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Griffith v. Taylor (4/18/97), 937 P 2d 297
<![CDATA[
NOTICE: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501; (907) 264-0608; fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
NED GRIFFITH, )
) Supreme Court No. S-6011/6021
Appellant and )
Cross-Appellee, ) Superior Court No.
) 4FA-91-1237 Civil
v. )
) O P I N I O N
WARREN TAYLOR II, and )
AGLIETTI, RODEY & OFFRET, ) [No. 4811 - April 18, 1997]
A Successor Partnership to )
AGLIETTI, PENNINGTON & RODEY, )
A Partnership, )
)
Appellees and )
Cross-Appellants. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Richard D. Savell, Judge.
Appearances: Andrew K. Kurzmann, Anchorage,
for Appellant and Cross-Appellee. Robert J.
Dickson, Atkinson, Conway & Gagnon, Anchorage,
for Appellees and Cross-Appellants.
Before: Rabinowitz, Matthews, and Compton,
Justices. [Moore, Chief Justice and Eastaugh,
Justice, not participating.]
RABINOWITZ, Justice.
I. INTRODUCTION
This appeal requires us to review the superior court's
grant of summary judgment on a claim for professional malpractice
against a law firm and an individual member of the firm.
Specifically, we examine the scope of the duty which a law firm
owes its former clients, as well as the scope of the duty which the
individual attorney owes in the factual context of this case. We
reverse in part the superior court's grant of summary judgment.
II. FACTS AND PROCEEDINGS
Joe Griffith owned a piece of real property located at
1543 Porchet Way in Fairbanks. Joe and his son, Ned Griffith,
improved the property by building a multi-family dwelling. Ned
invested a substantial amount of his own time and money in the
project.
At some point, Ned became concerned about his investment
because he believed that Joe's indebtedness to him had grown too
large. Joe agreed to quitclaim the property to Ned to secure Ned's
investment. It was further agreed that when the project was
completed, they would sell the property and that out of the
proceeds Ned would be reimbursed for any monies which he had
invested in the project.
Joe wanted Larry Dworkin to prepare a quitclaim deed
naming Ned as the grantee. However, Ned did not trust Dworkin and
he questioned Dworkin's advice regarding the deed. (EN1) Ned
therefore went to Aglietti, Pennington & Rodey (EN2) (the Firm) for
assistance with this matter. In April 1984, Ned met with Jill
Dean, an associate at the Firm. Dean prepared a quitclaim deed for
the property, which Joe signed on April 26, 1984.
On April 27, 1984, Ned signed a document prepared by
Dworkin, granting a power of attorney to Joe "to transact fully and
completely any and all business and confir [sic] these powers upon
my father and to execute any and all documents nesessary [sic] to
consumate [sic] any transaction." The parties dispute the purpose
of this document. Ned contends that the power was granted for the
purpose of purchasing land in California. (EN3) Before his death,
Joe asserted that it was granted so he could retransfer the Porchet
Way property back to himself when Ned had been reimbursed.
In August 1985, Joe approached the Firm and spoke with
Warren Taylor II. Taylor had joined the Firm sometime in the
spring of 1985. Joe told Taylor that the property had been
transferred to Ned as security, that Joe had paid Ned back, and
that he wished to use the power of attorney to transfer the
property from Ned back to himself. Taylor prepared a quitclaim
deed, with the signature line reflecting that it was being signed
by Joe through the power of attorney granted by Ned. The Firm then
recorded the deed.
In March 1987, it was called to Joe's attention that the
1985 deed might be invalid because Joe had used the power of
attorney to grant the property to himself. He therefore once again
approached Taylor, and this time asked him to prepare a deed to be
signed by Ned. Taylor, following the statutory form, drafted a
deed for Joe on which to obtain Ned's signature. (EN4) It was
later determined that Ned's signature had been forged. The Firm
did not assist Joe in recording the deed. Joe subsequently died.
In 1988, Ned learned of the 1987 deed when he attempted
to sell the property. Ned then brought an action in superior court
against Mary Griffith and the Estate of Joe Griffith to quiet his
title in the Porchet Way property. Griffith v. Griffith, No. 4FA-
89-775 Civil (Alaska Super., May 18, 1992). The jury found that
the 1985 and 1987 deeds were invalid, and that therefore title to
the property belonged to Ned. Id. at 4-5.
Ned subsequently commenced the present suit against the
Firm and Taylor, alleging professional malpractice, breach of
fiduciary duty, and breach of contract. The crux of Ned's
complaint was that the Firm had engaged in a conflict of interest
by participating both in the transfer of the property to Ned and in
the 1985 and 1987 transfers which attempted to divest him of title
to the property. Ned also asserted that the Firm had breached its
fiduciary duty to him by failing to notify him of Joe's efforts to
transfer title back from Ned to Joe. As a result, Ned claimed he
incurred $140,000 in attorney's fees and costs to litigate the
quiet title action and suffered a diminution in the value of the
property because of changes in the real estate market during the
period of the litigation.
Numerous pretrial motions were filed by both parties.
