## Facts

- Ralph W. Moores, Jr., a Maine longshoreman, was injured on the job and received workers’ compensation benefits through his employer’s insurer, Liberty Mutual Insurance Company (LMIC).
- Moores retained attorney Nathan Greenberg under a one-third contingent-fee agreement to pursue a third-party negligence action against shipowners in federal court.
- During the third-party litigation, shipowners made settlement offers, including offers of $70,000 and later $90,000.
- Moores presented evidence that Greenberg did not communicate the settlement offers to him and that Moores would have accepted the $90,000 offer had he been informed.
- The third-party negligence action went to trial and resulted in a defense verdict.
- Moores sued Greenberg for legal malpractice; the case was removed to federal court on diversity jurisdiction, and the parties agreed Maine substantive law applied.
- A jury found Greenberg liable and awarded Moores $12,000 in damages.
- Both parties appealed: Greenberg challenged liability and asserted trial errors; Moores challenged the adequacy of damages.

## Issues

1. Whether the evidence was sufficient under Maine legal-malpractice standards to submit liability to the jury or required a directed verdict for the attorney.
2. Whether, under Maine law, failure to convey settlement offers and other alleged litigation deficiencies could be found to have proximately caused compensable loss.
3. How damages should be measured for a lost settlement opportunity, including the effect of contingent fees, liens/offsets, and uncertainty in the underlying case.
4. In a diversity case, how a federal court should determine state law where the state’s highest court has not decided the specific questions presented.

## Decision

- The court affirmed the judgment in all respects.
- It held the district court properly denied Greenberg’s motion for a directed verdict because a rational jury could find breach of the standard of care and causation based on the uncommunicated settlement offers and Moores’s testimony that he would have accepted the $90,000 offer.
- It upheld the $12,000 damages award, rejecting Moores’s claim that damages had to equal the full lost net settlement value and rejecting Greenberg’s arguments for further limitation.
- It found no reversible trial error.

## Legal Principles

- In a legal-malpractice action, the plaintiff must prove (1) the attorney breached the applicable professional standard of care and (2) the breach proximately caused the plaintiff’s loss.
- Failure to communicate a bona fide settlement offer can constitute actionable malpractice if the client proves the offer would have been accepted and would have produced a better outcome than what occurred.
- Lost-settlement damages are based on what the client would have realized under the foregone settlement, accounting for contingent fees and other legally required adjustments, and may be discounted to reflect uncertainty in the underlying matter.
- In diversity cases, federal courts apply the forum’s choice-of-law rules and then apply the governing state’s substantive law; where controlling state authority is absent, the federal court predicts how the state’s highest court would rule using analogous decisions and relevant authority.

## Conclusion

The First Circuit, applying Maine law, upheld a jury finding that an attorney’s failure to relay settlement offers could support malpractice liability and affirmed a modest damages award because the jury could reasonably discount the hypothesized net settlement value based on contingencies and proof at trial.


Moores v. Greenberg, 834 F.2d 1105 (1st Cir. 1987)