Title: Johnson v. Hart

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Hassell, C.J., Keenan,1 Koontz, Lemons, Goodwyn and 
Millette, JJ., and Russell, S.J. 
 
NANCY E. JOHNSON 
 
v.  Record No. 090984  
OPINION BY JUSTICE DONALD W. LEMONS 
 
 
 
April 15, 2010 
JOHN W. HART, ET AL. 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 
Frederick B. Lowe, Judge 
 
 
In this appeal we consider whether a sole testamentary 
beneficiary, in her individual capacity, may maintain a legal 
malpractice action against the attorney for the estate for the 
attorney’s allegedly negligent services rendered to the estate.  
We also consider whether the prevailing party in the circuit 
court, by endorsing the final order “seen and consented to,” 
has expressly waived any arguments he presented to the trial 
court. 
I. 
FACTS AND PROCEEDINGS BELOW 
 
On January 17, 2007, Nancy E. Johnson (“Johnson”) filed a 
complaint against John W. Hart and John W. Hart, P.C. 
(collectively, “Hart”), alleging that Hart committed legal 
malpractice after being retained to provide legal counsel and 
advice regarding the probate of Johnson’s mother’s estate (“the 
Estate”).  As a result of Hart’s alleged malpractice, Johnson 
                     
1 Justice Keenan participated in the hearing and decision 
of this case prior to her retirement from the Court on March 
12, 2010. 
asserted that she was removed from her position as the executor 
of the Estate and suffered pecuniary loss. 
 
Hart filed an answer, affirmative defenses, and demurrer.  
Hart’s demurrer asserted that Johnson’s complaint failed to 
state a cognizable claim because Hart represented Johnson as 
the executor of the Estate, not in her individual capacity.  
Accordingly, any proper claim would be in the name of the 
Estate “and/or by [Johnson], in her capacity as” the executor. 
 
Subsequently, Hart filed a motion for summary judgment, 
along with a supporting memorandum.  In order to provide an 
adequate record for the trial court to rule on the summary 
judgment motion, the parties stipulated to the following facts: 
1. 
Peggy Johnson was the mother of [Johnson] 
and Andrea S. Johnson, and Peggy Johnson died on 
July 23, 2002, having executed her Last Will and 
Testament on December 5, 1980. 
 
2. 
[Johnson] was referred to [Hart] and met 
with Hart and asked Hart to represent the 
[Estate] and assist in having [Johnson] qualified 
as the Executrix of the Estate. 
 
3. 
There was no written contract or fee 
agreement between the Estate [and] Hart, and Hart 
represented the [Estate] between August 19, 2002 
through May 13, 2005, when he ceased any 
representation of the Estate. 
 
4. 
The claim being asserted by [Johnson] arises 
out of the alleged malpractice of [Hart] as the 
attorney for the [Estate].  Although no claim is 
being asserted against [Hart] for his conduct 
relating to anything other than his services to 
the [Estate], the parties would stipulate that 
John Hart did provide legal advice in some form 
 
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to [Johnson] in other personal matters, 
including: 
 
a. He did write checks for her personal 
bills; 
 
b. He did help in obtaining a Restraining 
Order for [Johnson] and her 
grandmother against [Johnson’s] 
former husband; 
 
c. He did help [Johnson] recover her cats 
from a friend; 
 
d. He did help in filing a suit for damages 
to [Johnson’s] ex-husband’s car; 
 
e. He did help [Johnson] with respect to 
qualifying as Guardian for her 
sister. 
 
5. 
John Midgett [“Midgett”] was appointed 
Administrator C.T.A. of the [Estate] when an 
Order was entered on July 1, 2005 
removing [Johnson] as the Executrix of the 
[Estate]. 
 
6. 
At no time prior to [Midgett’s] winding up 
the [Estate] and filing the final accounting for 
approval did the [Estate] ever file a claim 
against John Hart. 
 