Initially, Ned moved for partial summary judgment regarding the
relevant factual and legal issues resolved in Griffith v. Griffith.
Ned argued that the Firm should be collaterally estopped from
relitigating the issues decided in Griffith even though the Firm
was not a party to the prior litigation. The Firm then filed
separate summary judgment motions first on the part of Taylor
individually (EN5) and then on behalf of the Firm and Taylor
collectively. Finally, Ned filed a cross-motion for summary
judgment on the merits of his claims. The superior court granted
the Firm's motion for summary judgment and dismissed all causes of
action against both Taylor and the Firm. The superior court
additionally stated that Ned's claim against Jill Dean had not been
properly pleaded, and therefore was not properly before it. Ned
now appeals.
III. DISCUSSION
A. The Superior Court's Grant of Summary Judgment In Favor
of the Firm (EN6)
Ned claims that the Firm acted negligently when it
prepared the 1985 and 1987 deeds for Joe despite a conflict of
interest with Ned, its former client. According to Ned, he
approached the Firm to obtain advice regarding the securing of the
debt that Joe owed to him and the Firm assisted him in preparing a
quitclaim deed for this purpose. Ned then argues that by
subsequently representing Joe in his efforts to divest Ned of this
property, the Firm violated its ethical obligations by engaging in
a conflict of interest. According to Ned, the Firm had a duty to
either contact him to confirm that Joe had paid back the money he
owed Ned, or at least to decline representation of Joe.
A claim for professional malpractice against an attorney
must satisfy the following four elements:
1) [T]he duty of the attorney to use such
skill, prudence, and diligence as other
attorneys commonly possess and exercise;
2) [A] breach of that duty;
3) [A] proximate causal connection between
the negligent conduct and resulting
injury;
4) [A]ctual loss or damage resulting from
the breach.
Doe v. Hughes, Thorsness, Gantz, Powell & Brundin, 838 P.2d 804
(Alaska 1992); Belland v. O.K. Lumber Co., 797 P.2d 638, 640
(Alaska 1990).
The superior court ruled that the Firm owed Ned no duty,
and granted summary judgment to the Firm on that basis. It
reasoned that the conflict of interests rules with regard to former
clients are directed exclusively at preserving the confidentiality
of information disclosed in the course of the attorney's
representation of the former client. Because Ned conceded that no
confidential information was disclosed to Jill Dean, the superior
court reasoned, no conflict of interest arose. We disagree, and
reverse the superior court's grant of summary judgment in favor of
the Firm.
1. Attorneys owe more than a duty of confidentiality
to former clients. (EN7)
At the time of the Firm's preparation of the 1985 and
1987 deeds, the relevant standard for determining whether a
conflict of interest existed between a present and former client
was articulated in Aleut Corp. v. McGarvey, 573 P.2d 473 (Alaska
1978). In Aleut, we held that an attorney
may not represent a third party against a
former client where there exists a substantial
possibility that knowledge gained by him in
the earlier professional relationship can be
used against the former client, or where the
subject matter of his present undertaking has
a substantial relationship to that of the
prior representation.[ (EN8)]
573 P.2d at 474-75. The substantial relationship test for
determining disqualification of an attorney is a prophylactic rule
which obviates the need for the former client to demonstrate that
confidential information was actually disclosed in the course of
the prior representation. "For the Court to probe further and sift
the confidences in fact revealed would require disclosure of the
very matters intended to be protected by the rule [of
confidentiality]." T.C. Theatre Corp. v. Warner Bros. Pictures,
113 F. Supp. 265, 269 (S.D.N.Y. 1953).
In the instant case, Ned has conceded that "[i]t is not
alleged in this case that Warren Taylor, II utilized confidential
information acquired by Defendant Law Firm from Ned Griffith at the
time he prepared the quitclaim deed on behalf of Joe Griffith."
Rather, Ned argues that there are other values which underlie the
substantial relationship-disqualification test.
First, Ned asserts that the attorney's duty of loyalty to
the client is maintained by assuring that an attorney does not
violate the former client's trust by simply turning around and
opposing a position he took in his earlier representation. Second,
Ned contends that such a rule would require attorneys to avoid the
appearance of impropriety, which he states is "essential to
preserving the public's faith and confidence in the integrity of
the judicial system." Therefore, Ned argues, the substantial
relationship test should apply even if no confidential information
is acquired during the course of the former representation. We
agree.
Other courts which have considered this issue are split.
For example, in Collatt v. Collatt, 782 P.2d 456 (Or. App. 1989),
the Oregon court of appeals upheld the disqualification of the
plaintiff's attorney in an action challenging the transfer of a
close corporation's stock from the plaintiff to his parents. The
attorney had previously represented the parents at the meeting in
which the transfer took place, and had prepared all of the
necessary documents at the direction of the parents. In rejecting
the plaintiff's argument that the attorney "neither rendered legal
advice nor was privy to any of the defendants' confidences,"the
court noted that the plaintiff misunderstood the nature of the
duties imposed by the conflicts rule:
In fact, [the conflicts rule] both "protects
client confidences from intentional or
inadvertent disclosure and promotes the virtue
of loyalty. Even if [the attorney's]
representation of [the mother] did not provide
him with confidential information whose use
would be likely to inflict damage on her in
plaintiff's action for conversion and duress,
thereby creating an "information specific"
conflict, it clearly would conflict with her
interests in the matter in which he earlier
represented her, generating a "matter
specific"conflict.
