N.C. Judge Throws Out All Malpractice Charges in Attorney Free-for-All

A federal judge in North Carolina has thrown out all attorney malpractice charges exchanged in a free-for-all battle in which a woman hired a new lawyer to sue her previous two sets of attorneys and those law firms accused the new attorney — and each other — of negligence.

In the process of sorting out and throwing out each claim, the judge addressed an issue of first impression under North Carolina law. He found that a client's previous counsel cannot sue the succeeding lawyer for negligence for failing to preserve the client's right to appeal.

Plaintiff Lisa Shealy originally hired defendant Robert Shaver Jr. of Floyd & Jacobs to defend her against charges of alienation of affection and criminal conversation in North Carolina state court in the underlying action. After that court entered a default against Shealy, she fired Shaver and got another attorney — defendant John Lunsford of Greensboro, N.C. — to defend her in a default judgment hearing.

After a default judgment of $2 million was entered against her, Shealy fired Lunsford and hired Desa Ballard of West Columbia, S.C., who filed malpractice charges against the previous attorneys. They fired back counterclaims of negligence and contribution. Lunsford also filed cross-claims against Shaver and Floyd & Jacobs.

The U.S. District Court for the Middle District of North Carolina ruled that none of the claims and cross-claims had merit because they did not show that any action or inaction by the attorneys resulted in harm to anyone.

Since a clerk apparently entered the default in error, Shealy was not injured by her attorney, the court said. Similarly, Ballard cannot be liable for failing to preserve the record on appeal because she was hired to sue the previous attorneys, the court said.

"There is reason to believe that if faced directly with the issue, North Carolina courts would find it to be against state policy to allow a former counsel to sue a successor counsel for indemnification or contribution," the opinion said. "If an attorney whose primary duty is to promote the cause of his client in a light most favorable to him within the bounds of the law is also required to protect the rights of an adverse party, he will be caught in the midst of a conflict of interest."