Court Upholds Client’s Right to Sue Lawyer

A lawyer can be sued for malpractice for giving advice that was legally incorrect at the time, even though it ultimately turned out to be correct because of a change in the law, a split state Supreme Court ruled Thursday.

The 4-3 ruling comes as lawyers nationwide are decrying increasingly large legal malpractice awards, and as malpractice insurance rates are doubling and tripling.

The high court reversed a lower court order that barred Marcella G. Aloy from suing her former lawyer, Eugene A. Mash, who represented her in a 1971 divorce.

Mash had concluded that Aloy could not collect part of her soon-to-be ex-husband’s military pension, even though other divorce lawyers at the time believed that pensions were community property, the court said.

During the next decade, the law on the question went through several contortions. The state Supreme Court in 1974 said such pensions were community property. But the U.S. Supreme Court ruled in 1981 that pensions were exempt from state community property laws. (Two years later, Congress passed a law allowing pensions to become part of divorce settlements.)

Led by Justice Otto Kaus, the court dismissed Mash’s claim that the woman’s suit should be tossed out because, based on the U.S. Supreme Court decision, his advice proved to be right.

Calling this claim the “serendipity defense,” Kaus concluded that Mash failed to do enough research to justify his advice and misread the one case he had used to back up his conclusion.

However, dissenting Justice Cruz Reynoso pointed to the U.S. Supreme Court ruling and wrote: “With the exception of the majority opinion, I know of no case which suggests that an attorney whose advice is correct may be held liable for malpractice.”

Malpractice ‘Crisis’

Ronald E. Mallen, a San Francisco lawyer who argued on Mash’s behalf, said the ruling will contribute to the legal malpractice “crisis.” He noted that his firm’s malpractice insurance rates went from roughly $20,000 last year to about $60,000 this year.

“Mash is going to be a pebble in terms of the problem, but it certainly adds to it,” said Mallen, who is on an American Bar Assn. committee studying the issue.

“This is not a sweeping change in the law,” said Aloy’s attorney, William J. Seiler of Fresno. He added that although lawyers “cannot be held to accurately predict” changes in the law, they do have a duty to fully research legal questions.

In another action Thursday, the court let stand a lower court ruling that opens the way for the conservative Pacific Legal Foundation to sue several anti-nuclear power protesters over a massive September, 1981, demonstration at the Diablo Canyon nuclear power plant near San Luis Obispo.

1 Vote Short

Chief Justice Rose Elizabeth Bird and Justices Reynoso and Stanley Mosk voted to hear the case, one vote short of the necessary four to review a lower court case. Environmental groups including the Abalone Alliance claimed that the suit was an attempt to “silence dissent against nuclear power.”

After the demonstration, the Pacific Legal Foundation filed suit seeking to charge leaders of the demonstration with costs associated with the protest.

Although the first suit was thrown out, a renewed suit claims that the protesters harmed construction workers who worked on the plant by engaging in “riotous, violent and unlawful conduct” and seeks damages for false imprisonment, claiming that workers were prevented from leaving the plant. The suit also claims that there was intentional infliction of emotional distress and deliberate interference with the workers’ right to pursue an occupation.

The plant, owned by Pacific Gas & Electric Co., has been the site of numerous demonstrations and a protracted court fight. The utility recently began the testing process that will lead to its start-up.