyd's withheld. We
have examined the settlement agreement, which is a fully
integrated agreement, and conclude that it contains no
confidentiality provision that barred such disclosure to the
court. Rather, the agreement provides in paragraph twelve,
"Underwriters shall execute the attached 'ASSIGNMENT OF
SUBROGATION RIGHTS' that Kiribati may use to facilitate the
transfer of interests in the Tahiti litigation without
disclosing the full contents of this Agreement." The fact that
an assignment was attached to the agreement that did not
disclose the full contents of the agreement cannot reasonably be
interpreted as a confidentiality provision barring such
disclosure. Nor can paragraph seven of the settlement agreement
reasonably be interpreted to bar disclosure of that agreement to
the court of appeals. The relevant part of that paragraph
states, "The fact of this agreement shall not be admissible in
the future for any purpose, except in an action to enforce this
agreement or as necessary to implement its terms." It was
plainly necessary to disclose the "fact" of the agreement to the
court of appeals "to implement its terms" where the failure to
do so would foreseeably cause the court to decline to enforce
the assignment of subrogation rights provided in that agreement.
Moreover, it is undisputed that the settlement agreement had
earlier been filed in a court proceeding in Seattle, Washington, 23
with Lloyd's knowledge.
The scope of damages raises another issue that we address.
A plaintiff in a negligence action has a duty to mitigate
damages "that were avoidable by the use of reasonable
precautions." Burnham v. Mark IV Homes, Inc., 387 Mass. 575,
586 (1982). Where a client suffers an adverse decision because
of both an error of law and an attorney's negligence in failing
to act reasonably to prevent or mitigate that error, the
client's duty to mitigate damages might in some circumstances
require appealing from that adverse decision to a higher court
to correct the lower court's error of law. In such cases, the
loss to the client caused by the attorney's negligence would be
only the attorney's fees and costs incurred in prosecuting an
appeal that would not have been necessary had the attorney acted
with reasonable care. The defendant, however, bears the burden
of proving by a preponderance of the evidence that the plaintiff
failed to fulfil the duty to make reasonable efforts to mitigate
damages. See Sheriff of Suffolk County v. Jail Officers &
Employees of Suffolk County, 465 Mass. 584, 592 (2013) (in
wrongful discharge action, employer bears burden of proof on
issue of mitigation of damages); American Mech. Corp. v. Union
Mach. Co. of Lynn, 21 Mass. App. Ct. 97, 103 (1985) ("[T]he
burden of proving that losses could have been avoided by
reasonable effort rests with the party in breach"). Here, where 24
Dechert recommended against an appeal to the Cour de cassation,
Dechert cannot possibly meet its burden of proving that Kiribati
acted unreasonably by failing to appeal from the court of
appeals decision. Therefore, the loss proximately caused by
Dechert's negligence is the loss arising from the adverse ruling
of the court of appeals on the assigned subrogation claim.
As a result of this analysis, we need not decide whether
the judge abused his discretion in striking the affidavit of
Kiribati's expert on French law. That expert affidavit is not
necessary to find that Dechert was negligent where its
negligence was "obvious," or to find that its negligence was a
concurrent proximate cause of Kiribati's loss. See Global NAPs,
Inc., 457 Mass. at 500, quoting Pongonis, 396 Mass. at 1005.
Nor is it necessary to decide whether the court of appeals was
correct in its understanding of French law regarding the
assignment of subrogation claims, because Kiribati prevails on
its legal malpractice claim regardless of whether the court of
appeals was in error. And we need not determine whether an
appeal to the Cour de cassation would have resulted in the
mitigation of damages by the reversal of the court of appeals
ruling, because Dechert cannot meet its burden of proving that
Kiribati failed reasonably to mitigate damages by deciding not
to appeal.
Conclusion. We reverse the judge's allowance of Dechert's 25
motion for summary judgment and his denial of Kiribati's motion
for partial summary judgment on its legal malpractice claim, and
remand the case to the Superior Court for proceedings consistent
with this opinion.
So ordered.