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Attorney Judgment Rule Going to Trial

Posted on Monday, May 14, 2018

In Shannon v Foster Swift Collins & Smith, P.C., former clients brought a legal malpractice suit against the law firm and attorney who represented them in a real estate matter. The circuit court granted the law firm's motion for summary disposition on the ground that the attorney-judgment rule should shield the attorney from malpractice because he gave legal advice in good faith, even though the advice may not have been correct.

The Court of Appeals disagreed with the circuit court and reversed its grant of summary disposition. The Court stated that regardless of whether the attorney based his advice on well-recognized Michigan law, the standard of care still required him to function as an advocate for his clients. In this case, the attorney’s firm represented every bank involved in the real estate transaction, and failed to disclose one of the potential conflicts of interest to his clients. The attorney then convinced his clients to go through with the deal by stating that they would be held to the rent payments under the unsigned contract regardless of their actions. The Court of Appeals held that whether the attorney was acting in a manner consistent with the fiduciary standard of care depending on what a reasonable attorney would have done under the circumstances – a determination that must be made by the jury. Based on the circumstances of this case, the Court reversed and remanded the matter to the circuit court to be tried before a jury. [Judge Fitzgerald would have affirmed the circuit's decision].

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