ATTORNEY LIABILITY FOR THE EXPERTS THEY RETAIN

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1 ATTORNEY LIABILITY FOR THE EXPERTS THEY RETAIN By William E. Vita Gallagher Gosseen Faller & Crowley 1010 Franklin Avenue Garden City, New York (516)

2 ATTORNEY LIABILITY FOR THE EXPERTS THEY RETAIN by William E. Vita 1 You obtain authorization from your client to retain a top-flight expert who will make or break your case. You send the expert deposition transcripts, Interrogatory responses and similar items and then sit back. Your job is done, right? It s now time to relax and watch your expert go to work, isn t it? A recent California Appellate case indicates otherwise. The California court found that a law firm may be held liable when an expert s opinions unravel, leaving the plaintiffs unable to collect a dime on their big-ticket case. It happened in California, could it happen to you? The California Court s decision in Forensis Group, Inc. v. Frantz Townsend & Foldenauer, 130 Cal App. 4 th 14; 29 Cal. Rptr. 3 rd 622; 2005 Cal App LEXIS 929; 2005 Cal Daily Op. Service 4954(4th App. Dist. 2005) is sufficient to grab any practitioner s attention. The facts can be briefly summarized as follows: The law firm of Frantz Townsend & Foldenauer ( the Law Firm ) represented the plaintiffs in a wrongful death action. The plaintiffs husband and father died in a workplace accident when a forklift struck the decedent. The Law Firm retained a professional engineer through an expert witness clearing house. The engineer inspected the forklift in question and reviewed documents provided by the Law Firm, including publications by the Society of Automotive Engineering ( SAE ) regarding the placement of safety alarms on forklifts. When the engineer was deposed, he failed to identify applicable safety standards with respect to the installation of a back-up alarm. The forklift s manufacturer then moved for summary judgment, contending that the lack of a back-up alarm was not a defect and that the forklift met all applicable safety standards. In opposition to the summary judgment motion, the engineer submitted a declaration pointing out that the forklift failed the criteria of a particular SAE safety standard. However, the trial court found that this declaration contradicted the expert s earlier deposition testimony, in which he did not identify any such safety standards. The plaintiffs lost the summary judgment motion against the manufacturer. They then hired new counsel and promptly brought an action against the engineer and the expert witness clearing house firm (together, the experts ), alleging theories of professional negligence, misrepresentation, and breach of fiduciary duty. The plaintiffs claimed that the experts failed to exercise the care and skill that a member of the forensic engineering profession should have, thereby losing the underlying action for the [plaintiffs] and forfeiting their $1.5 million claim. 1 William Vita is a partner in the New York law firm of Gallagher Gosseen Faller & Crowley. He earned his Bachelor s Degree at the University of Notre Dame and the degree of Juris Doctor from Boston College. He engages in a wide range of civil litigation. He is a member of DRI s Commercial Litigation Section and serves as Chair of the F.D.C.C. s Management, Economics & Technology of Practice Section.

3 They also claimed the experts misrepresented the expertise of the [engineer]. Forensis, supra, at 21. The experts, in turn, filed cross-complaints against the Law Firm for indemnity. The engineers argued that: Forensis, supra, at 21. Law Firm had waited too late in the action to consult [the engineers] to obtain a suitable expert, and/or failed to provide [the mechanical engineer] with sufficient information to allow him to provide adequate services and had failed to provide experts with relevant information before and after the hiring. They also argued Law Firm attorneys failed to rehabilitate [the mechanical engineer] at his deposition about the problems regarding the use of the SAE industry standards and had failed to provide the trial court with accurate products liability law in opposing [the forklift manufacturer s] summary judgment motion, regarding admissibility or inadmissibility of industry standards evidence. This claim must have seemed, to the Law Firm, like every attorney s nighmare. They were not only second-guessed about the decisions the firm made during high-stakes litigation, they were also attacked by the very experts the Law Firm had relied upon to lead the charge against the product manufacturer. As any attorney who has ever worked with an expert knows, the preparation of expert reports, deposition testimony and, particularly, trial testimony, is a collaborative effort between the expert(s) and the attorney(s). Decisions on what arguments to make, how to make them, what aspects of a defendant s product to attack and what documents to rely upon when doing so, are only some of the dozens of decisions that attorneys and experts must make in every case, as they work together. The notion that all of these discussions and collaborative decisions, might, one day, pit the collaborators against each other in an ugly display of finger-pointing, is a sobering thought. Both attorneys and experts regularly accept or discard all sorts of theories and opinions and similarly, accept or discard all sorts of documentary evidence to support these opinions. To then go back and second-guess each of these innumerable decisions in the wake of an adverse verdict or court opinion, would chill the relationship between attorney and expert like a February day in Fairbanks. The trial court, perhaps, realizing this, dismissed the expert s cross-complaint against the Law Firm, based on the public policy consideration that conflicts of interest might arise between the Law Firm and its former clients and such a lawsuit would impinge on attorney-client communications. Specifically, the trial court noted that the Law Firm: 3

