Trask v. Butler

• Court: Washington Supreme Court
• Writing for the Court: GUY; ANDERSEN
• Citation: Trask v. Butler, 872 P.2d 1080, 123 Wn.2d 835 (Wash. 1994)
• Decision Date: 19 May 1994
• Docket Number: No. 59934-3
• Parties: Russell J. TRASK, individually and as Personal Representative of the Estate of George and Johanna Trask and as Assignee of the claims of Laurel Slaninka, Respondent, v. Richard L. BUTLER and Jane Doe Butler, husband and wife and their marital community; George S. Cook and Jane Doe Cook, husband and wife and their marital community; Robert A. Berst and Jane Doe Berst, husband and wife and their marital community; Jerry H. Landeen and Jane Doe Landeen, husband and wife and their marital community; Cook, Berst, Landeen and Butler and Richard L. Butler, P.S., a Washington professional services corporation, Petitioners.

Page 835

123 Wn.2d 835

872 P.2d 1080

Russell J. TRASK, individually and as Personal Representative of the Estate of George and Johanna Trask and as Assignee of the claims of Laurel Slaninka, Respondent, v. Richard L. BUTLER and Jane Doe Butler, husband and wife and their marital community; George S. Cook and Jane Doe Cook husband and wife and their marital community; Robert A Berst and Jane Doe Berst, husband and wife and their marital community; Jerry H. Landeen and Jane Doe Landeen, husband and wife and their marital community; Cook, Berst, Landeen and Butler and Richard L. Butler, P.S., a Washington professional services corporation, Petitioners.

No. 59934-3.

Supreme Court of Washington En Banc.

May 19, 1994.

Lane Powell Spears & Lubersky, Thomas W. Top, Seattle, for petitioners.

Christensen, O'Connor, Johnson & Kindness, F. Ross Boundy, Diana V. Blakney, Seattle, for respondent.

GUY, Justice.

Respondent Russell Trask filed a legal malpractice action against petitioner Richard Butler claiming professional negligence, breach of fiduciary duty, and breach of contract. Butler moved for summary judgment as to all of Russell's claims. The trial court denied Butler's motion. We granted discretionary review of an interlocutory decision to determine whether the trial court erred in denying Butler's motion for summary judgment. The question presented is whether an estate beneficiary is owed a duty of care from an attorney hired by the personal representative of the estate. We answer the question in the negative and reverse the trial court's order denying summary judgment.

BACKGROUND

Laurel Slaninka and Russell Trask are the children of George and Johanna Trask. After George's death in 1983, Laurel was appointed as personal representative for the estate of George Trask and as attorney-in- fact for Johanna. ¹ George's will and a reciprocal durable power of attorney requested that Laurel act in these capacities. In 1984, Laurel retained attorney Richard Butler to assist her with her duties as attorney-in-fact and as personal representative.

Before George died in 1983, he conveyed to Russell by quit claim deed a 13 1/2-acre parcel of land on Bainbridge Island. The deed gifting the property to Russell was signed by George but not Johanna. In 1985, Laurel attempted to negotiate the return of the 13 1/2 acres from Russell, arguing that the property legally belonged to their mother because the quit claim deed did not contain Johanna's signature. Laurel sought return of the property so that it could be sold to pay for their mother's health care. Russell refused to return the property. Laurel, acting as personal representative for the estate of George Trask and as attorney-in-fact for Johanna, initiated a quiet title action against Russell. The quiet title action related to the 13 1/2 acres quit claimed to Russell and a 6-acre parcel that included Johanna's Bainbridge Island waterfront home (the homestead). Laurel brought the quiet title action over the 6-acre parcel to determine whether Russell had lawfully constructed a garage, a greenhouse, and a turnaround driveway some 70 feet onto the homestead property. Russell owns a parcel of waterfront property contiguous to the homestead. Butler represented Laurel in the quiet title actions.

Believing the liquid assets required to care for Johanna were almost exhausted, Laurel listed the homestead for sale. Laurel sold the homestead to the Turkheimers in late 1986 for $275,000: a $150,000 cash down payment with a balance due of $125,000. The balance, however, was subject to reduction in the event the quiet title action over Russell's contested encroachments proved unsuccessful. Butler represented Laurel in connection with the sale to the Turkheimers.

Johanna Trask died in 1987. Pursuant to Johanna's will, Laurel was appointed as personal representative. Johanna's will provided that the entire estate was to be divided equally between Laurel and Russell. Butler represented Laurel in her capacity as personal representative for Johanna's estate.

Laurel was removed as personal representative of Johanna's estate by superior court judgment in early 1988. The trial judge determined that Laurel had breached her fiduciary duty to Johanna's estate when she attempted to set aside the conveyance of the 13 1/2 acres and when she sold the homestead to the Turkheimers on disadvantageous conditions. Butler represented Laurel in the removal proceeding. After the hearing, an interim personal representative was appointed, and in late 1988 the sale of the homestead to the Turkheimers was litigated and the sale was set aside.

