R H SCHWARTZ CONSTR SPECIALTIES v
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No. 53-241 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 R. H. SCHWARTZ CONSTRUCTION SPECIALTIES, INC., a Montana corportion, Plaintiff and Appellant, THOMAS J. HANRAHAN, Defendant and Respondent. APPEAL FROM: District Court of the Seventh Judicial District, In and for the County of Dawson, The Honorable R. C. McDonough, Judge presiding. COUNSEL OF RECORD: For Appellant: Nye & Meyer; Jerrold L . Nye argued, Billings, Montana For Respondent: Huntley & Eakin; Ira Eakin argued, Baker, Montana --.--.= -- Submitted: Decided: Filed: October 27, 1983 December 6, 1 9 8 3 [jC!> '$83 ci Clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Schwartz Construction filed complaint March 1983 in the District Court of the Seventh Judicial District, Dawson County, alleging legal malpractice by Thomas Hanrahan. The complaint was dismissed on May 10, 1983, for failure to state a claim upon which relief could be granted. Schwartz Construction appeals. Schwartz Construction hired Thomas Hanrahan, a 1-icensed, practicing attorney, to act as its legal counsel in two suits filed against it. According to the malpractice complaint filed by Schwartz Construction (which is the only evidence we have on the matters), Hanrahan failed to file answers in both cases. One suit resulted in a default judgment against Schwartz Construction and a subsequent sheriff's sale of some of its property. The other suit resulted in execution on Schwartz Construction's bank account. Execution on the account apparently resulted in the bank stripping Schwartz Construction's account of all funds. Section 7 of the complaint alleges: "7. The failure of the Defendant [Hanrahan] to perform even rudimentary legal functions to protect his client from the above law suits was negligent, wrongful, and failed to comply with the standard.^ by which conduct of any attorney are measured. These failures were the proximate cause of great expense and harm to Plaintiff." Further, the complaint seeks $50,000 in actual damages from Hanrahan for failure to represent his client and punitive and exemplary damages of not less than $250,000. Counsel for Hanrahan filed a motion to dismiss on April 19, 1983, based on Schwartz Construction's failure to allege that "'but for the negligence of the attorney' the particular result would not have occurred." granted for that reason. The motion to dismiss was Schwartz Construction did not attempt to amend its complaint, but brought this appeal instead. Montana's liberal rules of pleading are found in Rule 8, M.R.Civ.P. The rules relevant to this proceeding are: Claims for relief. A pleading which "Rule 8(a). sets forth a claim for relief, whether an original claim, counterclaim, cross-claim or third-party claim, shall contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief, and (2) a demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be demanded. "Rule 8(e). Pleading to be concise and direct consistency. (1) Each averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motion are required." Schwartz Construction's claim against Hanrahan is one of attorney malpractice, a negligence action. It is axiomatic that negligence requires the existence of a duty, a breach of that duty and harm caused by that breach. The complaint at issue simply and concisely sets forth allegations supporting each of those elements: (1) Schwartz Construction hired Hanrahan to act as its legal counsel. (2) While so acting, Hanrahan failed to file answers to two complaints filed against Schwartz Construction. (3 Those failures resulted in default judgments against Schwartz Construction. (4) Schwartz Construction suffered $50,000 in actual damages because of those judgments and demands relief in at least that amount. Clearly, the complaint against Hanrahan is sufficient under Rule 8, M.R.Civ.P. We therefore reverse the decision of the District Court and remand this cause for trial on the complaint. This decision is limited solely to the determination that the complaint filed by Schwartz Construction adequately states a malpractice. claim against Thomas Banrahan for attorney We leave for another time the substantive issue of what type of proof is required in an attorney malpractice action. Reversed and remanded. We concur: Justices Mr. Justice John C. Sheehy, dissenting: I dissent. The order of the District Court dismissing the complai.nt here is proper. Rule 8 (a), M.R.Civ.P., '"hall provides that a claim for relief contain (1) a short and plain sta-tementof the claim . that the is to showing -- pleader - entitled - relief . . ." One cannot read into plaintiff's claim in this case any to showing that the plaintiff is entitled - relief. Para-graph 7 of the complaint, upon which the majority relies, is so vague and overbroad as to be illusory. An examination of paragraph 7 will reveal that nothing in it contains facts from which it could be drawn that the plaintiff had been improperly sued or that the judgments against it were not proper. of The allegation that the failures Hanra.han a.s alleged in the comp'l-aint"were the proxima.te cause of great expense and harm to the pla.intiffn may include the fact that the lawsuits were properly brought, and judgments would have resulted regardless of what Hanrahan did in the premises. Therefore, the complaint does not show on its face that plaintiff