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Attorneys – Tort/Negligence – Legal Malpractice – Proximate Cause – Corporate Veil Piercing

Attorneys – Tort/Negligence – Legal Malpractice – Proximate Cause – Corporate Veil Piercing

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According to plaintiff’s allegations, even though a Texas court’s order confirming an arbitration award effectively rejected an attempt by General Fidelity Insurance Company (GFIC) to pierce the corporate veil of plaintiff’s company, the defendant-law firm and its attorney failed to raise this issue (or several other possible defenses) when GFIC filed suit to domesticate the Texas judgment here, again seeking to pierce the corporate veil. Moreover, defendants assigned plaintiff’s case to an inexperienced and unprepared associate and failed to adequately supervise her. The North Carolina trial court allowed GFIC to pierce the corporate veil and awarded treble damages, making plaintiff personally liable for $12,879,193.20 from the GFIC action. Based on this record, the court cannot rule that plaintiff has failed to plead proximate cause.

Defendants’ motion for judgment on the pleadings is denied.

Defendants contend that plaintiff was required, but failed, to allege that he would have ultimately prevailed in the GFIC action or that a fact existed that would have prevented the entry of summary judgment against him in that underlying case. Defendants are mistaken.

Plaintiff alleges that “Defendants owed duties to [plaintiff], including the duty to possess and to exercise the same degree of care, skill and learning as is possessed by a reasonable and competent attorney under the same or similar circumstances.” The complaint as a whole sets forth a litany of alleged negligent acts by defendants throughout their legal representation of plaintiff in the GFIC action, including their failure to submit any evidence or a brief in opposition to GFIC’s summary judgment motion. In addition, the complaint says, “But for the conduct of the Defendants, [plaintiff] would not be saddled with a personal judgment in the amount of $12,849,193.20,” and “As a direct and proximate result of the conduct of the Defendants, [plaintiff] has suffered damages and continues to suffer damages in an amount not less than $12,849,193.20, which sum continues to grow with post-judgment interest.”

These allegations, when viewed together in the light most favorable to plaintiff, sufficiently satisfy the pleading requirements for a legal malpractice claim and also give rise to a factual question of whether defendants’ alleged negligence in the GFIC action, including their alleged failure to adequately oppose GFIC’s summary judgment motion, was a proximate cause of plaintiff’s alleged damages.

Fleming v. Horner (Lawyers Weekly No. 020-022-21, 18 pp.) (Michael Robinson, J.) Charles Rabon, Eric Bland and Ronald Richter for plaintiff; Ryan Bolick for defendants. 2021 NCBC 22

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