LeRoy v. Allen Yurasek & Merklin
| Decision Date | 11 July 2005 |
| Docket Number | No. 14-04-49.,14-04-49. |
| Citation | 2005 Ohio 3516,162 Ohio App.3d 155,832 N.E.2d 1246 |
| Parties | LeROY et al., Appellants, v. ALLEN, YURASEK & MERKLIN et al., Appellees. |
| Court | Ohio Supreme Court |
Thomas J. Bonasera, Charles E. Ticknor, III, and Paul Giorgianni, Columbus, for appellants.
Joseph W. Ryan, Jr. and Carl A. Aveni II, for appellees.
{¶ 1} Plaintiffs-Appellants, Julie Behrens LeRoy and Mary Behrens Miller (hereinafter jointly referred to as "Appellants"), appeal a judgment of the Union County Court of Common Pleas, granting Defendants-Appellees, Allen Yurasek & Merklin, David Allen and Stephen Yurasek (hereinafter jointly referred to as "Appellees"), motion to dismiss, pursuant to Civ.R. 12(B)(6). On appeal, Appellants assert that that the trial court committed error in finding that they were barred, under Simon v. Zipperstein (1987), 32 Ohio St.3d 74, from asserting a claim of legal malpractice against Appellees. Finding that the claims asserted by Appellants in their complaint fall within the exception to the Simon v. Zipperstein rule, we reverse the judgment of the trial court.
{¶ 2} On May 1, 2002, Decedent, Mary Elizabeth Behrens, died, survived by her three children, who included Appellants and Dan Behrens, as well as her grandson, Kevin Behrens, son of Dan Behrens. Prior to her death, Mary Behrens and her children were the owners of Marysville Newspapers, Inc. ("Marysville News") Marysville News was a small, family owned corporation, which published several newspapers in Union, Delaware, Hardin, Wyandot and Logan counties. As of October of 2001, the distribution of the one hundred and forty-three shares of stock in Marysville News was as follows: Decedent owned sixty-three shares, Dan Behrens owed thirty shares, Julie Behrens owned thirty shares and Mary Behrens owned twenty shares.
{¶ 3} Appellants allege that, in November of 2001, a new will was prepared and that Appellee, David Allen, represented Decedent in the preparation of that will. Additionally, Appellants allege that, in December of 2001, Appellees participated in a stock transfer, involving Decedent and Kevin.
{¶ 4} In December of 2002, following Decedent's death, Appellants filed a complaint, on their own behalf, against Appellees. In their complaint, Appellants alleged two counts of legal malpractice, which included negligence and breach of contract. Additionally, the complaint alleged the following facts:
9. The [Marysville News] is a closely held corporation within the ambit of Crosby v. Beam (1989), 47 Ohio St.3d 105 and its progeny.
* * *
11. As of November 2001, Decedent was under the care of others 24 hours a day due to numerous physical ailments and dementia.
12. As of November 2001 and until Decedent's death, Dan was Decedent's attorney in fact.
13. Prior to November 2001, Decedent had a will.
14. Upon information and belief, in November 2001, Dan Behrens orchestrated the execution of another purported Will ("November 2001 Will"). Defendant Allen represented the Decedent in the preparation of the November 2001 Will.
15. On December 27, 2001, Dan and Kevin Behrens orchestrated a separate transfer of all of Decedent's stock in [Marysville News] to Kevin.
16. Despite being the attorney in fact for Decedent, Dan advised Kevin with respect to said transfer and participated in setting the price for the transfer.
17. The transfer price was $567,000, for which Kevin gave Decedent a promissory note. Kevin gave Decedent a security interest in the shares, but Dan, Kevin, and Defendants later orchestrated a release of that security for other than fair value.
18. Defendants participated in the preparation and/or execution of the November 2001 Will and in doing so simultaneously acted as counsel for Decedent, Dan, Kevin, and [Marysville News].
19. Defendants prepared the documents by which Dan and Kevin effectuated the transfer of all of Decedent's [Marysville News] stock to Kevin, and in doing so simultaneously acted as counsel for Decedent, Kevin and the [Marysville News].
20. The November 2001 Will is not the last will and testament of Decedent, because it was the result of undue pressure and/or influence upon Decedent, imposed directly and indirectly by Dan and Kevin, in collusion with Defendants.
{¶ 5} In their first count of legal malpractice, Appellants alleged that Appellees' negligently assisted in the transfer of Decedent's Marysville News stock and that Appellees were negligent in the preparation of Decedent's will. In this first count, appellants argued that appellees lack immunity under Simon v. Zipperstein, because appellees acted in bad faith. In the alternative, appellants argued that if their case did fall within the Simon v. Zipperstein rule, then Appellees actions fell within one of the exceptions to that rule. Specifically, Appellants noted that the apparent conflict of interest in Appellees' representation of Decedent as well as Dan and Kevin, rose to the level of collusion. Additionally, Appellants asserted that they were in privity with Decedent for the issue of the stock transfer.1
{¶ 6} In January of 2003, Appellees filed a motion to dismiss, pursuant to Civ.R. 12(B)(6), arguing that Appellants, as third parties, were barred from pursuing claims of legal malpractice against Appellees for their representation of Decedent, pursuant to Simon v. Zipperstein. Subsequently, the trial court granted Appellees' motion to dismiss.2 It is from this judgment that Appellants appeal, presenting the following assignment of error for our review.
