No Duty To Beneficiary

The Idaho Supreme Court reversed a finding against an attorney

Attorney Craig Wise appeals a district court’s determination that he breached a duty of care owed to Billy Kyser, Jr., as a beneficiary of Carolyn Kyser’s will. Wise represented Billy’s mother, Carolyn, in divorce proceedings from Bill Kyser, Sr., and in preparing a will that bequeathed her entire estate in equal shares to Billy and his brother Brent Kyser. As part of the divorce proceedings, and before Carolyn’s will was completed, Carolyn and Bill Sr. executed a property settlement agreement in which Bill Sr. and Carolyn agreed to retain sequential life estates in the family home, with the remainder going to Brent and Billy as tenants in common upon the death of the last surviving parent. Wise prepared a deed memorializing the terms of the property settlement agreement. After Bill Sr. and Carolyn both passed away, Brent retained Wise to represent him as the personal representative of Carolyn’s estate. Brent also hired Wise independently to prepare a quitclaim deed transferring Billy’s interest in the home to Brent. Wise sent the deed to Billy, who then executed it. David Kalb, Billy’s court-appointed conservator, then filed a malpractice suit against Wise. After a court trial, the district court held Wise breached the duty he owed to Billy as a beneficiary of Carolyn’s will by preparing the deed because it frustrated Carolyn’s testamentary intent that her estate be divided equally between her two sons.

We reverse the district court’s legal determination that Wise owed Billy a duty of care when Wise was acting as counsel for the personal representative of Carolyn’s estate, Brent. Although Wise owed Billy a duty of care in drafting and executing Carolyn’s will, the district court impermissibly extended that duty by requiring that Wise ensure an asset outside the probate estate complied with Carolyn’s intent in her will. We, therefore, remand with instructions to enter judgment for Wise.

Liability to a non-client

One may rightly question Wise’s “moral blame” as part of this test – indeed the district court did so. We make no conclusion regarding Wise’s professional responsibility here today; however, Idaho Rules of Professional Conduct 1.7(a)(2) and 4.3 may be relevant for an inquiry by the Idaho State Bar as to Wise’s ethically questionable actions in (1) directly contacting Carolyn’s unrepresented and severely disabled son, (2) having that son transfer his interest in the real property to Wise’s client, (3) failing to advise Billy to seek the advice or intervention of independent counsel, and (4) failing to consult Billy’s conservator before performing any of these acts.

Even so, an alleged violation of any ethical rules, and the moral blame attendant to such conduct, is insufficient alone to extend a duty in tort from Wise to Billy under the balance-of-theharms test. The remaining factors of the test simply do not support extending a duty to Wise’s conduct in preparing non-testamentary instruments – the 2002 Deed and the 2012 Deed – that ultimately transferred Billy’s interests in the home to his brother. While the district court found this action violated a duty owed by Wise to Billy because it frustrated Carolyn’s intent as expressed in her will, we disagree. Wise’s preparation of a deed as a non-testamentary document ten years after the will was drafted, and his contact with Billy to obtain his signature, did not violate a duty Wise owed to Billy as a beneficiary of Carolyn’s will since the deed did not concern an asset of her estate. Wise’s duty at that point was owed to Brent as the personal representative of the estate and to Brent individually in connection with the preparation of the deed. Billy was a non-client, and Wise owed him no duty of care.

I hope that Professor Mike Oths and his Concordia Law students are still reading this blog. (Mike Frisch)