Filed March 29, 2005. Nos. A-03-753, A-03-804. Appeal from the District Court for Douglas County: Thomas A. Otepka, Judge. Appeal in No. A-03-753 dismissed. Judgment in No. A-03-804 reversed, and cause remanded for further proceedings.
James D. Sherrets and Brian J. Mathey, of Sherrets & Boecker, L.L.C., for appellant. (Plaintiffs' boutique law firm handling many attorney malpractice actions)
Michael J. Mooney and Donald P. Dworak, of Gross & Welch, P.C., for appellees (leading Omaha defense firm; District Judge's former firm)
Interesting: both spouses were employees of the Millard School District but Patricia had 32 years service while Michael had only 9? Wonder what their age difference was if any? Or if Michael had a hard time holding down a steady job; after all if you are a school teacher isnt it in your better interest to stay put in one place so you do build up more retirement credit? The attorneys had estimated the wife's retirement fund at $100,000 while the husband's was estimated to be about $30,000. Micheal apparently thought his attorney had dropped the ball on persuading the court to order a QDRO split for Michael and in investigating how much the wife's fund was really worth with additional contingent State contributions. Malpractice defense counsel persuaded the trial court that if the client's attorney ARGUES for a QDRO, he/she does not have to value the pension assets. I think that was a stretch, and the court agreed, stating that while a pension valuation is not a QDRO's prerequisite, the attorney still needs to investigate the fund value. What really lost the Defendant law firm's summary judgment win was its failure to get its own expert affidavit supporting the attorneys work on the divorce case. All the Plaintiff had to do was offer an affidavit that could say anything in favor of finding malpractice. See Boyle v. Welsh, 256 Neb. 118, 589 N.W.2d 118 (1999). The Plaintiff's affidavit from a legal malpractice expert at least from the appeal court opinion describing it seems kind of thin, but it was good enough to persuade the appeals court to reverse summary judgment. QuerY; doesnt Daubert apply to expert opinions? Does this plaintiff's affidavit meet that standard, or could any attorney's affidavit in a malpractice case? Aside: you would expect a lawyer who specializes in suing other attorneys for malpractice would be suitably paranoid about watching his own P's and Q's. the Court noted that the Plaintiff's attorney filed 2 appeals just to make sure he had one on file, because the law on tolling the notice of appeal time after a winning summary judgment motion are not entirely clear.
3 comments:
Here is way the Court of Appeals was wrong in overturning the district court's decision:
1. In ruling that the determination of the standard of care presented a question of fact upon which Appellees were required to present expert evidence;
2. In ruling that the affidavit of Appellant’s expert created a factual issue as to the issues of duty and breach;
3. In ruling that the affidavit of Appellant’s expert, or any other evidence, created a factual issue as to proximate causation; and
4. In failing to affirm the district court’s decision on the basis of the rule of judgmental immunity.
STATEMENT OF THE CASE
This is a legal malpractice action brought by G. Michael Maas (Appellant) against Sodoro, Daly & Sodoro, P.C. and David Cripe (Appellees). This case arises from Appellees’ representation of Michael Maas (“Michael”) in a divorce action against his former wife, Patricia Maas (“Patricia”). The marital property included two Millard Public School (MPS) retirement plans, one owned by Michael and the other by Patricia. (E3, 3:3) (E1, 14,26:2). Prior to trial, Michael sent correspondence to Appellee Cripe discussing the features of the MPS retirement plan and requesting that Patricia’s plan be divided by means of a QDRO. (E6, 13,14:7) (E1, 68,80:2). The parties entered into a stipulation prior to trial which identified $107,993.65 as the portion of Patricia’s retirement plan that had been accumulated during the marriage. (E3, 3:3). Michael testified that he had reviewed and agreed with the stipulation. (E1, 7:2).
Patricia’s attorney asked the court to award 63.5% of the marital estate to Patricia, 36.5% to Michael, and each party to retain their own retirement accounts. (E1, 64-68,76,77:2). Cripe requested that the marital estate be divided equally and that Patricia’s plan be divided equally by means of a QDRO. (E6, 13,14:7) (E1, 68,80:2). Upon finding that Patricia made greater contribution to the marital estate, the trial court divided the estate 58% to Patricia, 42% to Michael, and awarded each party their own MPS retirement plans. (E2, 11,13:2). Michael then retained new counsel and appealed, claiming that the trial court erred in its valuation of Patricia’s retirement plan and that Michael did not voluntary enter into the stipulation. See Maas v. Maas, No. A-01-1391, 2003 WL 21646597. The court of appeals affirmed the trial court and found Michael’s contention that he did not voluntarily enter into the stipulation to be without merit.