Id. at 458 (citation omitted). (EN9)
However, some courts have taken the position advanced by
the Firm, that where it is clear that no confidential information
was disclosed during the course of the former representation, there
can be no conflict of interest:
[T]he determination of whether there is a
substantial relationship turns on the
possibility, or appearance thereof, that
confidential information might have been given
to the attorney in relation to the subsequent
matter in which disqualification is sought.
The rule does not necessarily involve any
inquiry into the imponderables involved in the
degree of relationship between the two matters
but instead involves a realistic appraisal of
the possibility that confidences had been
disclosed in the one matter which will be
harmful to the client in the other. The effect
of the Canons is necessarily to restrict the
inquiry to the possibility of disclosure; it
is not appropriate for the court to inquire
into whether actual confidences were
disclosed.
Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 224 (7th
Cir. 1978). (EN10) This line of cases generally emphasizes that
policies which favor allowing litigants to use the counsel of their
choice require careful scrutiny of the potential for disclosure of
confidences before disqualification is required. See, e.g.,
Satellite Fin. Planning, 652 F. Supp. at 1283.
Additionally, our own decisions are relevant to
resolution of the issue. First, in Aleut, after enunciating the
substantial relationship test, we noted that these principles could
be inferred from Ethical Considerations 4-5, 4-6 and 9-6 of the
Code of Professional Responsibility. Aleut, 573 P.2d at 475 n.2.
While EC 4-5 and 4-6 concern the duty of confidentiality owed to an
attorney's clients and former clients, EC 9-6 is concerned more
generally with upholding the integrity of the profession by
avoiding both actual improprieties and appearances of impropriety.
More recently in In re Estate of Adkins, 874 P.2d 271
(Alaska 1994), we upheld a superior court's refusal to disqualify
an attorney representing an estate. The attorney was originally
retained as tax counsel for the estate by the decedent's son who
was serving as the estate's administrator. The son later resigned
as administrator and was replaced by his sisters, who retained the
attorney as lead counsel for the estate. The son then moved to
disqualify the attorney.
Quoting Aleut, we noted that either the disclosure of
confidential information or a substantial relationship between the
subject matter of the present and former representations was
sufficient to disqualify the attorney. We then noted that "[the
former client] has not shown that [the attorney's] continuing
representation of the Estate . . . was in any way adversarial or
prejudicial to [his] interests. Moreover, [he] fails to describe
any specific confidences that were or might have been violated by
[the attorney's] continuing representation of the Estate." Estate
of Adkins, 874 P.2d at 273. Thus, we decided that even if no
confidences were disclosed in the former representation, an
attorney should be disqualified if there is a substantial relation
between the subject matter of the present and former
representations, and if the current client's position is adverse or
prejudicial to that of the former client.
Gabianelli v. Azar, 777 P.2d 1167 (Alaska 1989), also
bears on this question. Gabianelli did not concern a situation
where an attorney was disqualified because of a prior
representation. Rather, the superior court determined that
disqualification was appropriate because of the attorney's personal
relationship with the opposing party's accountant. We reversed the
superior court, holding that the appearance of impropriety alone
was not sufficient to warrant disqualification under Canon 9. Id.
at 1169. In reaching this decision, we noted that Canon 9 is
somewhat vague and that therefore "[s]ome courts look to other
ethical canons to establish the contours of the conduct proscribed
by Canon 9." Id. at 1168. Standing alone, this might be taken to
suggest that, at the very least, a showing of the potential for the
disclosure of confidential information would have to be made to
disqualify an attorney. However, we went on to state: "In the
instant case, which lacks the unseemly element of an attorney
taking a position adverse to a former client, Azar should have
demonstrated at least a reasonable possibility that [the attorney]
acquired privileged or confidential information . . . ." Id. at
1169. Thus, a showing that confidential information might have
been disclosed is necessary only if the attorney is not taking a
position adverse to the former client.
Finally, we note Charles W. Wolfram's informative
discussion of the duties that attorneys owe to former clients.
(EN11) Wolfram states: "[L]awyers are generally prohibited from
attacking their own work done for a former client, even if there is
no threat to the first client's confidential information." Id. at
362. He cites several cases for this proposition, and also notes
that T.C. Theater Corp., which is commonly viewed as the source of
the substantial relationship test, relied partially on the loyalty
principle owed clients as well as the confidentiality rationale.
Id. at 368.
We conclude that, as a general rule, a duty is owed on
the part of an attorney to a former client to avoid representation
if either (a) there is a potential that confidential information
may be revealed or (b) the subject matters are substantially
related and the attorney is taking a position directly adverse to
the client's position in the former representation.
