Who Can Sue Me? Liability to Non-Clients

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Generally an attorney only owes a duty of care to her client. Thus, a predicate to a meritorious legal malpractice action is the existence of an attorney-client relationship. But, identifying this relationship and determining to whom that duty extends is not simple. A recent decision demonstrates that an attorney may be exposed to malpractice based on the expectations of non-clients.

In Pete v. Anderson, (Nov. 21, 2013) the Kentucky Supreme Court considered whether the children of a man who died in an auto accident had standing to assert a malpractice claim against the attorney retained to file a wrongful death suit. The attorney was retained by the children’s mother; the children were minors at the time. The suit was eventually dismissed without any recovery.

Two years later, the children sued the attorney under a negligence theory. In his motion for summary judgment, the defending attorney argued that he had no attorney-client relationship with the children. On appeal, the Supreme Court rejected this argument and concluded that the children had standing to sue.

In reaching this conclusion the court reasoned that the existence of an attorney-client relationship is an issue of fact premised upon a party’s reasonable beliefs or expectations with regard to an attorney’s representation. The court concluded that based on the mother’s belief that the attorney was also representing her children, this raises a disputed fact sufficient to defeat a summary judgment motion.

Moreover, and importantly, the court concluded that the attorney owed a duty to the children based on their status as beneficiaries of the wrongful death claim. The court examined the state’s statute governing wrongful death actions and concluded that the claim belonged to the beneficiaries of the estate. According to the court, the children were the real parties in interest to the wrongful death claim and therefore intended beneficiaries with standing to file suit.

This case demonstrates that the professional/client relationship is not always clear. There are many examples of “non-clients” who can be reasonably expected to rely upon representations of the professional: i.e. an auditor may be susceptible to a claim from a non-client that relied upon the client’s audited financial statements or an attorney representing a borrower may be liable to the lender for furnishing an erroneous title opinion. A good rule of thumb is that the professional/client relationship is premised upon the expectation of the parties. So it is imperative that the professional communicate clearly – particularly through an engagement letter – to spell out the scope of the representation and to manage the expectations of the professional, the client, and others.