Jodi Kranendonk v. Gregory & Swapp, PLLC

¶1 This legal malpractice claim involves a case within a case.

Jodi Kranendonk was injured in an Oregon traffic accident. She

retained Gregory & Swapp, PLLC and Erik Highberg (the

Attorneys) to bring a negligence action against two truck drivers

Kranendonk v. Gregory & Swapp, PLLC

2. When reviewing a district court's rulings on a summary

judgment motion, we recite all facts and fair inferences in the light

most favorable to the nonmoving party. Poteet v. White, 2006 UT 63,

¶ 7, 147 P.3d 439.

3. An attorney or party who signs or submits a pleading in Oregon

certifies, "based on the person's reasonable knowledge,

information and belief, formed after the making of such inquiry as

(continued...)

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(the Truckers). The Attorneys twice failed to perfect service of

process on the Truckers; as a result, Kranendonk's Oregon

negligence case was ultimately dismissed. Kranendonk sued the

Attorneys in Utah for malpractice and fraud. The Attorneys admit

that they mishandled the Oregon case but maintain that because

that case lacked merit, no damages resulted.

¶2 On summary judgment, the district court ruled that

Kranendonk failed to raise a genuine issue of material fact as to

liability but succeeded in raising a genuine issue of material fact as

to damages. We reverse the first ruling and affirm the second.

BACKGROUND2

¶3 Kranendonk is a resident of Utah. In June 2006 she was

injured in a multi-vehicle accident in Clackamas County, Oregon.

Heavy traffic brought her car and others to a complete stop. Two

trucks, driven by the Truckers, struck the stopped traffic.

Kranendonk was injured.

¶4 Kranendonk retained Gregory & Swapp, PLLC, a Utah law

firm, to sue the Truckers. Gregory & Swapp assigned the case to

Erik Highberg, a lawyer licensed in Oregon. In 2007 the Attorneys

filed a complaint in Clackamas County, Oregon, on behalf of

Kranendonk. But because 3 they failed to perfect service within sixty

Kranendonk v. Gregory & Swapp, PLLC

3. (...continued)

is reasonable under the circumstances . . . that the allegations and

other factual assertions in the pleading . . . are supported by

evidence.” See Or. R. Civ. P. 17C(1), (4).

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days, the complaint was dismissed. A year later the Attorneys filed

a second complaint but again failed to perfect service within sixty

days. Consequently, that complaint was also dismissed. Under the

applicable Oregon statute of limitations, the second dismissal was

fatal to Kranendonk's Oregon claim. The following year the

Attorneys filed a third complaint, this time in Klickitat County,

Washington, seeking to take advantage of that state's longer statute

of limitations. The Washington court dismissed the complaint on

res judicata grounds. At that point the Attorneys disclosed to

Kranendonk that because they had not timely served the Truckers,

her negligence claim was time-barred. Kranendonk fired the

Attorneys and retained her current counsel.

¶5 Relying on the Oregon savings statute, Kranendonk's

current counsel filed yet another complaint in Oregon, which they

later amended. The Truckers filed answers to the amended

complaint. Those answers admitted that "the motor vehicle

accident was caused by the joint fault” of the Truckers. The

Truckers also apparently stipulated to an allocation of their fault.

Their answers also asserted a statute of limitations defense. The

case proceeded to trial, where the jury accepted the statute of

limitations defense and thus rendered no verdict on the merits.

Kranendonk's complaint was consequently dismissed.

¶6 Kranendonk then filed this legal malpractice action against

the Attorneys. The Attorneys admitted "professional negligence”

but moved for summary judgment on the grounds that

Kranendonk (1) had not made a prima facie case that "there was a

viable claim which was lost” as a result of the malpractice and

(2) had not presented evidence of what a Clackamas County jury

"would award even if they found full liability.”

Kranendonk v. Gregory & Swapp, PLLC

20120660-CA 4 2014 UT App 36

¶7 The district court granted summary judgment in part. With

respect to liability, the court ruled that Kranendonk had not raised

a genuine issue of material fact. The court noted that Kranendonk

had "relie[d] on two sources of evidence to establish fault or

liability of [the Truckers]”: Kranendonk's own deposition and the

Truckers' answers. The court ruled that Kranendonk's deposition

did not independently raise a genuine issue as to liability and that

the answers were inadmissible hearsay. Accordingly, it ruled that

Kranendonk had not made a prima facie case that her underlying

negligence case would have been successful but for the Attorneys'

malpractice. Kranendonk challenges this ruling on appeal.