2. A scrivener's exception may apply.
a. There is a genuine issue of material fact as
to whether the Firm acted as a mere scrivener
for Ned Griffith.
Ned argues that summary judgment was inappropriate
because a genuine issue of material fact exists with regard to the
scope of services provided by the Firm when Ned met with Jill Dean
in 1984. Ned contends that the Firm provided him with legal advice
as to whether a quitclaim deed would be adequate to secure the debt
owed him by Joe. The Firm argues that Ned merely sought advice as
to the formal requirements of a quitclaim deed, as well as
assistance in preparing the necessary papers.
At her deposition, Dean had no recollection regarding her
meeting with Ned. Nor could the Firm offer any evidence that the
only service it provided was the preparation of a quitclaim deed.
For his part, Ned first argues that the scope of the
Firm's legal representation is in part governed by his intent or
purpose in seeking the Firm's assistance and that summary judgment
is an inappropriate means to resolve issues of intent. However,
it is unreasonable to hold the Firm liable based merely on Ned's
unarticulated subjective intent as to the scope of the Firm's legal
representation. (EN12) Thus, in order to successfully oppose
summary judgment, Ned must have presented some evidence reasonably
tending to show that he sought legal advice regarding the use of a
quitclaim deed as security. (EN13)
Review of the record discloses that Dean did furnish some
legal advice. She advised Ned that in Alaska Joe Griffith's wife's
signature would not be needed on the quitclaim deed. Also, Ned
testified that after he spoke to Dean, "[s]he called up some places
to see, to make sure it was his property, to make sure everything
was legal and it was okay. . . . I went to see her in the morning
and she did research and the other stuff on the property . . . ."
Ned next argues that the subject matter code which was
assigned by the Firm to his case, the creation of a physical file
and trust ledger account, and the fee charged, are all inconsistent
with the simple preparation of a quitclaim deed. Ron Offret, the
supervising attorney of the Fairbanks office of the Firm, testified
at his deposition that in the case of simple transactions such as
the preparation of a quitclaim deed, the Firm generally would
assign a subject matter number ending ".2000,"would not open up a
file or a trust fund ledger account, and would charge a fee ranging
from $25 to $35. Ned then points to the ledger account to show he
was charged $150. Offret was unable to explain why this particular
subject matter code was used or why a physical file was opened.
(EN14)
Ned also points out that on the client intake sheet Dean
wrote "Sale of Property,"which Ned interprets as "suggesting more
was involved than mere scrivening of a deed." However, Ned does
not explain how this notation is either inconsistent with the
preparation of a deed or connotes that Dean did more. In short,
the notation makes it no more likely that services beyond the
creation of a quitclaim deed were provided, and is therefore
insufficient to create a factual dispute.
Finally, Ned points to his response to one of the Firm's
interrogatories which asked for "[t]he details . . . establishing
the causation between specific acts . . . of either of the
Defendants and the particular element of damage claimed." Ned's
answer states that he went to the Firm
seeking advice regarding securing moneys, time
and labor I was expending on developing 1543
Porchet Way. I was advised by Defendant law
firm that I would be secured by the 1984 Quit
Claim Deed from my father, Joe Griffith, to
me. I have since found out that this method of
securing my interest in the property probably
was not a very good way to do it.
At his deposition, Ned stated that he met with Dean for twenty to
thirty minutes and that his main question was whether his mother
had to sign the deed as well as his father. Ned was then asked,
"Now, did you talk to her about anything other than what you have
already described about this question as to whether you needed to
have [your mother's] signature on this document?" He responded,
"No."
In reviewing this evidence, we draw all reasonable
inferences in favor of Ned, the non-movant. Wright, 824 P.2d at
720. Additionally, where there is conflicting evidence with regard
to a party's version of the disputed events, the issue becomes one
of credibility and should generally be resolved at trial. Wilson
v. Pollet, 416 P.2d 381, 384 (Alaska 1966). In light of the
evidence discussed above, we hold that there is a genuine issue of
material fact as to the scope of services which the Firm provided.
As such, we reverse the superior court's grant of summary judgment
because of the existence of a dispute as to a material fact and for
the reasons discussed below.
b. The Firm may have owed a duty of loyalty to
Ned on the facts of this case.
As discussed previously, attorneys owe both a duty of
confidentiality and a duty of loyalty to former clients. The duty
of loyalty prohibits an attorney from representing a new client in
a matter that is substantially related to the first matter, when
the positions which the attorney takes are adverse to each other.
However, at least one treatise notes the existence of a
"scrivener's exception"to the substantial relation test. Wolfram
at 372-73. According to Wolfram, some courts have held that "if a
lawyer was retained only to draft a document, the lawyer can later
represent an adversary of the former client in a substantially
related matter." Id.
The exact scope of the scrivener's exception is unclear.
Wolfram's discussion of the doctrine implies that it implicates
only the duty of confidentiality which an attorney owes to a former
client. That is, the doctrine seems to provide that where an
attorney acts as a mere scrivener, and no confidences exist between
the attorney and the former client, it is impossible for the
attorney to violate the duty of confidentiality. As defined by
Wolfram, the doctrine is not a real exception, but rather is a
truism which states that an attorney does not breach the duty of
confidentiality where there were no confidences to be divulged.
