Professional Fiduciary, Inc. v. Silverman, No. A05-1322.
| Decision Date | 02 May 2006 |
| Docket Number | No. A05-1322. |
| Citation | 713 N.W.2d 67 |
| Parties | PROFESSIONAL FIDUCIARY, INC., et al., Respondents, v. Steven A. SILVERMAN, et al., Appellants. |
| Court | Minnesota Court of Appeals |
Patrick H. O'Neill, Jr., Stephen M. Warner, O'Neill & Murphy, LLP, St. Paul, MN, for respondents.
Lewis A. Remele, Jr., Kevin P. Hickey, Robin Ann Williams, Bassford Remele, Minneapolis, MN, for appellants.
Considered and decided by MINGE, Presiding Judge; TOUSSAINT, Chief Judge; and CRIPPEN, Judge.*
Appellants Steven Silverman and Progressive Casualty Insurance present a certified question whether respondent Professional Fiduciary, personal representative for the estate of Kory Erickson, is precluded from bringing a malpractice claim against attorney Silverman because (1) the personal representative is conflicted by its association with Western National Insurance, a party adverse to the decedent in the lawsuit out of which the malpractice claim arose; (2) the malpractice suit is a de facto, impermissible assignment of the decedent's claim against Silverman; or (3) the malpractice suit is an impermissible contribution claim against Silverman. Because we conclude that there is no evidence that respondent is conflicted, or that the action is an assignment or contribution claim, we answer the certified question in the positive.
This matter started with a three-vehicle accident. The car driven by decedent Kory Erickson accidentally crashed into a car operated by Sara Jean Meuhlhauser, causing Meuhlhauser's vehicle to collide with a truck owned by Hartmann Well Drilling and Service, driven by Brian Hartmann (jointly Hartmanns), and insured by Western National Insurance. On impact, pipes fell from the Hartmann truck, killing Muehlhauser's daughter, Salina, a passenger in the Muehlhauser vehicle. Salina Muehlhauser's next of kin commenced a wrongful death action against Erickson, his wife (as the owner of the car), and Hartmanns. The decedent and his wife were represented by Silverman, an attorney employed by their insurance company, appellant Progressive.
As co-defendants, Hartmanns and Ericksons were adverse to each other. Kory Erickson's wife was ultimately dismissed as a defendant and Erickson had only $30,000 in insurance coverage. Appellants allege that decedent Erickson and the Muehlhauser family wanted more liability to fall on Hartmanns because Hartmanns had substantial insurance coverage and because other than his limited insurance coverage, Erickson lacked resources to satisfy a judgment. Hartmanns brought an unsuccessful motion for directed verdict on the ground that Erickson's negligence was the sole cause of the accident.
During closing arguments, the attorney for the Hartmann defendants argued first and suggested a jury award of $75,000. Silverman argued next. Because he felt that the jury was offended by the suggestion of a low award, Silverman observed that an award could be as high as $1,000,000, but refused to name a number saying that the jury must ultimately determine the appropriate amount. The jury returned a verdict of $495,000 apportioning 50% of the fault to Erickson and 50% to Hartmanns. Because the defendants were jointly and severally liable for the entire award and because Erickson had no personal assets, Western National paid everything except Erickson's $30,000 policy limit which was paid by Progressive. Western National's attorney blamed the large award on Silverman's million dollar comment regarding damages during closing argument.
Subsequent to the trial, Erickson died. Western National brought a contribution claim and obtained a judgment against the decedent in the amount of $217,500 for his share of the jury award that it had paid. Although the family did not initiate a probate proceeding, as a judgment creditor, Western National sought the appointment of a personal representative for the estate. Western National believed that the estate had a malpractice claim against Silverman. The decedent's widow was notified of the proceeding and of Western National's hope that the personal representative would bring a malpractice claim. She did not object. At Western National's suggestion, respondent Professional Fiduciary was appointed personal representative for Erickson's estate.
