News & Blog

By Will Jordan

We’ve been dilatory in our blogging efforts lately. The blogging grind can be taxing. Other commitments get in the way. You know the drill. We know, “[R]ule number 76. No excuses. Play like a champion.” We’re back and we’ll try to be better.

Today’s dose of legal malpractice news comes out of the Supreme Court of Utah. USA Power and PacifiCorp had competing bids to construct a power plant. Attorney assisted both companies, first USA Power and later PacifiCorp, in acquiring the water rights necessary for their respective projects. PacifiCorp ultimately moved forward with the project, to the exclusion of USA Power. USA Power brought suit aginst Attorney, alleging that Attorney breached her fiduciary duty by helping PacifiCorp obtain water rights that were critical to PacifiCorp proceeding with its project.

At trial, the jury awarded judgment against Attorney, but the trial court granted Attorney’s JNOV motion on the ground that PacifiCorp failed to established that Attorney’s alleged breach caused PacifiCorp’s damages. The Utah Supreme Court affirmed, offering some strong language on the issue of proximate causation in legal malpractice cases in which the client alleges that the attorney breached the standard of care by providing legal assistance to a competitor:

[The parties] disagree as to whether [the causation standard] encompasses a requirement that USA Power demonstrate that a different attorney, with reasonable skill and diligence, would not have been able to duplicate Ms. Williams’s work for PacifiCorp. But this “no other lawyer” requirement is simply the application of the “would have benefitted” standard discussed above to certain kinds of breach of fiduciary duty claims—such as the ones asserted by USA Power here. Where a client has asserted that its attorney breached the duties of loyalty or confidentiality by working for or sharing information with a third party—whether an opposing party in litigation or business—and that the breach ultimately disadvantaged the client in some way, the client still has the burden of showing that absent that attorney’s breach, it would have benefitted. And if the third party or attorney provides evidence that the third party would have hired a different attorney in the stead of the breaching attorney, the client must accordingly show that this other attorney, with reasonable skill and diligence, would not have been able to do for the third party what the breaching attorney did.

You can read the full opinion here.