WOOD V. MCGRATH, NORTH, MULLIN & KRATZ, P.C. 589 N.W.2d 103 (1999) CASE BRIEF

WOOD V. MCGRATH, NORTH, MULLIN & KRATZ, P.C.

589 N.W.2d 103 (1999)

NATURE OF THE CASE: This was a dispute over the doctrine of judgmental immunity and its application.

FACTS: P sued D for legal malpractice alleging that one if its attorneys had negligently represented her in a dissolution action. P alleged that D allowed her to accept less than her share of the marital estate and was negligent in informing her that the distribution excluded all rights to unvested stock options, that state law indicated that a trial court was likely to include them in the marital estate, and that the settlement excluded $210,489 from the marital estate to account for the capital gains on that stock and that the court would likely value the stock without deducting for any potential capital gains tax. At trial P testified that D told her, that the 40% award was good as a judge would order between 35-50%. D testified that P never discussed or mentioned alternatives to settlement nor discussed any reasons to reject the proposed out of court settlement. Two attorneys testified that D breached the standard of care in that D failed to inform P of all the issues related to the stock options and that the effect of the deduction taken for the capital gains tax and what trial courts would generally do with such issues. They determined that D breached the standard of care because D did not fully inform his client. At the close of evidence, D moved for a directed verdict. It was granted and P appealed. The appeals court held that judgmental immunity was applicable as the law regarding the stock and the capital gains was unsettled and as such, D was not obligated to give additional advice regarding the unsettled nature of relevant legal principles.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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