California “settle and sue” legal malpractice case

The California Fifth Appellate District recently decided a Stanislaus County judgment against a California family law attorney. The client sued her attorney after she left her on her own for the divorce trial. The issue in Masellis v. Law Office of Leslie F. Jenson arose when the attorney and client disagreed over the value of the marital estate and the acceptance of an $800,000 settlement.

When the client refused to accept that offer, her attorney told her “I’m done” on the Friday before the trial was set to begin that Monday. The client then brought a legal malpractice suit by using a “settle and sue” method.

What does “settle and sue” mean?

Some jurisdictions in the United States, including California, allow clients to “settle and sue.” The client accepting a settlement offer, does not shield an attorney from a malpractice suit.

In Masellis, the client sued her former attorney for the difference in what she was seeking in the divorce settlement. At the divorce hearing with no counsel, the client accepted her husband’s $1.2 million offer so in the malpractice suit she requested $300,000 in damages.

How did the court rule?

In the trial court, the client prevailed and the jury awarded her $300,000 due to negligence and the mishandling of settlement negotiations. According to reports the client’s experts produced at trial, half of the marital estate carried a $1.5 million value. Accepting the $1.2 million settlement without her counsel present shorted the client $300,000.

On appeal, the attorney argued that the standard for evidence is higher in “settle and sue” cases than the “preponderance of the evidence” burden typically applied in these types of lawsuits. The appellate court disagreed with her stance, holding that the lower standard correctly applied to this trial and the client met that burden, thus affirming the judgment.