Title: Reynolds v. Schrock

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: September 8, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
DIANE REYNOLDS,
as Personal Representative of the Estate of
CLYDE G. REYNOLDS,
Respondent on Review,
v.
DONNA SCHROCK,
fka DONNA FRECHETTE,
Defendant,
and
CHARLES R. MARKLEY;
and GREENE & MARKLEY, P.C.,
an Oregon professional corporation,
Petitioners on Review.
(CC C991357CV; CA A119200; SC S52503)
En Banc
On review from the Court of Appeals.*
Argued and submitted March 6, 2006.
Thomas W. Brown, of Cosgrave Vergeer Kester LLP, Portland,
argued the cause and filed the brief for petitioners on review. 
With him on the brief was Wendy M. Margolis.
James E. Leuenberger, Lake Oswego, argued the cause for
respondent on review.  Terrance L. McCauley, Estacada, filed the
brief for respondent on review.
George A. Riemer, General Counsel, Lake Oswego, filed the
brief for amicus curiae Oregon State Bar. 
BALMER, J.
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.
*Appeal from Washington County Circuit Court, Marco A. Hernandez, Judge. 197 Or App 564, 107 P3d 52 (2005).
BALMER, J.
This case requires us to determine whether a lawyer may
be liable to a third party for aiding and abetting a client's
breach of fiduciary duty, and, if the lawyer may be so liable,
what circumstances must exist to impose liability. 
Plaintiff (1) sued defendant for breach of fiduciary duty, and
he also sued defendant's lawyer for his role in that alleged
breach. The trial court entered summary judgment in the lawyer's
favor, and the Court of Appeals reversed.  Reynolds v. Schrock,
197 Or App 564, 107 P3d 52 (2005).  
We allowed the lawyer's petition for review and now
reverse the decision of the Court of Appeals.  We hold that a
lawyer may not be held jointly liable with a client for the
client's breach of fiduciary duty unless the third party shows
that the lawyer was acting outside the scope of the lawyer-client
relationship.  Because there is no evidence in the summary
judgment record that the lawyer in this case was acting outside
the scope of that relationship, the lawyer was entitled to
judgment as a matter of law.  We therefore reverse the decision
of the Court of Appeals and affirm the trial court's summary
judgment in favor of the lawyer.
I.  FACTS
We take the facts from the Court of Appeals opinion and
the record.  Because this case comes to us on summary judgment,
we review the facts in the manner most favorable to plaintiff,
the nonmoving party. ORCP 47 C.  Plaintiff was a naturopathic
physician, and defendant Donna Schrock was one of plaintiff's
patients.  Plaintiff and Schrock bought two parcels of land
together.  In 1999, Schrock filed two separate actions against
plaintiff.  The first action concerned the jointly owned land,
and the second alleged that, in the course of the doctor-patient
relationship, plaintiff had engaged in improper sexual conduct
with Schrock.  The two actions were consolidated, and the parties
later settled them in an agreement negotiated and drafted by
their respective lawyers, including Schrock's lawyer, defendant
Charles Markley.  The settlement agreement provided, in part,
that plaintiff would transfer his share of one of the two jointly
owned properties (the "lodge property") to Schrock and that
Schrock and plaintiff together would sell the second property
(the "timber property") and transfer the proceeds to plaintiff. 
If the proceeds of the timber property sale were less than
$500,000, then Schrock would pay plaintiff the difference and
Schrock would grant plaintiff a security interest for that amount
in the lodge property to secure the payment.  If the proceeds of
the timber property sale equaled or exceeded $500,000, then
Schrock would owe plaintiff nothing and plaintiff would have no
security interest in the lodge property.
After the parties signed the settlement agreement,
plaintiff transferred his interest in the lodge property to
Schrock.  Markley then advised Schrock that, in his opinion,
nothing in the settlement agreement expressly required her to
retain the lodge property in anticipation of the possible
creation of a security interest in plaintiff's favor. (2) 
Schrock, with Markley's assistance and without plaintiff's
knowledge, sold the lodge property to a third party before the
parties sold the timber property.  Markley asked the escrow
officer handling the sale to keep the sale confidential.  Markley
also advised Schrock that she could revoke the consent that she
had given earlier to plaintiff's plan to sell the jointly owned
timber property.  In Markley's view, plaintiff had failed to
provide Schrock with information about the value of the timber
property prior to arranging to sell it, contrary to a requirement
in the settlement agreement, and that breach freed Schrock from
any obligation to consent to the sale of the timber property. 
