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SC: No Privity with Trust Beneficiaries, No Fiduciary Duty

Argoe v. Threee Rivers Behavioral Center and Psychiatric Solutions, 388 S.C. 394, 697 S.E.2d 551 (2010)

SC: Underlying Trusts, Real Estate; Breach of Fiduciary Duty

Student Contributor: Nicholas Seabrooks

Facts: Martha Argoe’s husband and son retained the defendant attorney Walsh to help protect her from her own irresponsible and erratic behavior. According to the husband and son Argoe was acting strangely and had become financially irresponsible. Specifically Martha had taken out a loan on her condominium, allowed the loan to go into default, and the property was about to go into foreclosure. In order to avoid financial disaster Walsh helped  in the transfer of the title to the property to a trust for the benefit of Martha, with remainder to himself in the event of her death. Martha then filed suit against Walsh for malpractice alleging breach of fiduciary duty for transfer of the title to the property without her knowledge.

Issue: Did Walsh have fiduciary duty to Martha t while representing her husband and son, therefore committing malpractice?

Ruling: No. There was no attorney-client relationship established between the plaintiff and the defendant while representing her husband and son. I

Lesson: An attorney is generally immune from liability to third parties arising from the performance of professional activities on behalf and with knowledge of his client. Furthermore an attorney owes no duty to a non-client unless he breaches some independent duty to a third party or acts in his own personal interests, outside of the scope of representing the client.  

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Posted in: South Carolina