¶8 With respect to damages, the court ruled that Kranendonk

had raised a genuine issue of material fact. The court ruled that

Kranendonk was not required to show what a Clackamas County

jury might award. Accordingly, the district court ruled that

Kranendonk had presented evidence sufficient to meet her burden

and thus create a genuine issue of material fact as to damages in the

underlying case. The Attorneys challenge this ruling on crossappeal.

ISSUES AND STANDARDS OF REVIEW

¶9 Kranendonk contends that she presented sufficient evidence

to raise a genuine issue of material fact as to liability in the Oregon

negligence case. "An appellate court reviews a trial court's legal

conclusions and ultimate grant or denial of summary judgment for

correctness and views the facts and all reasonable inferences drawn

therefrom in the light most favorable to the nonmoving party.”

Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citations and internal

quotation marks omitted).

¶10 The Attorneys contend that Kranendonk should have been

required to present evidence of the damages a jury in Clackamas

County would award. "Whether the district court applied the

correct rule for measuring damages is a question of law that we

Kranendonk v. Gregory & Swapp, PLLC

20120660-CA 5 2014 UT App 36

review for correctness.” Mahana v. Onyx Acceptance Corp., 2004 UT

59, ¶ 25, 96 P.3d 893.

ANALYSIS

¶11 A court may grant summary judgment only "if the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law.” Utah R. Civ. P. 56(c); see

also Gardner v. Board of County Comm'rs, 2008 UT 6, ¶ 17, 178 P.3d

893. "'Conversely, if there is any dispute as to any issue, material

to the settlement of the controversy, the summary judgment should

not be granted.'” Hone v. Advanced Shoring & Underpinning, Inc.,

2012 UT App 327, ¶ 6, 291 P.3d 832 (quoting Holbrook Co. v. Adams,

542 P.2d 191, 193 (Utah 1975)).

I. Liability in the Oregon Case

¶12 "In a legal malpractice action, a plaintiff must plead and

prove (i) an attorney–client relationship; (ii) a duty of the attorney

to the client arising from their relationship; (iii) a breach of that

duty; (iv) a causal connection between the breach of duty and the

resulting injury to the client; and (v) actual damages.” Harline v.

Barker, 912 P.2d 433, 439 (Utah 1996). To prove proximate cause, the

plaintiff "must show that absent the attorney's negligence, the

underlying suit would have been successful.” Id.

¶13 Here, the Attorneys argue that Kranendonk offered no

evidence that, absent their negligent conduct, the underlying suit

would have been successful—specifically, that she could have

shown that the Truckers were at fault and caused her injuries. The

district court agreed and granted summary judgment on this

ground. Kranendonk contends that the district court erred in

determining that she had "failed to provide competent evidence to

establish liability” in the Oregon case. She argues that she offered

Kranendonk v. Gregory & Swapp, PLLC

20120660-CA 6 2014 UT App 36

two forms of evidence, each sufficient to create a genuine issue of

material fact: her deposition testimony and the Truckers' answers.

A. Kranendonk's Deposition

¶14 Kranendonk contends that her deposition testimony was

sufficient to defeat the Attorneys' motion for summary judgment.

The district court ruled that the deposition "only establishes that

[she] was in an accident but fails to establish fault or liability” in the

Oregon case. The Attorneys maintain that the district court's ruling

was correct because, "[o]utside of [this] unreliable testimony, there

were no designated eyewitnesses, police officers, accident

reconstruction experts or anybody to explain what happened in the

Oregon accident.”

¶15 "[A] district court should grant summary judgment only

when, viewing all facts and reasonable inferences therefrom in the

light most favorable to the nonmoving party, there is no genuine

issue as to any material fact and . . . the moving party is entitled to

a judgment as a matter of law.” Suarez v. Grand County, 2012 UT 72,

¶ 18, 296 P.3d 688 (citation and internal quotation marks omitted).

And while a plaintiff facing summary judgment "is entitled to all

favorable inferences, [she] is not entitled to build a case on the

gossamer threads of whimsy, speculation and conjecture.” Ladd v.