Based on Markley's advice, and with Markley's assistance, Schrock
revoked her consent to the sale of the timber property.
II.  PROCEEDINGS BELOW
Plaintiff sued Schrock and Markley over their actions
in connection with the implementation of the settlement
agreement.  As to Schrock, plaintiff alleged, among other things,
that the settlement agreement had created fiduciary duties
between Schrock and plaintiff as joint venturers.  Plaintiff
asserted that Schrock, by selling the lodge property and revoking
her consent to the sale of the timber property, had breached her
fiduciary duty to plaintiff and the implied covenant of good
faith and fair dealing that was part of the settlement
agreement. (3)  He further alleged that Schrock had converted
his interest in the lodge property by selling that property and
retaining the proceeds.  
Plaintiff's complaint alleged that Markley was jointly
liable with Schrock because he had aided and abetted Schrock's
torts by giving her "substantial assistance and encouragement" in
the commission of the torts and acting "in concert with [her]
pursuant to a common design * * *."  He also alleged that Markley
had interfered with the contract (the settlement agreement)
between plaintiff and Schrock.  Plaintiff and Schrock later
settled, leaving Markley as the only remaining defendant.
Markley moved for summary judgment, and the trial court
granted his motion, stating, in part:
"[T]he only evidence is that Mr. Markley advised his
client of what she could do given the language of the
agreements. * * * [T]here is no evidence that he was
doing anything other than acting as Ms. Schrock's
lawyer.  Mr. Markley had no duty to the plaintiff.
* * * [His] duty runs only to his client." 
On appeal, plaintiff assigned error to the trial court's judgment
in Markley's favor on the "joint-liability tort claims" -- that
is, the claims that Markley was jointly liable with Schrock for
breach of fiduciary duty and conversion. (4)  The Court of
Appeals affirmed the trial court's judgment in Markley's favor on
the conversion claim.  Reynolds, 197 Or App at 578-79.  The
court, however, reversed the judgment on the breach of fiduciary
duty claim.  The Court of Appeals held that this court's
precedents did not exempt a lawyer from liability for assisting
in a client's breach of fiduciary duty and that the Court of
Appeals' case law suggested that a lawyer for a fiduciary could
be liable for knowingly aiding or assisting a fiduciary in a
breach of duty.  Id. at 573-74.  As noted, Markley sought review,
which we allowed. (5)
III.  ANALYSIS
The material historical facts in the summary judgment
record are essentially undisputed, (6) and the parties focus
their arguments on the applicable legal standard.  The trial
court's determination that Markley was entitled to judgment as a
matter of law is a legal question that we review for errors of
law.  Schaff v. Ray's Land & Sea Food Co., Inc., 334 Or 94, 98-99, 45 P3d 938 (2002).  Where necessary, we view the facts and
all reasonable inferences that may be drawn from them in the
light most favorable to the adverse party -- in this case,
plaintiff.  Id. at 99. 
A. Liability for Assisting a Breach of Fiduciary Duty  
We begin our analysis, as do the parties, with this
court's decision in Granewich v. Harding, 329 Or 47, 985 P2d 788
(1999).  That case provides a reasonable starting point because
it involved claims for breach of fiduciary duty, including a
claim against a lawyer for assisting others in breaching
fiduciary duties that they owed to the plaintiff.  Plaintiff
argues that Granewich describes the elements required to state a
claim and holds that a lawyer in Markley's position may be liable
for assisting in a client's breach of fiduciary duty.  In our
view, however, Granewich does not provide a complete answer to
the questions that this case raises.  
The plaintiff in Granewich, a minority shareholder in a
corporation, alleged that the corporation's two majority
shareholders had breached their fiduciary duty to him by
effectuating a corporate "squeeze-out."  The plaintiff also
asserted a separate claim against the corporation's lawyer,
alleging that the lawyer had assisted the other defendants in
that squeeze-out.  This court held that the lawyer could be
liable for aiding and abetting the other defendants' breach of
fiduciary duty, even though the lawyer had no independent
fiduciary duty to the plaintiff.  However, the Granewich opinion
specifically noted that the defendant lawyer in that case had
represented the corporation, not the other defendants (the
majority shareholders), and that the plaintiff had alleged that
the lawyer's actions had fallen "outside the scope of any
legitimate employment on behalf of the corporation."  Id. at 59
(emphasis added).  Therefore, in Granewich, this court did not
consider or answer the question that is at the core of this case: 
whether, and under what circumstances, a third party may assert a
claim against a lawyer, acting in a professional capacity, for
assisting a client in breaching the client's fiduciary duty.
