§41.4 Effect of Violation of Ethics Rules

The Case: Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C. , 813 S.W.2d 400 (Tenn. 1991).

The Basic Facts: A law firm was sued by its client for malpractice. An expert claimed that the law firm violated the Code of Professional Responsibility and, indeed, that was the sole basis for the negligence claim.

The Bottom Line:

• "Mehler insists that the Code of Professional Responsibility is the standard of care in a legal malpractice suit and that proof of a violation of the Code is sufficient basis for liability. Mehler's position is that "a violation of the Code itself when coupled with testimony regarding the deleterious results thereof, are and should be sufficient upon which to predicate an action for legal malpractice in Tennessee." 813 S.W.2d at 403 (emphasis added).
• "The initial inquiry, whether the Code is the standard of care in an action based on negligence, is answered by the Code itself. The purpose of the Code is set forth in the Preliminary Statement, which includes the following:

  The Code is designed to be adopted by appropriate agencies both as an inspirational guide to the members of the profession and as a basis for disciplinary action when the conduct of a lawyer falls below the required minimum standards stated in the Disciplinary Rules.
  
  The Disciplinary Rules, unlike the Ethical Considerations, are mandatory in character. The Disciplinary Rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action…. The Code makes no attempt to prescribe either disciplinary procedures or penalties for violation of a Disciplinary Rule, nor does it undertake to define standards for civil liability of lawyers for professional conduct."

  Id . at 403-04 (emphasis added by Court).
• "The Court of Appeals properly held in this case that the Code of Professional Responsibility is not designed to create a private cause of action for infraction of disciplinary rules but is designed to establish a remedy solely disciplinary in nature." Id. at 405.
• "Even though, as set forth above, the Code does not define standards for civil liability, the standards stated in the Code are not irrelevant in determining the standard of care in certain actions for malpractice. The Code may provide guidance in ascertaining lawyers' obligations to their clients under various circumstances, and conduct which violates the Code may also constitute a breach of the standard of care due a client. However, in a civil action charging malpractice, the standard of care is the particular duty owed the client under the circumstances of the representation, which may or may not be the standard contemplated by the Code." Id.
• "Since the Code does not set the standard of care upon which an action for negligence can be based, expert testimony that a lawyer violated provisions of the Code is not sufficient evidence to present an issue of fact for the jury. Such testimony is not evidence of the degree of knowledge, skill, prudence, and diligence which is commonly possessed and exercised by lawyers practicing with regard to the same subject matter in that jurisdiction. The testimony of Professor Freedman and Mr. Walker did not establish the proper standard of care required in an action for professional malpractice. The Court of Appeals properly granted the appellee's motion for directed verdict on this ground." Id. at 407.

Other Sources of Note: Roy v. Diamond, 16 S.W.3d 783 (Tenn. App. 1999) (it was not an abuse of discretion for the trial judge to admit into evidence in a legal malpractice case the findings of fact and judgment in a disciplinary proceeding involving the subject incident; evidence of violation of disciplinary rules may be evidence of a violation of the standard of care).

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