As literary devices, a “story-within-a story” and a “play-within-a-play” have a long lineage. Shakespeare seems to have been particularly fond of these devices. The legal analog may be seen as the “case-within-a-case” (“trial-within-a-trial,” “suit-within-a-suit”) arising in legal malpractice cases. The case-within-a-case terminology seems to be the most commonly used and hence will be used herein. While it is clear that the “case” is the malpractice case, it is not so clear what the “case-within-” is, which is usually referred to as the “underlying case.” Often, it seems to be presumed that the underlying case is limited to litigation, which would have involved a trial culminating in a judgment being entered in favor of one of the parties. In many instances, litigation (real or hypothetical), indeed, is the source of the plaintiff’s injury and resulting damages as a consequence of an attorney’s malpractice. For example, if an attorney should miss a statute of limitations, thus barring the plaintiff from recovering against a party asserting the statute, the plaintiff must prove that, but for the negligence of its attorney, it would have prevailed against that party had the case been tried and gone to judgment.
On the other hand, there are many situations where clients are injured due to the malpractice of attorneys that do not involve being denied a favorable judgment in litigation. An example of this in the context of patent law would be the negligent failure of a patent attorney to file a patent application on behalf of a client in a timely manner to avoid a statutory bar. This situation obviously does not involve litigation; nonetheless, the client has suffered the loss of a patent if it can be established that a patent would have been granted but for the failure of the attorney to file the application in a timely manner. If no patent would have been granted (e.g., because of prior art), the plaintiff would be unable to establish a causal connection between the attorney’s negligence and any damage suffered. On the other hand, even if the patent would have been granted, plaintiff will still have to establish in the malpractice case that it suffered damages—perhaps in the form of loss of infringement damages or license royalties.
When the malpractice plaintiff has suffered injury in the form of loss of a favorable judgment as a consequence of the malpractice of its attorney, this type of case-within-a-case will be termed herein as the “judgment” model. According to this model, the malpractice plaintiff must prove that it would have received a more favorable judgment in the underlying case (litigation) but for the malpractice of the attorney. However, this model is only a species of the general class of injuries that may be suffered by clients due to the malpractice of their attorneys.
When the malpractice plaintiff has suffered injury in other than the form of the loss of a favorable judgment as a consequence of the malpractice of its attorney, this type of case-within-a-case will be termed herein as the “non-judgment” model. The plaintiff, of course, bears the burden of proving it suffered actual damages of a nature other than the loss of a favorable judgment in the underlying case. To further illustrate these models, a more comprehensive definition of the “case-within-” (i.e., the underlying case) may be helpful.
Indeed, “case” has a broader connotation than litigation/trial/suit. The venerable Black’s Law Dictionary gives the following definition: “case . . . [a] civil or criminal proceeding, action, suit, or controversy at law or in equity.” Thus, according to this definition, it would be appropriate to consider a “controversy” as being included within the “case-within-” (the underlying case) as well as “proceeding, action, suit” to which “trial” could be added.
Courts, particularly those who are following the judgment model, often refer to “case-within-a-case” as a doctrine, rule, requirement, or element, thus giving the impression that it is mandatory that the malpractice plaintiff prove that it would have prevailed to judgment in the underlying case to recover in the malpractice case. Recognizing that “case” has a broader meaning than “litigation” to include “controversies” may help to avoid this significant limitation to the scope of legal malpractice cases (controversies). Other courts have preferred to categorize “case-within-a-case” as a methodology or analysis rather than as a doctrine/rule/requirement/element. There seems to be considerable merit in this usage because the “case-within-a-case” methodology is being used whether the malpractice plaintiff is alleging damages for the failure to obtain a favorable judgment in the underlying litigation (judgment model) or actual damages suffered as a result of malpractice in representation in the underlying controversy (nonjudgment model).
In both the judgment and non-judgment models, in the context of a malpractice case based on negligence, the duty and breach elements (constituting negligence) are the same for both the malpractice case and the underlying case (controversy), where malpractice is alleged to have occurred. However, in the “judgment” model, the causation and damage elements are conflated, with the only damage recoverable by the plaintiff being the hypothetical loss of a favorable judgment had the trial been held in the underlying case. Accordingly, the only “cognizable” damage in the “judgment” model is the loss of a favorable judgment in the hypothetical underlying case-within-a-case. There is, of course, no causal relationship between the negligent conduct of the defendant attorney and any damage suffered by the malpractice plaintiff, if damage is limited to the loss of a favorable judgment in the underlying case and the plaintiff cannot establish that specific form of damage.
In the “non-judgment” model, the duty-breach-causation elements are the same as in the “judgment” model; however, the damage element is determined by the nature of the damage the malpractice plaintiff pleads it has actually suffered, and such damage is not limited to prevailing in any hypothetical underlying case that would have resulted in a favorable judgment. In other words, the malpractice plaintiff in the “non-judgment” model is not required to prove it would have obtained a judgment in the underlying case, but only that it suffered actual damages causally related to defendant attorney’s negligence in the underlying transaction. These damages may be based on a variety of theories.
In using the “case-within-a-case” methodology, it is important to recognize that the underlying case that precipitated the malpractice claim is not limited to litigation that would have resulted in a favorable judgment for the malpractice plaintiff, but also includes any controversy where, due to the malpractice of the attorney, plaintiff has suffered damages. The judgment and non-judgment models provide an explanatory framework. The elements of a legal malpractice case remain the same in both models, with the understanding that the damage element may be satisfied by the loss of a favorable judgment or other actual damages in the underlying case (controversy).
Akron Intellectual Property Journal
Samuel Oddi, Patent Attorney Malpractice: Case-Within-A-Case-Within-A-Case , 6 Akron Intellectual Property Journal 71 (2012).