Bowers Trucking, Inc., 2011 UT App 355, ¶ 7, 264 P.3d 752 (citation

and internal quotation marks omitted). A reasonable inference

exists when "there is at least a foundation in the evidence upon

which the ultimate conclusion is based,” while "in the case of

speculation, there is no underlying evidence to support the

conclusion.” Harding v. Atlas Title Ins. Agency, Inc., 2012 UT App

236, ¶ 7, 285 P.3d 1260. Thus, "it only takes one sworn statement

under oath to dispute the averments on the other side of the

controversy and create an issue of fact.” Draper City v. Estate of

Bernardo, 888 P.2d 1097, 1101 (Utah 1995) (citation and internal

quotation marks omitted); accord Anderson Dev. Co. v. Tobias, 2005

UT 36, ¶ 32, 116 P.3d 323; Wolf Mountain Resorts, LC v. ASC Utah,

Inc., 2011 UT App 425, ¶ 12, 268 P.3d 872.

Kranendonk v. Gregory & Swapp, PLLC

20120660-CA 7 2014 UT App 36

¶16 Kranendonk's deposition is a sworn statement. In it, she

describes driving on a sunny day over dry pavement. The vehicles

ahead of her stopped due to heavy rush-hour traffic and she

brought her own vehicle to a complete stop. She was belted in, her

foot on the brake, her hands on the steering wheel. She testified

that, a few seconds later, "I looked in the mirror and here comes

the truck. I didn't even get time to lean over and tell my mom

before he hit us.” Her car was hit in the rear, "pushed to the right

side,” and then "sideswiped” by "[a]nother semi.” The impact

knocked her vehicle across two lanes.

¶17 The law in several states recognizes a rebuttable

presumption that when a stopped vehicle is rear-ended by a

following vehicle, the driver of the following vehicle was negligent.

See, e.g., Huntoon v. TCI Cable of Colo., Inc., 969 P.2d 681, 687 (Colo.

1998); Eppler v. Tarmac America, Inc., 752 So. 2d 592, 594 (Fla. 2000);

Andrade v. Housein, 810 A.2d 494, 498 (Md. Ct. Spec. App. 2002);

White v. Taylor Distrib. Co., 753 N.W.2d 591, 593–94 (Mich. 2008);

Gutierrez v. Trillium USA, LLC, 974 N.Y.S.2d 563, 565 (App. Div.

2013). Oregon has not adopted this presumption, holding that such

questions are for the jury. See, e.g., Fischer v. Kombol, 752 P.2d 349,

350–51 (Or. Ct. App. 1988) (holding that a lack of evidence that the

lead car stopped suddenly did not entitle the driver of that car to

a finding that the driver of the following car was negligent as a

matter of law); Winn v. Fry, 714 P.2d 269, 270 (Or. Ct. App. 1986)

(affirming trial court's refusal, in rear-end collision case, to instruct

the jury that the driver of the following car was negligent as a

matter of law). Like Oregon, Utah has not adopted this

presumption. See King v. Fereday, 739 P.2d 618, 620 (Utah 1987).

¶18 Nevertheless, our supreme court has stated "that in most

cases where one car 'rear ends' another it accords with common

sense and experience to believe that the following car has

disregarded the duty to keep a lookout ahead and keep the car

under control and is, therefore, at fault.” Bullock v. Ungricht, 538

P.2d 190, 191 (Utah 1975); cf. Mann v. Fredrickson, 2006 UT App 475,

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¶ 8, 153 P.3d 768 (upholding a jury verdict finding that in a rearend

collision, the driver of the following vehicle acted reasonably).

¶19 Thus, even without the benefit of such a presumption,

Kranendonk's deposition testimony, viewed "in the light most

favorable to the nonmoving party,” Suarez, 2012 UT 72, ¶ 18

(citation and internal quotation marks omitted), provides a

sufficient "foundation in the evidence upon which the ultimate”

inference of negligence may be based, Harding, 2012 UT App 236,

¶ 7. She describes an accident in which, approaching stopped

traffic, she brought her car to a complete stop but was rear-ended

by one fast-moving truck then side-swiped by another. Under these

circumstances, a reasonable jury could conclude that the driver

who stopped her car in time to avoid a collision was not negligent

and the drivers who failed to stop their trucks and crashed into the

stopped vehicles were negligent.

