Studio X, Inc. v. Weener, Mason & Nathan
| Citation | 276 Ga. App. 652,624 S.E.2d 157 |
| Decision Date | 05 December 2005 |
| Docket Number | No. A05A1316.,A05A1316. |
| Court | Georgia Court of Appeals |
| Parties | STUDIO X, Inc. et al. v. WEENER, MASON & NATHAN, LLP, et al. |
Greenberg, Traurig, Jeffrey M. Smith, Atlanta, Mike D. Harrison, Marietta, for appellants.
Swift, Currie, McGhee & Hiers, James T. McDonald, Jr., Atlanta, David B. Meltz, for appellees.
Studio X, Inc. and Interfinancial Properties, Inc., brought this action against Weener Mason and Nathan, LLP, Phillip Weener, P.C., Phillip Weener, William Mason, and Eric Nathan (collectively the attorneys), alleging the attorneys committed legal malpractice and breached a fiduciary duty in the manner in which they handled a commercial real estate transaction. Studio X and its joint venturer, Interfinancial Properties, [collectively Studio X], appeal from the grant of summary judgment to the attorneys.
Studio X entered into a commercial lease contract with the Mary T. Cristal Trust to lease real property owned by the Trust. The lease contained a "right of first refusal" clause, which provided that:
During the term of Tenant's tenancy in the demised premises should Mary T. Cristal Trust receive an acceptable offer to purchase the property of which the demised premises are a part, Mary T. Cristal Trust grants Tenant the right of first refusal to match the offer and purchase the property. In order to exercise its right of first refusal, Tenant must enter into a binding earnest money contract identical to that which was presented to Trust within 14 days of being presented with a copy of the acceptable contract.
The trust agreement contained a provision stating that no interest in real property belonging to the Trust may be sold without the written consent of a majority of the Trust's beneficiaries; there are six beneficiaries. Richard Browdy and Robert Krasnoff are the trustees.
During the lease term, trustee Browdy executed a listing agreement for a real estate agency to market the property. Five Kings, Inc., submitted an offer to purchase the property. Three of the six beneficiaries told Browdy that the Five Kings' offer was acceptable, while the other three had not agreed to sell the property.
Trustee Krasnoff took a copy of the offer to Howard Alpern, the president of Studio X. As part of its offer, Five Kings required that the Trust obtain a release from Studio X canceling its right of first refusal. Krasnoff presented Alpern with a release, which Alpern refused to sign.
Studio X retained the attorneys to analyze and exercise the right of first refusal. The attorneys prepared a purchase agreement and a letter stating that Studio X was exercising its right of first refusal and that the enclosed purchase agreement contained terms identical to the Five Kings' offer. The documents were sent to the Trust. Nine days later, the Trust sent a letter to both prospective buyers indicating that it was terminating negotiations and discontinuing efforts to sell the property because the majority of beneficiaries did not agree that the property should be sold.
When Studio X learned that the Trust was not going to renew the lease, it sued the Trust for not honoring the right of first refusal provision in the lease. The Trust moved for summary judgment. The trial court granted summary judgment to the Trust, holding that Studio X failed to satisfy the condition precedent of the right of first refusal. Specifically, the court held that Studio X failed to provide the Trust with a binding earnest money contract identical to that submitted by Five Kings, in that Studio X's offer differed in several material respects. Studio X appealed, and this Court affirmed the grant of summary judgment to the Trust. We held that the Trust was not required to sell the property to Studio X because Studio X failed to satisfy the condition precedent of submitting an identical purchase agreement.1
Studio X then filed the instant action against the attorneys, alleging legal malpractice and breach of fiduciary duty. Studio X claimed the attorneys failed to properly draft and execute the documents necessary to exercise its right of first refusal. The attorneys moved for summary judgment, which the trial court granted. The trial court found that the attorneys did not breach the duty of care owed to Studio X, and that they acted in good faith and to the best of their knowledge in an area in which the law is not well settled, clear and widely recognized. The court also found that Studio X failed to show that the attorneys' actions caused Studio X's damages, since the Trust was not required to sell the property. For the reasons that follow, we affirm the judgment of the trial court.
In a legal malpractice action, the client has the burden of establishing three elements: (1) that it employed the attorney; (2) that the attorney failed to exercise ordinary care, skill and diligence; and (3) that such negligence was the proximate cause of damage to the plaintiff.2 In other words, the plaintiff must prove that the attorney's alleged negligence proximately caused the client's harm.3 Proximate cause in a malpractice action requires the plaintiff to demonstrate that but for the attorney's error, the outcome would have been different.4 Accordingly, the attorneys in this case are entitled to summary judgment if they show that there is an absence of proof that their errors were the proximate cause of Studio X's damages.5 Here, there is an absence of proof that the attorneys' actions proximately caused Studio X's alleged damages.
The lease agreement gave Studio X the right of first refusal in the event the Trust received "an acceptable offer to purchase the property." The attorneys argue that the Trust never received an acceptable offer, and that it never accepted an offer from anyone. They point out that the...
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