FL: Underlying Estate Planning
FACTS: Ann Gasponi employed Frank R. Brady and his law firm Brady & Brady P.A. to carry out her estate planning. In the course of this representation, Brady suggested that Gasponi create a charitable remainder trust. Gasponi apparently agreed to do so and Brady wrote up the document. Following Gasponi’s death, the federal government assessed $72,000 in tax from Gasponi’s estate. Florence Gallo, as the personal representative of Gasponi’s estate, brought a legal malpractice claim alleging that “(1) the purpose of establishing the charitable trust was to save on federal estate taxes; (2) the trust failed to comply with mandatory requirements set forth by the United States Tax Code and related regulations; and (3) as a consequence of the trust’s deficiencies, a tax deduction was not available to the estate and the estate paid in excess of $72,000 in estate taxes that could have been avoided but for Brady’s negligence.” Brady filed a motion for summary judgment alleging that there was no evidence in the trust creation documents that the purpose of the trust was to limit tax liability and that extrinsic evidence could not legally determine Gasponi’s intent. The trial court granted the motion for summary judgment.
ISSUE: 1) Were there material issues of fact in dispute relating to the intent of Gasponi?
2) Is looking to extrinsic evidence permitted in this case, i.e. is a third party beneficiary entitled to bring a malpractice suit when they themselves weren’t in privity with the attorney?
RULING: 1) Yes. “[A] jury could look at the facts alleged by the personal representative and, without resort to extrinsic evidence, reasonably infer that one of Gasponi’s purposes for setting up the charitable remainder trust was to effectuate federal tax savings”
2) “Generally, a legal malpractice claim may be brought only by one who is in privity with the attorney… [t]here is, however, an exception that permits an intended third party beneficiary of the legal services to bring suit where ‘testamentary intent as expressed in the will . . . [was] frustrated by the attorney’s negligence and as a direct result of such negligence the beneficiaries’ legacy [wa]s lost or diminished.’” (citing Angel, Cohen, & Rogovin v. Oberin Inv., N.V., 512 So.2d 192, 194 (Fla. 1987))
LESSON: Liability in legal malpractice still attaches in cases of negligence in the construction of testamentary documents once the testator/grantor is deceased. A third party beneficiary has standing to bring a legal malpractice action in FL.