Update: On December 7, 2016, the Supreme Court of Ohio handed down a merit decision in this case. Read the analysis here.
“Obviously, we’ve got more reading to do, because this appears to be a train wreck of almost Biblical proportions,” Acting Chief Justice Pfeifer, to both counsel at the end of the argument.
On February 23, 2016, the Supreme Court of Ohio heard oral argument in the case of Lorna B. Ratonel et al v. Roetzel & Andress, LPA, et al. At issue in this legal malpractice case is when, how, and whether an attorney may and did limit the scope of an attorney-client relationship.
Chief Justice O’Connor recused herself from the case. Supreme Court justices need give no reasons for recusal. Justice Pfeifer, as senior associate justice on the court, was acting Chief for the argument. It showed in this prolonged argument; he has a far folksier style than the Chief. Sitting on the court for this argument in the Chief’s stead (but not as Chief) was Judge Betsy Luper Schuster of the Tenth District Court of Appeals in Columbus.
In 2007, Lorna Ratonel engaged the services of the law firm of Keating, Muething & Klekamp (“KMK”) to help Ratonel acquire a multi-family apartment complex in Dayton, Ohio known as the Holden House, and another apartment complex in Nebraska, known as the French Village. According to Ratonel, KMK committed legal malpractice in the acquisition of these properties, causing her significant financial losses.
Ratonel then engaged attorney Mark Ropchock of Roetzel & Andress, LPA (Collectively, “R&A”), to pursue a legal malpractice action against KMK. The two parties entered into a written engagement agreement for the provision of legal services with regard to the Holden House transaction, though the contract also noted that the parties could mutually agree to include additional services that were not specified in the agreement.
On May 13, 2009, Ropchock, on behalf of Ratonel, filed a complaint against KMK. The complaint related entirely to Holden House, except for a single paragraph which alleged a claim related to the French Village Apartments. Further emails between Ropchock and Ratonel discussed KMK’s handling of the French Village property. On January 26, 2010, Ropchock emailed Ratonel a draft settlement demand letter that included liability for French Village. On April 30, 2010, however, Ropchock sent an email to Ratonel, advising her that “there is no viable claim against KMK on [French Village],” because any damages were too speculative, and because of the lack of an expert on liability. The May 11, 2010 demand letter Ropchock did send made no mention of French Village. On August 8, 2010, Ropchock filed an amended complaint, in which any claim against French Village was removed.
The case was tried before a jury in October 2010. The trial court directed a verdict in favor of KMK, finding that Ratonel failed to present competent evidence regarding proximate cause and damages. The parties then entered into a settlement agreement. In exchange for Ratonel’s agreement to forgo an appeal, KMK agreed to dismiss its counterclaim for attorney fees. Thereafter, Ratonel and Ropchock exchanged emails in which Ratonel stated that she did not understand what had happened to cause the trial to end. She also accused Ropchock of pressuring her into accepting the settlement. Ratonel then hired another law firm to initiate a lawsuit against Ropchock and R&A for legal malpractice, claiming that Ropchock (i) erroneously advised Ratonel that the French Village claims were not viable, and (ii) dismissed the French Village claims with prejudice, without ever informing Ratonel of the dismissal, or even suggesting that she seek other counsel to pursue the claims.
The trial court rendered partial summary judgment in favor of Ropchock and R&A with regard to the claims concerning French Village, concluding that the alleged malpractice was outside the scope of Ropchock’s representation of Ratonel, and concluding that Ropchock refused to represent Ratonel with respect to any claims regarding French Village. At the request of the parties, the trial judge certified that there was no just cause for delay of the appeal. The claims against Holden House remain pending.
In a split decision authored by Judge Fain, joined by Judge Froelich, the Second District Court of Appeals reversed the trial court’s summary judgment order, finding that there were genuine issues of material fact on whether Ropchock undertook representation of Ratonel on the French Village claim, and on whether that representation was terminated. Judge Hall dissented, agreeing with the trial court that there was no genuine issue of material fact on the scope of the representation.