¶20 "[S]ummary judgment is appropriate in negligence cases

only in the clearest instances.” Dwiggins v. Morgan Jewelers, 811 P.2d

182, 183 (Utah 1991). Therefore, "[i]t is only when the facts are

undisputed and but one reasonable conclusion can be drawn

therefrom” that proximate cause becomes a question of law. Apache

Tank Lines, Inc. v. Cheney, 706 P.2d 614, 615 (Utah 1985). This case

is not so clear-cut. Kranendonk's deposition testimony at least

raised a genuine issue of material fact as to whether the Truckers

were negligent and whether their negligence caused her injuries.

B. The Truckers' Answers

¶21 Kranendonk also contends that the Truckers' answers,

submitted in response to the Attorneys' motion for summary

judgment, were sufficient to raise a genuine issue of material fact

as to fault and causation. The Truckers' answers each

"admit[] . . . that the motor vehicle accident was caused by the joint

fault of [the Truckers] in an agreed allocation.”

Kranendonk v. Gregory & Swapp, PLLC

4. The court did not reject the answers as untimely filed or as

lacking authentication.

20120660-CA 9 2014 UT App 36

¶22 The district court ruled that the answers were inadmissible

hearsay on the ground that the "[a]nswers were signed by counsel

for [the Truckers].”4 Kranendonk argues that the answers are not

hearsay on several grounds: because they are judicial admissions,

because the attorneys who signed them were authorized agents of

the Truckers, and because the answers are statements by opposing

parties. Kranendonk further asserts that even if the answers are

hearsay, they are admissible as self-authenticating public records,

as statements against interest, and under the residual hearsay

exception. We conclude that the answers are judicial admissions

and thus not hearsay.

¶23 "Hearsay is an out-of-court statement offered to prove the

truth of the matter asserted in the statement.” State v. McNeil, 2013

UT App 134, ¶ 44, 302 P.3d 844; see also Utah R. Evid. 801(c).

"Hearsay is generally inadmissible because the witness 'is acting as

a conduit to relay' the personal knowledge or observations of

others.” Id. (quoting State v. Sibert, 310 P.2d 388, 390 (Utah 1957)).

However, an admission in a pleading is not generally viewed

merely as the attorney's retelling of the client's out-of-court

statement; rather, it is "a judicial admission” that is "normally

conclusive on the party making it.” Baldwin v. Vantage Corp., 676

P.2d 413, 415 (Utah 1984). Likewise, under Oregon law, pleadings

are "not mere ordinary admissions . . . but judicial admissions . . . ;

i.e., they are not means of evidence but a waiver of all controversy

(so far as the opponent may desire to take advantage of them) and

therefore a limitation of the issues.” Borgert v. Spurling, 230 P.2d

183, 187 (Or. 1951); see also Linefsky v. Redevelopment Auth., 698 A.2d

128, 133 (Pa. Commw. Ct. 1997) ("It is well established that judicial

admissions are admissible as exceptions to the hearsay rule and

may arise from a party's statement in his pleadings.”).

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¶24 In keeping with the foregoing principles, our supreme court

has held that an answer and counterclaim were not subject to the

hearsay rule. See Condas v. Condas, 618 P.2d 491, 494–95 (Utah 1980),

disapproved on other grounds by White Pine Ranches v. Osguthorpe, 731

P.2d 1076, 1076–79 (Utah 1986) (discussing admissibility of abstract

of record). In Condas, defendants objected to the admission of an

answer and counterclaim, arguing that it was inadmissible under

any exception to the hearsay rule. Id. at 495. The answer and

counterclaim had been filed in a prior action by a non-party to the

current case. Id. at 492–93. Our supreme court rejected the hearsay

argument out of hand: "Though defendants have discussed this

point in detail under several exceptions to the hearsay rule, we do

not do so, as it is admissible as a judicial admission.” Id. at 495

(citing McCormick's Handbook of the Law of Evidence § 265 (Edward

W. Cleary ed., 2d ed. 1972)).

¶25 We accordingly hold that the Truckers' answers are

admissible to show that the Truckers conceded the issues of fault

and causation. We agree with Kranendonk that "the answers are

the best evidence of what would have happened in the underlying

case because the Truckers are bound by their own admissions.”