Russell was appointed as personal representative for the estates of George and Johanna Trask after the interim personal representative resigned in 1989. Thereafter, Russell threatened to sue Laurel for damages in connection with her actions as attorney-in-fact for Johanna and as personal representative for the estates of George and Johanna Trask. Laurel then signed a settlement agreement with Russell, giving to Russell her share of their parents' estate in exchange for a release of liability for her actions as attorney-in-fact and as personal representative. Laurel also assigned to Russell any claim or cause of action she might have against Butler as an estate beneficiary.

Following the settlement agreement, Russell filed this malpractice action against Butler in his capacity as successor personal representative, on his own behalf as a beneficiary, and as assignee on behalf of Laurel as a beneficiary. Russell claims Butler negligently advised Laurel to file the quiet title action, to sell the homestead on disadvantageous terms, and to contest the probate proceeding removing her as personal representative. Russell argues that Butler's advice depleted the assets of the estate by approximately $90,000. Butler moved for summary judgment asserting no privity of contract with Russell as either an estate beneficiary or as a successor personal representative. Butler's motion was denied. Butler appealed the trial court's decision directly to this court for discretionary review. We accepted review and reverse the trial court's denial of summary judgment.

PRIMARY ISSUE

To establish a claim for legal malpractice a nonclient plaintiff must prove the following elements: (1) the existence of an attorney-client relationship which gives rise to a duty of care to the plaintiff, (2) an act or omission by the attorney in breach of the duty of care, (3) damage to the plaintiff, and (4) proximate causation between the attorney's breach of duty and the damage incurred. Hizey v. Carpenter, 119 Wash.2d 251, 260-61, 830 P.2d 646 (1992); Stangland v. Brock, 109 Wash.2d 675, 679, 747 P.2d 464 (1987). The gravamen of this appeal centers on the first element: whether an attorney hired by the personal representative of an estate owes a duty of care solely to the personal representative, or whether the attorney's duty of care is extended to the nonclient estate and its beneficiaries.

ANALYSIS

I

Traditionally, the only person who could bring a lawsuit for attorney malpractice was the attorney's client. Bohn v. Cody, 119 Wash.2d 357, 364-65, 832 P.2d 71 (1992); Stangland, 109 Wash.2d at 679, 747 P.2d 464; 2 R. Mallen & J. Smith, Legal Malpractice § 26.4 (3d ed. 1989). Here, the attorney-client relationship existed between Butler as attorney and Laurel as personal representative. In re Estate of Larson, 103 Wash.2d 517, 520-21, 694 P.2d 1051 (1985) (in probate the attorney-client relationship exists between the attorney and the personal representative of the estate); see Stangland, 109 Wash.2d at 680, 747 P.2d 464; see also 2 R. Mallen & J. Smith § 26.10 (in the absence of an express undertaking, fraud or malice, the attorney for a personal representative owes no duty to and cannot be liable for negligence to heirs, legatees, creditors of the estate or surcharged by the probate judge). Under traditional privity of contract rules Butler does not owe Russell, a nonclient, a duty of care.

Absent privity of contract, two tests were previously applied in Washington to determine whether an attorney owes a duty to a nonclient: the California "multi-factor balancing" test and the Illinois "third party beneficiary" test. Bowman v. John Doe, 104 Wash.2d 181, 187-88, 704 P.2d 140 (1985); Stangland, 109 Wash.2d at 679-82, 747 P.2d 464 (under the third party beneficiary test and the multi-factor balancing test an attorney who drafts a will for his client owes a duty of care to the nonclient intended beneficiaries of the will); Bohn, 119 Wash.2d at 363-67, 832 P.2d 71 (under the multi-factor balancing test an attorney who represents a borrower may owe a duty of care to the nonclient lender). Russell maintains that Butler owes him a duty of care as a nonclient under either the multi-factor balancing test or the third party beneficiary test.

The multi-factor balancing test involves analysis of the following six factors:

(1) the extent to which the transaction was intended to affect the plaintiff;

(2) the foreseeability of harm to the plaintiff;

(3) the degree of certainty that the plaintiff suffered injury;

(4) the closeness of the connection between the defendant's conduct and the injury;

(5) the policy of preventing future harm; and

(6) the extent to which the profession would be unduly burdened by a finding of liability.

Bohn, at 365, 832 P.2d 71. The important inquiry under the multi-factor balancing test is whether the attorney's services were intended to affect the plaintiff. Stangland, 109 Wash.2d at 680, 747 P.2d 464.

In Goldberg v. Frye, 217 Cal.App.3d 1258, 266 Cal.Rptr. 483 (1990), a California appellate court applied the multi-factor balancing test to determine whether estate beneficiaries could maintain a legal malpractice cause of action against an attorney hired by the estate administrator. The California appellate court concluded that because the administrator and the attorney...