Spanish | French
33 South Sixth Street, Suite 3800
Minneapolis, MN 55402-3707
Phone: 612.333.3000
Fax: 612.333.8829
LoginContact Us

Bassford Remele is a full service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation and dispute resolution.

Press Releases

Minnesota Supreme Court Reaffirms that "But For" Causation is Required to Prove Transactional Malpractice

Date: Mar 25, 2006 — Minneapolis, MN  

The Minnesota Supreme Court recently held that in a legal malpractice case arising out of a transactional matter, the plaintiff must show that but for defendant attorney’s conduct, the plaintiff would have obtained a more favorable result in the underlying transaction than the result obtained.

Plaintiff hired the defendant law firm to represent it in the purchase of real estate. Plaintiff intended to subdivide the property and develop it for resale. The purchase agreement drafted by defendant included a buy-back option in the event plaintiff failed to develop the property within two years. The closing documents drafted by seller’s attorney did not include the buy-back option. Defendant law firm did not research whether the buy-back option survived closing and did not inform plaintiff that the buy-back option could create a cloud on the title.

Two years later, when plaintiff hadn’t begun to develop the property, the seller exercised the buy-back option but plaintiff refused to sell. After the Minnesota Supreme Court held the option survived closing--thereby forcing plaintiff to sell the property back at a loss--plaintiff sued defendant for legal malpractice. At trial, defendant argued that it had no duty to research whether the buy-back option survived closing because, at the time in question, the state of the law on the doctrine of merger was well-settled. The District Court agreed and granted a directed verdict to defendant.

The Minnesota Court of Appeals reversed and remanded the case for trial, holding (among other things) that because plaintiff alleged malpractice in a transactional matter and not in the course of litigation, plaintiff was relieved from making a showing of “but for” causation linking defendant law firm’s alleged negligence to plaintiff’s injury.

The Minnesota Supreme Court rejected that idea, holding that in an action for legal malpractice arising out of representation in transactional matters, the plaintiff must show that but for defendant’s conduct the plaintiff would have obtained a more favorable result in the underlying transaction.

Because this case raised serious issues about the law of legal malpractice in Minnesota, Bassford Remele Shareholder Charles E. Lundberg filed an amicus curiae brief on behalf of Minnesota Lawyers Mutual Insurance Company. Other amici curiae arguing for the same result included the Minnesota State Bar Association and the Minnesota Defense Lawyers Association.

Jerry's Enterprises v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811 (Minn. 2006). Link to Minnesota Supreme Court Opinion

Bassford Remele, A Professional Association, is a full-service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation. The Bassford firm is a community of experienced and committed trial lawyers who embrace a professional approach to the practice of law, providing the highest level of legal expertise and advice.

Return to Press Releases

 

 

 

 

© 2008 Bassford Remele. All rights reserved.

News and Events