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The Supreme Court of Virginia Holds that Failing to Anticipate Appellate Decision on an Unsettled Area of Law is Not Legal Malpractice

November 17, 2015 By Abby V. Uzupis

In Shevlin Smith v. McLaughlin, the Supreme Court of Virginia held that an attorney’s failure to anticipate an appellate ruling on an unsettled legal issue did not amount to legal malpractice.  In 1998, Bruce McLaughlin was charged with several counts of felony sexual abuse.   Mr. McLaughlin hired two attorneys from two different firms to represent him in this criminal matter.  At the conclusion of the trial, Mr. McLaughlin was convicted.  His subsequent direct appeal was denied.  His habeas petition, however, was granted and his convictions for felony sexual abuse were vacated and he was granted a new trial.  At his second criminal trial, McLaughlin was found not guilty on all charges.
After his second trial, McLaughlin hired the firm Shevlin Smith to file a legal malpractice claim against the two attorneys (and their respective firms) who had represented him in the criminal matter.  One of the firms implicated in the criminal malpractice matter made McLaughlin an offer of $50,000 to settle the claim against the firm.  Shevlin Smith, at the direction of McLaughlin, negotiated a settlement with the firm, which involved a “Release Agreement” releasing that firm, but specifically reserving the right to pursue the other firm for criminal malpractice.  Nearly four months after the Release Agreement was executed, the decision in the case of Cox v. Geary came down from the Supreme Court of Virginia, holding that the release of one co-defendant in a legal malpractice case acted as a release of all co-defendants.  The firm with whom no agreement had been reached filed a plea in bar.  Their plea in bar was sustained and McLaughlin’s criminal malpractice case was extinguished.
Unable to pursue his criminal malpractice claim, McLaughlin filed a legal malpractice suit against Shevlin Smith, which alleged, among other things, “that Shevlin Smith breached its duty to McLaughlin by failing to foresee how [the Supreme Court’s] holding in Cox would impact the Release Agreement.”  McLaughlin’s legal malpractice claim against Shevlin Smith went to trial and the jury awarded McLaughlin $7 million.  Shevlin Smith appealed on the basis that the Circuit Court should have granted its plea in bar on the issue of whether Shevlin Smith breached its duty of care by failing to anticipate future rulings of unsettled areas of law.
The Supreme Court agreed with Shevlin Smith and held that it was in error for the Circuit Court to have denied Shevlin Smith’s plea in bar on that issue.  While the question of whether an attorney breaches her duty of care to her client is normally a question of fact, where no reasonable minds could differ as to whether the attorney breached the duty of care, the issue becomes a question of law and therefore appropriate for a plea in bar.  As the Court described, no reasonable minds could differ as to whether Shevlin Smith breached its duty of care to McLaughlin and therefore the Circuit Court could and should have sustained the firm’s plea in bar.
Specifically, the Court noted that “a client must show that the attorney failed to exercise a reasonable degree of care, skill, and dispatch in rendering the services for which the attorney was employed.”  The Court went on to say that, if an attorney exercises a “reasonable degree of care, skill, and dispatch while acting in an unsettled area of the law, which is to be evaluated in the context of the state of the law at the time of the alleged negligence, then the attorney does not breach the duty owed to the client.”  At the time Shevlin Smith executed the Release Agreement, both Virginia common law and statutes held that the release of one joint tortfeasor for an indivisible injury did not bar recovery against the non-settling joint tortfeasor.  Moreover, at the time of release, there was no definitive legal determination as to whether legal malpractice claims sounded in tort or contract, and therefore covered by the common law and statutes dealing with the release of joint tortfeasors.   Thus, because Shevlin Smith’s actions comported with well-settled law as well as operated within the confines of unsettled law, the firm, as a matter of law, acted with the “reasonable degree of care, skill, and dispatch required of an attorney operating in an unsettled area of the law.”