to "is entitled - relief'' in the language of Rule 8 (a), M.R.Civ.P. An essential allegation a.gainst an attorney on the grounds of ma]-practice is that the malpractice resul-ted in actual loss to the client. As the Arizona court said in Brosie v. Stockton (1970), 105 Ariz. 574, 468 P.2d 933, 936: "The question in the instant case is whether the allegation of a representation by the defendant as an attorney for both the plaintiff and his former wife is of itself an allegation of damage to plaintiff. As far as the complaint is concerned, it falls short of stating that plaintiff was damaged in any way. He alleges the defendant, in violation of his obligations to the plaintiff, wilfully and intentionally brought suit; however, he does not allege that the suit was not a just one, nor that he did not owe money to his former wife under the property settlement. He does pray for damages, but in no place in the complaint does he allege damages. The whole theory of his cause of action is that the defendant had represented both plaintiff and his wife in a divorce case. This is not enough to show damage. ". . . 'Under the new rules of procedure the test as to whether a complaint is sufficient to withstand a motion to dismiss is whether enough is stated therein which, if true, would entitle plaintiff to some kind of relief on some theory.. .' . "In the instant case it does not appear that the plaintiff is entitled to relief under any state of facts susceptible of proof." In the words of Professor Ploore, 2A Moore's Federal Practice 8.14 at 8-136 ( 2 d ed. 1982) : "True, the courts will go very far in finding a basis on which to sustain a pleading as against a motion to dismiss for failure to stat-e a claim, but good practice demands that the pleader state his claim with simplicity and clarity in the first instance, rather than set out a jumble of unrelated facts and hope that the court will work out his case for him. Further, if the pleading is to give 'fair notice' of the claim, it will normally have to be bottomed upon some theory supporting recovery." (Footnotes omitted.) Professor Moore further points out that in ruling on the sufficien.cy of a pleading that is on the borderline, if this case can be considered on the borderline, the court should consider the following: " (1) At what stage of the action is the objection raised? "(2) Are the prima facie elements of the claim or defense stated? " (3) If these are stated, is the statement fair notice to the adverse party? " (4) Is it fea.si.ble to require more particularity?" 2A Moore's Federal Practice 9 8.13 at 8-130, 8-131 (2d ed. 1982) (Footnotes omitted.) The p l e a d i n g h e r e f a i l s t e s t no. 2 i n t h a t t h e prima f a c i e e l e m e n t s of t h e c l a i m a g a i n s t Hanrahan a r e n o t s t a t e d , s i n c e it i s n o t shown t h a t t h e a c t u a l l o s s , i f any, s u s t a i n e d by the plaintiff is the proximate i n s u f f i c i e n t r e p r e s e n t a t i o n of m e e t t e s t no. the result of the attorney. the It claimed does n o t 3 because t h e pleading i s n o t a f a i r n o t i c e t o adverse attorney, since is he not advised from the p l e a d i n g t h a t he i s t h e c a u s e of a c t u a l l o s s . Moreover, i n t h i s c a s e it i s f e a s i b l e t o r e q u i r e more p a r t i c u l a r i t y of the plaintiff, e i t h e r by a more d e f i n i t e s t a t e m e n t , o r by a n amendment. I hold t o t h e p r o p r i e t y of Rules of C i v i l P r o c e d u r e , t h e t h e o r y o f t h e Montana i d e n t i c a l t o t h a t of t h e Federal Rules o f C i v i l P r o c e d u r e , t h a t p l e a d i n g s a r e i n e f f e c t n o t i c e t o t h e adverse p a r t y of however, I do n o t , t h e c l a i m b e i n g made. throw o u t t h e window e v e r y n e c e s s i t y f o r p l e a d i n g , b e c a u s e even under n o t i c e p l e a d i n g s , t h e opposing p a r t y i s e n t i t l e d t o u n d e r s t a n d from t h e p l e a d i n g t h e n a t u r e o f t h e c l a i m a g a i n s t him. to allege that attorney's This complaint i s a r t f u l l y contrived not there was deficiencies, actual but loss seems arising rather from the intent on e m b a r a s s i n g him f o r c l a i m e d d e f i c i e n c i e s which may n o t have proximately r e s u l t e d i n a l o s s t o t h e c l i e n t . I t i s p r o p e r under Rule 1 2 ( b ) , M.R.Civ.P., t o attack a p l e a d i n g upon t h e ground t h a t it f a i l s " t o s t a t e a c l a i m upon which r e l i e f can be g r a n t e d . " T h a t i s what happened h e r e . F-ule 1 2 ( b ) may become u s e l e s s i f , vague, overbroad, a s here, m e r e unrelated, and i l l u s o r y s t a t e m e n t s o f damage can be held t o s t a t e a claim. When t h e motion t o d i s m i s s was made i n t h i s c a s e on t h e ground t h a t t h e compl-aint was i n s u f f i c i e n t , t h e p l a i n t i f f d i d not move to amend his pleading so as to make the proper allegations. That indicates to me a basic deficiency in plaintiff's case; otherwise, a motion for amendment would have been simple to make and proper for the District Court to grant. I therefore disagree with : the ma-jority and would affirm the dismissal by the District Court. Justice I join in Justice Sheehy's dissent. d ? Justice f ! L ,
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