Professional Fiduciary retained probate counsel. Counsel submitted the facts surrounding Silverman's representation of Erickson in the Muehlhauser wrongful-death action to an expert for review and the expert concluded that Silverman departed from the standard of care owed to decedent Erickson. Professional Fiduciary, in its capacity as personal representative, then filed a malpractice suit against Silverman and, because he was a staff attorney for Progressive, against appellant Progressive.
Appellants moved for summary judgment, arguing that Professional Fiduciary could not maintain the action. Although the district court denied appellants' motion, it agreed to certify the question raised in appellants' summary judgment motion for immediate appeal under Minn. R. Civ.App. P. 103.03(i). The question certified is:
Can an adverse party in an underlying lawsuit use its status as a creditor under Minnesota probate law to obtain the right to bring a legal malpractice claim against the opposing attorney in the name of the estate of the attorney's client?
Minn. R. Civ.App. P. 103.03(i) provides that an appeal may be taken to this court from an order that denies a motion for summary judgment if the district court "certifies that the question presented is important and doubtful." In deciding a certified question arising from denial of summary judgment, "we review the record to determine whether a genuine issue of material fact exists and whether the law was correctly applied." Murphy v. Allina Health Sys., 668 N.W.2d 17, 20 (Minn.App. 2003), review denied (Minn. Nov. 18, 2003). Absent genuine issues of material fact, appellate courts review certified questions de novo. Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn. 1998).
Although the district court in this case properly certified the question as "important and doubtful" under Minn. R. Civ. App. P. 103.03(i), this court evaluates whether the issue set forth in the certified question accurately reflects the record. See, e.g., Murphy, 668 N.W.2d at 19 (rephrasing certified question). The question submitted is as follows:
Can an adverse party in an underlying lawsuit use its status as a creditor under Minnesota probate law to obtain the right to bring a legal malpractice claim against the opposing attorney in the name of the estate of the attorney's client?
As framed, the certified question implies that Western National is bringing the malpractice claim against Silverman. There is no evidence in the record that Professional Fiduciary, as the personal representative, is simply an agent of Western National. We conclude that it is not helpful to the disposition of the litigation to answer the question as certified. Instead, we rephrase the certified question by noting that the creditor used its status to appoint a personal representative who then pursued a malpractice claim against the decedent's former attorney. The reformulated question reads as follows:
Can the personal representative of an estate maintain a malpractice claim against the decedent's former attorney even though (1) a judgment creditor of the decedent initiated the probate proceeding and the personal representative's appointment and urged the malpractice claim, (2) that creditor's judgment was based on its contribution claim against the decedent as co-defendant, and (3) the alleged malpractice occurred in the action that gave rise to the contribution claim?
We turn to the merits.
Appellants argue that the respondent personal representative may not bring a malpractice claim against attorney Silverman because (1) the personal representative is conflicted by its association with Western National, a party adverse to the decedent in the underlying lawsuit; (2) the malpractice suit is a de facto, impermissible assignment to Western National of the decedent's claim against Silverman; or (3) the malpractice suit is an impermissible contribution claim against Silverman.
Under Minnesota law, personal representatives may bring suit on behalf of the estate. Minn.Stat. § 524.3-703(c) (2004) (); see also Minn.Stat. § 524.3-715(22) (2004) (). This power extends to maintaining a malpractice action against the decedent's lawyer. Johnson v. Taylor, 435 N.W.2d 127, 129 (Minn.App.1989), review denied (Minn. Apr. 19, 1989).
Appellants argue that the personal representative in this matter is barred from pursuing this claim because of a conflict of interest. The record before us does not establish that Western National is a party to the malpractice action, or that Professional Fiduciary, as the personal representative, is beholden to Western National. Professional Fiduciary has a fiduciary duty to the estate to evaluate and pursue claims that would benefit the estate. See Minn.Stat. § 524.3-703(c), 524.3-715(22). There is no evidence before us to indicate that respondent is not independent or has breached its fiduciary duties to the estate. And even if the personal representative is successful in recovering from the appellant, before Western National can be paid on its claim, the decedent's wife is entitled to her statutory elective share and the expenses of the decedent's funeral and other associated costs and administrative...
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