Equitania Insurance Co. v. Slone & Garrett, P.S.C.
2006 Ky. LEXIS 47, 191 S.W.3d 552, 2006 WL 434137 (2006)
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Rule of Law:
In a legal malpractice action, a jury instruction is erroneous if it creates a broad exception for an attorney's 'errors in judgment.' The proper standard of care requires an attorney to exercise the degree of care and skill expected of a reasonably competent lawyer under similar circumstances, and an error in judgment can constitute malpractice if it falls below this standard.
Facts:
- Two groups of shareholders, the Vimont group and the Pavenstedt group, were competing for control of Equitania, an insurance company for horse owners.
- The Vimont group retained attorney Laurel Garrett and her law firm to provide legal representation during the shareholder dispute.
- Following Garrett's advice, the Vimont group ultimately bought out the Pavenstedt group's shares to gain control of the company.
- After the buyout, Equitania continued to experience financial decline.
- The Vimont group subsequently sold the company's book of business to Markel Insurance Company in January 1995.
- Vimont believed Garrett's advice on how to gain control was negligent, violated the insurance code, breached a fiduciary duty, and was unnecessarily expensive.
Procedural Posture:
- The Vimont group filed a civil action for legal malpractice against Laurel Garrett and her law firm in Fayette Circuit Court (trial court).
- The trial court judge granted a partial summary judgment in favor of Garrett.
- The remaining portion of the claim was tried before a jury, which returned a verdict in favor of Garrett.
- The Vimont group, as appellant, appealed the judgment to the Kentucky Court of Appeals.
- The Court of Appeals affirmed the trial court's judgment in favor of Garrett, the appellee.
- The Supreme Court of Kentucky granted discretionary review of the Court of Appeals' decision.
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Issue:
Does a jury instruction in a legal malpractice case that states a lawyer cannot be held responsible for 'errors in judgment' constitute a misstatement of the applicable standard of care under Kentucky law?
Opinions:
Majority - Wintersheimer, Justice
Yes. A jury instruction in a legal malpractice case misstates the applicable standard of care when it suggests a lawyer cannot be held responsible for errors in judgment. Kentucky law does not provide a blanket exception for an attorney's errors in judgment; rather, whether an error in judgment constitutes malpractice is a question of fact for the jury based on whether the attorney's conduct deviated from the standard of care of a reasonably competent lawyer. The instruction given improperly required the jury to understand abstract legal principles and confused the distinction between malpractice and a permissible, good-faith error of judgment. The court should have provided a 'bare bones' instruction stating the duty of the lawyer to exercise reasonable competence and skill, leaving it to the jury to determine if that duty was breached.
Analysis:
This decision clarifies that the 'error in judgment' rule is not a shield for attorneys who fail to meet the professional standard of care in Kentucky. It establishes that an attorney's judgment can be scrutinized, and if it falls below the level of a 'reasonably competent lawyer,' it can be the basis for a malpractice finding. The ruling also strongly reaffirms Kentucky's preference for 'bare bones' jury instructions, which state the essential legal duties without excessive detail, leaving counsel to 'flesh out' the facts and arguments during closing. This reinforces the principle that juries should decide factual questions of breach and causation without being confused by abstract legal distinctions within the instructions themselves.
