Dale Phillips, an attorney in Kentucky, provided title opinions to EQT Production Company concerning its oil interests in certain land. EQT sold its oil and gas rights in 14 Kentucky oil fields to Journey Acquisition II. The rights were conveyed by leasing the properties to Journey using Oil and Gas Leases and by assigning other leases to Journey.

At some point after granting the leases, EQT began to drill for oil and gas on some of the properties. Journey sued EQT and won a judgment for $14 million, as well as an order to convey the properties to Journey.

EQT blamed Phillips for the judgment, claiming that he provided faulty title opinions. Phillips moved for summary judgment and challenged the admissibility of opinions offered by Journey’s expert witness. The trial court declined to consider the expert’s opinion and, since legal malpractice cannot be proved without expert evidence, granted summary judgment to Phillips. EQT appealed.

Legal Dispute

According to EQT, Phillips conducted title examinations before it drilled wells on the properties and mistakenly concluded that EQT held a full interest in the areas where the wells were drilled. Phillips stated that he was never given leases or other conveyance documents and was only asked to determine whether EQT had good title when it first acquired the properties. Phillips said he offered no opinion as to the quality of title after EQT acquired it. EQT disagreed, claiming that Phillips represented that he had searched public records through the date of the title opinions, which he rendered shortly before EQT commenced drilling.

EQT sued Phillips for legal malpractice. The trial court followed the general rule that a legal malpractice claim requires proof that a lawyer failed to provide the professional standard of legal services that a lawyer of ordinary competence would provide. Unless the malpractice is obvious, the standard of care must be proved by expert evidence. Since there is nothing obvious about the law surrounding title opinions or mineral rights, the trial court decided that expert testimony was required.

Necessity for Expert Opinion

On appeal, EQT argued that no expert was needed. The Court of Appeals for the Sixth Circuit decided that whether an expert was needed depended on how the issue was framed.

If, as EQT suggested, the issue was whether an attorney breaches the standard of care by representing that he did something he failed to do, the answer might be so obvious that no expert opinion is needed. A more complicated question, however, is whether an attorney who is asked to provide an oil and gas title opinion breaches the standard of care by failing to examine conveyance documents that were executed after the land was acquired.

The dispositive question was whether Phillips did what a lawyer of ordinary competence would have done. Lay people on a jury would not know whether a lawyer providing an oil and gas title opinion should look beyond the documents by which a client acquired title to determine if the client’s interest in the property had subsequently changed. Since that is a question most jurors lack the ability to answer, the Court of Appeals decided that expert testimony was required.

Sufficiency of Expert Opinion

EQT relied on the expert opinion of James Kaiser, a lawyer who had performed title examinations for EQT in the past. Kaiser based his opinion on his legal education and thirty years of experience preparing oil and gas title opinions. Kaiser’s qualifications were undisputed.

Kaiser’s expert report, however, failed to address the standard that an ordinary oil and gas lawyer would have followed. Instead, Kaiser’s report explained that whenever EQT asked him to provide a title opinion, he always determined whether EQT had the right to drill at the time the opinion was provided. Kaiser then noted that Phillips failed to perform the same examination of conveyance documents that Kaiser would have performed.

The Court of Appeals agreed with the District Court that Phillips failed to address the standard of care that should be followed when drafting an oil and gas title opinion. The report did not offer even a conclusory opinion that the appropriate standard was breached. Rather, it merely stated what Kaiser did when he drafted title opinions for EQT.

Adequacy of Expert Report

Rule 26 of the Federal Rules of Civil Procedure requires disclosure of an expert report that includes a “complete statement of all opinions the witness will express and the basis and reasons for them.” The court therefore disagreed with EQT that Kaiser should be allowed to testify at trial to supplement the reasoning he provided in his report.

The report failed to explain the standard of care that a lawyer should follow and failed to articulate the basis and reasons for defining that standard of care. Accordingly, the report did not meet the requirements of Rule 26. As a consequence, the District Court appropriately disregarded the report when it considered Phillips’ summary judgment motion. In the absence of expert testimony, the District Court was entitled to grant summary judgment against EQT.

The case stands as a reminder that experts who are retained in a malpractice case cannot simply describe what they would have done differently. The case also sends the message that all experts who are hired in federal litigation, regardless of the issue, should comply with Rule 26 by writing a report that provides a complete statement of the factsupon which the expert has relied and the reasoning that supports each opinion the expert will express at trial.