Wednesday, July 4, 2007

Closing Time

A lawyer was retained to represent a seller of real property located in Maine. The buyers believed that they were purchasing 39 acres; the documents presented at closing showed the purchase of 10 acres. The buyers asked the seller's attorney if they were getting 39 acres and whether they should obtain title insurance. There was conflicting evidence at the ensuing malpractice trial as to what the lawyer said, but it appears that he assured the buyers that the title was "clear" and that they would receive additional deeds for the remaining 29 acres. A few days later, the lawyer sent the buyers a letter  saying it had "been a pleasure to serve them." The buyers received additional documents but did not closely inspect them.

The sellers discovered the problem when they attempted to subdivide. They sued the lawyer for malpractice. A jury found an attorney-client relationship and awarded damages. On appeal, the lawyer contended that the case was brought after the statute of limitations had run. The Maine Supreme Court agreed and reversed. The lawyer had not given a "real estate title opinion" for which the statute would commence on discovery. Rather, it was a case of malpractice that had expired six years after the closing. The court did not question the existence of an attorney-client relationship between the buyers and the lawyer. (Mike Frisch)

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