Fischer v. Longest

WILNER, Chief Judge. Appellant filed a five-count complaint in the Circuit Court for Baltimore City, charging appellees, his former attorneys, with malpractice, fraud, conversion, and conspiracy, and seeking both substantial damages and an accounting. In November, 1991, the court dismissed the four tort actions for failure to state a claim upon which relief could be granted and referred the claim for accounting to an auditor. Eventually, the auditor held a hearing and, in a report filed in July, 1992, concluded that appellant still owed appellees nearly $22,000 in attorneys’ fees.

Appellant excepted to the report. After a hearing held March 11, 1993, the court overruled the exceptions and ratified the report. This appeal is from the November, 1991 dismissal of the tort claims and the subsequent ratification of the auditor’s account. 1 ³⁷³ Underlying Alleged Facts In May, 1987, appellant was arrested for driving under the influence of alcohol and possession of a handgun. Because he had previously been convicted of a felony (manslaughter) in California, Federal charges were brought against him for possessing a firearm after conviction of a felony.

Following a search of his home, he was charged as well with certain drug offenses and a number of other weapons offenses. Somewhere between August 7 and 11, appellant engaged appellees to represent him on the Federal charges and also, according to his complaint, to represent his interests in maintaining certain real and personal property. The parties agreed to a fixed fee of $50,000 plus an additional $10,000 for expenses. Appellant paid them $3,000 in cash and executed a $60,000 note secured by deeds of trust on appellant’s two properties.

Appellee Longest entered his appearance for appellant on August 11, 1987; appellees Schanno and Gavin entered their appearances a month later, on September 9. On October 6, having waived a preliminary hearing, they filed various motions in the District Court, including a motion to suppress evidence, a motion for leave to file a plea of not guilty by reason of insanity, and motions regarding appellant’s competence to assist counsel and stand trial. All during this time, appellant was in pre-trial detention. Apparently dissatisfied with appellees’ efforts, appellant engaged new counsel in December, 1987.

In February, 1988, appellees withdrew their appearance and appellant proceeded solely with his new counsel. In June, 1988, appellant was released from detention on $150,000 secured bond. Through his new counsel, he then proceeded to negotiate a plea agreement with the Government, pursuant to which he pled guilty to possession with intent to distribute marijuana and possession of a firearm by a convicted felon and agreed to forfeit certain property. He was sentenced to concurrent terms of five years on each offense, those sentences then being suspended in favor of parole and probation. ³⁷⁴ Nature of the Complaint In Count I of his complaint, appellant charged appellees with malpractice—failing to exercise such reasonable and ordinary skill, care, and diligence as would be reasonably necessary to fulfill the objectives of their employment.

He enumerated ten kinds of failings: (1) failure to take any measures to seek his release on bond, (2) failure to investigate the charges against him, (3) disclosure of confidential information to the Government, (4) failure to “adequately protect [appellant’s] rights,” including the failure to file “appropriate” motions and to properly research and draft the motions they did file, (5) failure to obtain information concerning the expungement of appellant’s prior conviction in California, (6) failure to discuss with him his right to a preliminary hearing and the recommendation that he waive such a hearing, (7) failure to communicate with him, explain his options, and assess his chance of conviction, (8) failure to obtain his consent to the entry of a plea of insanity, (9) failure to preserve and protect his real and personal property, and (10) failure to provide an accounting of the time spent on his case. Nowhere in Count I, or elsewhere in the complaint, did appellant complain about the plea agreement or the judgments entered pursuant to it. In Count II, appellant charged appellees with two kinds of misrepresentation. First, he claimed that, to induce him to retain them, appellees deliberately misrepresented to him their experience and expertise and the amount and type of work they would do on his behalf.

Second, he asserted that they further misrepresented to his “representatives”—presumably his newly retained attorneys—the amount and type of work they had done on appellant’s behalf. He averred that these various misrepresentations were deliberate, that they were relied upon, and that, as a result, he was incarcerated for ten months when he was eligible for bond if appellees had only requested one, he lost real and personal property, he paid $30,000 in legal fees for services that had little value to him, and his credit rating was adversely affected. ³⁷⁵ Count III charged appellees with “regularly and systematically converting] to their own use numerous valuable items of personal property belonging to [appellant],” the value of which he asserted to be in excess of $30,000. In Count IV, he alleged that appellees entered into an agreement to deprive appellant of his legal rights in the pending criminal case, to cause his continued incarceration despite his legal right to bond, and to convert his real and personal property. Finally, in Count V, appellant claimed a right to an accounting of the money he had paid appellees and the services they had performed.

Procedural History After having answered the complaint, appellees moved to dismiss Count I on the ground that appellant had failed to plead any cognizable harm from appellees’ alleged malpractice. This was based on the fact that appellant had never attacked his Federal conviction or sentence and, on the supposition that he had eventually received credit for his pre-trial detention, that that detention had caused him no harm. At the hearing on that motion, appellees made an oral motion to dismiss Count II as well, also on the ground that it failed to allege any harm to appellant. Although no motion was made to dismiss Counts III or IV, the court not only agreed with the views expressed by appellees as to Counts I and II but concluded as well that Counts III and IV also failed to state a cause of action.

All four counts were therefore dismissed. As noted, Count V was referred to an auditor who, after considering such evidence as the parties offered, concluded that, based on appellees’ time records and the rates specified in a retainer agreement, appellees were entitled to a total fee of $48,554, that they had previously been paid $26,618, and that there was due to them by appellant the remaining sum of $21,936. Upon the overruling of appellant’s exceptions, that finding was subsequently ratified by the court. Appellant raises three issues in this appeal: ³⁷⁶ “1.

