Saadeh v. Connors, — So.3d —-, 2015 WL 3875682 (Fla. 4th DCA June 24, 2015) 

risk-management
If you represent a fiduciary in a contested Florida estate, trust or guardianship proceeding and you commit malpractice, you need to assume the possible universe of plaintiffs in a malpractice suit against you includes not just your client (i.e., the guy who hired you and thinks you’re brilliant), but also every third-party beneficiary of the estate, trust or guardianship estate who thought your client was a jerk and blames you personally for every real or imagined injury he may have caused.

The general trend in Florida (especially in the trusts and estates context) is that a third-party beneficiary of your legal services can sue you for malpractice — and it doesn’t matter that the third party was never your client and had zero privity of contract with you. Examples of this trend include cases in which the beneficiaries of a deceased ward’s estate had standing to sue the guardian’s lawyers for malpractice (click here), estate beneficiaries had standing to sue a decedent’s estate planning attorneys for malpractice (click here), and a successor personal representative had standing to sue his predecessor’s attorney for malpractice (click here). This case is yet another example of that trend.

Case Study:

I first wrote about this train-wreck of a guardianship case back in 2012 (see here). Two initial observations: First, this case is yet another example of why the public is clamoring for reform of Florida’s court-administered guardianship system (see here). Second, when a case blows up, there’s going to be collateral damage. And the lawyers involved are often prime targets — no matter whose side they were on. This case is no exception. After unwinding the mess caused by everyone involved in obtaining the underlying “emergency” guardianship appointment, Karim Saadeh (an immigrant and self-made millionaire) got busying suing everyone in sight — including their lawyers. One of his claims was for malpractice against the lawyer for his court-appointed guardian. That’s the claim dealt with in this appeal.

The defendant lawyer argued the claim against her should be dismissed as a matter of law because there was no privity of contract between her and Mr. Saadeh (the ward), and thus she owed no duty directly to Mr. Saadeh. She also argued that Saadeh’s interests were adverse to her client’s interest, the court-appointed guardian. Sound familiar? It should. A version of this same defense was tried in all of the other third-party malpractice claims (see here, here, here). It didn’t work then, and it’s not working now (although the trial court bought it). Everything a guardian (and by extension her lawyer) does is supposed to be for the benefit of the ward. If that guardian’s lawyer commits malpractice, the ward can hold her accountable in a direct malpractice suit . . . so sayeth the 4th DCA:

In a 1996 opinion of former Attorney General Robert Butterworth, the existence of this duty of care is explained:

Under the state’s guardianship statutes, it is clear that the ward is the intended beneficiary of the proceedings. Section 744.108, Florida Statutes, authorizes the payment of attorney’s fees to an attorney who has “rendered services to the ward or to the guardian on the ward’s behalf[.]” Thus, the statute itself recognizes that the services performed by an attorney who is compensated from the ward’s estate are performed on behalf of the ward even though the services are technically provided to the guardian. The relationship between the guardian and the ward is such that the ward must be considered to be the primary or intended beneficiary and cannot be considered an “incidental third-party beneficiary.” . . .

Since the ward is the intended beneficiary of the guardianship, an attorney who represents a guardian of a person adjudicated incapacitated and who is compensated from the ward’s estate for such services owes a duty of care to the ward as well as to the guardian.

Fla. AGO 96–94, 1996 WL 680981.

In its amicus brief that we invited and appreciate, the Real Property Probate & Trust Law Section of the Florida Bar indicates agreement with the Attorney General opinion. The Section reminds us that the lack of privity does not foreclose the possibility of a duty of care to a third party intended to benefit from a lawyer’s services. The Section points out that the reasoning in the Attorney General opinion is supported by section 744.1012, Florida Statutes (2009), in which the Legislature states its willful intent to protect incapacitated persons.

Based on the foregoing analysis, we find that Saadeh and everything associated with his well-being is the very essence i.e. the exact point, of our guardianship statutes. As a matter of law, the ward in situations as this, is both the primary and intended beneficiary of his estate. To tolerate anything less would be nonsensical and would strip the ward of the dignity to which the ward is wholly entitled. Whether there was a breach of the duty which caused damages obviously remains to be determined. But Mr. Saadeh has a viable and legally recognizable cause of action against the guardian’s attorney which is available to Mr. Saadeh and which we direct be immediately reinstated. Accordingly, we remand for further proceedings.

Lesson learned?

Trusts and estates lawyers often represent clients in matters that benefit third parties. Examples include a client’s children in an estate-planning engagement (your client is the testator, but his children are third-party beneficiaries of your work), or the beneficiaries of a trust (your client is the trustee, but the trust’s beneficiaries are third-party beneficiaries of your work), or the beneficiaries of a probate estate (your client is the personal representative, but the estate’s beneficiaries are third-party beneficiaries of your work), or the ward in a guardianship proceeding (your client is the guardian, but the ward is a third-party beneficiary of your work). In all of these cases the attorney has only one client, and our duties of confidentiality and the reciprocal rules protecting our attorney-client communications apply (see here). However, just because the third-party beneficiaries can’t compel you to disclose confidential attorney-client communications, doesn’t mean they can’t sue you for malpractice. That’s the key take-away from this case and others like it, and one that still comes as a surprise to many. By now, it shouldn’t.

If you represent a fiduciary in a contested Florida estate, trust or guardianship proceeding and you commit malpractice, you need to assume the possible universe of plaintiffs in a malpractice suit against you includes not just your client (i.e., the guy who hired you and thinks you’re brilliant), but also every third-party beneficiary of the estate, trust or guardianship estate who thought your client was a jerk and blames you personally for every real or imagined injury he may have caused.

Bonus material: