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Legal Memorandum: Damages in Legal Malpractice Actions in MN

Issue: Under Minnesota law, what compensatory damages may a client recover against an attorney in a professional malpractice action?

Area of Law: Ethics & Professional Responsibility, Personal Injury & Negligence
Keywords: Legal malpractice action; Damages; Lost profits
Jurisdiction: Federal, Minnesota
Cited Cases: 711 N.W.2d 811; 437 N.W.2d 749; 297 N.W.2d 260; 336 N.W.2d 279
Cited Statutes: None
Date: 06/01/2009

            In a legal malpractice action based on erroneous advice or judgment, the measure of the plaintiff client’s damages is the difference between the result or loss actually reached, and the more favorable result in the underlying transaction that would have been reached absent the negligence.  Jerry’s Enters., Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811 (Minn. 2006).  See Estate of Hartz v. Nelson, 437 N.W.2d 749, 755 (Minn. Ct. App. 1989) (holding that where the attorney’s failure to use a reasonable degree of skill in handling the plaintiff’s matters caused her to incur amounts to recover funds overpaid, the plaintiff was entitled to such amounts as compensatory damages).

In Bellino v. McGrath North Mullin & Kratz, PC LLO, 738 N.W.2d 434 (Neb. 2007), the court affirmed the jury’s finding that the attorneys’ negligent advice to their client to reject a settlement offer and proceed in litigation caused the client damages.  738 N.W.2d at 452.  The court looked at the chain of damages that ensued.  “After Bellino did not accept Anderson’s offer, Bellino’s appeal [in the underlying lawsuit] continued until this court affirmed the judgment in favor of Anderson.”  A constructive trust was imposed on the plaintiff, and he “was locked into the existing arrangement for several more years,” during which he “‘suffered terribly monetarily.'”  Id.  Following the conclusion of the appeal in the underlying case, the plaintiff had to pay $3.1 million in order to separate from the […]

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