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April 14, 2023 Practice Points

Hidden Clients: When Do Lawyers Owe Nonclients a Duty of Care?

It will depend on clear evidence that the nonclient was an intended beneficiary of the client’s direction to the lawyer.

By Michael S. LeBoff

As an attorney that regularly handles legal malpractice cases, I frequently recite the standard elements of a professional negligence claim: duty, breach, causation and damages. In the vast majority of cases, the battles are fought over the last three elements. There is rarely a fight over whether the attorney owed the client a duty of care because, in most instances, ascertaining the identity of the client is not that difficult. In some cases, however, the client’s identity is less clear. Or, as often happens in trust and estate malpractice cases, the plaintiff bringing the legal malpractice case is not the attorney’s client. That brings up a question: When (if ever) does an attorney owe a nonclient a duty of care?

In a recent California case, Gordon v. Ervin Cohen & Jessup LLP, 88 Cal. App. 5th  543, 305 Cal. Rptr. 3d 53 (Cal. Ct. App. 2d Dist. 2023), a California Court of Appeal addressed this very issue. In Gordon, two beneficiaries sued the law firm that created the estate plan claiming the plan did not adhere to the settlors’ intent. It was undisputed the settlors were the law firm’s only clients. But, when the dispute arose, the settlors were deceased, and thus, could not bring a malpractice claim against their former attorneys.

Addressing the question of whether the two affected beneficiaries, who were not clients, could bring a malpractice lawsuit, the court articulated the rule that “[a] lawyer has a duty to a nonclient third party only if the client’s intent to benefit that third party (in the way the third party asserts in their malpractice claim) is ‘clear,’ ‘certain,’ and ‘undisputed.’” Put another way, if the client tells the attorney “Do X,” and X was intended to benefit a nonclient, then the nonclient may sue if the attorney did not “Do X.” In Gordon, the appellate court affirmed summary judgment, finding the attorneys prepared the estate plan as directed by the settlors.

The Gordon case provides an excellent reminder that, in very limited cases, an attorney’s duty of care may extend beyond the direct client. Attorneys must recognize that when a client provides instructions intended to benefit a third party, the attorney may owe a duty of care to those intended beneficiaries of the attorney’s services. However, in those rare instances where a nonclient seeks to hold an attorney liable for legal malpractice, it is essential to ascertain the client’s intent. Absent clear evidence showing the client’s intent to benefit the nonclient was clear, certain, and undisputed, the nonclient’s malpractice claim is likely to fail.

Michael S. LeBoff is a partner in Klein & Wilson in Newport Beach, California.

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