Picadilly, Inc. v. Raikos

555 N.E.2d 167, 1990 Ind. App. LEXIS 643, 1990 WL 77138
CourtIndiana Court of Appeals
DecidedJune 6, 1990
Docket41A01-8908-CV-311
StatusPublished
Cited by6 cases

This text of 555 N.E.2d 167 (Picadilly, Inc. v. Raikos) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Picadilly, Inc. v. Raikos, 555 N.E.2d 167, 1990 Ind. App. LEXIS 643, 1990 WL 77138 (Ind. Ct. App. 1990).

Opinions

ROBERTSON, Judge.

Appellant-plaintiff Picadilly, Inc. (Picadilly) appeals the granting of summary judgment in favor of appellee-defendants Gus-tin Raikos and Dennis Thomas (Raikos and Thomas).

We affirm.

This action arose from a dram shop claim against Picadilly in which Picadilly was held responsible for injuries suffered by Charles Colvin in an automobile accident with a drunk driver, who had patronized [168]*168Picadilly's bar before she drove home and collided with Colvin's car. The full facts are set forth at Picadilly, Inc. v. Colvin (1988), Ind., 519 N.E.2d 1217. In that decision, the supreme court vacated the court of appeals' decision and upheld the jury verdict awarding Colvin punitive damages in the amount of $150,000. It held that an error in the jury instruction on punitive damages was waived, and the evidence was sufficient to show Picadilly's malicious conduct by clear and convincing evidence. Id. at 1221.

In October, 1986, Picadilly filed a complaint against attorneys Raikos and Thomas, who represented Picadilly in the dram shop trial, for failure to exercise proper care in defending Picadilly, "including but not limited to a failure to properly preserve any objection to the Court's improper jury instructions on punitive damages." In November, 1988, the trial court entered summary judgment for Raikos and Thomas in response to their motion. Prior to the entry of judgment, the supreme court handed down Picadilly v. Colvin, id., in March, 1989. Shortly after summary judgment, in December, 1988, a United States Bankruptcy Court entered an order confirming Pica-dilly's plan of reorganization under its Chapter 11 petition for bankruptcy. As part of its plan, Picadilly listed the punitive damage claim, and provided that the claim would be discharged in full by a $5,000 cash payment to Colvin, allowance of a $15,000 class II unsecured claim, and the transfer to Colvin of Picadilly's malpractice claim against Raikos and Thomas.

This appeal is from summary judgment against Picadilly, with the sole issue being whether there remained a genuine issue of material fact respecting whether the attorneys' negligence caused any damage to Pi-cadilly.

Attorneys Raikos and Thomas raise a threshold issue which we must address.

Attorneys Raikos and Thomas assert that the real party in interest is Charles Colvin, to whom Picadilly transferred its cause of action pursuant to the bankruptcy reorganization plan, and because legal malpractice claims are generally unassignable, this appeal may not be maintained. Although Indiana has not had occasion to decide whether legal malpractice claims are assignable, other jurisdictions have. Those which prohibit assigning such claims cite the peculiar nature of claims for attorney malpractice (as opposed to malpractice among other professions, like surveyors, see, eg. Essex v. Ryan (1988), Ind.App., 446 N.E.2d 368). They argue

the need to preserve the element of trust between attorney and client, which could be impaired if the attorney perceives a future threat of the client's assignment to a stranger or adversary of a legal malpractice claim. - Similarly, counsel might be discouraged from pursuing vigorous advocacy on behalf of his or her client if that advocacy might alienate the adversary, who might someday be motivated to sue the attorney for legal malpractice under an assignment of rights. An attorney might also seek to please an employer-insurer at the expense of the insured's best interest, if the attorney fears the employer might someday turn over its malpractice cause of action to a third party. Finally, if malpractice claims could be bought and sold, the inevitable result would be raised malpractice insurance premiums.

Jackson v. Rogers & Wells (1989), 210 Cal.App.3d 336, 258 Cal.Rptr. 454; accord, Christison v. Jones (1980) 83 Ill.App.3d 334, 39 Ill.Dec. 560, 405 N.E.2d 8; Moorhouse v. Ambassador Ins. (1985), 147 Mich.App. 412, 383 N.W.2d 219; H.N. Schroeder v. Hudgins (1984), 142 Ariz. 395, 690 P.2d 114.

As persuasive as these decisions seem in the arena of assignments to third parties generally, we agree with the Maine court in Thurston v. Continental Casualty Company (1989), Me., 567 A.2d 922, in which the court held that that rationale did not justify the same result in its case where the insolvent corporation assigned its legal malpractice claim to a products liability plaintiff who had apparently asserted a claim against the corporation:

[169]*169We hold first that there is no reason to prohibit the assignment of a legal malpractice claim in a situation such as this. We are not here confronted with the establishment of a general market for such claims; this assignee has an intimate connection with the underlying lawsuit. Although some cases from other jurisdictions flatly prohibit the assignment of any legal malpractice claim, their reasoning is not persuasive. The argument that legal services are personal and involve confidential attorney-client relationships does not justify preventing a client like 3K from realizing the value of its malpractice claim in what may be the most efficient way possible, namely, its assignment to someone else with a clear interest in the claim who also has the time, energy and resources to bring the suit.

Thurston, 567 A.2d at 923, (citations omitted). Although the corporation had surrendered all its assets to a major creditor, it was evident that the assignment to the products liability plaintiff was not pursuant to any formal plan resulting from a bankruptcy petition. Nevertheless, we believe the same reasoning applies in the instant case, where Picadilly's carefully formulated plan of reorganization includes a transfer of its malpractice claim to Colvin. But of. Christison, supra. It seems especially just here to allow Colvin to assert his claim where the action has already been brought in Picadilly's name, and has been developed factually in the discovery process by Pica-dilly. Deciding a rather narrow issue solely on these peculiar facts, we hold that the transfer of Picadilly's cause of action to: Colvin, via a Chapter 11 plan of reorganization, does not cireumvent any established law in Indiana against such assignments, and does not do violence to any policy considerations prohibiting such assignments. Accordingly, we proceed to review the judgment from which Picadilly appeals.

In Indiana, an attorney may be held liable to his client for damages resulting from his failure to exercise ordinary care, skill and diligence. Breach of that duty, combined with damages proximately caused by the breach, completes a cause of action for attorney negligence. Sanders v. Townsend (1987), Ind. App., 509 N.E.2d 860. The specific error cited by Picadilly in its complaint is its attorneys' failure to object to an instruction read to the jury on punitive damages which failed to set forth a willful and wanton standard of conduct, and its attorneys' failure to tender a correct instruction.

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Picadilly, Inc. v. Raikos
555 N.E.2d 167 (Indiana Court of Appeals, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
555 N.E.2d 167, 1990 Ind. App. LEXIS 643, 1990 WL 77138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/picadilly-inc-v-raikos-indctapp-1990.