The Court of Appeals recognized that Granewich left
that question unanswered.  However, based on two explanatory
footnotes in Granewich, the Court of Appeals interpreted that
case as holding that "an attorney may be liable for assisting a
client's tortious conduct * * *."  Reynolds, 197 Or App at 574. 
First, the court relied on a footnote in which this court stated
that "[w]e do not suggest * * * that it necessarily matters that
the corporation, rather than [the majority shareholders], was the
client."  Granewich, 329 Or at 59 n 7.  However, that footnote
simply conveyed this court's reluctance to answer a question that
was not before it, and it was not an indication that the lack of
a lawyer-client relationship in that case was irrelevant. (7) 
Second, the Court of Appeals observed that, in another footnote,
this court quoted a treatise stating that a lawyer could be
liable for the torts of the lawyer's client under certain
circumstances.  Reynolds, 197 Or App at 572 (quoting Granewich,
329 Or at 56 n 5).  The Court of Appeals then went on to explain
that dicta in its opinion in Roberts v. Fearey, 162 Or App 546,
556, 986 P2d 690 (1999), supported its ultimate determination
that Markley could be liable.  Reynolds, 197 Or App at 573-74. 
Although Granewich left unanswered the question of when
a lawyer representing a client may be liable for the client's
torts, that case usefully describes the circumstances in which a
person who assists another in committing a tort ordinarily may be
liable for resulting harm to a third party.  Granewich stated
that section 876 of the Restatement (Second) of Torts
(Restatement) "reflect[s] the common law of Oregon" on that
subject.  329 Or at 54.  Section 876 provides:
"For harm resulting to a third person from the
tortious conduct of another, one is subject to
liability if he
"(a) does a tortious act in concert with the other
or pursuant to a common design with him, or
"(b) knows that the other's conduct constitutes a
breach of duty and gives substantial assistance or
encouragement to the other so to conduct himself, or
"(c) gives substantial assistance to the other in
accomplishing a tortious result and his own conduct,
separately considered, constitutes a breach of duty to
the third person."
The parties agree that plaintiff's allegations do not state a
claim under subsection (c) because plaintiff does not assert that
Markley's "own conduct, separately considered, constitute[d] a
breach of duty to [plaintiff]."  The parties further agree, for
purposes of this court's review, that Schrock owed a fiduciary
duty to plaintiff and that she breached that duty.  The specific
issue thus is whether plaintiff can recover from Markley for
acting in concert with Schrock or substantially assisting her in
breaching the fiduciary duty that she owed to plaintiff. (8)  
Under Granewich and the Restatement, a person who acts
"in concert with" or "gives substantial assistance or
encouragement" to a fiduciary who breaches a duty to a third
party may be liable for the resulting harm.  Markley argues,
however, that that general rule does not apply when a lawyer, in
the context of a lawyer-client relationship, advises a client who
breaches a fiduciary duty to a third party.  The Restatement
labels any such exemption from liability that the law otherwise
would impose as a "privilege."  See Restatement § 890 ("One who
otherwise would be liable for a tort is not liable if he acts in
pursuance of and within the limits of a privilege * * *.").  We
therefore consider whether the fact that Markley was acting as
Schrock's lawyer when he engaged in the challenged conduct
created a privilege that protects Markley from liability.  If
that status does create such a privilege, then we must consider
the circumstances in which the privilege applies.
B. Privilege Against Joint Liability for a Lawyer Assisting a
Client's Breach of Fiduciary Duty
This court has not considered previously what
privileges, if any, protect a person from liability for
substantially assisting another in a breach of fiduciary duty. 
However, several cases have considered privileges as they relate
to claims for interference with contractual relations brought
against advisors or agents who acted on behalf of another person
or entity. (9)  Those cases are instructive, because, like the
present case, they involve claims against a person for actions on
behalf of a client or principal that allegedly harmed a third
party.  
In Wampler v. Palmerton, 250 Or 65, 439 P2d 601 (1968),
the plaintiff sued a corporation's financial advisors for
intentional interference with contractual relations for advising
the corporation to breach its contract with the plaintiff.  This
court noted that the advisors owed a "duty of advice and action"
to the corporation and that imposing liability on those advisors
would paralyze the corporation's ability to act and to secure
advice on how to act.  Id. at 74-75.  The court therefore
recognized a privilege against liability for corporate advisors
who act in good faith and for the benefit of the corporation. 
