Dingle v. Dellinger

• Decision Date: 27 February 2014
• Docket Number: No. 5D13–1725.,5D13–1725.
• Citation: 134 So.3d 484
• Parties: Robert DINGLE and Janet L. Dingle, Appellants, v. Jacqueline C. DELLINGER, et al., Appellees.
• Court: Florida District Court of Appeals

134 So.3d 484

Robert DINGLE and Janet L. Dingle, Appellants,

v.Jacqueline C. DELLINGER, et al., Appellees.

No. 5D13–1725.

District Court of Appeal of Florida,

Fifth District.

Feb. 7, 2014.

As Corrected on Denial of Rehearing Feb. 27, 2014.

Craig A. Brand, of The Brand Law Firm, P.A., Miami, for Appellants.

Joseph M. Mason, Jr. and Carole Joy Barice, of McGee & Mason, P.A., Brooksville, for Appellee, Jacqueline C. Dellinger.

Ryan J. Millhorn, of The Millhorn Law Firm, The Villages, for Appellees, Michael Millhorn, Eric Millhorn and The Millhorn Law Firm, L.L.C.

ORFINGER, J.

Robert and Janet Dingle appeal the dismissal with prejudice of their legal malpractice claims against attorney Jacqueline Dellinger and the Millhorn Law Firm, L.L.C. We affirm in part, reverse in part, and remand.

This suit arose out of the alleged failure of Dellinger to properly draft documents gifting property to the Dingles. According to the Dingles' third amended complaint, John P. Kyreakakis, the sole shareholder and agent of Whiteway Investments, Inc., a Panamanian corporation, retained Dellinger, an employee or agent of Millhorn, to prepare a quitclaim deed to gift a piece of real property from Whiteway to the Dingles. Kyreakakis provided Dellinger with an English translation of a power of attorney, originally drafted in Spanish in Panama, to evidence his authority to transfer Whiteway's property to the Dingles. Dellinger drafted and recorded the quitclaim deed following its execution. Several months later, Kyreakakis died and his widow challenged the conveyance. Ultimately, this Court concluded that the power of attorney did not authorize Kyreakakis to make a gift on Whiteway's behalf and determined that the conveyance was invalid. See Dingle v. Prikhdina, 59 So.3d 326 (Fla. 5th DCA 2011). The Dingles then sued Dellinger and Millhorn, alleging legal malpractice. Dellinger and Millhorn moved to dismiss, arguing that because the Dingles were not parties to the attorney-client relationship, Millhorn and its employees or agents owed them no duty. The trial court agreed and, after several amendments, dismissed the Dingles' causes of action with prejudice.

We review de novo a trial court's order dismissing a complaint with prejudice. E.g., Wendler v. City of St. Augustine, 108 So.3d 1141, 1143 (Fla. 5th DCA 2013). To determine the sufficiency of a pleading, we accept as true all well-pled allegations of the complaint. Kinney v. Shinholser, 663 So.2d 643, 645 (Fla. 5th DCA 1995). In order to properly state a cause of action against an attorney for professional negligence, a plaintiff must plead sufficient facts to establish three elements: 1) the attorney's employment; 2) the attorney's neglect of a reasonable duty; and 3) the attorney's negligence as the proximate cause of the client's loss. Law Office of David J. Stern, P.A. v. Sec. Nat'l Servicing Corp., 969 So.2d 962, 966 (Fla.2007); Moscowitz v. Oldham, 48 So.3d 136, 138 (Fla. 5th DCA 2010). In this case, the issue on appeal involves the second element—whether Dellinger and Millhorn owed any duty to the Dingles. While the Dingles concede no attorney/client relationship existed between them and either Dellinger or Millhorn, they claim that they were the intended third-party beneficiaries of the contract between Whiteway and its attorneys.

An attorney's liability for professional negligence is generally limited to clients with whom the attorney shares privity of contract. See Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So.2d 1378, 1379 (Fla.1993). Because the party who retains an attorney is in privity with that attorney, that party may bring a negligence action for legal malpractice. Angel, Cohen & Rogovin v. Oberon Inv., N.V., 512 So.2d 192, 194 (Fla.1987). If the parties are not in privity, to bring a legal malpractice action, the plaintiff must be an intended third-party beneficiaryof the lawyer's services. See Espinosa, 612 So.2d at 1380. To assert a third-party beneficiary claim, the complaint must allege: (1) a contract; (2) an intent that the contract primarily and directly benefit the third party; (3) breach of the contract; and (4) resulting damages to the third party.¹See, e.g., Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So.2d 1028, 1031 (Fla. 4th DCA 1994). A party is an intended beneficiary only if the parties to the contract clearly express, or the contract itself expresses, an intent to primarily and directly benefit the third party or a class of persons to which that party claims to belong. See id.;see also Jenne v. Church & Tower, Inc., 814 So.2d 522, 524 (Fla. 4th DCA 2002) (explaining that courts look to nature or terms of contract to find parties' clear or manifest intent that it is for third party's benefit). Thus, it is not necessary that the third-party beneficiary is named in the contract. See Fla. Power & Light Co. v. Mid–Valley, Inc., 763 F.2d 1316, 1321 (11th Cir.1985). Rather, the parties' pre- or post-contract actions may establish their intent. Id.

