Attorney or Scrivener? LPL Claim Dismissed Due to Non-Representation Clause

A recent decision rendered by the New York Appellate Division, First Department, on October 17, 2019, held that the lower court properly dismissed a legal malpractice complaint on the ground that documentary evidence established there was no attorney-client relationship. In Seaman v Schulte Roth & Zabel LLP, 176 A.D.3d 538 (1st Dep’t 2019), the dispute centered on the enforceability of a “non-representation clause” disclaiming the existence of an attorney-client relationship and reaffirmed the importance of providing such clauses where an attorney seeks to limit potential exposure for work performed outside of an attorney-client relationship.

Plaintiff Seaman alleged that Defendant Attorney agreed to represent him and his then-wife in drafting a separation agreement between them. Seaman executed a two-page agreement prepared by Attorney. The agreement provided that Seaman would pay $3.5 million towards a new home for Wife and assume responsibility for paying one-half of the expenses associated with the home so long as Wife owned the home. Subsequently, Seaman blamed Attorney for failing to advise him that his obligations under such agreement would not cease in the event he and Wife divorced, despite his specific request that their prior prenuptial agreement remain intact.

Attorney argued that they did not represent either Seaman or Wife in connection with the preparation of the agreement. Rather, they acted as mere scrivener of the agreement and not as counsel to either party. Significantly, defendants disclaimed the existence of any attorney-client relationship repeatedly in writing. Attorney argued that each of the parties to the agreement had been informed of their right to obtain independent counsel of his or her own choosing. Both also had time to review the agreement before signing it.

In opposition, Seaman argued that an attorney-client relationship existed, despite the presence of a non-representation clause. In essence, Seaman argued that actions, not words, should determine whether an attorney-client relationship existed. Seaman argued that an attorney-client relationship existed in this instance, because the attorney had drafted a legal document, had provided advice, and had sent a bill for “legal services” for his “personal representation.”

The Appellate Court disagreed with Seaman. The Appellate Court held that “[a]lthough defendants were required to use the ordinary degree of skill required of the legal community in drafting a postnuptial agreement, there [was] no claim that the agreement was ineffective due to a technical error or that Frunzi failed to accurately memorialize the terms of the parties’ agreement.” Therefore, the Appellate Court affirmed the dismissal of the complaint. In sum, this case reaffirms the importance and enforceability of non-representation clauses when seeking to limit legal malpractice exposure for services performed by counsel outside of an attorney-client relationship.