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CA appeals court: attorney’s conduct flagrant, but no damages

Film producer David Bergstein’s long legal odyssey in search of a money recovery against a formerly retained attorney later adjudged to have betrayed him will simply have to continue if he ever wants to receive a dime in damages.

Actually, the entertainment principal, described in a recent legal article as “embattled,” figuratively sat upon a veritable mountain of dimes a few years ago, following a jury verdict that awarded him a stunning $50 million in damages against his ex-legal counsel.

But that changed dramatically last week, when a California appellate court “pulled the plug” on those millions, ruling that, notwithstanding clearly egregious conduct committed by the lawyer, a sufficient link between her behavior and Bergstein’s actual losses was never established at trial.

In other words, noted the appeals panel, there was no clear nexus shown between the attorney’s “repeated acts of misconduct” and the economic collapse of Bergstein’s film empire. The court was firm in that position even while conceding that the lawyer purposefully took actions to harm Bergstein, which did ultimately force him to declare multiple bankruptcies.

“[B]reaches of fiduciary duty, no matter how flagrant, must still be tied to actual damages in order to support a verdict,” stated the court.

Evidence in court had established that the attorney — long-tenured legal counsel for Bergstein — grew angry with the producer when he questioned her work quality and hired an additional lawyer. She thereafter passed along confidential documents to his litigation rival and actively helped him take legal action against Bergstein.

The appeals court termed her conduct an “inexcusable abuse,” and the California State Bar suspended her from practice for two years (some of our readers might reasonably point to that outcome as being materially misaligned with the clearly acknowledged malpractice actions she engaged in).

The matter is clearly instructive on many points, including this takeaway: A proven plaintiffs’ legal malpractice attorney must always and necessarily focus broadly on both conduct that is alleged to constitute malpractice and damages that reasonably arose because of it.

As is clearly shown from the above case, a firm nexus must be established between deficient attorney representation and personal harm suffered by a client justifiably relying on an attorney’s competent performance.