The privity requirement has been relaxed most frequently in will drafting situations, but “the third party intended beneficiary exception to the rule of privity is not limited to will drafting cases.” Hodge v. Cichon, 78 So.3d 719, 722 (Fla. 5th DCA), review denied,99 So.3d 942 (Fla.2012); Winston v. Brogan, 844 F.Supp. 753, 756 (S.D.Fla.1994) (citing Greenberg v. Mahoney Adams & Criser, P.A., 614 So.2d 604, 605 (Fla. 1st DCA 1993)). Although privity of contract may create a duty of care providing the basis for recovery in negligence, the lack of privity does not necessarily foreclose liability if a duty of care is otherwise established. See Baskerville–Donovan Eng'rs, Inc. v. Pensacola Exec. House Condo. Ass'n, 581 So.2d 1301, 1303 (Fla.1991). Still, “[a] person who is not a party to a contract may not sue for breach of that contract where that person receives only an incidental or consequential benefit from the contract.” Taylor Woodrow Homes Fla., Inc. v. 4/46–A Corp., 850 So.2d 536, 543–44 (Fla. 5th DCA 2003) (quoting Caretta Trucking, 647 So.2d at 1030–31);see Hunt Ridge at Tall Pines, Inc. v. Hall, 766 So.2d 399, 400 (Fla. 2d DCA 2000) (“To find the requisite intent, it must be shown that both contracting parties intended to benefit the third party; it is insufficient to show that only one party unilaterally intended to benefit the third party.”).

In a case very similar to the one before us, the Iowa Supreme Court held that a third party, alleging legal malpractice in preparation of donative nontestamentary instruments of conveyance, could assert a claim for legal malpractice by establishing that the donor specifically identified the third party as the object of the donor's intent and that the third party's expectancy was lost or diminished as a result of the lawyer's professional negligence. Holsapple v. McGrath, 521 N.W.2d 711 (Iowa 1994). In so holding, the Iowa Supreme Court wrote:

[W]e note[ ] two basic problems with recognizing third-party suits against lawyers: without the privity requirement, parties to a contract for legal services could easily lose control over their agreement. In addition, the imposition of a duty to the general public could expose lawyers to a virtually unlimited potential for liability.

On the other hand, we note[ ] the policy consideration supporting such a claim, primarily giving effect to the intent of the testator to transfer the property.

....

In deciding whether to recognize such a claim, we look to ... the desirability of effecting the grantor's intent, the general policy of providing a remedy for a loss, and the need for an effective deterrent to future negligence. These concerns are as pertinent in a nontestamentary context as they [are in a testamentary context].

On the other hand, the dangers inherent in an overbroad recognition of liability are as real in this case as they are in a testamentary disposition case, and any recognition of a claim in these circumstances must be tempered accordingly. Primarily, we must be concerned that such a claim be so circumscribed as not to “expose lawyers to a virtually unlimited potential for liability.” See [Schreiner v. Scoville, 410 N.W.2d 679,] 681 [ (Iowa 1987) ].

Schreiner required, in order to limit the scope of recognizable third-party plaintiffs, that a plaintiff be a “specifically identifiable” beneficiary “as expressed in the testator's testamentary instruments.” Id. at 682. Thus, more than an unrealized expectation of benefits must be shown; a plaintiff must show that the testator (or here, the grantor) attempted to put the donative wishes into effect and failed to do so only because of the intervening negligence of a lawyer ....

Second, under Schreiner, “a cause of action ordinarily will arise only when as a direct result of the lawyer's professional negligence ... the [benefit] is ... lost, [in whole or in part].” Id. at 683....

Interpolating the requirements for a cause of action to the circumstances of this case, we hold that a plaintiff must establish that (1) the plaintiff was specifically identified, by the donor, as an object of the grantor's intent; and (2) the expectancy was lost or diminished as a result of professional negligence.

Id. at 713–14 (internal citations omitted); see Speedee Oil Change No. 2, Inc. v. Nat'l Union Fire Ins. Co., 444 So.2d 1304 (4th Cir.1984) (holding that corporation, as intended third-party beneficiary of promoter's contract with attorney, could sue attorney based on incorrect advice to promoters as attorney understood that legal advice was intended for use and benefit of corporation, and that corporation, rather than individual promoters, would act upon advice); Admiral Merchs. Motor Freight, Inc. v. O'Connor & Hannan, 494 N.W.2d 261, 266 (Minn.1992) (explaining that intended third-party beneficiary may bring action for legal malpractice where client's sole purpose is to benefit third party directly, and attorney's negligent act...