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Interesting Case on Assignability of Legal Malpractice Claims

By David Hricik, Mercer Law School

After Prince, the musician, died an engineer who had unreleased recordings hired a Massachusetts firm who advised the engineer that he was a joint author of the recordings and jointly owned copyright in them, and so could distribute the recordings subject to paying Prince’s estate a share of royalties.  He arranged to do so, and in part arranged it so the law firm would receive a percentage of sales.

Prince’s estate filed suit to enjoin further distribution.  The Massachusetts firm initially represented the defendant, but then was named as a defendant. The firm later was dismissed for lack of personal jurisdiction.  The case against the engineer settled, and as part of the settlement agreement the engineer assigned any claim against the lawyer to Prince’s estate.

Prince’s estate filed a legal malpractice suit — asserting the advice to the engineer had been flawed — against the Massachusetts law firm in Massachusetts.  The law firm moved to dismiss because legal malpractice claims are not assignable under Minnesota law.  The trial court granted the motion, but this court reversed, holding that under conflicts of law principles, Massachusetts law controlled and it permitted assignment (with exceptions).  The court noted the law firm emphasized the agreement’s overall connection to Minnesota, and stated:

They emphasize the contacts with Minnesota, including the fact that the plaintiffs are domiciled in Minnesota and that the agreement to settle the Minnesota litigation was negotiated and executed in Minnesota. Our case law, however, directs our focus to the State with the most significant relationship to the transaction and the parties “with respect to [the] issue” that presents the conflict of laws. Oxford Global Resources, LLC, 480 Mass. at 467, quoting Bushkin Assocs., Inc., 393 Mass. at 632. Here, it is the assignability of legal malpractice claims that presents the conflict of laws. We therefore focus our inquiry on which State has the most significant relationship to the assignability of the legal malpractice claim asserted against Attorney Brown.

Two considerations are particularly important in the context of a conflict regarding assignability: protecting the justified expectations of the parties and effectuating the
policy of the State “with the dominant interest” with respect to the issue of assignability. Restatement (Second) of Conflict of
Laws § 208 comment b. Applying Massachusetts law would protect the justified expectations of Attorney Brown, his law firm, and his clients. Massachusetts law has long permitted the assignment of legal malpractice claims, see New Hampshire Ins. Co. v. McCann, 429 Mass. 202, 208-209 (1999), and Attorney Brown, as a Massachusetts lawyer practicing in a Massachusetts firm, would reasonably expect that his clients might assign their legal malpractice claims against him….

With respect to the second factor, the states’ interests, the court reasoned in part:

Attorney Brown is a Massachusetts-licensed attorney, and his law firm is a Massachusetts limited liability company. He is authorized to practice law by the Supreme Judicial Court of
Massachusetts, see S.J.C. Rule 3:01, as appearing in 478 Mass. 1301 (2018), and his professional duties arise under
Massachusetts law.

The case is Comerica Bank & Trust v. Brown & Rosen LLC (Mass. App. Aug. 30, 2022) (here).

Besides the connection to Prince and the interesting legal analysis — focusing on the issue, not the contract — the case may be another reason why a law firm’s engagement letter should specify choice of law.  While here that would not have changed the outcome, perhaps it might where a Minnesota law firm is sued in Massachusetts, but with a choice of law provision invoking Minnesota law.


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Prior Articles:
The Scope of Comparison Prior Art in Design Patent Infringement
Tribunal Burden – Nike v. Adidas
Copyright Law Preempting Contractual Terms of Use
Ohio Supreme Court: $32 Million Judgment Against Dentons for Conflict of Interest Stands
Venue (and Changing Venue) in Criminal Trade Secret Cases
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Happy to talk through interesting cases -- Dennis Crouch

dcrouch@patentlyo.com

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