PROFESSIONAL LIABILITY CLIENT ALERT: Collateral/Crossover Estoppel as a Bar to Legal Malpractice Claims

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Depending on the facts and issues involved in a legal malpractice claim, there are various defenses to be proffered. One potential defense is the doctrine of collateral/crossover estoppel, a “rule of issue preclusion”[1] that “precludes relitigation of an issue in a subsequent, different cause of action between the same parties when the prior proceeding culminated in a valid final judgment and the issue was actually and necessarily determined in the prior proceeding.”  Barrow v. Pritchard, 235 Mich. App. 478, 480 (1999).  Crossover estoppel is the application of collateral estoppel in a civil matter after a final determination was made in a prior criminal matter.  In Saad Akram Bahoda v. Steven M. Kaplan (Case No. 332313, July 20, 2017), the Michigan Court of Appeals affirmed the Macomb County Circuit Court’s grant of summary disposition for a defendant-lawyer applying the doctrine of collateral/crossover estoppel to hold that his former client’s legal malpractice claim was precluded as a matter of law.

Case Summary – Factual Background

The Bahoda case arose out of Defendant, Steven Kaplan’s (“Defendant” or “Kaplan”) prior representation of Plaintiff, Saad Akram Bahoda (“Plaintiff” or “Bahoda”), in a criminal case.  Bahoda was ultimately convicted after a jury trial of assault with intent to do great bodily harm less than murder.  In post-conviction proceedings, Bahoda filed a motion claiming that Kaplan provided ineffective assistance of counsel.  The trial court denied Bahoda’s ineffective assistance motion.

As these post-conviction proceedings were occurring in the criminal matter, Bahoda filed a legal malpractice lawsuit against Kaplan; however, Bahoda’s legal malpractice claim was summarily dismissed due to collateral/crossover estoppel because the trial court in the underlying criminal matter previously denied Bahoda’s claim of ineffective assistance of counsel (i.e. the same issue was addressed and denied by the trial court in Bahoda’s criminal matter). Bahoda then appealed the trial court’s order in the civil matter[2] arguing that the doctrine of collateral/crossover estoppel should not preclude his legal malpractice claim.

Case Summary – The Court of Appeals’ Analysis, Rationale, and Holding

In Bahoda, the Court of Appeals identified the 3 elements of collateral/crossover estoppel as: “(1) a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment; (2) the same parties must have had a full [and fair] opportunity to litigate the issue; and (3) there must be mutuality of estoppel.”  Monat v. State Farm Ins. Co., 469 Mich. 679, 682-84 (2004).  Of particular relevance, the Court also discussed the concept/application of “crossover estoppel” which involves the “preclusion of an issue in a civil proceeding after a criminal proceeding, and vice versa.”  Barrow, 225 Mich. App. at 481.  Crossover estoppel applies “where a full and fair determination has been made in a previous criminal action that the client received the effective assistance of counsel” such that “the defendant-attorney in a subsequent civil malpractice action brought by the same client may defensively assert collateral estoppel as a bar.”  Knoblauch v. Kenyon, 163 Mich. App. 712, 725 (1987).  Importantly, the Bahoda Court held that the “legal standards for ineffective assistance of counsel in criminal proceedings and for legal malpractice in civil proceedings are equivalent for the purposes of application of the doctrine of collateral estoppel.”

Applying the elements of collateral/crossover estoppel, the Court ruled that: (1) Bahoda’s legal malpractice allegations were essentially the same as his ineffective assistance of counsel claims made in his criminal matter “because they all involve issues relating to how [Kaplan] represented [Bahoda] during the criminal matter and [Kaplan’s] alleged failure to properly advise [Bahoda]…”, (2) the same parties and issues that were fully and fairly litigated were involved in both the criminal and civil matter (and Bahoda’s criminal appeal was no longer pending), and (3) mutuality of estoppel was not required because “collateral estoppel is being asserted defensively against a party who already had a full and fair opportunity to litigate the issue…”  Monat, 469 Mich. at 695.  The Court thus applied collateral/crossover estoppel and emphasized that “where a full and fair determination has been made in a previous criminal action that the client received the effective assistance of counsel, the defendant-attorney in a subsequent civil malpractice action brought by the same client may defensively assert collateral estoppel as a bar.”  Knoblauch, 163 Mich. App. at 725. 

Practical Application and Conclusion

From a practical standpoint, the Bahoda decision confirms the use of collateral/crossover estoppel as a defense to a legal malpractice claim and provides helpful guidance and analysis for attorneys attempting to utilize it.  This is especially true with regard to criminal defense attorneys who are being sued by their former clients in the civil context where collateral/crossover estoppel can be used to obtain dispositive relief in a legal malpractice lawsuit where an ineffective assistance of counsel claim was previously litigated.

[1]Moses v. Dep’t of Corrections, 274 Mich. App. 481 (2007).

[2]While Bahoda’s appeal in the civil action was pending, the Michigan Court of Appeals affirmed the rulings of the trial court in Bahoda’s criminal case.  See People v. Bahoda (Bahoda I), unpublished opinion per curiam of the Court of Appeals, issued June 14, 2016 (Docket No. 316879).  The Michigan Supreme Court denied Bahoda’s application for leave to appeal the Court of Appeals’ judgment.  People v. Bahoda, 500 Mich. 959 (2017).  

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