Weekly Edition

Client had oral contract, lawsuit was filed too late

Lawyers like retainer agreements because they offer protection when things go wrong with a client.

But having no written agreement meant one former Virginia lawyer caught a break when a client sued for legal malpractice. The lawyer sought shelter in the shorter statute of limitations that applies to oral contracts under Virginia law.

An Alexandria federal district judge dismissed the client’s legal malpractice action against the lawyer – who allegedly missed a statute of limitations – because the client did not file suit within three years under the Virginia statute.

More and more, when litigating legal malpractice claims, “we get into fights” over the existence of a written contract, said McLean lawyer Danny M. Howell. Then clients scramble to produce correspondence to show a contract. Howell represented the defendant lawyer, who now practices in Florida.

Lawyers routinely are counseled to get it in writing, but “there are a lot of practice areas, such as insurance defense,” where written client agreements are not common, Howell said.

In the Alexandria case, the only document the client offered as a stand-in for a written contract was a letter the defendant lawyer sent to the D.C. lawyer who referred the client to him. U.S. District Judge Gerald Bruce Lee said in Laios v. Wasylik (VLW 008-3-255), that letter could not count as an agreement between the client and the defendant.

Defendant Michael Wasylik wrote the letter to lawyer James Loots, who was licensed to practice in the District of Columbia, but not in Virginia. Loots had previously represented client Edward Laios and referred Laios to Wasylik in December 2001.

Laios and Wasylik met and discussed filing a lawsuit to recover loan proceeds against MGM Settlements Inc., Grethel Valverde, SLH Consulting Inc. and Steven L. Harrell. The day after Wasylik met with Laios, Wasylik sent a letter to Loots.

In the letter to the other lawyer, Wasylik confirmed that he filed a complaint on behalf of Laios, with attendant costs, and reiterated a fee agreement with Loots for Wasylik’s legal services to Laios. The letter concluded with the Wasylik’s typewritten name, but no handwritten signature.

Laios and Waylike never signed a written fee agreement, according to Lee’s April 2 opinion.

Wasylik litigated Laios’ lawsuit until March 24, 2003, when he moved for a nonsuit with Laios’ consent. Wasylik had six months to refile the claim for Laios, but he failed to do so, according to Laios’ suit.

Lee said Wasylik’s letter to Loots did not constitute a written contract between Laios and Wasylik. The letter was sent to Loots solely for his records. The letter also lacked other “vital terms” of an attorney-client contract, such as each party’s obligations, whether representation was fee-based or contingent or what retainer fee was required.

And the letter had no signature of Wasylik, the person sued on the contract.

The three-year statute of limitations, Virginia Code § 8.01-246(4), which began to run either on March 23 or September 23 2003, had run out before Laios filed.

Lee entered summary judgment for the lawyer.

McLean lawyer Thomas J. McKee Jr., who represented Laios, could not be reached for comment.

© Copyright 2008, by Virginia Lawyers Media, all rights reserved