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Swartz v. Vieh

Court of Appeals of Arizona, First Division, Department D

October 29, 2013

BRIDGET O'BRIEN SWARTZ, BRIAN J. THEUT, as co-guardians ad litem for the minor, Efrem Campbell, Jr., Plaintiffs/Appellants,
JAMES E. VIEH; CAMPANA, VIEH & LOEB, P.L.C., an Arizona limited liability company, Defendants/Appellees.

Not for Publication -Rule 28, Arizona Rules of Civil Appellate Procedure

Appeal from the Superior Court in Maricopa County Cause No. CV2008-014406 The Honorable John A. Buttrick, Retired Judge

William G. Walker, P.C. Phoenix by William G. Walker Attorneys for Plaintiffs/Appellants

Dickinson Wright/Mariscal Weeks PLLC Phoenix by Timothy J. Thomason Jonathan S. Batchelor Attorneys for Defendants/Appellees

Haralson, Miller, Pitt, Feldman & McAnally, P.L.C. Tucson by Stanley G. Feldman and Knapp & Roberts, P.C. Scottsdale by David L. Abney Attorneys for Amicus Curiae Arizona Association for Justice/ Arizona Trial Lawyers Association



¶1 We are asked to decide whether the superior court erred by granting summary judgment to James Vieh and Campana, Vieh & Loeb, P.L.C. ("Vieh") and dismissing the legal malpractice claims for an inadequate settlement and charging unreasonable fees. Because Bridget O'Brien Swartz and Brian J. Theut, co-guardians ad litem, for Efrem Campbell, Jr. ("Junior"), a minor, failed to have an expert to demonstrate that they could prove the case-within-a-case, we affirm the judgment.


A. The Medical Malpractice Lawsuit

¶2 Junior was born in 2003 and suffers from significant disabilities. His parents, Efrem Campbell Sr. and Canisha Glass, thought their child's disabilities were the result of medical negligence and hired the Goldwater Law Firm to prosecute a medical malpractice action against the obstetrician, Thomas E. Masters, D.O., and Casa Grande Community Hospital ("Hospital"). They entered into a written contingent fee agreement that provided for a forty percent contingent fee, and Goldwater associated Vieh to prosecute the claim.[1] Vieh filed suit on behalf of Junior and his parents against Masters and the Hospital alleging that Masters had negligently delivered the child and caused his severe disabilities, including cerebral palsy.

¶3 Masters settled the claim for his malpractice policy limits of $1, 000, 000. Vieh sought and received approval of the settlement from the probate division of the Maricopa County Superior Court. The November 1, 2004 order also appointed Junior's mother as his conservator; approved a forty percent contingent fee; approved individual payments to each parent; approved the deposit and investment of the remainder with the First National Bank of Arizona; and authorized a monthly stipend for Junior's mother.

¶4 After a November 2005 settlement conference, the Hospital agreed to settle the lawsuit for $1, 000, 000, which was to be used to buy an annuity for Junior. The following month, the probate court approved the settlement, as well as using the settlement proceeds to purchase a single premium annuity from the New York Life Insurance Company to provide Junior with a monthly tax free payment[2] for life and an additional $30, 000 every five years for incidental expenses. The order also approved distribution of amounts to pay the Arizona Health Care Cost Containment System medical lien, attorneys' fees and costs, and modest payments to Junior's parents.

B. The Legal Malpractice Lawsuit

¶5 After Junior's mother sought permission to use proceeds to purchase a van, the probate court appointed Theut to investigate if she was an appropriate conservator. Swartz was subsequently appointed to evaluate if Junior was eligible for public benefit programs and if he needed a special needs trust. The court also substituted Southwest Fiduciary as Junior's conservator.

¶6 The co-guardians sued Goldwater and Vieh in June 2008 for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, legal malpractice, and breach of fiduciary duty re: conservatorship. The complaint alleged the settlements were inadequate, the lawyers breached their fiduciary duty to Junior, the contingency fee was unreasonable, and the structured settlement was inadequate for Junior's needs especially since it disqualified him from public benefits.

¶7 Vieh filed motions for partial summary judgment. The co-guardians conceded that the breach of contract and breach of fiduciary claims "are not independent of the negligence claims" and agreed those claims should be dismissed. They also stated that they were abandoning the claim for lost public benefits. The superior court subsequently granted Vieh summary judgment on the legal malpractice claim and excessive fee claim.

¶8 The remaining issues — whether Vieh was negligent in recommending purchase of the annuity; whether Vieh was subject to punitive damages; and whether Swartz negligently sold a portion of the annuity — were resolved by trial.[3] The jury returned a defense verdict for Vieh. ...

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