One case which Wolfram cites in support of the doctrine, Mildfelt
v. Lair, 561 P.2d 805, 815 (Kan. 1977), applies the doctrine in
just this manner. See also Towns v. Towns, 96 P.2d 971 (Cal. App.
1939).
However, we think that the scrivener's exception can also
operate as a bona fide exception to the general duty of loyalty
which an attorney owes to a former client. (EN15) As we envision
such a rule, an attorney owes no duty of loyalty to a former client
where the attorney acts in such a manner that a reasonable client
would not expect the attorney to have assumed a continuing duty of
loyalty to the client. Such a situation exists where the attorney
merely fashions a statutory form of deed, or performs other
clerical or ministerial tasks.
This exception should, of course, be construed extremely
narrowly. Therefore, if the attorney furnishes any legal advice to
a client, or in any way makes use of her or his legal skills, the
exception will not apply. Additionally, if the client divulges any
confidences to the attorney during the course of representation,
the attorney's duty of confidentiality is triggered, even if the
attorney is merely acting as a scrivener. More importantly, we
think that a bona fide scrivener's exception is defensible on
policy grounds and should be adopted.
We are aware of the potential pitfalls of such a rule.
First, many clients assume a certain amount of loyalty from their
attorneys, even when they ask their attorneys to perform merely
clerical or ministerial tasks. Adoption of the scrivener's
exception increases the risk that attorneys will defeat this
expectation of loyalty. Additionally, there are problems in
administering this exception. That is, were we to reject the
scrivener's exception, what would remain is an easily followed,
bright-line rule to the effect that in a matter substantially
related to work performed for a former client an attorney could
never take a position materially adverse to the interests of the
former client.
These potential problems can be minimized by a strict
construction of the scrivener's exception; namely, that it will
only apply to purely clerical tasks which attorneys perform. If
such a purely clerical task constitutes the entirety of the
attorney-client relationship, then most reasonable clients will not
expect an ongoing duty of loyalty from the attorney. Similarly,
when construed in such a limited manner, administration of the
exception becomes practical. This is so because the doctrine
should apply only in those rare cases where the attorney is not
privy to any confidences of his or her client, and where the
attorney's services are of a purely clerical nature.
The adoption of the scrivener's exception furthers the
goal of allowing clients a reasonable choice of legal counsel.
(EN16) Also, it allows attorneys to represent new clients when
that representation does not violate a former client's reasonable
expectation of loyalty. (EN17)
In the case at bar it is unclear whether the Firm acted
as a mere scrivener, or whether its actions triggered a duty of
loyalty to Ned. Therefore, on remand, the exact nature of the
services provided by the Firm must be established. If it is
determined that the Firm acted as a mere scrivener, then the
scrivener's exception would apply, and it would follow that the
Firm owed no duty to Ned at the times it subsequently represented
Joe. If this result is reached, then the other issues on appeal
relating to the Firm will be rendered moot. However, if it is
determined that the Firm owed Ned a duty of loyalty due to the
scope of services it provided him, then the superior court should
consider the remaining elements of Ned's claim against the Firm.
(EN18)
We now address the other issues in this appeal which are
applicable to the instant case in the event the superior court
holds that the Firm owed a duty to Ned.
B. The Superior Court Correctly Concluded that Ned had Not
Sufficiently Pled the Issue of Jill Dean's Negligence.
(EN19)
In its written decision, the superior court refused to
consider Ned's argument that Jill Dean's negligence facilitated
Joe's ability to deprive Ned of the property. Apparently, Ned
sought to prove at trial that he approached Jill Dean to obtain
advice as to the best method of securing his claim against Joe,
that she advised him that a quitclaim deed was the best method of
doing so, and that such advice was negligent because it facilitated
his father's conveyance of the property to himself by use of his
power of attorney.
In determining whether Ned sufficiently pled a negligence
claim against Jill, we look to the requirements of Alaska Civil
Rule 8 and its underlying purposes. Civil Rule 8(a) states in
part:
A pleading which sets forth a claim for
relief, whether an original claim,
counterclaim, cross-claim or third party
claim, shall contain (1) a short and plain
statement of the claim showing that the
pleader is entitled to relief, and (2) a
demand for judgment for the relief the pleader
seeks.
Furthermore, Civil Rule 8(e)(1) states, "[E]ach averment
of a pleading shall be simple, concise and direct. No technical
forms of pleading or motions are required." Finally, Rule 8(f)
requires that "[a]ll pleadings shall be so construed as to do
substantial justice."
In interpreting this rule, this court has noted that
"[p]leadings are intended to serve as a means of arriving at fair
and just settlements of controversies between litigants. They
should not raise barriers which prevent the achievement of that
end."(EN20) Generally, the complaint's function is to put the
opposing party on notice "of the nature of the claim being
asserted,"(EN21) leaving it to discovery and other pretrial
procedures to narrow the issues. (EN22) Additionally, we have
stated that "a party should be granted the relief to which he is
entitled under the evidence, regardless of the theory of his
pleadings." Brayton v. City of Anchorage, 386 P.2d 832, 833
(Alaska 1963).
