Legal malpractice claim follows construction site accident. $1.5M. Orange County.

Summary

When construction worker is injured on job site, his attorneys are said to have brought incorrect type of action.

The Case

Case Name: Matthew Foster v. Madison Harbor ALC, Robert Sabahat and Ali Parvaneh
Court and Case Number: Orange County Superior Court / 30-2014-00707156
Date of Verdict or Judgment: Monday, December 04, 2017
Type of Case: Legal Malpractice
Judge or Arbitrator(s): Hon. Peter Wilson
Plaintiffs:
Matthew Foster, 57, elevator constructor
Defendants:
Madison Harbor ALC
Robert Sabahat
Ali Parvaneh
Type of Result: Jury Verdict

The Result

Gross Verdict or Award: $1,537,154.75: value of the lost subrogation claim plus prejudgment interest.
Jury Deliberation Time: Approximately 3 1/2 hours.
Jury Polls: 12-0.
Post Trial Motions & Post-Verdict Settlements: Defendants have filed their motions for new trial and judgment notwithstanding the verdict.

The Attorneys

Attorney for the Plaintiff:
Mesisca Riley & Kreitenberg LLP by Dennis P. Riley, Los Angeles.
Attorney for the Defendant:
Madison Harbor, APC by Ali Parvaneh, Jenos Firouznam-Heidari, Irvine.

Knypstra Hermes LLP by Bradley P. Knypstra, Irvine.

The Experts

Plaintiff's Technical Expert(s):
David B. Parker, legal standard of care, Los Angeles.

Larry J. Gliko, construction, La Mesa.
Defendant's Technical Expert(s):
David A. Gauntlett, legal standard of care, Irvine.

Jeff Hughes, construction, Marina del Rey.

Facts and Background

Facts and Background:
Plaintiff was injured in April 2006 on a construction site when a wall stud was knocked down an elevator shaft, hitting plaintiff in the head 10 floors below. Plaintiff hired attorney-defendants Ali Parvaneh, Robert Sabahat and their firm, Madison Harbor ALC, to bring a personal injury action. Defendants brought an action against the general contractor and two subcontractors.

In November 2008 defendants filed a second action on plaintiff’s behalf, asserting the rights obtained in the assignment against the second subcontractor. Defendants eventually lost the second action after a reversal on appeal because they brought the action based on breach of contract rather than subrogation despite the fact that the insurance carrier had paid all settlement monies, and as a result, there were no contract damages. Plaintiff was then subjected to a contractual attorneys’ fee judgment of approximately $100,000.
Plaintiff's Contentions:
That defendants brought the wrong claim, breach of contract, in the underlying case because they did not realize they had a subrogation claim.

On the eve of trial in March 2008, defendants recommended a settlement with the general contractor and one of the subcontractors for $800,000 and an assignment of their rights against the second subcontractor which breached its obligations to indemnify and defend the general contractor. The second subcontractor issued a $5,001.00 CCP 998, and defendants recommended plaintiff accept, believing it would help prove liability in the second action.
Defendant's Contentions:
There was no evidence of defendants recommending a settlement or believing that acceptance of a 998 offer would help prove liability; that breach of contract was the only viable theory of recovery in the second indemnity action (and the trial judge in that action agreed with defendants’ position).

The Court of Appeal made its decision based on a split of authority concerning the collateral source rule, holding that the doctrine did not apply to contract cases (despite contrary, and then recent, authority in the same district holding that the collateral source rule applies to a contract case when such a case involves an underlying tort, such as the instant case, where the trial court awarded breach of contract damages in addition to specifically finding the subcontractor negligent).

Demands and Offers

Plaintiff §998 Demand: $400,000
Defendant §998 Offer: Payment of the attorneys’ fee judgment against plaintiff.

Additional Notes

Defendants had no insurance and represented themselves with the help of Bradley Knypstra.