United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
SARAH EVANS BARKER, District Judge.
This cause is before the Court on Plaintiff William Mills's Motion for Partial Summary Judgment [Docket No. 86], filed on March 26, 2014. For the reasons set forth below, the motion is GRANTED in part and DENIED in part.
Factual and Procedural Background
This motion for summary judgment arises out of a legal malpractice action, which in turn arises out of a personal injury claim. Plaintiff William Mills, the personal injury claimant, sued his former counsel, Defendant Hausmann-McNally S.C. ("Hausmann-McNally") for legal malpractice. Hausmann-McNally, in turn, asserted as an affirmative defense to the malpractice claim that a non-party-namely Plaintiff's present counsel, Price Waicukauski & Riley, LLC ("PWR")-was responsible in whole or in part for any legal malpractice that Hausmann-McNally may have committed. See Docket No. 9 at 6. Having rejected Defendant's counterclaims, we now address for the first time the merits of Plaintiff's claim for legal malpractice.
Larry Mills was injured in a traffic accident on October 10, 2008 when his motorcycle was struck by another vehicle at an intersection on State Road 37 in rural Lawrence County, Indiana. Compl. ¶¶ 5-6. The driver of the other vehicle was Hannah Nelson,  an employee of the Hoosier Uplands Development Corporation, who at the time of the accident was driving on an errand related to her employment with that agency. Id. at ¶¶ 7-8. As Nelson was turning left onto State Road 37 on a green light, her car collided with Mills's motorcycle as he attempted to proceed straight through the intersection. The police crash report prepared at the scene stated that Nelson failed to yield to oncoming traffic in making her left turn, Docket No. 46-14 at 2; Nelson testified that she did not see Mills's motorcycle before the collision. Docket No. 46-3 (Nelson Dep.) at 17, 18, 28. She also stated that her attempt to turn was complicated by a piece of debris in the intersection, and she recalled that her view of oncoming traffic may have been limited by a hill. Id. Mills was severely hurt as a result of the accident, suffering a significant head injury as well as other injuries.
After the accident, Nelson was interviewed by police; she told them that she was the owner of the vehicle, and she provided her personal insurance information. The police crash report stated that Nelson used the vehicle for "PERSONAL (FARM, COMPANY)" purposes. Docket No. 31, Ex. A at 3. Shortly thereafter, Mills retained the law firm of Hausmann-McNally to represent him in claims against "all liable parties" to seek recovery for his injuries; attorneys Rodney A. Tucker and Christopher Moeller handled the representation of Plaintiff's interests within the Hausmann-McNally firm. Tucker Dep. 132-133; Moeller Decl. ¶ 5. Larry Mills died in February 2012, and Plaintiff William Mills now serves as the representative of the decedent's estate. Compl. ¶ 2.
Shortly after agreeing to represent Plaintiff, Hausmann-McNally contacted Farm Bureau, Nelson's personal automobile insurer. On November 6, 2008, Farm Bureau sent Hausmann-McNally copies of Ms. Nelson's insurance policy and a declarations page. The declarations page stated that Nelson's vehicle "is driven to and from work 150 miles or less each week." Pl.'s Ex. 13 at 5. In preliminary negotiations with Hannah Nelson pursuant to the personal injury claim, Hausmann-McNally discovered that the limit of her personal automobile insurance policy was $50, 000-significantly less than the amount of damages Plaintiff planned to seek. Hausmann-McNally did not make any further inquiries about Nelson's employment status or the possibility of recovering from her employer. Instead, Hausmann-McNally made demand on Farm Bureau for the full $50, 000, and Farm Bureau agreed to settle on May 13, 2009 for that amount. Farm Bureau provided Hausmann-McNally with a release, and ordered a $50, 000 draft to be paid to Plaintiff and counsel. Docket No. 45 at 7 (citing Pl.'s Ex. 12 at 1).
Because his damages substantially exceeded the settlement amount, Mills expressed interest in the possibility of recovering from other entities, such as the manufacturer of his motorcycle helmet and the state agencies responsible for designing the intersection where the accident occurred. To facilitate this expansion of the scope of the case, Mills retained PWR on October 19, 2009. Docket No. 63 at 3, ¶ 12; Docket No. 45 at 8-9. The parties differ in their recountings of the scope of PWR's representation. According to Hausmann-McNally, PWR took on the role of lead counsel for all of Mills's potential claims. Docket No. 30 at 4 ("PWR served as lead counsel in the litigation"). PWR, in contrast, asserts that it was retained only to pursue the new causes of action, and that it had no role in the original personal injury claim against Nelson. Docket No. 45 at 8-10.