At Oral Argument
David C. Greer, Bieser, Greer & Landis, LLP, Dayton, for Appellants Roetzel & Andress LPA and Mark A. Ropchock
David M. Deutsch, Dayton, and Sam G. Caras, Sam G. Caras Co., LPA, Dayton, for Appellees Lorna B. Ratonel, Carmalor Ohio, LLC and Carmalor, Inc.
The legal issue in this case is a lawyer’s right to limit the lawyer’s representation. The limits of a lawyer’s responsibility should be defined by the scope of that lawyer’s undertaking. That is so basic there should be no disagreement about it. Nor are there any disputed factual issues on any determinative actions in this case, which is why the court of appeals must be reversed and the trial court affirmed. The trial court correctly found that Ropchock had effectively limited his representation, and in a manner the client understood.
There are four things that defined the scope of the lawyer’s undertaking in this case, which was strictly limited to Holden House. 1) The written engagement agreement says that the engagement is in connection with the purchase of the Holden House apartments in Dayton; 2) the complaint that was filed shortly after the engagement agreement makes abundantly clear that the only claims being asserted are with regard to Holden House; 3) Ratonel’s deposition testimony under oath makes it unmistakably clear that she knew the representation was only about Holden House; and 4) Ratonel protesting throughout the representation that she wanted to sue on French Village also, which confirms her understanding that the representation was limited to the Holden House.
Ropchok told Ratonel on a number of occasions that he was not representing her on the French Village matter. She just didn’t seem to understand the word “no.” Emails and drafts and unsent demand letters that mention French Village do not change this. Even with a limited representation, a lawyer has to be able to discuss freely any topic the client may have without being deemed to have fallen into inadvertent representation.
The court of appeals decision in this case casts a shadow on all the lawyers in the state who seek to limit the scope of their representation. This is a big policy issue that the court needs to address. What is not in the rules of professional conduct about limited representation is where the parameters of a limited engagement letter are, as a matter of law, and how to avoid inadvertent exposure to a legal malpractice claim.
It is clear beyond dispute that the representation in this case was limited. The court of appeals has opened the door to inadvertent exposure to malpractice litigation for lawyers and did so in a manner that was not only harmful to the bar of this state, but harmful to clients of lawyers because it disincentivizes lawyers from taking cases. Limited representation is both proper and appropriate; whenever that scope of representation is defined without ambiguity in a written engagement agreement it should be upheld.
Ratonel’s argument was divided. I’ve said many times that this seldom works well, and in this case it did not at all. The opening portion by Mr. Deutsch, presumably to discuss why there was not a final appealable order in the case, would have been better had it been skipped. It was rambling, unfocused, and internally inconsistent.
Mr. Caras carried the bulk of the argument. He went into tremendous and lengthy detail about Ratonel’s background, (unsophisticated) and the exact nature of the malpractice by KMK—all of debatable relevance to the issue at hand, but a fine jury speech.
The engagement in this case was not limited just to the Holden House. That letter also included the provision, “should you decide to retain our firm for additional services not specified in this letter, we would be pleased to provide such services under such terms as you and we may agree.” Ropchock knew the representation included French Village. He did something that is one of the prima indicia of representation of a client—he went into court on behalf of a client and made an allegation. He filed a complaint that included an allegation against French Village. After he did that he never told Ratonel he had only done that for strategic reasons, or anything like that.
After Ropchock expanded the scope of the representation, and filed the complaint, there is not one instance before April 30, 2010, where Ropchock told Ratonel that he was not interested in representing her about the French Village. But just months before trial, because he knew he didn’t have an expert, he filed an amended complaint and dropped the French Village claim on April 30, 2010. So any claim against French Village is now time-barred.
It is time honored law in Ohio that a lawyer by his or her actions can expand the scope of representation. That is what happened here. This court should actually render judgment in favor of Ratonel because there are no genuine issues of material fact with respect to the scope of the representation.
