Supreme Court of California
70 P.3d 1046 (2003)
The Viners (plaintiffs) formed Dove Audio, Inc. (Dove) in 1984. Dove made a public stock offering in 1994. The Viners retained all of the company’s preferred stock and a substantial share of its common stock. The Viners also entered into long-term employment contracts with the company. In 1997, Media Equities International (MEI) entered into an agreement with the Viners to purchase Dove. Attorney Charles Sweet (defendant) represented the Viners in the transaction. After the sale, the Viners filed a malpractice action, alleging seven counts of negligence against Sweet and his law firm, Williams & Connolly (Sweet) (defendant). Following a trial, a jury awarded damages to the Viners. Sweet appealed, arguing that the traditional “but for” rule of causation in legal malpractice cases required the Viners to prove that Sweet’s negligence was the only reason they failed to either end up with a better deal or walk away from the transaction altogether. The Viners argued that requiring the plaintiff in a transactional malpractice action to prove attorney negligence was the proximate cause of claimed damages would make it too difficult to obtain supporting evidence. The Viners asserted that the “but for” standard would require them to procure testimony from adversarial parties acknowledging that they would have agreed to terms more favorable to the Viners if not for Sweet’s negligence. The state court of appeals rejected Sweet’s arguments and upheld most of the jury’s damages award in favor of the Viners. Sweet petitioned the Supreme Court of California for review.
Rule of Law
Holding and Reasoning (Kennard, J.)
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