Id. at 75.  Indeed, the court noted, the privilege protects the
advisor from liability "even though plaintiff argues that the
defendants intended to cause the corporation to take an unfair
advantage of the plaintiff by means of the breach of contract." 
Id. at 76.  
This court followed Wampler in Straube v. Larson, 287
Or 357, 600 P2d 371 (1979), where it considered an intentional
interference claim by a radiologist against a hospital chief
administrator who had recommended that the hospital suspend the
radiologist's hospital privileges and other medical staff members
who allegedly had conspired in seeking the suspension.  The
defendants claimed that they had acted to fulfill their duty to
the hospital to ensure the proper care for patients.  Id. at 369. 
This court applied the reasoning of Wampler and concluded that,
if the defendants had acted in good faith and in the hospital's
interest, then they had what "amount[ed] to the application of a
qualified privilege" against liability.  Id. at 369-71. (10) 
The court also addressed the issue of which party had the burden
of proving that the defendants' acts came within the scope of the
privilege and held that the plaintiff had "the burden of negating
[that] qualified privilege * * * as part of his affirmative
case."  Id. at 371.
In Welch v. Bancorp Management Services, 296 Or 208,
214, 675 P2d 172 (1983), this court again considered the issue of
when an agent can be liable in tort for actions that the agent
takes on behalf of its principal and that cause harm to a third
party.  In that case, a real estate developer alleged that a
lender had agreed to provide financing for a project but had 
breached that agreement based on "misrepresentations" and "false
advice" given to the lender by its investment committee.  Id. at
211.  The developer sought to recover from the investment
committee members for tortious interference with the financing
agreement.  Relying on its earlier decisions in Wampler and
Straube, this court held that the investment committee had been
acting as the agent of the lender and therefore was immunized
from tort liability if its actions had been within the scope of
its authority:
"An agent acting as a financial advisor is thus
privileged to interfere with or induce breach of the
principal's contracts or business relations with third
parties, as long as the agent's actions are within the
scope of his employment and taken with an intent to
further the best interests of the principal."
Welch, 296 Or at 218; see also id. at 216-17 ("[T]he proper test
is whether the agent acts within the scope of his authority and
with the intent to benefit the principal.").    
This court, in the cases described above, protected
from liability defendants who owed duties to an entity or person
and who, in the course of performing those duties, harmed a third
party.  This court recognized a qualified privilege in those
cases because it was necessary to protect important relationships
between the defendant and the entity or person -- the financial
advisor and the corporation in Wampler, the staff and the
hospital in Straube, and the investment committee and the lender
in Welch.  That is, this court, in exercising its common-law
authority to define tortious conduct, implicitly concluded that
the effective performance of the duties arising from those
relationships required that the person performing those duties
have a qualified privilege from tort liability. (11)   
The principle underlying the cases just discussed --
that, for individuals and corporations to obtain the advice and
assistance that they must receive from their agents, the agents
must have some protection from tort liability to third parties --
assists us in determining the rule that should be applied in this
case.  Not every relationship between a person who breaches a
contract or a fiduciary duty and one who substantially assists in
such a breach necessarily justifies recognition of a privilege
against liability.  However, we think that the lawyer-client
relationship is one that does. (12)  That is true, in our view,
because safeguarding the lawyer-client relationship protects more
than just an individual or entity in any particular case or
transaction; it is integral to the protection of the legal system
itself.  See Restatement (Third) of the Law Governing Lawyers
(Restatement of Lawyers) ch 2, Introductory Note (2000) (citing
"the importance to the legal system of faithful representation");
id. § 121 comment b (conflict rules protect "interests of the
legal system" by preventing compromise of process of adversary
litigation).  Myriad business transactions, as well as civil,
criminal, and administrative proceedings, require that the client
have the assistance of a lawyer.  And a variety of doctrines,
from the rules against conflicts of interest to the confidential
nature of lawyer-client communications, demonstrate the ways in
which the legal system protects the lawyer-client relationship. 
