Appellants clients challenged a take nothing verdict from the Superior Court, Alameda County (California) in their malpractice suit against respondent law firm.
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Appellants clients hired respondent law firm to prosecute an action brought by them. Respondents obtained default judgments and appellants were awarded damages, which on review were reduced. Appellants sought to hold respondents liable for the reduction in the damage award. The trial court ruled that appellants could recover for any attorney negligence only to the extent that the underlying litigation had not made them whole. The trial court concluded that each appellant would have been awarded no more than was awarded in the underlying action, entered a take nothing judgment, and awarded appellees attorney costs. The court affirmed the judgment of the trial court. In order to recover on a theory of professional negligence, the claimant needed to demonstrate that the alleged breach of duty caused actual loss or damages. Appellants default judgment greatly exceeded the value of the underlying claim and thus they suffered no loss or damages. The court reversed the attorney fees award and remanded that portion of the case to the trial court for determination of what portion of claim was for defense of the legal malpractice action, as that was the only compensable portion of the award.
The judgment of the trial court was affirmed because the damages that appellants client received in the underlying action in which they were represented by respondent law firm exceeded the value of their malpractice claim. The attorney fee award was reversed and remanded to the trial court because the trial court failed to apportion the award for those costs associated with defense of the legal malpractice action.