The court of common pleas erred in dismissing Appellant's Complaint (filed on their own behalf in Union County Court of Common Pleas No. 02-CV-0327) for failure to state a claim upon which relief can be granted.
{¶ 7} In the sole assignment of error, Appellants assert that the trial court erred in granting Appellees' Civ.R. 12(B)(6) motion to dismiss. Essentially, appellants assert that their complaint does, in fact, state a claim upon which relief can be granted because (1) their claims do not fall within the general rule of Simon v. Zipperstein and (2) even if their claims do fall within the general rule of Simon v. Zipperstein, Appellees' actions fall within the exceptions to that general rule.
{¶ 8} In reviewing a Civ.R. 12(B)(6) motion for dismissal, we accept all of the factual allegations in the complaint as true. Mitchell v. Lawson Milk Co. (1988), 40 Ohio St.3d 190, 192. Because the factual allegations are presumed to be true, a reviewing court must decide only legal issues, and an entry of dismissal on the pleadings is reviewed de novo. Schumacher v. Amalgamated Leasing, Inc., 156 Ohio App.3d 393, 2004-Ohio-1203, at ¶ 5, citing Mitchell, 40 Ohio St.3d at 192. However, "as long as there is a set of facts, consistent with the plaintiff's complaint, which would allow the plaintiff to recover, the court may not grant a defendant's motion to dismiss." Schumacher, 156 Ohio App.3d at ¶ 5, citing York v. Ohio State Hwy. Patrol (1991), 60 Ohio St.3d 143, 144-145. "In order to dismiss a complaint for failure to state a claim upon which relief can be granted (Civ.R.12(B)(6)), it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery." O'Brien v. Univ. Community Tenants Union, Inc. (1975), 42 Ohio St.2d 242, syllabus.
{¶ 9} In the case sub judice, the first count in appellants' complaint essentially raised two separate issues of legal malpractice. The first issue deals with the transfer of the decedent's Marysville News stock. According to Appellants' complaint, the transfer was made prior to Decedent's death and Appellees assisted in that transfer. The second issue involves Appellees' participation in the preparation of a will, which was allegedly drafted for Decedent in November of 2001.
{¶ 10} Attorneys in Ohio enjoy a qualified immunity from liability to a third party arising out of acts he or she takes while representing a client. Hahn v. Satullo, 156 Ohio App.3d 412, 2004-Ohio-1057, at ¶ 69. "An attorney is immune from liability to third persons arising from his performance as an attorney in good faith on behalf of, and with the knowledge of his client, unless such third person is in privity with the client or the attorney acts maliciously." Simon v. Zipperstein, 32 Ohio St.3d at 77, citing Scholler v. Scholler (1984), 10 Ohio St.3d 98, para. one of the syllabus. In Simon, the Court set forth the following rationale for this rule: "[T]he obligation of an attorney is to direct his attention to the needs of the client, not to the needs of a third party not in privity with the client." Simon at 76. The fear of indiscriminate third party suits against attorneys would make attorneys reluctant to offer zealous client representation. Id. To allay this fear, courts place a heightened burden on third parties seeking to assert claims against attorneys representing their clients. Other state courts have taken similar approaches. See, e.g., Mehaffy, Rider, Windholz & Wilson v. Central Bank Denver, N.A. (Colo.1995), 892 P.2d 230, 235 (); Strid v. Converse (Wis.1983), 331 N.W.2d 350, 356 (); Roth v. La Societe Anonyme Turbomeca France (Mo.App.2003), 120 S.W.3d 764, 776 (same); but, see, Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (Cal.App.2003), 107 Cal.App.4th 54, 69 ().
{¶ 11} In their complaint and on appeal, Appellants assert that Simon v. Zipperstein should not control, because Appellees acted in bad faith. Essentially, Appellants argue that the issue of bad faith is a gateway issue, which must be addressed first. As noted above, in Simon v. Zipperstein, the Supreme Court, quoting Scholler, held that "`[a]n attorney...
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Schlegel v. Gindlesberger, 2007-0113.
... ... also hold the cause for the decision in 2005-1593 and 2005-1926, LeRoy v. Allen, Yurasek & Merklin, Union App. No. 14-04-49, 162 Ohio App.3d 155, ... ...
- LeRoy v. Allen Yurasek & Merklin, 2005-1926.