Gunster, Yoakley & Stewart, P.A. v. McAdam, — So.2d —-, 2007 WL 2376658 (Fla. 4th DCA Aug 22, 2007)

As reported here, a unanimous panel of the 4th DCA just upheld a $1 million legal malpractice judgment against the law firm Gunster Yoakley & Stewart awarded to the heirs of the Gannett newspaper fortune.

Here’s how the 4th DCA summarized the trial court proceeding in the linked-to opinion:

Frank Gannett McAdam and Charles McAdam, III, individually, as personal representatives of the Estate of Charles V. McAdam, Jr., and as trustees of The Charles V. McAdam, Jr. Revocable Trust, brought an action against Gunster Yoakley, one of Gunster Yoakley’s probate attorneys and J.P. Morgan Trust Company, N.A., (“J.P.Morgan”). In their complaint, plaintiffs asserted claims of breach of fiduciary duty, constructive fraud, civil conspiracy, negligence and unjust enrichment. The substance of these accusations was that Gunster Yoakley wrongfully procured J.P. Morgan’s appointment as corporate fiduciary and caused the estate administration to be more expensive. As such, plaintiffs sought, among other things, recompense for all “avoidable probate expenses” and disgorgement of all fees paid to Gunster Yoakley by decedent Charles V. McAdam, Jr.

After settling their claims against J.P. Morgan, plaintiffs proceeded against Gunster Yoakley and ultimately won a $1.2 million jury verdict. The trial court, however, granted remittitur and entered final judgment of $1,043,430, including interest and costs.

Once the "disloyalty" charge sticks, you’re dead:

I’ll get to the legal issues below, but as an initial point I think it’s important to note the case against Gunster was framed in conflict-of-interests terms.  Basically, the case presented to the jury was that Gunster was disloyal to its estate-planning client in order to secretly favor J.P. Morgan.  This type of allegation against a lawyer is radioactive.  As I’ve reported before [click here], it’s claims of disloyalty NOT negligence that will really get you in trouble.  Even if the facts show no economic harm was done, juries will crucify you if there’s even a whiff of disloyalty.  In the linked-to case the jury originally awarded the plaintiffs $1.2 million — even though they only asked for $1 million! (See here).

Yes, the heirs have standing to sue you:

So says the 4th DCA:

[W]e hold that the .  .  .  plaintiffs demonstrated they had standing to bring suit against Gunster Yoakley-Plaintiffs showed that their father’s intent, as expressed in his will, was frustrated by the negligence of Gunster Yoakley and that, as a direct result of such negligence, their legacy was diminished. See Hewko v. Genovese, 730 So.2d 1189, 1192 (Fla. 4th DCA 1999).

Proving liability in estate planning malpractice cases:

Florida law isn’t exactly clear on whether heirs can sue a decedent’s estate planning attorney for malpractice.  In this case the 4th DCA seems to open the door to these claims.  All trusts-and-estates attorneys need to keep this point in mind.  Here’s how the 4th DCA framed the liability issues:

We have considered the issues raised by Gunster Yoakley on appeal, including its contentions that . . . it was not liable to the estate for administration expenses or damages arising out of the appointment of J.P. Morgan . . . . As to [this] point, we hold that reversal is not merited on any of the grounds argued by Gunster Yoakley because:

[1] Plaintiffs sought relief not available to them in probate and therefore could, contrary to Gunster Yoakley’s assertion on appeal, collaterally attack the appointment of J.P. Morgan. See Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 586 So.2d 1221 (Fla. 3d DCA 1991) (holding testator’s estate can maintain legal malpractice action against attorney who prepared the will of the deceased in order to address issues not remedied in probate court);

[2] The trial court did not err in submitting to the jury the question of whether Gunster Yoakley had a duty to fund a revocable trust during decedent’s lifetime as there was sufficient evidence that Gunster Yoakley implicitly agreed to do so. See Tibbs v. State, 397 So.2d 1120, 1123 (Fla.1981) (“[T]he concern on appeal must be whether, after all conflicts in the evidence and all reasonable inferences therefrom have been resolved in favor of the verdict on appeal, there is substantial, competent evidence to support the verdict and judgment.”); see also Lane v. Cold, 882 So.2d 436, 438 (Fla. 1st DCA 2004) (holding action for breach of fiduciary duty may be maintained where, “A relationship exist[s] with respect to the acts or omissions upon which the malpractice claim is based,” and a party may demonstrate this relationship by showing that his attorney implicitly agreed to undertake these responsibilities); and

[3] The trial court did not abuse its discretion in denying Gunster Yoakley’s request for jury instruction, nor did the court err in making an award under the “wrongful act doctrine.” See In re Amendment to Rules Regulating Fla. Bar, 605 So.2d 252, 309 (Fla.1992) (providing that rules of professional conduct “are not designed to be a basis for civil liability”); see also Martha A. Gottfried, Inc. v. Amster, 511 So.2d 595, 598 (Fla. 4th DCA 1987) (“Where the wrongful act of the defendant has involved the claimant in litigation with others, and has placed the claimant in such relation with others as makes it necessary to incur expenses to protect its interests, such costs and expenses, including reasonable attorney’s fees upon appropriate proof, may be recovered as an element of damages.”) (quoting Baxter’s Asphalt & Concrete, Inc. v. Liberty County, 406 So.2d 461 (Fla. 1st DCA 1981)), quashed on other grounds, 421 So.2d 505 (Fla.1982).