Legal Malpractice

The Texas Version of Privity in Legal Malpractice

By (Andrew Lavoott Bluestone)

One of the beautiful things about the US is that every state has its own law.  It was shocking to learn in Law School that events a few miles away, across a state border could be handled differently.  Sure, other countries, but Connecticut?

Here is a story  from Law.Com about how Texas handles executor-estate attorney legal malpractice cases.

"In a 5-2 decision, the Texas Supreme Court held on June 26 that the executor of an estate may sue a decedent's attorneys for alleged malpractice committed outside the realm of estate planning.

"We hold that the executor should not be prevented from bringing the decedent's survivable claims on behalf of the estate," Justice Harriet O'Neill wrote for the majority in Smith, et al. v. O'Donnell.

According to the majority opinion, Corwin Denney retained the San Antonio firm Cox & Smith to advise Denney in the independent administration of the estate of his wife following her death in 1968. The firm's legal name is Cox Smith Matthews.

As noted in Cox & Smith's petition for review to the state Supreme Court, the defendants in Smith also include attorneys Paul H. Smith and Jack Guenther and the former partnerships of Cox, Smith & Smith; Cox, Smith, Smith, Hale & Guenther; and Cox, Smith, Smith, Hale & Guenther Inc., all predecessors to Cox & Smith Inc.

The Supreme Court's majority opinion in Smith provides the following background: Denney contended that he and his wife had agreed orally that stock in Automation Industries Inc. would be his separate property, and property in Gilcrease Oil Co. would be hers. Cox & Smith advised Denney in a memorandum that additional information was necessary before classifying the assets. According to Cox & Smith, the firm advised Denney that he probably should seek a declaratory judgment to properly classify the stock, but Denney declined to do so. Without seeking a declaratory judgment and relying on an analysis by Denney's California accountant, Cox & Smith prepared an estate tax return that omitted Automation stock from a list of the deceased wife's assets. After Denney died 29 years later, leaving the bulk of his estate to charity, the Denney children sued Denney's estate, alleging that he underfunded their mother's trust. Thomas O'Donnell, the executor of Denney's estate, settled the children's claims for $12.9 million and then sued Cox & Smith, alleging that the firm failed to properly advise Denney about the serious consequences of mischaracterizing assets and that their negligence caused damage to Denney's estate. Asserting a claim of malice, O'Donnell alleged that Cox & Smith's conduct constituted gross negligence."
 

Full post as published by New York Attorney Malpractice Blog on July 09, 2009 (boomark / email).