Nelson's counsel quickly reached a settlement agreement with Plaintiff, but the products liability suit proceeded. In the course of discovery on that claim, PWR, acting on Plaintiff's behalf, deposed Hannah Nelson as a witness on September 18, 2012. Docket No. 45 at 13-14. During this deposition, Nelson revealed that she was acting within the course and scope of her employment with the Hoosier Uplands Development Corporation ("Hoosier Uplands") at the time of the accident. Docket No. 31, Ex. F. Hoosier Uplands is a "Community Action Agency, " and is therefore considered a "political subdivision" of the State of Indiana for purposes of the Indiana Tort Claims Act. Id. (citing Ind. Code § 34-13-3-8). Under Indiana law, a prospective plaintiff intending to sue a political subdivision of the state for damages must provide written notice to the defendant agency outlining the nature of the claim and damages within 180 days of the injury. See Ind. Code § 34-13-3-8(a). If a prospective plaintiff fails to provide this notice, he is permanently barred from bringing the claim. Id. As of September 18, 2012, when Ms. Nelson was deposed and PWR discovered that the procedural bar applied, the 180-day notice period for any claim by Plaintiff against the state agency had long since run. For the accident occurring in October 2008, notice would have been required by April 2009-some six months before PWR was retained in October 2009. See Compl. ¶ 18.
2. Procedural History
After deposing Nelson, an attorney with PWR contacted Tucker-Plaintiff's primary counsel with Hausmann-McNally-and informed him that since the car accident had been caused by a state agency employee acting within the scope of employment, the 180-day notice period applied. Id. at ¶ 21. According to PWR, Tucker responded: "Your case just got easier. You have a client to call, and you need to sue us for malpractice." Id. at ¶ 22. Shortly after this deposition, Hausmann-McNally withdrew as Plaintiff's co-counsel; on October 16, 2012, the Marion Superior Court granted Hausmann-McNally's motion to withdraw in the pending personal injury suit pending before that court. Docket No. 38 at 14.
Plaintiff subsequently made demand on Hausmann-McNally for its alleged malpractice in allowing the 180-day notice deadline to lapse, and thus denying Plaintiff any prospect of recovery from the Hoosier Uplands Development Corporation for the injury caused by the agency's employee. Id. at ¶¶ 24-28. When Hausmann-McNally denied any liability, Plaintiff sued Hausmann-McNally for malpractice, filing its complaint with this Court on January 9, 2013. See Docket No. 1. In its answer, filed on March 4, 2013, Hausmann-McNally continued to deny that it had committed malpractice, and it asserted three affirmative defenses. Docket No. 9 Defendant's first affirmative defense was that PWR was a non-party wholly or partly responsible for any malpractice Hausmann-McNally may have committed. Id. at 6, ¶ 1. In the alternative, it also filed a third party complaint against PWR, seeking recovery on indemnity and contribution theories in the event that Hausmann-McNally is found liable to Plaintiff. Docket No. 9. Hausmann-McNally also filed a motion to disqualify counsel on July 3, 2013. See Docket No. 29.
We previously dismissed Defendant's third-party complaint against PWR for indemnification and contribution in an order dated January 14, 2014. Docket No. 69. We also dismissed Defendant's motion to disqualify counsel on the same day. Docket No. 70. Plaintiff moved for partial summary judgment against Defendant's first affirmative defense [Docket No. 44] as of September 19, 2013, and Defendant filed its cross motion for partial summary judgment on the same issue [Docket No. 62] on December 9, 2013. The Court granted Defendant's motion for summary judgment-and denied Plaintiff's cross motion for summary judgment-on September 24, 2014. Docket No. 100.
