Tuesday, November 2, 2004
Court of Appeal Limits Attorney Liability to Kin of Dying Client
‘Intended’ Estate Planning Beneficiaries Cannot Maintain Malpractice Action Where Intent Is in Question
By DAVID WATSON, Staff Writer
A lawyer who prepares a will or deed for a dying client cannot be sued for malpractice by a relative claiming the transaction was intended to benefit him or her if the client’s intent was open to question, this district Court of Appeal ruled yesterday.
The court’s Div. One issued rulings in two cases in which children sued lawyers who had acted on behalf of their hospitalized mothers. Both opinions were authored by Justice Miriam A. Vogel, and much of the language used was identical.
“Although a lawyer retained to provide testamentary legal services to a testator may also have a duty to act with due care for the interests of an intended third-party beneficiary, the lawyer’s primary duty is owed to his client and his primary obligation is to serve and carry out the client’s intentions,” Vogel explained at the beginning of her opinion in Boranian v. Clark, B1645402. “Where, as here, there is a question about whether the third-party beneficiary was, in fact, the decedent’s intended beneficiary, and the beneficiary’s claim is that the lawyer failed to adequately ascertain the testator’s intent or capacity, the lawyer will not be held accountable to the beneficiary—because any other conclusion would place the lawyer in an untenable position of divided loyalty.”
Vogel opened her opinion in the companion case, Featherson v. Farwell, B169057, with the same sentence, except that she wrote “testator or grantor” instead of “testator” and “intended third-party beneficiaries” instead of “an intended third-party beneficiary. ” Featherson involved a deed transferring a residence rather than a will.
Neither of the lawyers involved—Monterey Park attorney Laurence E. Clark and Los Angeles practitioner Gary A. Farwell—owed a duty of professional care to the daughters of the women who retained them, Vogel explained.
In Boranian the appellate court overturned a $100,000 judgment against Clark in favor of Juanitia Boranian and John Farris, the children of Marlene Farris. Los Angeles Superior Court Judge Ernest M. Hiroshige found that Clark negligently prepared a will that made a gift of a business owned by Farris, a widow, to her companion, Placido Chavez, who had been operating it. A loan taken out to purchase the business was secured by Marlene Farris’ home.
Marlene Farris died three days after executing the will, which Clark prepared at the request of Chavez and which was executed in the dying woman’s hospital room.
The children contested the will, but the contest was settled when Chavez agreed to give up any claim to the business, a laundromat, in return for $5,000. They then sued Clark for malpractice.
But Vogel said Clark owed no duty to the children.
“[W]hile out of an agreement to provide legal services to the testator, a duty also arises to act with due care with regard to the interests of the intended beneficiary, the scope of duty owed to the beneficiary is determined by reference to the attorney-client relationship,” she declared. “The primary duty is owed to the testator-client, and the attorney’s paramount obligation is to serve and carry out the intention of the testator. Where, as here, the extension of that duty to a third party could improperly compromise the lawyer’s primary duty of undivided loyalty by creating an incentive for him to exert pressure on his client to complete her estate planning documents summarily, or by making him the arbiter of a dying client’s true intent, the courts simply will not impose that insurmountable burden on the lawyer.”
The justice repeated that language word-for-word in Featherson, though without italicizing the word “intended.”
In Featherson, the court affirmed a trial court ruling that Mary Jean Featherson could not maintain a cause of action against Farwell for failing to record a deed executed by her mother, Marie Featherson. The deed transferred Marie Featherson’s home to Mary Featherson, retaining a life interest.
Marie Featherson died several months later. Farwell explained in a letter that he did delayed recording the deed for several months “to protect Marie Featherson’s interests.”
Marie Featherson’s son, Charles Featherson, successfully petitioned the Probate Court to transfer the home to the estate. The probate judge, relying in part on the delay in recording the instrument and Farwell’s testimony, ruled that the evidence did not establish that Marie Featherson had “an immediate present intent to convey the property” to her daughter.
Mary Featherson then sued Farwell for malpractice.
“Farwell’s duty was to Marie, and his testimony in the probate proceedings shows that he had that duty in mind when he did not immediately record the deed because he was ‘being overly protective of [his] elderly client.’ Since the probate court found that Marie did not intend to deliver the deed, a rule that imposed on Farwell an obligation to act in Mary’s best interests would necessarily result in a breach of Farwell’s duty to Marie, a classic example of divided loyalty.”
Justices Reuben A. Ortega and Robert M. Mallano concurred in both cases.
Clark was represented on appeal by Janice R. Mazur and William E. Mazur Jr. of Mazur & Mazur in El Cajon. Boranian and John Farris were represented by Encino attorney Charles E. Alpert and Granada Hills lawyer Tamila C. Jensen.
Joseph Andrews of Andrews & Hensleigh in Los Angeles represented Mary Featherson, while Edith R. Matthai and Natalie A. Kouyoumdjian of Robie & Matthai, also in Los Angeles, represented Farwell.
Copyright 2004, Metropolitan News Company