Moreover, as was true in Wampler, Straube, and Welch, a
third party's claim against the lawyer that puts the lawyer at
odds with the client will compromise the lawyer-client
relationship.  A lawyer who is sued for substantially assisting a
client's breach of fiduciary duty becomes subject to divided
loyalties.  As this court has recognized, lawyers cannot serve
their clients adequately when their own self-interest -- in these
examples, the need to protect themselves from potential tort
claims by third parties -- pulls in the opposite direction.  See,
e.g., In re Jeffery, 321 Or 360, 898 P2d 752 (1995) (conflict of
interest for lawyer to represent client in criminal case in which
lawyer also was implicated); see also Restatement of Lawyers
§ 121 comment b (conflict compromises client's expectation of
effective representation).  Moreover, allowing a claim against
the lawyer may raise issues of lawyer-client privilege, if the
preparation of an adequate defense for the lawyer would require
the disclosure of privileged communications.  Cf. State ex rel
OHSU v. Haas, 325 Or 492, 500, 942 P2d 261 (1997) (purpose of
lawyer-client privilege "'is to encourage full and frank
communication between attorneys and their clients and thereby
promote broader public interests in the observance of law and
administration of justice'" (quoting Upjohn Co. v. United States,
449 US 383, 389, 101 S Ct 677, 66 L Ed 2d 584 (1981)));
Restatement of Lawyers § 121, comment b (conflict rules prevent
use of confidential client information against client's
interest); see also ORS 9.460(3) (lawyer shall "[m]aintain the
confidences and secrets of the attorney's clients * * *").  
To summarize the discussion above, this court's earlier
decisions hold that a person may be jointly liable with another
for substantially assisting in the other's breach of a fiduciary
duty owed to a third party, if the person knows that the other's
conduct constitutes a breach of that fiduciary duty.  Granewich,
329 Or at 57.  Our tort case law also makes clear, however, that,
if a person's conduct as an agent or on behalf of another comes
within the scope of a privilege, then the person is not liable to
the third party.  In this case, we extend those well-recognized
principles to a context that we have not previously considered
and hold that a lawyer acting on behalf of a client and within
the scope of the lawyer-client relationship is protected by such
a privilege and is not liable for assisting the client in conduct
that breaches the client's fiduciary duty to a third party. 
Accordingly, for a third party to hold a lawyer liable for
substantially assisting in a client's breach of fiduciary duty,
the third party must prove that the lawyer acted outside the
scope of the lawyer-client relationship.
Several features of the rule regarding the
circumstances in which a lawyer's conduct may be privileged are
particularly important.  First, the rule places the burden on the
plaintiff to show that the lawyer was acting outside the scope of
the lawyer-client relationship.  See Straube, 287 Or at 371
(plaintiff has burden of negating qualified privilege).
Second, the rule protects lawyers only for actions of
the kind that permissibly may be taken by lawyers in the course
of representing their clients.  It does not protect lawyer
conduct that is unrelated to the representation of a client, even
if the conduct involves a person who is a client.  Because such
unrelated conduct is, by definition, outside the scope of the
lawyer-client relationship, no important public interest would be
served by extending the qualified privilege to cover it.  See
Welch, 296 Or at 216-17 ("[T]he proper test [for a privilege
against liability for interference with contract] is whether the
agent acts within the scope of his authority and with the intent
to benefit the principal.")  For the same reason, the rule does
not protect lawyers who are representing clients but who act only
in their own self-interest and contrary to their clients'
interest.  Similarly, this court would consider actions by a
lawyer that fall within the "crime or fraud" exception to the
lawyer-client privilege, OEC 503(4)(a), and Rule of Professional
Conduct 1.6(b)(1), to be outside the lawyer-client relationship
when evaluating whether a lawyer's conduct is protected. 
The Court of Appeals, in this case, like other courts
that have considered similar claims by nonclients against
lawyers, struggled to reconcile the client's need for a lawyer's
confidentiality, advice, and assistance with the desire to hold
lawyers accountable for "affirmative conduct that actually
furthers the client's breach of fiduciary duty, done by the
attorney with knowledge that he or she is furthering the breach." 
Reynolds, 197 Or App at 576. (13)  For that reason, the court
held that, although a lawyer could be jointly liable under the
principles of Restatement, section 876(a) and (b), for assisting
a client that breached its fiduciary duty, "a strict and narrow
construction best protects the attorney-client relationship
without conferring on attorneys a license to help fiduciaries
breach their duties."  Id.  
The Court of Appeals' "strict and narrow construction"
formulation, however, provides insufficient guidance to lawyers
and lower courts.  Similarly, the court's distinction between a
lawyer's advice to a client and the lawyer's other assistance to
a client -- such as drafting a letter or an agreement -- fails to
recognize the lawyer's role in actual transactions.  In this
case, for example, Schrock's right to receive legal advice from
Markley is unduly cramped if Markley's potential tort liability
to third parties prevents him from drafting transactional
documents or making telephone calls necessary for Schrock to act
on that advice.  For that reason, we think that a test for
liability that focuses on whether the lawyer's actions fall
outside the scope of the lawyer's representation of his or her
client provides a better balance between the important interests
at stake.