4 Forensis, supra, at has a duty to do nothing in the trial by [plaintiffs] against the [experts] that would harm [plaintiffs ] case. Yet defeating or diminishing the [plaintiffs ] case is exactly the self-interest the Law Firm would have, knowing that if plaintiff recovers, Law Firm will have to defend the claim that it should indemnify [the experts] from its loss. Therefore, there was a conflict between the... Law Firm and their former [plaintiffs] clients no matter what opinion the attorneys at the Law Firm held concerning the merits of the underlying product defect action. The Appellate Court reversed, noting that: In today's technologically driven litigations [experts] frequently are hired to assist a party in preparing and presenting a legal case. Often they play as great a role in the organization and shaping and evaluation of their client's case as do the lawyers'... As experts, they are subject to liability, if they perform the services negligently... Forensis, supra, at 33, citing Mattco Forge Inc. v. Arthur Young & Co., 52 Cal App. 4 th 820, 834, 60, Cal Rptr2d 780 (1997). to: The Appellate Court went on to note the duty of an attorney who hires an expert witness [m]ake sure that the expert, particularly the inexperienced expert understands the governing legal principles and elements that each party to the litigation must prove in order to prevail... An expert is not a mechanical toy that can simply be wound up and turned loose. Regardless of the expert's skill, it is the lawyer's responsibility to make sure that his or her expertise is presented to the trier of fact in an admissible and persuasive way. Forensis, supra, at 34, citing California Expert Witness Guide (Cont. Ed. Bar.2d ed. 2005), 8.28, page The Court observed that: 4

5 Forensis, supra, at [e]xperts could not independently communicate their knowledge and opinions to the trial court, and had to act through the intermediary of the counsel who retained them... Consequently,... Experts should ordinarily be permitted to sue Law Firm for equitable indemnification of professional malpractice damages for which they have become liable. The appellate court did admit that: Forensis, supra, at p. 35. an otherwise permissible equitable indemnification claim may become improper if certain important public policy principles are violated by it. Specifically, it must be asked in this case whether Law Firm will be able to defend itself against the cross-complaint while: 1) avoiding significant conflicts of interest between itself and the former client... and 2) protecting confidentiality of prior attorney-client communications. The potential for a conflict of interest arises because a law firm dragged into litigation between ex-clients and an expert must necessarily argue either that: 1) the client's case was a strong one, thus driving up the value of the case on which the firm may owe indemnity obligations (an obvious conflict of interest) or 2) the client's case was a weak one (an equally obvious conflict, as the law firm is taking a position adverse to its ex-client's interests). The Forensis court's decision was made much easier because the Law Firm's underlying client settled with the expert defendants, thereby solving the conflict of interest dilemma. Because the client no longer had a financial stake in the case, it did not much matter what position the Law Firm took regarding the strength of the underlying case. Turning to the attorney-client confidentiality policy issues, the Court indicated that the California Code of Evidence exempted issues involving alleged breach of an attorney's duty from the attorney-client privilege protections. Further, the cross-complaint dealt with communication and strategy shared by the Law Firm and the experts, not by the Law Firm and it's clients. So, evaluating the peculiar aspects of the fact pattern, as presented, the Appellate Court reversed the trial court and allowed the experts' claims to proceed against the law firm. The California Appellate Court was not asked to consider whether the doctrine of witness immunity should have barred the client's action against the experts. But this argument has been rejected by other courts throughout the country. In LLMD of Michigan, Inc. et al. v. Jackson- Cross Company, 559 Pa. 297, 306, 740 A.2d 186, 1999 Pa. LEXIS 3206 (1999), the 5

6 Pennsylvania Supreme Court refused to extend the witness immunity doctrine to professional negligence actions which are brought against an expert witness when the allegations of negligence are not premised on the substance of the expert's opinion. California, Missouri, New Jersey and Texas have also held that witness immunity doctrine does not protect an expert witness from liability. Hanson, R., Witness Immunity Under Attack: Disarming Hired Guns, 31 Wake Forest L. Rev. 497 (1996). See, also, Marrogi v. Howard, 805 So.2d 1118; 2002 La. LEXIS 19 (La. 2002) (the Louisiana Supreme Court rejected witness immunity doctrine as protection for an expert witness); Boyes-Bogie v. Horvitz, 14 Mass L. Rep. 208; 2001 Mass Super. LEXIS 582 (Mass Superior Ct. 2001); Pollock v. Manohar Murlidbar Panjabi, et al, 47 Conn. Supp. 179, 781 A2d 518, 2000 Conn Super. LEXIS 1338 (Conn. Superior Ct. 2000); but, see, Darragh v. Superior Court of the State of Arizona, 183 Ariz. 79; 900 P.2d 1215, 1995 Ariz. App. LEXIS 160 (Ariz Ct. of App. 1995); Kahn v. Burman, 673 F.Supp. 210, 1987 U.S. Dist. LEXIS (E.D. MI., 1987). The key question is: will the Forensis decision serve as a harbinger of further cases to come? Will clients bring direct actions against their attorneys if the clients are dissatisfied with the experts the attorneys select? One can certainly envision a future in which attorneys will be held increasingly responsible for the success or failure of the experts they choose. Perhaps, such outcomes are appropriate when applied to mass tort plaintiffs' cases in which experts have engaged in junk science or outright fraud. Recent revelations about the fraudulent collusion between plaintiffs attorneys and radiologists in asbestos and silica litigation is one example of egregious and unethical behavior on the part of attorneys and experts. See, Case of the Vanishing X-Rays, Wall Street Journal, August 31, 2005, pg. A8 (Federal Judge Janis Graham Jack uncovered evidence that plaintiffs had filed fraudulent asbestosis and silcosis claims, based on highly suspect readings of x-rays by expert radiologists.) But are we prepared for such outcomes in situations where an attorney retains a reputable expert who, for whatever reason, fails to persuade a trier of facts? In any event, attorneys should consider these questions in the future as they retain and prepare experts for trial. 6

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