What Was On Their Minds
The Engagement Letter and Limited Representation
How do we write that a lawyer should write an engagement letter and define the scope of the lawyer’s responsibilities, asked Justice O’Donnell? In a key comment of the day, he noted that the court already has that provision in its rules, and that lawyers were disciplined for not doing that. Later, he asked whether the engagement letter was limited to Holden House or not. (clearly, the parties differ on this) Did the engagement agreement state that the scope of the representation can be expanded by mutual consent?
It would not be uncommon for a lawyer to look at the other problems a client has and say, I don’t think you have a case, or it’s in Nebraska and I don’t want to deal with it, or any number of things—but if the lawyer looks at it, and tells the client he doesn’t think she has a case, isn’t that legal representation, asked Justice Pfeifer?
Was R&A saying that an attorney’s actions can never expand a limited engagement agreement, asked Judge Schuster? (no, he wasn’t, just that it didn’t happen here.)
Does a contract with a specific limitation in it, referring to one specific matter, cover other claims that derive from it, asked Justice French? Later, she noted that the engagement letter didn’t say any expansion of the engagement had to be in writing, only that it be mutually agreed upon.
Is the sentence in the engagement letter that states the parties can take on other matters by mutual agreement the only thing that expands the representation beyond Holden House, asked Justice Lanzinger? Could this case be written to explain to lawyers how to limit their representation?
What is On Appeal
Is French Village the only issue that went to the court of appeals on summary judgment, asked Justice Pfeifer? Is the only issue before this court whether or not Roetzel and Andress was representing Ratonel on the French Village Property?
Is this just a matter of the court of appeals not reading the documents carefully, asked Justice O’Donnell? What is the legal issue in the case? Should it be remanded to the trial court for a determination of scope of representation? What should the court do here? Reverse the court of appeals? Send the matter back to the trial court?
Didn’t the court of appeals disagree with the trial court? Wasn’t their reversal because they thought there were factual issues and summary judgment shouldn’t have been granted, asked Judge Schuster?
Should the court specifically address the issue of an open-ended statement that the agreement can be expanded by mutual consent, asked Justice Lanzinger? Should the court require all limitations to be put in writing?
Drowning in Facts
Isn’t what is before the court just a factual dispute, with no law to write, asked Justice Pfeifer (and later Justice O’Donnell). Mr. Greer insisted there was law to be written. Later, he commented that there appeared to be two cases here-one case that tells us this is about the scope of the engagement, and another case with all of the facts in it.
Didn’t one paragraph of the complaint reference this property, asked justice Pfeifer? And wasn’t there reference to this property in a demand letter, which was not sent? At some point the lawyer told the client, we are just flat out not handling that? Had the statute of limitations run on this claim when it was dismissed in the amended complaint? If Ropchock wasn’t going to the mat on French Village, didn’t he need to make sure Ratonel understood that she needed another lawyer to take action in a timely fashion?
What more should have been done to make it clear the representation did not include French Village, asked Justice Lanzinger?
Was there an email exchange that expanded the representation to French Village, asked Justice O’Donnell? Did deleting the claim about French Village from the amended complaint abrogate that claim permanently?
The Underlying Malpractice
Was the Keating firm also serving as financial advisors or real estate appraisers or anything of the kind in all of this, asked Justice Pfeifer? (answer: no) Is the problem that the client wasn’t told that the above-market money that these units were generating because they had HUD subsidies going on, was going to expire before the loan was paid off?
Does the complaint in this case cover both Holden House and French Village, asked Justice O’Donnell?
Is there a final appealable order in this case, asked Justice O’Neill?
If there is a denial of summary judgment that is not final and appealable, commented Justice French. But has this court ever said that if you appeal the grant of summary judgment and you lose, that is not a final appealable order for the purposes of coming to this court?
How it Looks from the Bleachers
To Professor Bettman
I’m calling this for Ratonel. By calling it for Ratonel, I mean the court of appeals will likely be affirmed, and the case sent back for a trial on whether or not the limited representation was expanded to include the French Village property. Did Ropchok, by his actions, exceed the scope of a limited engagement? Did Ratonel reasonably believe he did? I think those factual issues are on the table.
