Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Monday, August 31, 2009

Malpractice Outside of Estate Planning Context

Texas Smith v. O’Donnell, 52 Tex. Sup. Ct. J. 52 (Tex. 2009): Executor sued Decedent’s former Attorneys for malpractice in advising Decedent in his capacity as the executor of his wife’s estate.  The lower court ruled in favor of Attorneys basing its judgment on the fact that Decedent’s executor and the estate lacked privity of contract with Attorneys.  The Supreme Court of Texas granted a petition for review without reference to the merits, vacated the lower court’s judgment, and remanded so the lower court could take into account the holding in Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780 (Tex. 2006).

On remand, the Court of Appeals began its analysis by holding that Belt was not limited to estate planning malpractice actions.  Accordingly, the court explained that Executor stepped into Decedent’s shoes and could bring whatever malpractice action Decedent could have brought while alive, even if it did not involve the planning of Decedent’s estate.  The court relied on language in the Belt decision which provided that “legal malpractice claims alleging pure economic loss survive in favor of a deceased client’s estate.”  The court then examined the evidence and concluded that although there was no evidence that Attorneys acted with malice or breached fiduciary duties, there was a triable issue as to what damages were attributable to Attorneys’ acts.  The court remanded the case to the trial court to determine whether Attorneys’ acts amount to malpractice.  O’Donnell v. Smith, 234 S.W.3d 135 (Tex. App.—San Antonio 2007).  Attorneys appealed.

The Texas Supreme Court affirmed.  The court agreed with the Court of Appeals that Executor is in the same position as Decedent.  If Decedent had not died, Decedent could have brought the malpractice action and thus Executor may bring the action on Decedent’s behalf.  The court explained that the concerns about third-party malpractice suits (e.g., by disgruntled beneficiaries) do not apply in this type of case as the estate’s suit is the same as the one the client would have brought; the attorney-client relationship is not jeopardized by the attorney considering the impact on a third party.

Note:  The court does not address whether Attorneys’ actions constituted malpractice.

Dissent:  A two-judge dissent asserted that this case falls under the Barcelo v. Elliott, 923 S.W.2d 575 (Tex. 1996), rule which precludes a malpractice action by a non-client (e.g., an unhappy beneficiary) against the decedent’s attorney for malpractice because of lack of privity.

Moral:  A decedent’s claim for legal malpractice, regardless of whether it involves the planning of the decedent’s estate or some other legal matter, survives and thus may be brought by the decedent’s personal representative.

https://lawprofessors.typepad.com/trusts_estates_prof/2009/08/malpractice-outside-of-estate-planning-context.html

Estate Administration, Malpractice, New Cases | Permalink

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