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Crouse v. Brobeck11/25/1998
ch 1990 he became a partner in Page. BPH continued to represent Crouse with respect to the Med-Trans sale and the note until March 1990.
C. The Aborted Restructuring
In early 1990 Crouse learned the obligors on the note wished to renegotiate the terms of the note. Crouse consulted Boatwright in the spring of 1990 about negotiating a restructuring of the terms of the note, and then retained Page and Boatwright to represent her in those negotiations. BPH, at Crouse's request, transferred her Med-Trans file to Page in April 1990.
Crouse told Boatwright during an April 1990 meeting that she did not have the note. The Crouse file transferred from BPH to Page in April did not include the note. In May Crouse again told Boatwright she could not find the note, and Boatwright told her to " ut it on the back burner."
During the spring and summer of 1990, Boatwright and Page negotiated a restructuring of the terms of the note. Under the restructured note, Crouse was to receive in exchange for the note $6.25 million in cash and a new $1 million note payable 18 months after the note-restructuring closing scheduled for September 25, 1990.
During the six months prior to the scheduled closing of the note-restructuring, Boatwright took no steps to locate the note. On the date scheduled for closing, Boatwright was aware he did not have the note. He had not contacted BPH about the missing note. He had not assessed the legal significance on the closing, or evaluated the alternatives that might be available to Crouse, if the note could not be found and delivered to the note obligors.
At the closing, Ms. Eisner, the attorney for the note obligors, demanded surrender of the note. Because Crouse was unable to produce the note, Eisner aborted the closing. Eisner believed that the note was negotiable and unless the note obligors obtained possession of the note in exchange for the $6.25 million cash payment and the new $1 million note, a holder in due course of the note would be entitled to demand payment of the note from the note obligors at a later date.
D. The Final Restructuring
A few days after the aborted closing, Boatwright negotiated a different note-restructuring agreement pursuant to which Crouse was to receive $5 million in cash to be held in escrow for one year, and a new $2.5 million note (the new note). This restructuring agreement closed October 12, 1990, without surrender of the note to the note obligors.
E. Crouse Learns of Malpractice Claim
By mid-October 1990 Crouse had been advised by independent attorneys that the loss of the note was negligence and that Page and Boatwright had been negligent during the spring and summer of 1990 in connection with the restructuring of the terms of the note by not searching for the note, not explaining to Crouse the significance of producing the note, and not making alternative arrangements in lieu of producing the note, at the closing of the note-restructuring transaction.
F. Boatwright's Continued Involvement With Crouse
Boatwright and Page continued to represent Crouse until July 1993 in collecting the escrowed proceeds from the restructured-note transaction and amounts due under the new note, including negotiating a discounted payoff of the new note.
II.
PROCEDURAL HISTORY
Although Crouse's action for legal malpractice against BPH, Boatwright and Page was filed in August 1994, the relevant date of filing the action for statute of limitations purposes is December 1993 in accordance with a statute of limitations tolling agreement entered into by Crouse, BPH, Boatwright and Page. Pag
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