Thus, we must decide, in light of these liberal pleading
rules, whether Ned's complaint can reasonably be construed so as to
include the claim involving Jill Dean's alleged negligence.
Examination of the record Ned submits to support his claim leads us
to conclude that the complaint cannot be so construed.
Counts one through three of both the complaint and the
amended complaint focus on the actions of Taylor and the duty of
the Firm to inform Ned of a potential conflict of interest. To the
extent that the complaints mention Jill Dean, it is by way of
background factual information. In this regard, paragraph 7 of
Ned's complaint (EN23) reads as follows:
In order to satisfy the past debts, as well as
provide compensation for labor and materials,
Plaintiff and his father Joe Griffith agreed
to secure the debt by transferring the
property to Ned Griffith by way of Quitclaim
Deed. Before doing so, Plaintiff sought the
advice and legal counseling of the Defendant
law firm with regard to this transaction.
Jill Dean, an associate of Defendant Aglietti,
Pennington & Rodey, counseled the Plaintiff
regarding securing an interest in the property
[sic] to protect Plaintiff. Jill Dean failed
to properly index the conflict file. Having
advised the Plaintiff, Defendant prepared a
Quitclaim Deed and recorded same for and on
behalf of their client, Plaintiff Ned
Griffith.
Ned additionally claims that interrogatory "responses
placed the Firm on notice of the nature of his claims so as to
render the existing pleadings sufficient." Specifically, to show
that the Firm should have been on notice that he was going to
prosecute the negligence claim based on Jill Dean's actions, Ned
cites an answer to an interrogatory where he states that "I have
since found out that this method of securing my interest in the
property [i.e., use of a quitclaim deed] probably was not a very
good way to do it." Further, to demonstrate that the Firm had
actual notice of Ned's intention to prosecute the negligence claim,
he points to a Expert Witness List prepared by the Firm. The list
states that one of the Firm's experts would testify about various
aspects of how to use real estate and quitclaim deeds for security,
as well as about the other actions taken by the firm in 1985 and
1987.
None of those portions of the record relied on by Ned can
be construed as satisfying Civil Rule 8(a), which requires the
pleader, at minimum, to submit "a short and plain statement of the
claim showing that the pleader is entitled to relief." The three
counts focused on actions of Taylor. The information in the
pleadings regarding Jill Dean served to provide background
information, and did not indicate that any relief was sought based
on her conduct. Without more, the Firm could not reasonably be
expected to be on notice that Dean's actions or inactions were at
issue.
Furthermore, Ned's answer to the interrogatory noted
above was insufficient to impart notice to the Firm that negligence
was at issue. (EN24) Finally, the Firm's witness list does not
demonstrate that the Firm had actual notice of the negligence
claim. Rather, it shows that the Firm intended to put on testimony
as to how Ned had used the quitclaim deed for the property to
secure his claim against Joe. That is, the Firm nowhere denies
that the quitclaim deed was used as security. Therefore, its
intent to offer testimony regarding use of a quitclaim deed as
security does not indicate that the firm had notice that the
question of Jill Dean's advice was at issue.
Therefore, we affirm the superior court's ruling that Ned
did not properly plead the issue of Jill Dean's negligence.
C. The Superior Court Erred in Dismissing the Claims Against
Taylor Individually. (EN25)
The superior court held that Taylor could not be held
personally liable for violating the duty of an attorney to avoid
conflicts of interest. The superior court reasoned that because
Taylor was not employed by the Firm when Ned was a client, he could
not personally have acquired any duties or contractual obligations
to Ned. Also, the court reasoned that, as an agent of the Firm,
Taylor could not be held liable for breach of contract by the
principal even if that breach was carried out by him under his
agency.
It is well established that "[a]n agent who does an act
otherwise a tort is not relieved from liability by the fact that he
acted at the command of the principal or on account of the
principal . . . ."(EN26) The mere fact that the duty which the
attorney owes to the client arose vicariously out of the attorney's
affiliation with the principal firm, or that the firm's duty arose
out of dealings with the client which occurred before the attorney
joined the firm, does not affect this rule. We have said, "The law
is well established that in the event of negligence by a disclosed
agent acting within the scope of his authority, the agent may be
personally liable to a third party." Austin v. Fulton Ins. Co.,
498 P.2d 702, 704 (Alaska 1972). Thus, if the Firm, acting through
Taylor, is liable for failing to contact Ned before preparing the
deed for Joe's signature, or for failing to decline to represent
Joe when asked that a deed in Ned's name be prepared, Taylor can be
individually liable for the same failures. His duty as an employee
of the Firm arises from a prior lawyer/client relationship between
the Firm and Ned, and that duty is independent of when Taylor
became an employee of the Firm. (EN27)
Therefore we reverse the superior court on this issue.
