TX: Underlying decedent’s estate claims
Student Contributor: Aaron Moncibiaz*
FACTS: Executor Thomas O’Donnell sued Decedent’s former attorneys, Cox & Smith, for legal malpractice, breach of fiduciary duty, and gross negligence/malice. The claims are based on Cox & Smith’s advice to Decedent when Decedent served as executor of his wife’s estate. The Decedent retained Cox & Smith to advise him in the independent administration of his wife’s estate, and consulted the law firm regarding the separate vs. community classification of the couple’s shares of stock. Cox & Smith prepared an estate tax return that omitted certain shares of stock from a list of the wife’s assets.
The Decedent died twenty-nine years later, leaving the bulk of his estate to charity and not his children. Approximately one month after the Decedent’s death, his children sued the Decedent’s estate alleging that the Decedent has misclassified certain shares of stock as separate property, and as a result underfunded their mother’s trust. O’Donnell settled the children’s claims for just under $13 million, less than half of their estimated value. O’Donnell then sued Cox & Smith, alleging that the attorneys failed to properly advise the Decedent about the serious consequences of mischaracterizing assets, and that the firm’s negligence caused damage to the Decedent’s estate.
PROCEDURAL HISTORY: At trial, Cox & Smith won summary judgment on all claims, but the court gave no basis for its decision. The court of appeals ruled in favor of Cox & Smith, basing its judgment on the fact that O’Donnell, as executor of the estate, lacked privity of contract with the attorneys. The Supreme Court of Texas vacated the lower court’s judgment and remanded for reconsideration in light of its decision in Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780 (Tex. 2006). In Belt, the Supreme Court of Texas held that an estate’s personal representative may bring the decedent’s survivable claims on behalf of the estate. The court further held that legal malpractice claims for pure economic loss survive, and an estate’s personal representative may bring survivable claims on behalf of the estate.
On remand, the court of appeals held that Belt was not limited to estate planning malpractice suits. The court explained that O’Donnell, as executor, stepped into Decedent’s shoes and could bring whatever malpractice action Decedent could have brought while still alive. The court then reviewed the record and found that although no evidence supported O’Donnell’s malice or breach of fiduciary duty claims, a triable issue of fact existed as to what damages were attributable to Cox & Smith’s actions. The court remanded the case to the trial court to determine if Cox & Smith’s actions constituted legal malpractice. Cox & Smith appeal this decision.
ISSUE: The court considered whether an executor may bring suit against a decedent’s attorney for malpractice committed outside the estate-planning process.
RULING: The Supreme Court of Texas agreed with the court of appeals’ interpretation of Belt and held that an executor should not be prevented from bringing the decedent’s survivable claims on behalf of the estate. The court does not, however, address whether Cox & Smith’s actions constituted legal malpractice.
A dissent supported by two justices of the court argued that the majority applied the wrong case in forming its opinion. The justices contend that Barcelo v. Elliott, 923 S.W.2d 575 (Tex. 1996) should control. Under the Barcelo privity barrier, a non-client is precluded from bringing a malpractice suit against the decedent’s attorneys because of lack of privity.
LESSON: A decedent’s legal malpractice claim does not terminate with the death of the decedent. Regardless of whether the claim involves an estate planning matter or some other legal caveat, the claim survives and may be brought by the decedent’s personal representative.
*Aaron Moncibaiz, a third year law student at Texas Tech University School of Law, will be receiving his J.D. degree in May 2010. A member of the Board of Barristers and a competitor in the American Association of Justice National Trial Advocacy Competition, Aaron has focused his studies to trial and appellate practice. Aaron served as a legal intern for the American Legislative Exchange Council in Washington, D.C. and is currently employed as a law clerk with the Lubbock County District Attorney’s Office. Aaron received his B.S. in Architecture from Texas Tech University in 2007.