Computer Once, Inc. and Caroline C. Roberts V. Grisham & Lawless, P.A., professional association, Thomas L. Grisham, and Stephen F. Lawless.

http://caselaw.findlaw.com/nm-supreme-court/1116280.html

Facts: Defendants represented Computer One in a breach of contract against Sandia Corporation. Defendants entered into settlement with Sandia Corporations and agreed to settle Computer One’s $750,000 claims. After this settlement was made, Computer One stated that the Defendants did not have the authority to do so. Defendants then filed an attorney lien. Sandia Corporation filed a motion to enforce the settlement and Computer One objected, stating that again the Defendants had no authority to enter into the settlement. After the district court found that Computer One had given Defendants the authority to settle for $750,000, the Defendants got the settlement. Following the attorney lien charge, the district court held a hearing and the parties discussed claims between Defendants and another creditor of the settlement. Computer One then state they had the intendancy to dispute the enforceability of the Defendants’ claims for the fees and Computer One requested a hearing on the issue of the attorneys fees and stated it would be filing objections to the charging lien. Computer One was given ten days to files its objections. Computer One stated that the attorney feed that the Defendants wanted were excessive and unreasonable because Defendants: (1) negotiated the settlement without consent; (2) released potential claims of both Computer One and Roberts without authority and to their economic detriment; and (3) failed to pursue a malpractice claim valued at 1.5 million dollars against predecessor counsel and failed to negotiate an attorney charging lien filed by predecessor counsel. Computer One also claimed that (4) the amended charging lien included fees for services not related to representation of Computer One in the action; and (5) the contingency fee agreement on which the charging lien was based did not conform to Rule 16-105(C) NMRA, and was therefore unenforceable. Computer One repeated these statements to Sandia Corporation’s motion, as well and the court held a hearing on Sandia Corporation’s motion to disburse fees and on Defendants’ attorney charging lien. Over a year later, Computer One sued Defendants for legal malpractice. Computer One claimed that Defendants’ recommendation to accept settlement for $750,000 constituted legal professional negligence. Computer One claimed that Defendants failed to properly assess the damages available for breach of contract in the Sandia case. Defendants requested for summary judgment arguing that Computer One’s legal malpractice claims were barred by claim preclusion. The district court stated the Computer One had raised legal malpractice claims in the litigation concerning the attorney charging lien and had been unsuccessful. The district court also found that computer One had the opportunity to litigate the issue of whether there had been an improper handling of the litigation by Defendants and was attempting to telitigate the issue by raising different legal theories.

Issue: Did Grisham & Lawless Law firms commit legal malpractice to Computer One?
Rule of Law: Anaya v. City of Albuquerques argues that Claim preclusion rests on the need to balance the interests of defendants and the courts, on the one hand, to bring a close to litigation, and of plaintiffs, on the other hand, to seek relief of their claims. Moffat, 2005-NMCA-103 states that for claim preclusion to apply, four requirements must exist. "The two actions (1) must involve the same parties or their privies, (2) who are acting in the same capacity or character, (3) regarding the same subject matter, and (4) must involve the same claim."

Holding: The district court correctly determined that claim preclusion barred Computer One’s claims for legal malpractice.