Justice Pfeifer, presiding with the Chief in recusal on the case, really got into the weeds in this case. The first eight minutes of the argument were entirely between him and the eminently respected David Greer. That’s a long stretch for a single questioner.
It is already established law in Ohio that a lawyer can limit the scope of a representation. Prof. Cond. Rule 1.2(c) states that a lawyer may limit the scope of a new or existing representation if the limitation is reasonable under the circumstances and communicated to the client, preferably in writing. Contrary to Mr. Greer’s dire warnings, I don’t think this case is going to cast a shadow over the legal profession or limit access to justice. It may cause more careful drafting, such as requiring any expansion of a limited engagement to be written also, signed by both parties, so there is no dispute about whether the expansion is mutually agreed upon. The high court could write such a rule here, but even if it doesn’t, that certainly would be a best practice.
After listening to this incredibly messy argument, I became persuaded that there is indeed a genuine issue of material fact on the question of whether the original limited representation was expanded by certain actions taken by Ropchock, such as including a reference to French Village in the original complaint and then deleting it in the amended complaint, and by the email which included a draft settlement demand letter that included French Village, and that Ratonel relied on these things. Generally, disputes over the question of inadvertent representation should be viewed from the point of view of the client. What did Ratonel think about those things? Let a jury decide. Mr. Greer’s client may well prevail after all the evidence is in, but surely all that evidence should be heard.
On the issue of the final appealable order, it is a bit puzzling why the trial court certified this as no just cause for delay since the claim against Holden House remains to be adjudicated. Unfortunately, Mr. Deutsch wasn’t clear in the argument he was trying to make about this, but the no-final-appealable-order argument didn’t seem to have any legs. In addition, he and Mr. Caras didn’t seem to agree on what relief should be granted—he ultimately agreed that the case needed to go back to the trial court (more likely); Mr. Caras argued that the court should find for Ratonel as a matter of law (totally unlikely.)
To Student Contributor Michael Elliott
Justice Pfeifer described this case as a “train-wreck of almost biblical proportions” and I am inclined to agree. The case seemed easy to understand on its face but proved a nightmare to decipher, and a few of the justices seemed unsure how to handle it. To me, this is a clue that the court is going to punt on this one, allowing the case to go to trial.
If I had to call a winner in this case based on the strength of the arguments, I would say that R&A was the clear winner. Counsel for R&A leaned heavily on his public policy argument, arguing that attorneys must be able to limit the scope of representation in their engagement letters. He blamed Ratonel for any confusion, and argued that Ropchock repeatedly informed her that he would not undertake the French Village claims. Judge Schuster, filling in for the Chief Justice, asked whether his argument meant that attorneys’ actions could never bring them beyond the scope of a limited engagement agreement. Counsel for R&A responded in the negative, but argued that in this case Ropchock had clearly limited the scope of the representation.
On the other side of the case, two attorneys presented Ratonel’s argument. I’m generally not a fan of dividing time between two different attorneys, and this argument illustrates why. Ratonel’s first lawyer presented a disjointed argument that at times seemed to contradict itself. He first argued, after some prodding by Justices Pfeifer and O’Donnell, that this case should be dismissed to the trial court to determine, based on the facts of the case, the scope of R&A’s representation. The second counsel argued that the court should instead render a judgment in favor of Ratonel because there are no genuine issues of material fact. Further, a key part of the argument for Ratonel- that the R&A attorney extinguished Ratonel’s right to bring a claim against KMK for the French Village malpractice because he left that issue out of his amended complaint, was not mentioned until near the end of the allotted time.
There were a few clues that lead me to believe that the court will not make a ruling as a matter of law. First, both Justice O’Neill and Justice Pfeifer did not want to take this case, and Justice O’Donnell seemed unsure on what the court’s ruling would look like. Finally, there seems to be some general confusion from the rest of the court on how it should rule as well. I think it’s likely that the court will not render a decision on this issue, and allow the trial court to rule on the facts of this case.