Courts in other jurisdictions also have limited a
lawyer's joint liability for the wrongdoing of his or her clients
to protect the lawyer-client relationship.  In Chem-Age
Industries, Inc. v. Glover, 2002 SD 122, 652 NW2d 756, 774-75
(2002), the South Dakota Supreme Court concluded that a lawyer
could not be jointly liable for aiding a client's breach of
fiduciary duty if the lawyer was "[m]erely acting as a scrivener
for a client" and that liability could be imposed only if the
lawyer "rendered 'substantial assistance' to the breach of duty,
not merely to the person committing the breach."  652 NW 2d at
774.  The Massachusetts Supreme Judicial Court rejected claims by
trust beneficiaries that a trustee's lawyers could be liable for
assisting the trustee's breach of fiduciary duty, holding that
the beneficiaries had to "show that the [lawyer] knew of the
breach and actively participated in it such that he or she could
not reasonably be held to have acted in good faith."  Spinner v.
Nutt, 417 Mass 549, 556, 631 NE2d 542, 546 (1994).  In a case
involving the liability of an accountant for aiding and abetting
a client's breach of fiduciary duty, the Minnesota Supreme Court,
quoting Restatement, section 876(b), noted that "most courts have
recognized that 'substantial assistance' means something more
than the provision of routine professional services" and found
that allegations that alleged only that the accountant provides
such "routine services" were insufficient to meet the
"substantial assistance" requirement.  Witzman v. Lehrman,
Lehrman & Flom, 601 NW2d 179, 189 (Minn 1999).
In our view, the test that we hold applicable here --
whether the lawyer's conduct fell outside the permissible scope
of the lawyer-client relationship -- often will lead to the same
result as the tests adopted in the cases described above.   It
does so, however, in a more predictable and useful way, because
it focuses on the scope of the lawyer-client relationship -- and
the legal rules, such as OEC 503(4)(a), that help define that
scope -- rather than on the fine line between "advice" and
"assistance" or between "substantial assistance" and other
assistance.  We acknowledge that the test does not identify a
bright line between liability and immunity, but it nevertheless
uses concepts tied directly to the lawyer's role in representing
the client and existing sources of law regarding the scope of
that role. (14)
C. Application of the Privilege
We now return to the facts of this case.  Like the
parties and the courts below, we assume for these purposes that
Schrock breached a fiduciary duty to plaintiff and that Markley
knowingly provided substantial assistance to her or acted in
concert with her in so doing.  We focus on whether Markley, as
Schrock's lawyer, has a qualified privilege from liability to
plaintiff for assisting in that breach of duty.  Here, plaintiff
had "the burden of negating [the] qualified privilege * * * as
part of his affirmative case."  Straube, 287 Or at 371.  On
summary judgment, therefore, plaintiff had the burden of
producing evidence that would show that Markley's conduct was not
privileged because it fell outside the permissible scope of his
role as Schrock's lawyer.  See ORCP 47 C (on summary judgment,
"[t]he adverse party has the burden of producing evidence on any
issue raised in the motion as to which the adverse party would
have the burden of persuasion at trial.").
Taken in the light most favorable to plaintiff, the
summary judgment record shows that Markley took four actions that
plaintiff asserts are relevant to his claims.  First, Markley
advised Schrock that the settlement agreement did not require her
to retain the lodge property in anticipation of the possibility
that plaintiff's security interest would attach to it and
assisted her in selling it.  Second, he called the escrow officer
and asked her not to tell anyone about the pending sale of the
property.  Third, he assisted Schrock in revoking her consent to
sell the timber property.  Finally, he accepted substantial fees
for performing legal work for Schrock, including the foregoing
three actions.
Nowhere has plaintiff suggested, and nothing in the
record indicates, that any aspect of Markley's advice and
assistance to Schrock fell outside the scope of the lawyer-client
relationship or the assistance that a lawyer properly provides
for a client.  There is no credible claim that Markley's conduct 
violated any applicable statute. (15)  No evidence in the
summary judgment record suggests that Markley's or Schrock's
conduct was criminal or fraudulent.  Whether or not Markley's
interpretation of the agreement was correct -- a determination
that we need not make here -- the purpose of the privilege
requires that lawyers be able to assess the legal problems that
their clients bring to them and discuss the full range of
available solutions.  Moreover, lawyers must be able to assist
their clients in implementing those solutions, to the extent that
that assistance falls within the legitimate scope of the lawyer-client relationship.  Although courts may not always agree with
the legal advice that a lawyer provides, protecting a lawyer from
liability to a third party for advising a client is essential to
the administration of justice.  Cf. In re Hockett, 303 Or 150,
160, 734 P2d 877 (1987) ("A lawyer must be able to advise and
assist clients in their affairs without fear of discipline if he
[or she] is wrong in interpreting close questions of law.  He or
she must be given some latitude to be wrong.").