7. 
When [Midgett] completed his 
responsibilities as Administrator C.T.A., Andrea 
S. Johnson had died, and [Johnson] was the sole 
beneficiary under the Last Will and Testament of 
Peggy Johnson.  [Midgett], as Administrator 
C.T.A. of the [Estate], submitted the final 
accounting for the [Estate], which was approved 
on June 5, 2006, at which time [Johnson] 
inherited all of the assets of the [Estate] as 
the sole beneficiary of the Estate. 
 
8. 
On October 18, 2005, [Midgett], as 
Administrator C.T.A. of the [Estate], executed an 
Assignment of Interest in Real Estate Contract 
whereby the [Estate] assigned to [Johnson] all of 
 
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the Estate’s right, title and interest in and to 
that certain written instrument by and between 
the [e]state of Peggy Lee Anderson Johnson and 
D.M. Barbini Contracting, Inc. dated October 21, 
2002 for the purchase of Lot 16, Phase I, 
Seaboard Forest on Live Oak Trail, Virginia 
Beach, Virginia and for the construction of a 
residence thereon. 
 
9. 
The Final Accounting for the [Estate] was filed 
and approved on June 5, 2006, at which time the 
Estate was closed. 
 
10. The lawsuit that has been filed by [Johnson] 
was filed in her individual capacity and has not 
been filed as a fiduciary, and as of this time, 
no lawsuit has been filed by the [Estate] against 
[Hart]. 
 
 
In his memorandum, Hart argued that Johnson was not the 
proper party to the legal malpractice action because “[i]n 
order to maintain a claim for legal malpractice, a plaintiff 
must plead and prove, inter alia, that an attorney-client 
relationship existed between the plaintiff and the defendant.”  
In this case, Hart continued, “the attorney-client relationship 
that Hart purportedly breached was between Hart and the 
Estate.” 
 
Johnson argued that Code § 8.01-13 permitted her, as a 
beneficial owner of the Estate, to bring suit in her individual 
capacity.  Hart responded that Code § 8.01-13 “does not answer 
the question whether Ms. Johnson is the ‘beneficial owner’ of 
the legal malpractice claim.  Rather, this section ‘simply 
stipulates that [beneficial owners] of claims can sue in their 
 
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own names.’”  Finally, Hart contended, “to find that Ms. 
Johnson inherited the legal malpractice claim belonging to the 
Estate would be contrary to Virginia common law and public 
policy that legal malpractice claims cannot be assigned.”   
 
In her memorandum in opposition to Hart’s motion for 
summary judgment, Johnson conceded that legal malpractice 
claims are not assignable under Virginia law, but she argued 
Code § 8.01-13 distinguishes beneficial ownership from 
assignment.  She further argued that a beneficiary, devisee, 
legatee or donee under a will is a beneficial owner of the 
assets of the estate, and for that reason Code § 8.01-13 
permits such a beneficiary to bring a legal malpractice action 
in her own name.   
 
The trial court issued a letter opinion granting Hart’s 
motion for summary judgment holding that Johnson, “as a 
beneficiary [of the Estate,] possesses beneficial ownership of 
the [E]state’s legal malpractice claim.”  The trial court then 
acknowledged that while Code § 8.01-13 “would therefore appear 
to allow her to proceed,” “she is the functional equivalent of 
an assignee.”  Accordingly, because this Court has interpreted 
Code § 8.01-26 to exclude the assignment of legal malpractice 
claims, the trial court reasoned that Code § 8.01-13 should not 
“serve to override the public policy against suits by strangers 
to the personal representative-attorney relationship.” 
 
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The trial court later entered an order which incorporated 
its letter opinion, granted Hart’s motion for summary judgment, 
and dismissed Johnson’s complaint with prejudice.  Counsel for 
Hart endorsed this order “[s]een and consented to,” and counsel 
for Johnson endorsed the order “[s]een and objected to.” 
 
