The Des Moines Register , Friday, September 6, 1985

FARM COUPLE WINS $335,000 IN LAWYER MALPRACTICE CASE
By WILLIAM RYBERG
Of The Register's Davenport Bureau

CLINTON, IA. - In what appears to be Iowa's biggest-ever lawyer malpractice verdict, a jury awarded $335,000 in damages Thursday to a DeWitt couple who sued an attorney and a real estate agent for making mistakes in a farm sale contract.

The case focuses on the relatively new legal concept of holding a lawyer responsible for damages allegedly resulting from his representation of a client.

"It's something that every lawyer is going to have to stop and think about," said lawyer H. Reed Doughty of Rock Island, Ill., who represented one of the defendants.

The amount of the jury verdict probably is the highest ever awarded in the state in a legal malpractice case, said Des Moines lawyer Nick Critelli, vice president of the Iowa Academy of Trial Lawyers.

The court case centered on an 83-word paragraph, and might never have wound up in court if Iowa farmland prices hadn't plummeted. Now, depending on the outcome of appeals, it could be looked to in the future as a guidepost in such malpractice suits, which still are a rarity in Iowa, Critelli said.

The case involves a lawsuit filed by James and Maurita Burke of DeWitt against Maquoketa lawyer Dennis Roberson and DeWitt real estate agent John Crowley.

The Burkes alleged that because of faulty wording in the contract, they missed out on a chance to sell their 260-acre Clinton County farm for $1,050,000 in November 1981, when farmland prices were at an all-time high. Now, they allege, their farm is worth half that amount, their net worth has plummeted from $900,000 to minus $150,000 and they are on the brink of bankruptcy.

In closing arguments Wednesday in Clinton County District Court, the Burke's lawyer, Tom Riley of Cedar Rapids, asked an eight-member jury to award the Burkes damages totaling $542,500.

But the jury decided the Burkes had suffered damages totaling $348,621, resulting from negligence on the part of Roberson, Crowley and the Burkes themselves. The jury, following state law, worked it out in percentage terms: Roberson's negligence was 67 percent of the problem, meaning he must pay about $257,000. His insurance covers claims up to $200,000, court records show.

Crowley, who has no insurance, was 20 percent at fault for about $77,000, the jury said, and the Burkes themselves were 13 percent to blame, meaning they won't collect $50,000 of that $384,000 total. Testimony showed that the Burkes believed the sale was final, so they borrowed money to buy a lot and build a house at a cost of $100,000 to $150,000, and also purchased an apartment building.

"We were very happy" with the verdict, said a juror, who asked not to be identified.

Brooke said an appeal is expected. Doughty said he expects to ask the trial judge, Clinton County District Court Judge Charles Pelton, to set aside the damages assessed against Crowley. Riley said he'll ask Pelton to set aside the part of the verdict assessing part of the responsibility to the Burkes.

Based on statements from the layers and court records, this is what happened in the land deal:

The Burkes contacted Crowley to sell their farm. He found buyers, Alan and Carolyn Stampe of rural Delmar, and a complex deal was worked out, with a contract drawn to cover it.

Crowley, court records show, authored the critical part of the contract, but it was found acceptable by both the Burkes and lawyer Roberson, whom the Burkes had specifically contacted for legal advise and assurance that the contract itself was a binding sale.

The Burkes believed the deal would work this way: To buy the burke farm for $1,050,000, the Stampes would sell a 157-acre farm they owned near Elvira, valued at $700,000, and pay off the difference over a period of years. If the Stampes couldn't sell their farm in 17 months, they'd sign it over to the Burkes for them to sell. For the first year after that, the Stampes could veto any sale of less than $700,000; after that, the Burkes could sell the farm for whatever they could get, meaning the Stampes could end up having to pay off a larger amount, if the farm sold for less than $700,000.

The Stampes, court records show, believed that after the "veto clause" expired, their farm would be traded to the Burkes at a "trade value" of $700,000, meaning the Burkes would end up receiving less than their million-dollar sale price, if the Stampe farm sold for less than $700,000.

This is the disputed paragraph:

"If the Elvira farm is not sold as of March 1, 1983, the Burkes would sell the farm first year of ownership, and the Stampes would guarantee the sale price of $699,843.73, net after commission, if there should be a deficit it would be added on to the contract balance, if there is a surplus it would be subtracted from the contract balance due Burkes, and during that year the Stampes would have right to approve any sale less than amount stated above."

By the time the actual transfer of property was to take place, farmland prices had fallen drastically, and the Stampes refused to go through with the deal, court papers show.

The Burkes went to court, asking a judge to make them carry out the agreement as the Burkes understood it, but the judge declared in December 1983 that the paragraph was too vague, and he refused to force the Stampes to go through with the deal. The Burkes then sued Roberson and Crowley.

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