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Legal Memorandum: Elements of a Legal Malpractice Action

Issue: Under Minnesota law, does an attorney that fails to advise a client to form new entities for new projects to limit liability commit professional malpractice?

Area of Law: Ethics & Professional Responsibility, Personal Injury & Negligence
Keywords: Legal malpractice action; Elements; Bad advice
Jurisdiction: Federal, Minnesota
Cited Cases: 711 N.W.2d 811; 857 N.E.2d 229; 333 N.W.2d 895; 177 S.W.3d 17; 686 N.Y.S.2d 404; 738 N.W.2d 434
Cited Statutes: None
Date: 06/01/2009

As a general matter, a cause of action arising from improper representation or bad legal advice constitutes legal malpractice.  Rangel v. Lapin, 177 S.W.3d 17 (Tex. App. 2005).  An attorney is liable for any damages resulting to the client by the attorney’s improper or erroneous advice or judgment, when an attorney of reasonable knowledge and professional capacity, who is exercising ordinary care under the circumstances, would have avoided the error.  7A C.J.S. § 309, at 343 (Heather S. Crane, et al. eds., Thomson West 2004).  “When, in the course of his or her professional dealings with a client, an attorney unnecessarily exposes a client to a risk of loss, or otherwise jeopardizes the pecuniary interests of the client, the attorney has breached a duty to the client.  DeLuna v. Burciaga, 857 N.E.2d 229, 246 (Ill. 2006).

The elements of a legal malpractice action based on errors in advice or judgment under Minnesota law are (1) an attorney-client relationship; (2) the attorney’s negligence or breach of contract; (3) proximate causation between the attorney’s acts and the plaintiff’s damage; and (4) but for the defendant attorney’s conduct, the plaintiff would have obtained a more favorable result in the underlying transaction than what was actually obtained.  Jerry’s Enters., Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811 (Minn. 2006). 

Thus, when an attorney admittedly failed to research the issue of a merger and repurchase option under an exception to […]

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