D. The Superior Court Should Determine Whether the Firm Was
Collaterally Estopped from Relitigating Issues Litigated
in Griffith v. Griffith.
Ned also appeals the superior court's denial of his
motion seeking to collaterally estop the Firm from relitigating
issues resolved in Griffith v. Griffith. Ned contends that,
although the Firm was not a party to the prior litigation, under a
variety of theories it was fully and fairly represented in the
earlier litigation. The superior court did not rule on this
motion, presumably because its decision to grant the Firm's summary
judgment motion mooted this issue.
Meaningful appellate review of this issue is difficult,
if not impossible, in the absence of factual findings by the
superior court regarding the Firm's participation in the prior
action. Therefore, we remand this issue for resolution in
accordance with this opinion.
E. The Superior Court Should Enter an Order Identifying the
Real Party in Interest.
The Firm argues on cross-appeal that Ned assigned all
proceeds from this lawsuit to the law firm of Staley, DeLiso, Cook
& Sherry, Inc., and that therefore Ned is no longer the real party
in interest. As such, the Firm asks us to affirm the dismissal of
Ned's claims pursuant to Civil Rule 17(a), which states that
"[e]very action shall be prosecuted in the name of the real party
in interest."
However, Rule 17(a) further states that "[n]o action
shall be dismissed on the ground that it is not prosecuted in the
name of the real party in interest until a reasonable time has been
allowed after objection for ratification of commencement of the
action by, or joinder or substitution of, the real party in
interest." We have held that before dismissing an action pursuant
to Rule 17(a) the court must first enter an order identifying the
real party who must ratify the action or join it within the
reasonable time given. KOS v. Williams, 616 P.2d 868, 870 (Alaska
1980). On remand the superior court should enter an appropriate
order pursuant to Civil Rule 17(a).
IV. CONCLUSION
The superior court's grant of summary judgment in favor
of the Firm is REVERSED, and this aspect of the case is REMANDED
for proceedings consistent with this opinion. The superior court's
grant of summary judgment in favor of Warren Taylor II is REVERSED.
ENDNOTES:
1. Ned testified at his deposition that he was concerned about
whether the deed transferring the property from Joe to him had to
be signed by both Joe and his wife Mary, or whether a single
signature was legally sufficient under Alaska law.
2. Aglietti, Rodey & Offret, the co-defendant in superior court,
is the successor partnership to Aglietti, Pennington & Rodey.
3. This was the finding of the court in Griffith v. Griffith, No.
4FA-89-775 Civil (Alaska Super., May 18, 1992).
4. According to Ned's brief, Taylor gave the deed to Joe.
According to Taylor's deposition testimony, Joe came to the office
and took the deed without Taylor's knowledge.
5. This motion was filed pursuant to both Civil Rule 12(b)(6) and
Civil Rule 56.
6. We review a grant of summary judgment using our independent
judgment. "[T]he court must determine whether any genuine issue of
material fact exists and whether the moving party is entitled to
judgment on the law applicable to the established facts. All
reasonable inferences of fact from proffered materials must be
drawn against the moving party and in favor of the non-moving
party." Wright v. State, 824 P.2d 718, 720 (Alaska 1992) (citation
omitted). However, this court may affirm a grant of summary
judgment on grounds different from those advanced by the trial
court. Native Village of Eyak v. GC Contractors, 658 P.2d 756, 758
(Alaska 1983).
7. We note that most of the cases discussed below are attorney
disqualification cases rather than attorney malpractice cases.
Ultimately, actions which constitute a violation of professional
ethics rules may not constitute actionable legal malpractice.
However, professional ethics rules are evidence of the scope of the
duties owed by an attorney to a client or former client. See,
e.g., Elliott v. Videan, 791 P.2d 639, 642 (Ariz. App. 1989).
Since this case turns on the Firm's duty to Ned, it is appropriate
to look to the attorney disqualification cases for guidance.
8. The substantial relationship test has been incorporated in
Alaska Rule of Professional Conduct 1.9(a) (effective July 15,
1993). That rule bars a lawyer from representing a new client "in
the same or a substantially related matter in which [the present
client's] interests are materially adverse to the interests of the
former client . . . ."
9. See also E.F. Hutton & Co. v. Brown, 305 F. Supp 371, 394
(S.D. Tex. 1969); Berg v. Marine Trust Co., N.A., 416 N.W.2d 643,
649 (Wis. App. 1987).
10. See also Satellite Fin. Planning Corp. v. First Nat'l Bank,
652 F. Supp. 1281, 1283 (D. Del. 1987) ("Court . . . should
undertake þa realistic appraisal of the possibility that
confidences had been disclosed in the one matter which will be
harmful to the client in the other.þ").
11. Charles W. Wolfram, Modern Legal Ethics 358-375 (1986).
12. See Peterson v. Wirum, 625 P.2d 866, 870 (Alaska 1981) ("[T]he
court must look to express manifestations of each party's
understanding of the contract in attempting to give effect to the
intent behind the agreement.").
13. A material issue of fact exists where reasonable jurors could
disagree on the resolution of a factual issue. Air Van Lines v.