Johnson timely filed her notice of appeal and we granted 
an appeal on the following assignment of error: 
1. 
The trial court erred in granting summary judgment in favor 
of Hart in holding that Johnson, as a beneficial owner of a 
legal malpractice claim accruing to the Estate, lacked 
legal standing to maintain her action against Hart. 
 
We also granted Hart’s assignment of cross-error: 
 
1. 
The trial court erred in applying Virginia Code § 8.01-13 
to the facts in this case. 
 
II. ANALYSIS 
A. 
Standard of Review 
 
In this case, the trial court granted Hart’s motion for 
summary judgment relying upon the stipulated facts presented by 
the parties.  “[W]e conduct a review of the trial court’s 
application of law to the undisputed facts.”  Virginia College 
Building Authority v. Lynn, 260 Va. 608, 622, 538 S.E.2d 682, 
688 (2000).  Therefore, Johnson’s assignment of error and Hart’s 
assignment of cross-error “are questions of law which we review 
de novo.”  Davenport v. Little-Bowser, 269 Va. 546, 552, 611 
S.E.2d 366, 369 (2005). 
B. 
Hart’s Assignment of Cross-Error 
 
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On brief to this Court, Johnson argues that Hart waived 
his objection to the trial court’s holding that Johnson was a 
beneficial owner pursuant to Code § 8.01-13 when counsel for 
Hart endorsed the trial court’s order “[s]een and consented 
to.”  This argument misapprehends the language of Code § 8.01-
384, which provides in pertinent part:   
No party, after having made an objection or 
motion known to the court, shall be required to 
make such objection or motion again in order to 
preserve his right to appeal, challenge, or move 
for reconsideration of, a ruling, order, or 
action of the court.  No party shall be deemed 
to have agreed to, or acquiesced in, any written 
order of a trial court so as to forfeit his 
right to contest such order on appeal except by 
express written agreement in his endorsement of 
the order. 
 
The first question before this Court is whether Hart expressly 
waived the arguments he presented to the trial court in his 
memorandum in support of his motion for summary judgment, 
thereby precluding him from assigning error to the portion of 
the trial court’s letter opinion that was adverse to him. 
 
Hart’s endorsement as “[s]een and consented to” was no 
more an express waiver of his objection to the trial court’s 
unfavorable ruling than was Johnson’s endorsement of the order 
as “[s]een and objected to” an objection to that portion of the 
same ruling, which was favorable to her.  Rather, the context 
of Hart’s endorsement, as the prevailing party, indicates that 
he consented to the trial court’s order granting his motion for 
 
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summary judgment.  With regard to the trial court’s ruling that 
Johnson was a beneficial owner of a legal malpractice action 
pursuant to Code § 8.01-13, Hart clearly stated his opposition 
to this ruling in memoranda before the court and cannot be 
deemed to have abandoned this position by acquiescing in a 
summary judgment order in his favor. 
C. 
Beneficial Ownership of a Legal Malpractice Claim 
 
Code § 8.01-13 provides in pertinent part, “[t]he assignee 
or beneficial owner of any bond, note, writing or other chose 
in action, not negotiable may maintain thereon in his own name 
any action which the original obligee, payee, or contracting 
party might have brought.”  On brief, Johnson concedes that 
Virginia law prohibits the assignment of legal malpractice 
claims, notwithstanding Code § 8.01-26.2  Similarly, we hold 
today that Code § 8.01-13 does not permit beneficial ownership 
of a cause of action for legal malpractice. 
 
Virginia has adopted the strict privity doctrine in legal  
malpractice cases; as a threshold requirement, a plaintiff must 
demonstrate the existence of an attorney-client relationship.  
“It is settled in the Commonwealth that no cause of action 
exists in cases [involving a claim solely for economic losses] 
                     
2 Code § 8.01-26 provides in pertinent part:  “Only those 
causes of action for damage to real or personal property, 
whether such damage be direct or indirect, and causes of action 
ex contractu are assignable.” 
 
