Tennen v. Lane

• Decision Date: 18 November 1985
• Docket Number: No. 2,CA-CIV,2
• Citation: 149 Ariz. 94,716 P.2d 1031
• Parties: Harriet TENNEN, Plaintiff/Appellant v. Robert L. LANE and Elsa Lane, husband and wife, Defendants/Appellees. 5480.
• Court: Arizona Court of Appeals

Page 1031

716 P.2d 1031

149 Ariz. 94

Harriet TENNEN, Plaintiff/Appellant v. Robert L. LANE and Elsa Lane, husband and wife, Defendants/Appellees.

No. 2 CA-CIV 5480.

Court of Appeals of Arizona Division 2, Department A.

Nov. 18, 1985.

Review Denied April 1, 1986.

Renaud, Cook & Videan, P.C. by James M. Videan, Phoenix, for plaintiff/appellant.

Monbleau, Vermeire & Turley by Albert R. Vermeire, Phoenix, for defendants/appellees.

OPINION

BIRDSALL, Presiding Judge.

This appeal is from a directed verdict against the plaintiff, Harriet Tennen, in a legal malpractice claim against the defendant, Robert L. Lane, an attorney practicing in Phoenix. The verdict was directed because the trial court found, as a matter of law, that no evidence showed that the malpractice, if any, was a proximate cause of any damage to the plaintiff. The obvious issue on appeal is whether this finding was error. We reverse.

The facts giving rise to the appellant's claim, viewed in the most favorable manner to her, follow. The appellant was married to Bob Tennen in Mexico in 1963. Her prior marriage was dissolved in a Mexican divorce proceeding shortly before her marriage to Tennen. Bob Tennen was in the jewelry business in Tucson at the time of the marriage, but had accumulated little or no wealth. After a brief time in Tucson, they moved to Phoenix, where his business prospered. His Phoenix business was incorporated and he was the sole stockholder. Although nominally a director, the appellant did not participate in the management of the business. She did, however, help in the business by making deliveries between the Phoenix stores, doing design work, setting up store windows, and making molds and castings.

Sometime prior to June 8, 1979, Bob agreed to sell the business to a Delaware corporation for $920,000, payable $170,000 at closing and the balance of $750,000 by deferred payments over five years. The buyers were required to pay the seller's income tax resulting from the sale. He did not tell Harriet about this proposed sale.

On June 8, Harriet and Bob went to the appellee's office and executed a "Declaration of Property Agreement." That agreement provided, in part, that the stock in the jewelry corporation was Bob's separate property. The appellee did not explain the agreement to Harriet, nor did Bob. Neither did the appellee advise Harriet that she should have independent legal advice. The agreement was not a property settlement in contemplation of divorce. There was no marital discord at that time. Harriet signed the agreement without reading it. She was not told about the pending sale. Harriet believed the appellee was her attorney. He had previously written her will, which he was safekeeping in his office. He had also been counsel for the corporation, and Bob's attorney.

Before proceeding with the purchase, the buyers requested that Harriet consent to the sale and prepared an "adoption, ratification and consent." On June 12, Bob, one of the buyers, and the appellee took this form to the appellant at her home, where Bob asked her to sign it. Bob told the appellant she was signing something for the I.R.S. No one explained the document to her, and she signed without knowing what she was signing. The appellee notarized her signature on that agreement. We set forth that agreement in its entirety:

"I, the undersigned, wife of Robert Tennen, do hereby acknowledge that I have carefully read the foregoing Stock Purchase Agreement and all exhibits made a part thereof (hereinafter called the "Agreement"), and I understand its meaning and effect; that I fully and truly consent to, approve of and join in the purposes of the Agreement and the wisdom of the Agreement's provision; that I do hereby make fully and unconditionally subject to the terms of the Agreement any community property interest that I may now or hereafter have in any property referred to in the Agreement (including, without limitation, any and all shares of capital stock referred to in the Agreement as the Shares, and any and all cash sums delivered or to be delivered pursuant to the Agreement, any and all promissory notes delivered or to be delivered pursuant to the Agreement, and the proceeds of each of the foregoing), and that I promise and agree to execute any and all instruments, to be fully bound by all applicable terms and conditions of the Agreement and to do any and all things necessary and proper to accomplish the purposes set forth in the Agreement. I do hereby irrevocably appoint my husband, my Attorney-in-Fact for the purposes of modifying, amending, supplementing or terminating the Agreement and I do hereby authorize, approve, ratify, confirm and adopt any such modification, amendment, supplement or termination as may at any time, and from time to time, be made by my husband. I hereby agree that I am and shall be bound by the terms and conditions of the Agreement as surviving spouse, heir, legatee, executrix and/or administratrix in the event that I shall survive my husband."

About two and one-half weeks after June 12, 1979, Bob, at Harriet's request, gave her a copy of the declaration of property agreement. This was just before he left on a trip to Europe. On February 11, 1980, Harriet, represented by new counsel, filed a petition for dissolution of the marriage. In that petition she also sought to have the property agreement set aside, alleging that it had been fraudulently procured. Bob was present in Arizona and first appeared in the dissolution by the appellee, attorney Lane. However, shortly thereafter new counsel was substituted to represent him. An answer and counterclaim for annulment were filed on his behalf. The annulment pleading theorized that the Mexican marriage was invalid. However, before the dissolution action could be tried, Bob discounted the balance owing on the sale of the jewelry business and disappeared with the money. The appellant has never received any of the proceeds from the sale.

With Bob gone to places unknown, his attorney was permitted to withdraw and the dissolution proceeded as a default. It was heard by Judge Cecil B. Patterson, Jr. The decree, which was entered February 25, 1981, contained a finding that the husband had disappeared and that a court receiver had been appointed on that date to handle the liquidation of the property allocated in the decree to the husband and "for the location of assets secreted by the husband." The decree awarded the marital home to the appellant and ordered the sale of another house, with the sale proceeds to go to her. It also awarded her an automobile and up to $500,000 of the proceeds from the sale of the business, with the remainder of the $1,000,000 sale price to go to the husband. The decree also found that the marriage was valid and the declaration of property was invalid, "as having been procured at a time the wife was not represented, was not able to understand the content of the document, was not informed as to the content of the document, and her signature on this document was procured in an unfair manner." The property agreement was set aside.

The complaint in the legal malpractice action from which this appeal is taken was filed March 24, 1981. The verdict was directed May 2, 1983, and judgment entered May 27. The appellant testified she would not have signed the property agreement or the consent if she had known what they were. However, the appellee argues that no evidence shows what would have happened had she not signed. He points out that although two of the buyers' attorneys' depositions were taken, they were never asked what the buyers would have done without the property agreement or the consent. ¹ The stock was in Bob Tennen's name. He could have sold it without the appellant's consent. He could, likewise, have sold the business, or taken the jewelry. For these reasons he contends that what would have happened, but for the malpractice is pure speculation.

We agree with the appellee that, when the evidence presented in a negligence action fails to show a causal connection between the tort and the damage, a directed verdict is mandatory. Green v. Jennings, 26 Ariz. 132, 222 P.2d 1039 (1924). Where proof of causation would be left to the jury's speculation, a directed verdict is properly entered. Shaner v. Tucson Airport...