Moen v. Thomas, 20030309

Citation682 NW 2d 738,2004 ND 132
Decision Date30 June 2004
Docket NumberNo. 20030309,20030309
PartiesCarol Kay Moen and LaRae A. Thomas, Co-Trustees of the Jay V. Thomas Family Trust, Plaintiffs v. Laurie Thomas, n/k/a Laurie Moorhead, individually and as surviving spouse, heir and personal representative of Jerry J. Thomas, deceased, and his estate, Defendants, Third Party Plaintiffs and Appellants v. Fred C. Rathert and Neff Cresap Rathert Eiken & Irigoin, P.C., Third Party Defendants and Appellees.
CourtUnited States State Supreme Court of North Dakota

Greg W. Hennessy, Hennessy Law Office, P.C., P.O. Box 756, Williston, ND 58802-0756, for defendants, third-party plaintiffs and appellants.

Frederick E. Whisenand, Jr. (argued) and Kenneth G. Hedge (on brief), Crowley, Haughey, Hanson, Toole & Dietrich, P.L.L.P., P.O. Box 1206, Williston, ND 58802-1206, for third-party defendants and appellees.

Opinion of the Court by VandeWalle, Chief Justice.

VandeWalle, Chief Justice.

[¶1] Laurie Thomas appealed from a judgment entered upon a jury verdict dismissing her third-party complaint against Fred C. Rathert and his former law firm, Neff Cresap Rathert Eiken & Irigoin, P.C. ("Rathert"). We affirm.

I

[¶2] Many facts relevant to this case are set forth in our decisions resolving prior appeals in Moen v. Thomas, 2001 ND 95, 627 N.W.2d 146 ("Moen I"), and Moen v. Thomas, 2001 ND 110, 628 N.W.2d 325 ("Moen II"), and we will not reiterate them here except as necessary to explain the resolution of the issues in this appeal.

[¶3] Laurie Thomas and her husband, Jerry, lived on Jay Thomas's ranch. In October 1995, Jay Thomas died and his will gave Jerry Thomas, his son, the ranch headquarters and some additional land in Williams County. Jerry Thomas also received an option to purchase other ranch land on a contract for deed. As an alternative to the option, the will provided Jerry Thomas could, for $3 per acre, lease the additional land annually for seven years, with an option to purchase during the lease term. Rathert was Jay Thomas's attorney and represented the estate upon Jay Thomas's death. Shortly after Jay Thomas died, Rathert met with Jay Thomas's widow and children to discuss probate of the will. Jay Thomas's widow and children held several family meetings to discuss various estate and tax issues. Rathert was present at some of the meetings, but was not present at others. During one of the early family meetings, Rathert orally advised the family members there might be possible conflicts and they should consult with their own attorneys. During a December 1995 meeting, Jerry Thomas declined the option to purchase the property on a contract for deed and stated he wanted to exercise his right to lease the property.

[¶4] As the probate progressed, Rathert advised the family to put Jay Thomas's ranch into a trust. Rathert drafted the trust agreement, which was signed by the family members, including Jerry Thomas, on December 3, 1996. The agreement provided that Jerry Thomas had the right and option to lease the property for agricultural purposes as provided in Jay Thomas's will. Two of Jay Thomas's daughters, LaRae Thomas and Carol Moen, were named co-trustees.

[¶5] Rathert originally intended to draft a written lease between the trust and Jerry Thomas. However, one of the co-trustees informed the office staff at Rathert's firm that the family would prepare its own lease. Jerry Thomas informed the family he did not want to be bound to a seven-year lease, but preferred to continue renting the property on an oral year-to-year lease. At Jerry Thomas's request, no written lease was executed, and the family agreed to an oral year-to-year lease. A handwritten note was delivered to Rathert's office by LaRae Thomas. It stated, "It is [Carol Moen's] and my intention to draw up our own lease agreement following terms stated w/in the Will." As a result, Rathert did not draft a written lease agreement, and no written agreement between Jerry Thomas and the trust was ever executed.

[¶6] Jerry Thomas died in 1997 and Laurie Thomas remained in possession of the land. In December 1997, she tendered a check to the trustees for the 1998 lease payment. The trustees notified her that there was no valid lease agreement. When Laurie Thomas remained on the land, the trustees initiated an action to quiet title to the property. Laurie Thomas answered, counterclaimed, and filed a third-party complaint for legal malpractice against Rathert.