Plaintiff argues that we should interpret Markley's
acceptance of fees as a self-interested act that fell outside the
scope of the qualified privilege.  We disagree.  Whether Markley
took no fee or an hourly fee or a contingent fee is irrelevant to
the central question whether his actions fell within the scope of
the lawyer-client relationship.  If anything, Markley's
acceptance of a fee supports his claim that he was acting as
Schrock's lawyer, although there is no evidence here that he was
not acting as her lawyer.  
The summary judgment record reveals no evidence from
which a reasonable jury could find that Markley acted outside the
scope of the lawyer-client relationship in his representation of
Schrock.  Markley's conduct therefore falls within the scope of
the privilege that we have described above.  The trial court was
correct in granting Markley's motion for summary judgment. 
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.
1. This action was brought by Clyde Reynolds.  During the
litigation, Clyde Reynolds died, and the personal representative
of his estate was substituted as plaintiff.  For convenience, we
refer to Clyde Reynolds and his estate collectively as
"plaintiff."  
2. We express no view regarding the correctness of
Markley's advice to Schrock on that or the other legal issues as
to which she consulted him.
3. Both the claim for breach of fiduciary duty and the
claim for breach of the covenant of good faith and fair dealing
arose from the duties that plaintiff and Schrock allegedly owed
one another as a result of the settlement agreement.  The parties
and the courts below treated the claims as a single claim for
breach of fiduciary duty, and we do as well.  
4. Plaintiff did not appeal the trial court's ruling in
Markley's favor on the interference with contract claim.
5. Plaintiff did not cross-petition for review of the
Court of Appeals' ruling in favor of Markley on the conversion
claim, and the parties do not discuss that claim in their briefs. 
For that reason, we do not address that issue.
6. One factual matter that the parties dispute is whether
plaintiff was actually harmed by Schrock's sale of the lodge
property.  Markley asserts that there is no evidence in the
record that plaintiff suffered "actual" harm from the sale
because the record does not show whether the timber property sold
for less than $500,000, which was a precondition of any
additional financial obligation of Schrock to plaintiff and
therefore of any security interest.  Plaintiff disagrees.  In
addressing whether Markley can be held liable for substantially
assisting in Schrock's breach of fiduciary duty, we assume, for
purposes of this case, that Schrock did in fact breach a
fiduciary duty that she owed to plaintiff, including causing
plaintiff actual harm.  
The parties also disagree as to whether the settlement
agreement itself granted plaintiff a security interest in the
lodge property, with plaintiff claiming that it did and Markley
that it did not.  We agree with the Court of Appeals that
plaintiff's security interest always was contingent and "never
came into existence."  Reynolds, 197 Or App at 579.  In any
event, given our disposition of the case, that asserted factual
dispute is not material.
7. Indeed, as commentators discussing Granewich have
emphasized, the context of that case -- the squeezing-out of a
minority shareholder in a closely held corporation -- is one in
which the legal obligations of the corporation, the majority
shareholder(s), and the minority shareholders (and the lawyers
representing each) are complex and rapidly changing.  See, e.g.,
Comment, Redefining Obligations in Close Corporation Fiduciary
Representation:  Attorney Liability for Aiding and Abetting the
Breach of Fiduciary Duty in Squeeze-Outs, 58 Wash & Lee L Rev 551
(2001) (discussing Granewich and other cases involving squeeze-outs; advocating redefinition of lawyers' obligations when
representing majority shareholders).  In Granewich, this court
decided only the issue before it:  a claim against the
corporation's lawyer for substantially assisting the majority
shareholders in their breach of fiduciary duty.
8. The Court of Appeals treated subsections (a) and (b) of
Restatement section 876 as requiring similar, although not
identical, showings of affirmative conduct by Markley for him to
be jointly liable with Schrock for her breach of fiduciary duty. 
Reynolds, 197 Or App at 576.  We do as well, for purposes of the
issues decided in this case.  We therefore do not consider
Markley's other arguments concerning the differences between the
elements required to establish liability under those two
subsections.
