Estate Administration Can be a Malpractice Minefield

It can be a lonely – and perilous – business serving as the attorney for an estate where the family members are at odds with each other.

It can also be confusing. Who do you represent? Whose interests must you look out for?

And even if you know the answers to these questions, the feuding relatives may not be quite so certain.

Take for instance the recent case of Schroeder v. Brewer, where a Kansas appellate court said a son battling his sister over the family farm could not sue the estate attorney for malpractice.

The son alleged the attorney mishandled the administration of the estate and botched the settlement discussions, which resulted in less inheritance money for him.

The trial court granted summary judgment to the attorney, saying there was no lawyer-client relationship between the parties.

The Kansas Court of Appeals affirmed: “The traditional rule is that an attorney was only liable for negligence to the attorney’s client,” the court said. “The rationale was that there could be no action against an attorney for professional negligence in the absence of privity of contract between the plaintiff and attorney. The privity requirement has been relaxed where an attorney has rendered services which the attorney should recognize as involving a foreseeable injury to a third- party beneficiary, such as in will drafting. But an attorney cannot be held liable to a client’s adversary. An attorney has no duty to a client’s adversary.”

Ah, Privity!

Privity is something you might have learned in Contracts 101 and quickly forgotten – but in the context of a malpractice claim it can be a lifesaver.

In its simplest form, privity is a connection or mutual interest between parties. Under contract law, it is generally required before one party can bring an action to enforce the terms of the deal against the other.

Privity arises when a client hires you to represent them in a case. If they don’t pay your bill, you can sue them to collect your fee. If you mishandle their case, they can sue you for malpractice.

Simple enough. But things can get complicated when multiple parties are involved, and this is especially true in estate cases pitting family members against each other.

Caught in the Middle of a Family Feud

It is the inherently adversarial nature of estate proceedings that make this area a malpractice minefield, experts say.

“Estate proceedings are fundamentally adversarial,” writes Professional Liability Matters. “[A]n administrator’s obligations are to act in the best interests of the estate, with no obligation flowing to a particular heir of the estate itself. [T]he court found that son was not merely an heir—he was clearly an adversary of the estate because he sued daughter and mother. Because an estate’s attorney cannot be an advocate for a beneficiary against the estate, the court found that the lower court was correct that no such malpractice claim could be maintained against attorney by son under these circumstances.”

Keep in mind that this was a Kansas case, decided under Kansas law. The laws governing estate administration and lawyer malpractice vary from state to state. If you have questions about a specific case you’re handling, contact your malpractice carrier for guidance.

Sources:

• Professional Liability Matters http://professionalliabilitymatters.com/2017/03/01/family-feud-leads-to-privity-lesson/
• Schroeder v. Brewer, 2017 Kan. App. Unpub. LEXIS 101 (Kan. Ct. App. Feb. 17, 2017)  http://www.kscourts.org/cases-and-opinions/Opinions/Unpublished/Ctapp/2017/20170217/114123%20.pdf
• Dictionary of Law http://dictionary.law.com/Default.aspx?selected=1617