Summary judgment is appropriate on a claim if the moving party can show that there is no genuine dispute as to any material fact, leaving them entitled to judgment as a matter of law. Fed. R. Civ. Pro. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255. However, neither the "mere existence of some alleged factual dispute between the parties, " id., 477 U.S. at 247, nor the existence of "some metaphysical doubt as to the material facts, " Matsushita, 475 U.S. at 586, will defeat a motion for summary judgment. Michas v. Health Cost Controls of Ill., Inc., 209 F.3d 687, 692 (7th Cir. 2000).
Summary judgment is not a substitute for a trial on the merits, nor is it a vehicle for resolving factual disputes. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994). Therefore, after drawing all reasonable inferences from the facts in Plaintiff's favor, if genuine doubts remain and a reasonable fact-finder could find for Plaintiff, summary judgment is inappropriate. See Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). But if it is clear that Plaintiff will be unable to satisfy the legal requirements necessary to establish his case, summary judgment is not only appropriate, but mandated. Ziliak v. AstraZeneca LP, 324 F.3d 518, 520 (7th Cir. 2003). Further, a failure to prove one essential element "necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323.
Plaintiff claims that Defendant Hausmann-McNally engaged in legal malpractice by failing to discover that Hannah Nelson was a state government agency employee acting in the scope of her employment at the time of her collision with Larry Mills-and consequently failing to provide Hoosier Uplands notice of a tort claim within the 180-day deadline prescribed by the Indiana Tort Claims Act. Because suit against Hoosier Uplands became time-barred by Hausmann-McNally's inaction, Plaintiff alleges, Mills permanently lost a significant avenue of recovery for his injuries, which exceeded the $50, 000 limit of Nelson's personal liability insurance policy. Compl. ¶¶ 29-34.
Plaintiff seeks partial summary judgment on all the elements of his legal malpractice claim except for damages, whose determination will be left to the finder of fact if Plaintiff prevails. Under Indiana law, a plaintiff must establish the following to prevail on a claim for legal malpractice: (1) the existence of a duty arising from an attorney-client relationship; (2) the attorney's failure to meet the standard of care imposed upon attorneys by exercising "ordinary skill and knowledge"; and (3) damages proximately caused by this breach of the standard of care. Clary v. Lite Machs. Corp., 850 N.E.2d 423, 430 (Ind.Ct.App. 2006); Oxley v. Lenn, 819 N.E.2d 851, 856-857 (Ind.Ct.App. 2004). Summary judgment is "rarely appropriate" in legal malpractice cases because "whether a particular act or omission is a breach of duty is generally a question of fact." Rhodes v. Wright, 805 N.E.2d 382, 387 (Ind. 2004); Oxley, 819 N.E.2d at 856. Judgment may be rendered as a matter of law, however, when "the facts are undisputed and only a single inference can be drawn from the facts." Oxley, 819 N.E.2d at 856 (citing Stephenson v. Ledbetter, 596 N.E.2d 1369, 1372 (Ind. 1992)).
The existence of an attorney's duty towards a client is a question of law to be resolved by the Court. See Keybank Nat'l Ass'n v. Shipley, 846 N.E.2d 290, 295 (Ind.Ct.App. 2006). Here, the parties do not dispute that Hausmann-McNally and Plaintiff had an attorney-client relationship at the time of the alleged malpractice, giving rise to a duty of care. See Def.'s Answer at ¶¶ 9, 10; Def.'s Resp. 19. There are therefore two issues we must resolve: whether Hausmann-McNally breached the applicable standard of care, and whether that breach was the proximate cause of harm to Plaintiff.
I. Breach of the standard of care
Attorneys generally owe their clients a duty "to exercise ordinary skill and knowledge" in their representation. Flatow v. Ingalls, 932 N.E.2d 726, 729 (Ind.Ct.App. 2010). The precise contours of that duty in practice-the "standard of care"-are dependent upon factual context. Here, Plaintiff has submitted the expert report of Irwin B. Levin, an Indiana-licensed attorney and partner with the firm Cohen & Malad, LLP. Docket No. 87-2 (Levin Decl.) at 1. As a practitioner with significant experience in litigating legal malpractice actions, Levin opines that, in the exercise of ordinary skill and knowledge, Hausmann-McNally's standard of care in agreeing to represent Mills in the aftermath of the accident included the following steps:
(1) Fully investigate the facts surrounding the collision;
(2) Investigate specifically all facts and law which could afford the client alternate sources of recovery, especially given the magnitude of the injuries and the small amount of ...