A North Carolina appellate court has affirmed a summary judgment granted in favor of an attorney in a legal malpractice action. In Tarrant v. Hudson, a client suffered injuries in a motor vehicle accident. The attorney who he hired to make a claim against the other driver in the accident, failed to file a complaint before the statute of limitations had expired.
The client then sued the attorney for malpractice. The attorney moved to dismiss the complaint, claiming there were no damages because the client had never filed an action. The court denied the motion, but ordered the client to proceed to file a complaint in the underlying action, which the client did. When the driver of the other vehicle failed to answer the complaint, the court entered a default judgment.
In North Carolina, a plaintiff in a legal malpractice action must demonstrate that he/she would have prevailed in the underlying case, but for the attorney’s negligence. The client moved for summary judgment in the malpractice action, arguing that the attorney was collaterally estopped from maintaining that causation was lacking based on the default judgment in the client’s favor. The trial court denied the motion, and entered summary judgment for the attorney. The client appealed.
The appellate court affirmed, finding that the default judgment was not preclusive. The court reasoned that collateral estoppel had application only when both parties were the same in the prior litigation, or in privity with those parties. The court ruled that the attorney was not in privity with the defaulting driver because he could not have prevented the entry of default. Since the client was unable to demonstrate any damages arising from the attorney’s conduct, summary judgment for the attorney was appropriate.
Decision: Tarrant v. Hudson