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absent privity of contract.”  Copenhaver v. Rogers, 238 Va. 
361, 366, 384 S.E.2d 593, 595 (1989). 
 
“A cause of action for legal malpractice 
requires the existence of an attorney-client 
relationship which [gives] rise to a duty, breach 
of that duty by the defendant attorney, and that 
the damages claimed by the plaintiff client must 
have been proximately caused by the defendant 
attorney’s breach.”  Rutter v. Jones, Blechman, 
Woltz & Kelly, P.C., 264 Va. 310, 313, 568 S.E.2d 
693, 695 (2002).  Thus, “an action for the 
negligence of an attorney in the performance of 
professional services, while sounding in tort, is 
an action for breach of contract . . . .”  Oleyar 
v. Kerr, 217 Va. 88, 90, 225 S.E.2d 398, 400 
(1976); accord Shipman v. Kruck, 267 Va. 495, 
501, 593 S.E.2d 319, 322 (2004).  It is the 
contract formed between an attorney and a client 
that gives rise to the attorney-client 
relationship; but for the contract, the attorney 
owes no duty to the client.  O’Connell v. Bean, 
263 Va. 176, 180, 556 S.E.2d 741, 743 (2002). 
 
Cox v. Geary, 271 Va. 141, 152, 624 S.E.2d 16, 22 (2006). 
 
In MNC Credit Corp. v. Sickels, 255 Va. 314, 497 S.E.2d 
331 (1998), we answered the question “whether a claim of legal 
malpractice against an attorney may be assigned by a former 
client to a third party.”  Id. at 316, 497 S.E.2d at 332.  We 
held that Code § 8.01-26 “does not abrogate the common law rule 
which prohibits the assignment of legal malpractice claims in 
this Commonwealth because the General Assembly did not plainly 
manifest an intent to do so.”  Id. at 318, 497 S.E.2d at 333.  
In view of the “highly confidential and fiduciary relationship 
between an attorney and client,” we reasoned, “the common law 
 
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rule which prohibits the assignment of legal malpractice claims 
safeguards the attorney-client relationship which is an 
indispensable component of our adversarial system of justice.”  
Id. at 318, 319, 497 S.E.2d at 333, 334. 
 
This same policy precludes a testamentary beneficiary from 
maintaining, in her own name, a legal malpractice action 
against an attorney with whom an attorney-client relationship 
never existed.  To hold otherwise would implicate the same 
concerns that counsel against the assignment of legal 
malpractice claims.  Although Code § 8.01-13 permits the 
“beneficial owner of any . . . chose in action” to maintain in 
her own name any action the original contracting party might 
have brought, the common law has long provided that this 
particular chose in action requires the existence of an 
attorney-client relationship as a threshold element.  See 
Ayyildiz v. Kidd, 220 Va. 1080, 1086, 266 S.E.2d 108, 112-13 
(1980). 
In this case, no such relationship existed between Johnson 
and Hart.  As the stipulation indicated, Hart was retained to 
represent the Estate, not Johnson.  Additionally, “the General 
Assembly did not plainly manifest an intent” in Code § 8.01-13 
to “abrogate the common law rule which prohibits the assignment 
of legal malpractice claims in this Commonwealth.”  MNC Credit 
Corp., 255 Va. at 318, 497 S.E.2d at 333.  Similarly, the trial 
 
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court erred when it held that Johnson, “as a beneficiary [of 
the Estate,] possesses beneficial ownership of the [E]state’s 
legal malpractice claim.”  Despite this error, the trial court 
reached the correct resolution of the issue. 
III.  CONCLUSION 
 
We hold that the trial court correctly concluded that 
Johnson lacked standing to maintain a legal malpractice claim 
against Hart.  For the reasons stated herein, we will affirm 
the judgment of the trial court granting Hart’s motion for 
summary judgment. 
Affirmed. 
 
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