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Claimants Should Not Receive A Windfall In Claims Against Lawyers: Ohio Supreme Court
Post on August 1st, 2008

The Ohio Supreme Court recently considered who should have the burden of proof regarding collectible damages in a legal malpractice case when the claim involves the value or amount of a “lost” claim giving rise to the malpractice action.

In Paterek v. Petersen & Ibold, Slip Opinion No. 2008-Ohio-2790, the Court followed the majority of jurisdictions that have decided the issue and held that the plaintiff has the burden of proving the value and collectability of a lost claim giving rise to a malpractice action. The Court specifically rejected the minority position, where the burden of proof is shifted to the defendant-lawyer. The Court, in dicta, indicated that proof in certain cases might be provided by a plaintiff where there is some chance of future collectability of the value of the claim, although Ohio’s general prohibition against awarding claimed damages that are speculative in nature was not discussed regarding this particular issue.

Paterek involved a case where an auto accident occurred, and Mr. Paterek was injured. The claim against the alleged tortfeasor eventually failed due to a missed deadline, and a stipulation was entered that the only collectible asset of the tortfeasor was the $100,000 auto policy limit of liability. The Patereks also had underinsurance in the amount of $250,000. Although they brought claims against both the lawyers involved and their own auto insurer, the claim against the auto insurer

was dismissed shortly before trial without being settled.

In a trial of the legal malpractice case, the jury was allowed to consider damages without a limitation on the amount that Patereks could prove was collectible, and awarded $382,000, a “windfall” far greater than any amount the Patereks could have recovered in the underlying auto personal injury claim. The trial court remitted the verdict to the $100,000 amount, but this decision was reversed by the court of appeals, which reinstated the original jury award in a 2-1 decision. The Supreme Court reversed this decision, but found that the appropriate award should have been $250,000, the amount of the tortfeasor’s coverage plus the additional amount of the Paterek’s underinsured coverage. As of this writing, a motion to reconsider the amount of the damages is pending with the Supreme Court, as two justices concurred with the decision, but found that the appropriate award for Paterek should have been $100,000. The concurring justices disagreed with the total amount awarded, because Paterek did not fully litigate her rights with respect to the underinsured coverage.

With this decision, the Ohio Supreme Court has answered one of the fundamental issues in legal malpractice cases, which party has the burden of proving the amount and collectability of the “lost” claim in the case giving rise to the malpractice claim. Ohio joins the majority of jurisdictions that have considered this issue