Because we determine that the answers were "admissible

as . . . judicial admission[s],” we need not consider whether any

hearsay exceptions apply. Id.

¶26 Kranendonk's deposition testimony and the Truckers'

answers raised a genuine issue of material fact as to the Truckers'

liability in the underlying negligence case. Accordingly, we reverse

the district court on this issue.

II. Proving Damages

¶27 The Attorneys cross-appeal, contending that the district

court erred by ruling "that the Utah jury could set the value of the

lost personal injury claim without any reference to where the claim

arose.” In moving for summary judgment, the Attorneys argued

that Kranendonk was required to prove "the value of her

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20120660-CA 11 2014 UT App 36

underlying case” and therefore must show what a Clackamas

County jury "would award if she was successful.” Because

Kranendonk made no such showing, the Attorneys argued, she

failed to raise a genuine issue of material fact as to her damages.

The district court rejected this argument.

¶28 In a malpractice case, the plaintiff must prove the "trialwithin-

a-trial”; that is, the plaintiff "must show that absent the

attorney's negligence, the underlying suit would have been

successful.” Harline v. Barker, 912 P.2d 433, 439–40 (Utah 1996). The

measure of damages is generally held to be the value of the

plaintiff's lost claim, that is, the actual amount the plaintiff would

have recovered had she been successful in the underlying case. See

Eastman v. Messner, 721 N.E.2d 1154, 1158 (Ill. 1999); Schultheis v.

Franke, 658 N.E.2d 932, 939–40 (Ind. Ct. App. 1995); Campagnola v.

Mulholland, 555 N.E.2d 611, 613 (N.Y. 1990); 3 Ronald E. Mallen &

Jeffrey M. Smith, Legal Malpractice § 21.1, at 3 (2013 ed.).

¶29 In determining what the outcome of the trial-within-a-trial

would have been, an "objective standard” applies; the purpose of

the trial-within-a-trial is to determine "not what a particular judge

or jury would have decided (a subjective standard),” but what the

result "should have been.” Harline, 912 P.2d at 440 (holding that a

malpractice plaintiff was not entitled to a have a jury decide how

a reasonable bankruptcy judge would have ruled); 4 Mallen &

Smith, Legal Malpractice § 37.30, at 1731. "Because the standard is

objective, neither the identity, idiosyncrasies nor opinions of the

particular trier of fact [are] relevant . . . .” 4 Mallen & Smith, Legal

Malpractice § 37.30, at 1731.

¶30 We agree with the district court that this rule applies even

across state lines. Under the Harline objective test, the trier of fact

must determine not what a particular jury—for example, a

Clackamas County jury—would have awarded Kranendonk in

damages but what a reasonable jury should have awarded her.

Kranendonk v. Gregory & Swapp, PLLC

5. The Attorneys also argue that Oregon law concerning such

issues as comparative negligence and damage caps applies here.

However, because the district court did not rule on this question,

we do not address it.

20120660-CA 12 2014 UT App 36

¶31 And contrary to the Attorneys' argument, we see nothing in

this conclusion that runs afoul of our supreme court's

pronouncement, in a different context, "that each state retains the

right and the responsibility to draw on its own values and

traditions when assessing the reprehensibility of tortious conduct

for the purpose of reviewing the propriety of a punitive damages

award, so long as that review conforms to . . . the demands of due

process.” Campbell v. State Farm Mut. Auto. Ins. Co., 2004 UT 34,

¶ 46, 98 P.3d 409.

¶32 We therefore affirm the district court's ruling that

Kranendonk was not required to present expert testimony on the

amount a Clackamas County jury would award to survive the

Attorneys' motion for summary judgment.5

¶33 Kranendonk’s deposition testimony provided a sufficient

foundation for the ultimate inference that the Truckers were liable

for her injuries. The Truckers’ answers were not hearsay, because

they were judicial admissions. The answers also support

Kranendonk’s claim that the Truckers’ fault caused the accident.

Accordingly, we reverse the partial summary judgment on the

basis that disputed issues of material fact remain. We affirm the

district court’s ruling that Kranendonk was not required to present

expert testimony regarding Clackamas County community values

and previous jury awards to support her damages claim.