News Brief

Appler Wins Defense Verdict in Legal Malpractice Case

November 21, 2011

Thomas Appler (Of Counsel-McLean) obtained a defense verdict in Fairfax County Circuit Court following a two-day bench trial that ended on November 15, 2011 in a legal malpractice action against a Rockville, Maryland, general practice law firm and two of its attorneys. Messrs. Appler and Hall represented the defendants, insureds of a national legal malpractice insurance carrier. The plaintiff, the defendants’ former client, alleged that the defendants negligently represented them in their role as lender's counsel in a $2 million secured hard money loan transaction.

The plaintiff claimed that the defendants failed to ensure that the guarantors executed a required unconditional guaranty of payment document that would have allowed the plaintiff to obtain confessed judgments against the guarantors in the event of a loan default. The borrower defaulted on the loan in 2007 and neither the lender nor the defendants had an executed copy of the unconditional guaranty of payment in their files to use to obtain confessed judgments. In making its ruling, the Court concluded, despite the plaintiff's allegations to the contrary, the defendants drafted and sent the unconditional guaranty to the settlement company to have executed at closing.

Furthermore, the Court found that the plaintiff authorized the closing of the loan by an entity owned and controlled by the guarantors. The Court determined that the plaintiff made this decision despite clear advice from the defendants to use a different settlement company to close the loan. This decision, in the Court's view, constituted contributory negligence that barred the plaintiff's recovery in whole, and was, along with defendants' negligence, a proximate cause of plaintiff's injury.

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