Howard v. Adams

• Court: Arkansas Court of Appeals
• Writing for the Court: JOSEPHINE LINKER HART, Judge.
• Citation: Howard v. Adams, 2009 Ark. App. 621, 332 S.W.3d 24 (Ark. App. 2009)
• Decision Date: 30 September 2009
• Docket Number: No. CA 08–1190.,CA 08–1190.
• Parties: Gary HOWARD, Individually and as the Administrator of the Estate of Odis Howard, Deceased, Appellant,v.Lauren ADAMS, Don Brady, Todd Mazzanti, and Adams & Brady & Jackson, P.L.L.C., Appellees.

2009 Ark. App. 621

332 S.W.3d 24

Gary HOWARD, Individually and as the Administrator of the Estate of Odis Howard, Deceased, Appellant,

v.Lauren ADAMS, Don Brady, Todd Mazzanti, and Adams & Brady & Jackson, P.L.L.C., Appellees.

No. CA 08–1190.

Court of Appeals of Arkansas.

Sept. 30, 2009.

Harry McDermott, Fayetteville, for appellants.Friday, Eldredge & Clark, LLP, by: Clifford W. Plunkett and C. Aaron Holt, Fayetteville, for appellees.JOSEPHINE LINKER HART, Judge.

Gary Howard, acting individually and as the administrator of his late father's estate, sued attorney Lauren Adams and her law partners for breach of contract, legal malpractice, and fraud. Adams moved for summary judgment, which the trial court granted on all counts other than Gary's individual fraud claim. Gary appeals and argues that summary judgment was inappropriate because genuine issues of material fact remain to be decided. He also argues that the trial court erred in reducing a fee request by the estate's attorney. We agree that fact questions preclude the entry of summary judgment. We therefore reverse the partial-summary-judgment order. We also reverse the attorney-fee award for reconsideration in light of our disposition on appeal.

Facts

We view the facts in a light most favorable to Gary, as the party resisting the motion for summary judgment. See Lynn v. Wal–Mart Stores, Inc., 102 Ark.App. 65, 280 S.W.3d 574 (2008). Gary is the only child of Odis Howard, who died on January 16, 2001. He is also the stepson of Odis's wife, Mabel. In the latter part of 1998, Odis and Mabel visited attorney Bill Watkins to obtain estate-planning services. Watkins drafted a revocable trust to hold all of Odis's and Mabel's property, and he drafted a deed transferring Odis's primary asset, a forty-six-acre tract of land, to the trust. The trust named Mabel as trustee and provided that, upon the death of the last settlor, the trust assets would be distributed to Gary. The trust also provided that either settlor could revoke or amend the trust.

Odis did not sign either the trust or the deed transferring his land. By June 2000, he was suffering from Alzheimer's disease and his family was concerned that he lacked the capacity to care for himself or his affairs. Gary, Mabel, and Gary's daughter, Samantha, decided that Gary should be appointed as Odis's guardian. According to Gary, he hired Bill Watkins to petition the court for a temporary guardianship. Watkins did so, and the court appointed Gary as Odis's guardian for ninety days, beginning June 19, 2000.

In December 2000, approximately three months after the guardianship expired, Gary and his family believed that Odis's death was imminent. Gary, Mabel, and Samantha met with attorney Watkins, and, according to Gary, Watkins advised him to immediately sign the trust and the deed as Odis's guardian. Gary followed Watkins's advice and signed the documents. There is evidence that Watkins back-dated the documents to September 6, 2000, when Gary's guardianship was still in effect. During this meeting, Gary also agreed with Mabel and Samantha that the three of them would become co-trustees with equal authority. Watkins assured the family that he would amend the trust to reflect the co-trusteeship. Watkins did not tell Gary that, in the absence of the trust and deed, he stood to inherit Odis's property by intestate succession or through a will, subject only to Mabel's dower interest.¹ Watkins also did not advise Gary that his and Mabel's interests were in conflict with regard to Odis's property and that the trust document gave Mabel the unfettered discretion to revoke or amend the trust.

Following Odis's death on January 16, 2001, Watkins amended the trust to name Gary, Mabel, and Samantha as co-trustees. However, the amendment did not alter the provisions that gave Mabel the authority to revoke or amend the trust. In December 2001, Watkins drafted a second amendment, signed by Mabel, that purported to remove Gary as co-trustee, even though Watkins had previously agreed to amend the trust to grant equal authority to all co-trustees. A third amendment, drafted by Watkins and signed by Mabel in July 2002, unequivocally removed Gary as co-trustee. It also provided that, upon Mabel's death, Gary would receive approximately one-third of the trust assets, with the remainder going to Samantha. Thereafter, Mabel asserted that she owned the trust's real property, both individually and as trustee.