Buster, 673 P.2d 774, 778 (Alaska 1983).
14. We also note that there is some ambiguity as to why the $150
entered on the ledger was returned to Ned. The $150 deposit may be
associated with the Firm's representation of Ned on a misdemeanor
charge. This would also explain the creation of the trust ledger
account. It seems that the Firm represented Ned on several cases.
The first time Dean was consulted in the current case was April
1984. The Firm's records indicate some kind of contact with Ned in
1983, on May 3, on September 29, and on October 11. These contacts
could not have concerned the misdemeanor -- for which Ned consulted
with the Firm -- because they were a year prior to the entry for
that case, on August 13, 1984. They also have different matter
numbers.
15. Wolfram disagrees. He states: "Conflicts rules aim to
protect against more than the misuse of information that falls
within the narrow limits of the privilege. Scriveners who are
lawyers are also under an obligation of loyalty that should alone
suffice to prevent them from attempting to upset their own work."
Id. at 325.
Additionally, the Comment to Alaska Rule of Professional
Conduct 1.9 arguably would prohibit using the scrivener's exception
to nullify the duty of loyalty. The Comment states, "[A] lawyer
could not properly seek to rescind on behalf of a new client a
contract drafted on behalf of the former client." However, if the
lawyer merely copied a contract or other document from a book of
forms, the attorney did not truly draft the document, and the
prohibition would not apply.
16. See Comment to Alaska Rule of Professional Conduct 1.9.
17. Our adoption of the scrivener's exception does affect the
Alaska Rules of Professional Conduct. As we noted previously in
this opinion, Rule 1.9(a) has adopted the "substantial relation"
test. Specifically, the rule states:
A lawyer who has formerly represented a client
in a matter shall not thereafter represent
another person in the same or a substantially
related matter in which that person's
interests are materially adverse to the
interests of the former client unless the
former client consents after consultation.
From our above discussion of the scrivener's exception, it should
be clear that when an attorney performs a purely ministerial or
clerical function for a client, and subsequently takes on another
case which requires him or her to take a position materially
adverse to the work performed for the first client, there is no
substantial relationship between the two matters. Therefore, in
the rare instance where the scrivener's exception applies, the
attorney can forgo receiving the consent of the former client,
without running afoul of Rule 1.9(a).
We are aware that Rule 1.7 also contains the substantial
relation test. That rule deals with conflicts of interest between
a lawyer's current clients. However, we express no opinion as to
whether the scrivener's exception also applies to that situation.
18. The Firm argues on cross-appeal that we should uphold the
superior court's grant of summary judgment on the alternative
ground of a lack of proximate causation. We decline to do so
because the superior court did not rule on the causation issue,
deeming it moot in light of its decision that no duty existed.
On remand the superior court should also address Ned's
argument that the Firm owed a duty to avoid even the appearance of
impropriety. We note, however, that the law frowns upon imposing
disciplinary action based solely on the appearance of impropriety.
See Comment to Alaska Rule of Professional Conduct 1.9 ("since
þimproprietyþ is undefined, the term þappearance of improprietyþ is
question-begging. It therefore has to be recognized that the
problem of disqualification cannot be properly resolved . . . by
the very general concept of appearance of impropriety."). See also
Gabianelli, 777 P.2d at 1169.
19. Questions involving amendments to pleadings are reviewed for
an abuse of discretion. Revelle v. Marston, 898 P.2d 917, 928
(Alaska 1995).
20. Mitchell v. Land, 355 P.2d 682, 687 (Alaska 1960) (quoting
Maty v. Grasselli Chem. Co., 303 U.S. 197, 200 (1938)).
21. Martin v. Mears, 602 P.2d 421, 427 (Alaska 1979).
22. Schaible v. Fairbanks Medical & Surgical Clinic, Inc., 531
P.2d 1252, 1256 n.16 (Alaska 1975).
23. The complaint at issue is Ned's "First Amended Complaint."
Ned was granted leave to amend pursuant to Civil Rule 15(c) in
order to include the previous partnership of Aglietti, Pennington
& Rodey as a defendant, as well as its successor Aglietti, Rodey &
Offret named in the original complaint.
24. Indeed, this court has previously stated:
[T]here is no suggestion . . . that the mere
mention of a new theory in interrogatories or
depositions might suffice to require amendment
under Civil Rule 15(b). Such a position
would, in our view, clearly be unsound as it
would require counsel to comb through all the
discovery adduced from an adverse party and
make motions to strike answers which are
suggestive of unpled theories.
Superior Fire Protection Co. v. Du Alaska Co., 772 P.2d 1088, 1089
(Alaska 1989).
25. This issue requires that we construe the law of agency. As
such, it is a question of law and is reviewed de novo. Taylor v.
McGlothlin, 919 P.2d 1345, 1351 n.3 (Alaska 1996).
26. Restatement (Second) of Agency sec. 343 (1958).
27. At the very least, the burden is on Taylor to demonstrate that
he exercised reasonable care to ensure that he was not acting
contrary to the interests of a former client of the Firm.
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