Appellant’s malpractice suit is based upon the claim that Cripe committed malpractice by failing to adduce evidence of the actuarial present value of Patricia’s plan. (T2-3). The district court granted summary judgment in favor of Appellees upon the finding that Cripe was not under a legal duty to adduce such evidence. (T22). The court of appeals reversed the district court upon the grounds that: (i) the determination of the duty of care is an issue of fact upon which Appellees were required, and failed, to present expert evidence, and (ii) the affidavit of Appellant’s expert, and/or other evidence, created factual issues as to duty, breach, and causation.
I. THERE WERE NO “UNVESTED” BENEFITS OR HIDDEN ASSETS.
Appellant’s claim is premised upon the notion that Patricia’s retirement plan included an “unvested portion” or “matching funds” of which the trial court was unaware. In fact, however, the notion that there existed an “unvested portion” or some hidden “asset” associated with Patricia’s plan is inaccurate and misleading. The concept of “vesting” does not even have any applicability to this case. The MPS retirement plan is a “defined benefit plan”, which provides a lifetime monthly annuity benefit upon retirement. (E8, 21,32:7). Employees contribute 7.25% of their gross salary to the plan, and this amount is credited to the individual member’s account. (E8, 24,27,28:7). Matching contributions that are made by the employer and state are never credited to an individual member’s account, nor do such contributions ever “vest” in the individual’s account. (E6, 38:7). Rather, these contributions are deposited into a general fund for the purpose of funding the retirement system in its entirety. (E6, 38:7); Neb. Rev. Stat. § 79-958. There are no circumstances under which a member (or spouse or bene-ficiary) can ever receive any principal payment comprised of any portion of the employer or state contributions. Neb. Rev. Stat. §§ 79-955, 79-956.
The amount of a member’s monthly retirement benefit is not determined by, nor has it any relation to, the amount of contributions made by the member, employer or state. (E5, 3:5) (E6, 38-40:7) (E8, 21,32:7). Rather, the monthly benefit amount is calculated using a formula based strictly on years of service, salary, age. (E8, 32:7) (E6, 38-40:7). The term “vesting point” refers to the point at which a member is entitled to receive a lifetime monthly retirement benefit upon reaching eligibility age. (E6, 38-39:7). At the time of the trial, Patricia was already a “vested member” of the plan. (E6, 39:7).
Evidence adduced regarding the plan:
The notion that the trial court was unaware of the nature of the benefits provided under Patricia’s plan is also completely without merit. At trial, Cripe adduced evidence establishing the following: (i) that the stipulated amount reflected only Patricia’s individual contributions, (ii) that the plan provided for matching contributions of 101% which were pooled into the general retirement system to fund the system, and (iii) that Patricia’s beneficiary could never receive more than Patricia’s individual contributions. (E1, 51-52:2). The trial judge indicated that he was fully aware of the following: (i) the plan provided for a lifetime monthly annuity payment, (ii) there were matching contributions that were deposited into a general fund, (iii) if Patricia withdrew her funds, she would receive nothing beyond her own contributions, and (iv) Patricia’s beneficiary could not receive any amount above Patricia’s contributions. (E1, 52:2).
II. APPELLEES WERE NOT REQUIRED TO PRESENT EXPERT EVIDENCE.
The court of appeals determined that the issue of whether Cripe adduced sufficient evidence regarding Patricia’s plan presented a question of fact upon which Appellees were required, and failed, to offer expert evidence. (Opinion, pg. 5-6). This is contrary to Nebraska law because in the context of a legal malpractice action, an issue involving the sufficiency of evidence constitutes “a legal matter concerning which judges are required to be their own legal experts of the standard of care.” Baker v. Fabian, Thielen & Thielen, 254 Neb. 697, 703, 578 N.W.2d, 446, 451 (1998) (whether attorney committed malpractice by failing to adduce sufficient evidence to invoke presumption of delivery rule was “solely a question of law”). Therefore, the court of appeals erred in determining that the issue presented a fact question upon which Appellees were required to present evidence, expert or otherwise. [It should be noted that although Appellant assigned errors relating to failure to investigate and provide information to Michael, no such claims were asserted in the Petition or were at issue before the district court.]
