D. Col. – The Transaction Within The Case Doctrine
By Will Jordan
In a legal malpractice case arising in the context of litigation, the “case within the case” doctrine, requiring the plaintiff to prove he would have been successful in the underyling case but for his attorney’s negligence, is well-established. But what about legal malpractice cases arising from a failed business or real estate transaction? The U.S. District Court in Colorado recently recognized that the same concept applies. It wrote “In cases involving a failed transaction, a plaintiff must show the transaction would have been successful, i.e., would have closed, but for the attorney’s alleged negligence.” This is a difficult hurdle for a legal malpractice plaintiff to overcome because proving the transaction “would have closed” will typically involve a great deal of speculation. As the court noted in granting the law firm summary judgment, “the material, undisputed facts establish any opinion that [the other party] would have approved the transaction is speculative.”
Pioneer Centers Holding Co. Employee Stock Ownership Plan & Trust v. Alerus Financial, N.A., No. 12-cv-02547-RM-MEH (D. Col., May 1, 2015).
Read the full opinion here.