Legal Malpractice Suit in D.C. Dismissed For Plaintiff’s Lack of Expert Testimony

In Footbridge Limited Trust v. Zhang, 584 F.Supp. 2d 150 (D.D.C. Nov. 5, 2008), Judge Kollar-Kotelly dismissed a legal malpractice suit due to plaintiff's lack of expert testimony to support the claim. The suit arose out of a real estate closing in which the plaintiff had loaned certain non-party borrowers $1.5 million, through Cambridge Holdings Group. Cambridge Holdings at the time employed the defendant attorney. Plaintiff alleged that the defendant attorney's negligence was responsible for a seven month delay in the recordation of its security interests on the property that was purchased. During the seven month period, a bank recorded a mortgage as to which a security interest in the same property was pledged. Subsequently, the borrowers defaulted on their loan and filed for bankruptcy. The plaintiff attempted to foreclose on its security interests, but alleged that because of the intervening security interest of the bank, it received only $467,959 from the sale instead of $2.25 million.

The defendant attorney denied any responsibility for the delay in the recordation, and denied having attended the loan closing or having any knowledge of the loan transaction.

The defendant moved for summary judgment after the close of discovery, on the grounds that the plaintiff had not presented any expert testimony in support of its claims. The plaintiff argued that an attorney's failure to file a lien instrument for over one-half year following a real estate closing demonstrates a lack of skill and care so obvious that the trier of fact can find negligence as a matter of common knowledge.

The Court acknowledged that under D.C. law, there is a "common knowledge" exception to the requirement that a legal malpractice claim must be supported by expert testimony. The following examples are under the "common knowledge" exception: allowing the statute of limitations to run on a client's claim; permitting entry of default judgment against the client; failing to instruct the client to answer interrogatories; failing to allege affirmative defenses; failing to file tax returns; failing to follow the client's explicit instructions; and billing a client for time not spent providing services. Beyond that, the "common knowledge" exception is narrowly applied.

Here, the Court noted that the defendant attorney was not employed by the plaintiff, and that there is no allegation that the attorney received instructions from his own client which he failed to follow. The Court stated that "lt is entirely unclear what duties an attorney owes not only to his client, but to ta third-party, by merely attending a loan closing (even assuming that there was evidence that [defendant] attended the closing, which tere is not)." The Court also pointed out that on the issue of proximate cause of plaintiff's damages, to evaluate the parties conflicting evidence, the jury would need to know the effect that priority security interests have on properties subject to multiple unrelated liens, and particularly how those liens are paid when they are subject to a bankruptcy proceeding.

Accordingly, because the plaintiff did not produce a timely expert report, the Court granted the defendant's motion for summary judgment.