It also must be questioned whether Boyle v. Welsh, 256 Neb. 118 (1999) is properly interpreted as establishing that the determination of the standard of care presents a question of fact. This would represent a drastic departure from long-standing principles of law that the issue of whether a duty exists, and the extent of the duty, presents a question of law. Stahlecker v. Ford Motor Co., 266 Neb. 601, 613, 667 N.W.2d 244, 256 (2003); Fu v. State, 263 Neb. 848, 867, 643 N.W.2d 659, 673 (2002); Crookall v. Davis, Punelli, Keathley & Willard, 77 Cal.Rptr.2d 250 (Cal.App.1998) (formulation of standard of care in legal malpractice is determined by court, and whether defendant’s conduct conformed therewith is determined by trier of fact). In any event, based upon Baker, supra, the question of whether expert evidence is required for the court to establish duty may depend upon the particular facts of the case. Baker establishes that such evidence is not necessary when the issue involves an evidentiary matter such as at issue in the case at bar.
III. THE DISTRICT COURT CORRECTLY JUDGED THE LAW.
Since the issue involved a matter of law upon which Appellees were not required to present expert evidence, the proper inquiry should have been whether the district court correctly judged the law as applied to the facts of the case. Appellant’s position is that Cripe had a legal duty to do something which has been expressly discouraged by Nebraska’s appellate judiciary. In Polly v. Polly and Koziol v. Koziol, the court of appeals unequivocally discouraged courts from attempting to calculate present value of prospective pension rights due to the “considerable speculation and uncertainty” that is involved. Polly v. Polly, 1 Neb.App. 121, 127, 487 N.W.2d 558, 562 (1992), Koziol v. Koziol, 10 Neb.App. 675, 636 N.W.2d 890 (2001). In Polly, the court of appeals relied upon the case of Bloomer v. Bloomer, 267 N.W.2d 235 (Wis.1978), in which the Wisconsin Supreme Court identified numerous uncertainties associated with attempting to present-value prospective retirement benefits. The most obvious problem is that such benefits do not exist, but rather are only “prospective” and “may be terminated by death, discharge, or other contingencies”. Bloomer at 238. Furthermore, the present value method requires that future benefits be discounted for future interest and mortality and then calculated with respect to life expectancy, which is a calculation involving “considerable uncertainty”. Id. at 241.
As a matter of law, the holdings in Polly and Koziol necessarily preclude any finding that Cripe, under the facts of this case, had a legal duty to adduce present value evidence. Furthermore, the record establishes that Cripe adduced sufficient evidence to inform the court as to the nature of the plan and that the amount stated in the stipulation reflected only Patricia’s contributions. (See above, pg. 4) (E1, 51-52:2). Neb. Rev. Stat. § 42-366(8) requires only that the court include certain deferred compensation plans as part of the marital estate, it does not require that the court perform any type of valuation analysis.
IV. GALTER’S AFFIDAVIT DOES NOT CREATE AN ISSUE OF FACT.
As discussed above, Baker, supra establishes that the issue before the district court presented a question of law upon which Appellees were not required to present expert evidence. But regardless of whether the issue is legal or factual, the affidavit of Appellant’s expert is inadmissible, irrelevant, and insufficient to create a material issue of fact. As discussed in Boyle, expert testimony presented in an attorney malpractice action is relevant and admissible only if it is addressed to the particular facts of the case. Expert testimony concerning the status of the law, or a question of law, is irrelevant and generally not admissible. Baker, supra, at 703, 578 N.W.2d at 451; Sports Courts of Omaha, LTD v.Brower, 248 Neb. 272, 278, 534 N.W.2d 317, 321 (1995) (district court erred in receiving opinion of law professor regarding status of the law). Galter’s affidavit cannot create a fact issue because it does not address the particular facts of this case, but rather consists only of general proclamations and recitations of the law. (E7, 1-3:7). Galter sets forth only a general duty of care which he apparently believes should be applied in all dissolution actions involving pension plans. Galter does not provide any opinion as to the duty of care applicable under the particular facts of this case. In fact, Galter’s affidavit does not contain even a single reference to the case at bar or otherwise indicate that he has any familiarity whatsoever with the particular facts of this case. (E7, 1-3:7).
V. THE COURT OF APPEALS ERRED IN DETERMINING THAT A FACT ISSUE
EXISTS AS TO PROXIMATE CAUSATION.