Whether it is a prerequisite in a legal malpractice action arising from a criminal case, where a wrongful criminal conviction is not one of the damages for which compensation is sought, that the plaintiff first establish ineffective assistance of counsel in a post-conviction proceeding in the criminal case. 2. Whether the Trial Court erred in dismissing counts of a Complaint alleging wrongful conversion and civil conspiracy on the basis of collateral estoppel where no motion to dismiss, written or oral, had been made directed to those counts and where there had been no previous proceeding at which such issues had been necessarily decided or actually adjudicated. 3. Whether the Trial Court erred in ratifying the Auditor’s Report on Appellant’s claim for an accounting, where the Auditor made a fee award to Appellees despite no counterclaim for fees having ever been filed, and where the Auditor penalized Appellant for failing to produce an expert to comment on a Statement of Services which was not produced by Appellees until the day of the Auditor’s hearing.” The Malpractice Claim The question, as framed by appellant, is an interesting one of first impression in Maryland. The trial court regarded the case as requiring an answer to that question.

It does not. The argument made by appellees is that, in order to recover damages based upon the inadequacy of an attorney’s representation of the plaintiff in a criminal case, the plaintiff must establish, under the standards set forth in Strickland v. Washington, 466 U.S. 668 , 104 S.Ct. 2052 , 80 L.Ed.2d 674 (1984), that (1) the defendant’s performance fell below the standard for an attorney of reasonable skill and diligence, and (2) there was actual prejudice to the defense as a result of the negligence. They further assert that this showing must be made either in the criminal proceeding itself or in a collateral attack on the judgment entered in that proceeding, and point out that many other state courts appear to have so held. See ³⁷⁷ generally Gregory G. Sarno, Annotation, Legal Malpractice in Defense of Criminal Prosecution, 4 A.L.R.5th 273 (1992).

We think that the circuit court accepted that argument and based its dismissal on it. We say we think that is so because the precise basis for the court’s ruling is not altogether clear. In explaining its rationale for dismissing Count I, and ultimately Counts II, III, and IV as well, the court stated: “As The Court has reviewed all of the authorities in the area, it is quite clear that most of them require that there be an ineffective assistance [of] counsel claim brought in the appropriate forum prior to bringing a malpractice case. He [appellant] was advised of his rights, he did not take advantage of them, and under all of those circumstances, this Court believes that these issues are barred by collateral estoppel.” (Emphasis added).

It is the reference to collateral estoppel that clouds the issue, for that doctrine necessarily assumes that there has, in fact, been a prior proceeding in which the factual issues sought to be raised here were considered and adjudicated on their merits. MPC, Inc. v. Kenney, 279 Md. 29 , 367 A.2d 486 (1977). There has been no such proceeding; the deficiencies alleged in appellant’s complaint have not been previously raised and adjudicated, and so the doctrine of collateral estoppel cannot apply to bar them now. This was, quite properly, conceded by appellees at oral argument before us.

It appears that the court’s reference to collateral estoppel was simply a case of misspeaking, and that the rationale actually employed was a notion of exhaustion of other remedies—that no civil action for malpractice could be brought against appellees unless and until appellant first established in a direct or collateral attack upon the conviction that their assistance had been Constitutionally deficient and that, as a result, he had suffered sufficient prejudice to warrant vacation of the judgment of conviction. We discern that to be the basis of the court’s ruling for two reasons: first, it was the argument offered by appellees in support of their motion to dismiss ³⁷⁸ Count I; and second, because, in announcing its decision, the court cited and appeared to rely upon a law review article taking that position. Susan M. Treyz, Note, Criminal Malpractice: Privilege of the Innocent Plaintiff?, 59 Fordham L.Rev. 719 (1991). We need not consider here whether, in an appropriate case, that view correctly states the Maryland law, for this is not an appropriate case for the application of such a doctrine in any event.

Although he asserts in his complaint a number of failings on the part of appellees in the manner in which they handled his case, appellant has never asserted that his conviction or sentence were the product of those alleged failings, or were otherwise unjust or unlawful. He claims to be satisfied with the ultimate outcome of the criminal proceeding and therefore had no reason to attack that outcome, directly or collaterally. He recognizes that his conviction and sentence were the result of a plea agreement that he negotiated with the Government while represented by other counsel, and he does not suggest that he was forced into entering such an agreement because of any failing on appellees’ part. The thrust of appellant’s complaint is that (1) appellees’ lack of diligence and aggressive representation caused him to remain in pre-trial detention longer than was necessary, and (2) as a result of that and as a result of other, unspecified, lack of effective representation, he suffered some loss of property.

No direct or collateral attack on his conviction could possibly have resolved those complaints. Appellees contend, however, that, for reasons of public policy, the law should not permit a malpractice claim against an attorney based on ineffective representation in a criminal case unless the plaintiff can show that the end product of that malpractice was an unjust conviction or sentence. They urge that the law not recognize any prejudice short of wrongful conviction or sentence and thus, in particular, that it give no regard to a claim of unnecessary pre-trial detention which, they contend, can never be prejudicial because, as a matter of ³⁷⁹ law, the plaintiff/criminal defendant must receive credit for it when the ultimate sentence is imposed. We reject that argument.

For one thing, it overlooks the case in which the plaintiff was ultimately acquitted, placed on probation without entry of judgment, had imposition of sentence suspended, or had execution of sentence suspended. In those situations, the plaintiff would not have received credit for pretrial detention, for there would be nothing against