9. In some cases, this court has referred to section 890
of the Restatement, quoted in the text, in the course of
determining whether a privilege exists in particular
circumstances.  See, e.g., Comini v. Union Oil Co., 277 Or 753,
756, 562 P2d 175 (1977) (quoting Restatement and concluding that
oil company's interference with contract between distributor and
buyer of distributor's business was privileged due to the consent
of the parties to such interference).  In other cases, such as
those discussed in the text, this court has decided whether a
privilege exists as a matter of Oregon's common law and without
reference to the Restatement.
10. Applying that standard, this court affirmed summary
judgment for two of the defendants but reversed the summary
judgment entered in favor of two other defendants, because there
was evidence that those defendants had acted "to satisfy private
grudges" rather than on behalf of the hospital and, therefore,
did not come within the scope of the privilege.  Straube, 287 Or
at 370.
11. Although the cases described in the text involved
agents and advisors other than lawyers, decisions in other
jurisdictions apply the same qualified privilege from tort
liability to claims brought against lawyers for their actions on
behalf of clients.  See, e.g., Schott v. Glover, 109 Ill App 3d
230, 440 NE2d 376 (1982) (illustrating proposition); Randy R.
Koenders, Annotation, Attorney's Liability in Tort for
Interference with Contract to which Client was Party, 85 ALR4th
846 (1991) (collecting cases).
12. The arguments for and against permitting claims against
a lawyer for substantially assisting a client's breach of
fiduciary duty are discussed in Robert W. Tuttle, The Fiduciary's
Fiduciary:  Legal Ethics in Fiduciary Representation, 1994 U Ill
L Rev 889 (1994), and Comment, Changing the Nature of Corporate
Representation:  Attorney Liability for Aiding and Abetting the
Breach of Fiduciary Duty, 28 St Mary's LJ 213 (1996).
13. The Restatement of Lawyers also describes those
competing policy interests multiple times but provides virtually
no useful guidance to courts deciding cases where those interests
conflict:
"Lawyers regularly act in disputes and
transactions involving nonclients who will foreseeably
be harmed by inappropriate acts of the lawyers. 
Holding lawyers liable for such harm is sometimes
warranted.  Yet it is often difficult to distinguish
between harm resulting from inappropriate lawyer
conduct on the one hand and, on the other hand,
detriment to a nonclient resulting from a lawyer's
fulfilling the proper function of helping a client
through lawful means.  Making lawyers liable to
nonclients, moreover, could tend to discourage lawyers
from vigorous representation.  Hence, a duty of care to
nonclients arises only in the limited circumstances
described in the Section.  Such a duty must be applied
in light of those conflicting concerns."
Restatement of Lawyers, § 51 comment b; see also id. § 56 comment
b ("[A]mong the circumstances relevant to liability or defense
under the general law are some that commonly attend lawyers
practicing law, such as the fiduciary duties lawyers owe to
clients and the powers, duties, and responsibilities that lawyers
have in the legal system.  Thus, courts considering the civil
liability of lawyers must consider how a ruling that affirms or
precludes liability would affect the vigorous representation of
clients within the limits of the law, including, for example, the
candid expression to clients of the lawyer's views on any matter
within the scope of the representation.  Courts must also take
care, in construing liability provisions and professional rules,
to avoid subjecting lawyers to inconsistent obligations."); id. §
56 comment c ("The social benefit of proper legal advice and
assistance often makes it appropriate not to hold lawyers liable
for activities in the course of a representation[.] * * * On the
other hand, a lawyer is not always free of liability to a
nonclient for assisting a client's act solely because the lawyer
was acting in the course of a representation[.]").
14. In Schott v. Glover, 109 Ill App 3d 230, 440 NE2d 376
(1982), the Illinois Court of Appeals adopted an approach similar
to the one that we take today in a case involving a breach of
contract claim against a bank and a related interference with
contract claim against the bank's lawyer.  The court held that
the claim against the lawyer was insufficient because it failed
to allege that the lawyer was acting outside the scope of the
lawyer-client relationship.  The lawyer's fiduciary duty to the
bank meant that he was "privileged, in his capacity as the bank's
attorney, to perform the acts and give the advice alleged" as to
the bank's contractual obligations to the plaintiff.  440 NE2d at
380.
15. Plaintiff asserts that Markley's and Schrock's actions
constitute theft under ORS 164.015, which provides, in part, that
a person "commits theft when, with the intent to deprive another
of property or to appropriate property to the person or to a
third person, the person:  (1) [t]akes, appropriates, obtains or
withholds such property from an owner thereof * * *."  The facts
do not support plaintiff's claim that Markley's or Schrock's
actions constituted theft.