Contrary to the determination of the court of appeals, Galter’s affidavit cannot create a fact issue as to proximate causation. Again, Galter’s affidavit does not address the particular facts of this case. (E7, 3:7). Galter’s assertion as to proximate cause amounts to only a vague and completely unsupported conjecture implying that in all cases in which the full amount of a marital estate is not presented (regardless of the dollar amount or any other factors), such omission “would” in every case result in an inequitable division of the assets. (E7, 3:7). Such testimony is not even admissible, let alone sufficient to create a fact issue as to whether Cripe’s actions proximately resulted in any damage to Michael.
The court of appeals also determined that a fact issue exists as to proximate cause because “it is possible to argue that if the unvested portion of the pensions had been included …, the total would have been greater and Michael’s 41% would necessarily have amounted to a larger sum”. (Opinion, pg. 7). This conclusion is not supported by any evidence and is based only upon speculation, which cannot create a fact issue. Richards v. Meeske, 268 Neb. 901, 909, 689 N.W.2d 337, 344 (2004) (“conclusions based on guess, speculation, conjecture, or a choice of possibilities do not create material issues of fact for purposes of summary judgment.”).
The conclusion of the court of appeals is premised upon the notion that if Cripe had offered evidence similar to Appellant’s single premium annuity quote, then the following would have happened: (i) the trial court would have received such evidence, (ii), the trial court would have correspondingly inflated the size of the marital estate, and (iii) Michael would have received a greater award. In the first place, as discussed above, the notion that there existed an unvested or hidden principle sum of which the trial court was unaware is inaccurate and misleading. Patricia’s plan provides for a lifetime benefit which, at some point in the future, may be funded by employer contributions; but neither Patricia, nor her beneficiaries, will ever have access to any principle amount beyond Patricia’s individual contributions.
Secondly, besides Galter’s affidavit, the only other evidence to support Appellant’s causation theory is an affidavit stating that a fifteen-year single premium annuity would cost $296,258.79. (E4, 1:4). Such evidence would have been inadmissible and irrelevant at trial because it represents a non-existent principal sum that Patricia would never have access to under any circumstances. Nor does an annuity quote provide any indication of the actuarial present value of a plan. This would require that future benefits be discounted for future interest and mortality and then be calculated with respect to life expectancy. Bloomer, supra. As recognized in Bloomer, it is practically impossible to accurately value prospective future benefits. It is thus not surprising that the court of appeals and the Wisconsin Supreme Court have expressly discouraged the use of the present value method. In the case at bar, it would have constituted reversible error for the trial court to have artificially inflated the size of the marital estate upon the basis of the evidence that Appellant contends Cripe was under a legal duty to adduce. Therefore, as a matter of law, the failure to offer such evidence could not have proximately resulted in a lesser award to Michael.
Furthermore, Appellant’s theory of proximate causation is disproved by the uncontroverted evidence which establishes that the trial court was fully aware that Patricia’s plan provided for a lifetime monthly benefit funded by matching contributions that were not reflected in the balance stated in the stipulation. (E1, 52:2). The trial court also received evidence that Patricia had produced $5,000 to $6,000 more income than Michael per year, and that Patricia and Michael had been separated for over ten years. (E1, 6,14,27:2). Upon these facts alone, it would be naturally expected that the court would award Patricia a greater portion of the estate and allow each party to keep their respective retirement plans. It is sheer speculation to conclude that the amount of Michael’s award proximately resulted from the lack of present value evidence relating to Patricia’s plan.
VI. THE RULE OF JUDGMENTAL IMMUNITY APPLIES TO THIS CASE.
The Court of Appeals erred in failing to affirm the trial court’s decision upon the basis of the rule of judgmental immunity. Good faith tactical decisions or decisions made on a fairly debatable point of law are generally not actionable under the rule of judgmental immunity. Wood v. McGrath, North, Mullen & Kratz, P.C., 7 Neb.App. 262, 281, 581 N.W.2d 107, 120 (1998). In Polly and Koziol, the court of appeals criticized and specifically discouraged the use of the present value method. At the very least, these holdings establish that the question of whether Cripe had a duty to offer present value evidence is “fairly debatable”, and thus clearly within the scope of the rule of judgmental immunity.
Donald P. Dworak
Interesting comments, did the defendant take this up to the supremes on further review?
Thank you for sharing such great information. It is informative, can you help me in finding out more detail on Retirement Fund, i am interested and would like to know more about this field and wanted to understand the basics of Best Retirement Plans
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