These events and a belief that he had been deprived of his inheritance prompted Gary to seek legal advice from appellee, attorney Lauren Adams. According to Gary, he and Adams entered into an oral contract that called for Adams to probate Odis's estate; to rectify the situation involving the trust's real property; and to collect her attorney fees from Watkins's malpractice carrier, with whom she had already spoken. Adams later presented Gary with a written contract for recovery of the real estate, reflecting a thirty-three-percent contingency fee of “all amounts recovered.” Gary asserts that Adams told him that the sole purpose of the contract was “to show her fee to Bill Watkins' malpractice insurance carrier.” According to Gary, he asked Adams to write the terms of their oral agreement on the back of the contract, and she did so. The handwritten notations on the back of the contract read as follows: “will see malpractice insurance to re-pay attny fees & loses (probate & taxes); Bill [Watkins] has $1m in coverage and CNA has been notified; if ins. is insufficient to cover cost of litigation we agree to pro-rata reduction of fees.” Adams later described the handwriting as mere notes from a conversation.

In October 2003, Adams filed a petition to have Gary appointed as administrator of Odis's estate. She also filed a complaint against Mabel seeking to void the trust documents. The probate case languished, but on February 11, 2005, Adams successfully set aside the deed that conveyed the forty-six acres to the trust. Adams subsequently asserted that the property then became an asset of Odis's estate. Gary inquired about the malpractice suit against Watkins, and Adams told Gary that he should seek other counsel on that cause of action. Gary made inquiries to several attorneys, but they informed him that the statute of limitations had expired on a malpractice case against Watkins.

In April 2005, Gary hired his third and current attorney, Harry McDermott. McDermott agreed to help Gary probate Odis's estate, and he terminated Adams's services with a demand that she relinquish any claim for fees. In response, Adams filed an attorney-fee lien in the probate proceeding, along with a notice of lis pendens and a fee claim against the estate for $613,333, purportedly one-third of the value of the land that Adams had removed from the trust. Gary, acting individually and as the administrator of Odis's estate (having been appointed in August 2005), countered with a suit against Adams for breach of contract, fraud, and legal malpractice. The gist of his claim was that Adams failed to file a timely malpractice suit against Watkins as she had agreed to do in order to fund the probate proceedings and the case against Mabel.

The circuit court held a hearing in October and December 2006 to determine the validity of Adams's attorney-fee lien. The court ruled that Adams's lien was correctly filed but that Gary could pursue his legal claims against Adams in a jury trial to determine the amount of any offset to which he might be entitled. The court also found that Adams's handwriting on the back of the contingency-fee agreement may well have been part of her contract with Gary, which she failed to perform.

In October 2007, Adams filed two summary-judgment motions, one against Gary individually and the other against Gary as administrator of Odis's estate. She argued primarily that 1) her failure to file a malpractice suit against Watkins did not damage Gary individually because Gary had no case against Watkins, due to lack of contractual privity; 2) the estate had no claim against Watkins because the decedent, Odis Howard, suffered no harm from Watkins's actions prior to his death; and 3) she took no actions that harmed the estate, nor did she have a contract with the estate. Following a hearing, the circuit court granted Adams's motions for summary judgment on all counts, other than Gary's individual fraud claim. Gary now appeals the court's partial-summary-judgment order.²

Standard of Review

Summary judgment should be granted only when it is clear that there are no disputed issues of material fact. Lynn, 102 Ark.App. 65, 280 S.W.3d 574. The object of a summary-judgment proceeding is not to try the issues but to determine if there are any issues to be tried. Id. If there is any doubt whatsoever, the motion should be denied. Id. In summary-judgment cases, we view the evidence and all doubts and inferences therefrom in the light most favorable to the party resisting the motion. See id.

Partial Summary Judgment on Gary's Personal Claims

Gary's personal claims against Adams stem from Adams's failure to pursue a legal-malpractice suit against Watkins. In order for Gary to prevail against Adams, he must prove a case within a case, that is, he must prove that he has a meritorious claim against Watkins. See Nash v. Hendricks, 369 Ark. 60, 250 S.W.3d 541 (2007). Adams argued below that Gary had no case against Watkins because Gary did not have privity of contract with Watkins. The circuit court agreed with Adams and made the following pertinent findings:

7. At the time that Mr. Watkins provided services to have Gary Howard appointed guardian of Odis Howard and have the Trust and deed executed, Mr. Watkins was providing legal services to Odis and Mabel Howard, not Gary Howard in his individual capacity. Any representation by Mr. Watkins to Gary Howard was done only in Gary Howard's capacity as representative of Odis Howard. Therefore, as a matter...