[¶7] The quiet title action proceeded to trial, which resulted in a judgment quieting title in the trust. We affirmed on appeal. Moen I, 2001 ND 95, ¶ 1, 627 N.W.2d 146. Rathert was granted summary judgment on Laurie Thomas's legal malpractice claim, and in Moen II, we reversed and remanded. 2001 ND 110, ¶ 16, 628 N.W.2d 325 (concluding a genuine issue of material fact existed regarding whether there was an attorney-client relationship between Rathert and Jerry Thomas). On remand, trial was held before a six-person jury, which found Jerry Thomas subjectively believed he had an attorney-client relationship with Rathert, but the greater weight of the evidence did not indicate Rathert owed a duty to Jerry Thomas. Judgment was entered dismissing, with prejudice, Laurie Thomas's third-party complaint against Rathert.

[¶8] On appeal, Laurie Thomas raises three issues. First, she contends the special verdict, as accepted by the trial court, is inconsistent and irreconcilable. Second, she argues the wording and content of the special verdict form precluded the jury from determining an ultimate issue of fact, confused the jury, and caused the jury to misapprehend the jury instructions. Finally, she claims the trial court abused its discretion by refusing to instruct the jury on Rathert's potential liability to her as a third-party beneficiary.

II

[¶9] Laurie contends the special verdict is inconsistent and irreconcilable. In part, the special verdict form returned by the jury contained the following questions, instructions, and answers:

1. Do you find by a greater weight of the evidence that Jerry Thomas subjectively believed he had an attorney-client relationship with the Defendants?

T Yes No

If you answered Question 1 "Yes" then answer Question 2. If you answered Question 1 "No" then sign and return the Verdict.
2. Do you find by a greater weight of evidence that the Defendants had a duty to Jerry Thomas?

Yes T No

If you answered Question 2 "Yes" then answer Question 3. If you answered Question 2 "No" then sign and return the Verdict.
3. Do you find by a greater weight of the evidence that the Defendants breached any duty owed to Jerry Thomas?

_____ Yes _____ No

If you answered Question 3 "Yes" then answer Question 4. If you answered Question 3 "No" then sign and return the verdict.

During the reading of the jury's verdict, the clerk of court read the jury's answers to the first two questions, the second of which indicated the jury found no duty owed by Rathert to Jerry Thomas. Laurie Thomas contends that, although the jury was instructed not to answer the third question if it found no duty existed under question two, the clerk of court indicated during the reading of the verdict that the jury answered "No" to the third question anyway. The trial court stopped the clerk's reading of the verdict based on the jury's response to the second question. The jury was polled and all of the jury members indicated the result was their "true verdict." The jury was then released. Laurie Thomas did not object or move for a new trial. The paper verdict delivered to Laurie Thomas after trial indicated the jury answered "Yes" to the first question and "No" to the second question. There was no answer to the third question.

[¶10] Laurie Thomas claims, based upon the clerk's reading of the verdict, that the jury answered the third question on the special verdict form in plain disregard of the court's instructions. She argues this created an inconsistent and irreconcilable verdict because, without a duty, there cannot be a finding of no breach of duty.

[¶11] A special verdict is set aside on appeal only if it is perverse and clearly contrary to the evidence. Moszer v. Witt, 2001 ND 30, ¶ 11, 622 N.W.2d 223. We have adopted the following test for reconciling apparent conflicts in a jury's verdict:

"[W]hether the answers may fairly be said to represent a logical and probable decision on the relevant issues as submitted. If after a review of the district court's judgment no reconciliation is possible and the inconsistency is such that the special verdict will not support the judgment entered below or any other judgment, then the judgment must be reversed and the case remanded for a new trial."

Id. (quoting Barta v. Hinds, 1998 ND 104, ¶ 6, 578 N.W.2d 553) (emphasis in original). In this case, we are not convinced the alleged inconsistency in the verdict exists because the copy of the special verdict form provided to the parties indicates the jury only answered the first two questions. Therefore, Laurie Thomas's first issue on appeal is without merit, and she properly abandoned it during oral argument.

III

[¶12] The second issue on appeal focuses on the trial court's inclusion of the word "subjectively" in the first question of the special verdict form, which addressed whether there was an attorney-client relationship between Rathert and Jerry Thomas. Laurie Thomas claims it was error for the trial court to include the word because it precluded the jury from finding Rathert owed an objective duty to Jerry Thomas. Whether an attorney-client relationship exists depends upon the particular circumstances of each case, and we agree with Laurie Thomas that an attorney-client relationship does not depend entirely upon a potential client's subjective belief. See In re Disciplinary Action Against Giese, 2003 ND 82, ¶ 17, 662 N.W.2d 250 ("The existence of an attorney-client relationship turns largely on the client's subjective belief it exists and looks to the nature of the work performed and...

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