No. 88-494

IN THE SUPREME COURT OF THE STATE OF MONTANA
1989

MARION LORASH

### , Plaintiff and Appellant,-vsLARRY D. EPSTEIN, and JAMES C. NELSON, d/b/a WERNER, NELSON & EPSTEIN, Defendants and Respondents.

APPEAL FROM: District Court of the Ninth Judicial District, Inand for the County ofGlacier, TheHonorable R.D. McPhillips, Judgepresiding.
COUNSEL OF RECORD:
ForAppellant: Sweeney & Healow; Kevin T. Sweeney,Billings, Montana
For Respondent: Floyd D. Corder;Alexander & Raucus, Great Falls, 

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### c .-,I w Submitted onBriefs: Dec. 16, 1988

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# - " UJZ Filed: 7 Z cn M 0



# . =E Decided: January 27, 1989

ClerkMr. Justice L. C. Gulbrandson delivered the Opinion of the Court.

Appellant appeals the order of the Ninth Judicial District Court, Glacier County, Montana, granting the defendant's motion for summary judgment upon finding plaintiff presented no material facts proving that the defendantscommitted legal malpractice. We affirm. Appellant,Marion Lorash,the owner of a glassbusiness in Cut Bank, Montana, entered into a partnership with one Chad Standish to operate an auto repairbusiness in Browning, Montana. The partners contacted Wilbur Werner, a lawpartner in the firm of Werner, Nelson and Epstein, for thepurpose o+ drafting a partnership agreement. Thepartnership agreement
was prepared and executed in March of 1982. The partners constructed abuilding, in which they intended to operate the auto repair business, on land owned by Standish. The partnership began using the building for the auto repair business in August, 1982. By December, 1982, the partners
were aware that the businesswas not going to succeed. They discussed ways in which the appellant could protect his interest in the partnership. They decided that the best way would be for the appellant to file a lien against the building and the land on which the building stood. In December of 1982 or January of 1983, appellant contacted defendantEpstein for thepurpose of securinghis interest in the labor and materials contributed to the building. Defendant Epstein agreed toprepare a mechanic's lien which would secure plaintiff's interest. Mr. Lorash provided a schedule of the labor and materials he supplied for the building and a property description. After appellant supplied the necessary data, defendant Epstein drafted the mechanic's lien which was then filed on March 18, 1983. Nothing further happened regarding the mechanic's lien untilDecember, 1984,when the appellantwas contacted regardingan incorrect legal description on the mechanic's lien which affected another person's property. Appellant contacted the defendant Epstein, who determined from an examination of the mechanic's lien statute and conversations with the title company manager that there was no problem regarding the validity of the lien. This information was communicated to the appellant. In March or April of 1985, appellantwas notified that Mr. Standishhad filed bankruptcy. Concernedwith the effect of the bankruptcy on the mechanic's lien, appellant then contacted defendant Epstein. After consultation with his partner Mr. Nelson, defendant Epstein informed the appellant thatdue to a conflictof interesthewasunable to represent him in foreclosing the lien. The conflict arose due to defendant Nelson's position as the county attorney and Mr. Epstein's position as deputy county attorney, and the fact the county attorney's office was conductinq an investigation in which the appellantwas involved. The appellant then contacted another attorney in Cut Rank to attempt to foreclose the mechanic's lien and protect his claim in Mr. Standish's bankruptcy. That attorney was unsuccessful in establishing a priority claimbased upon the mechanic's lien, due to the running of the statute of lirnj-tationsunder Montana law. As a result, appellant was only able to establish an unsecured claim in the bankruptc~i. action and received nothing when the hankruptcy court discharged his claim. Appellant then brought this legal malpractice action seeking the value of the lien, approximately $24,000, lost due to the alleged: (1) negligent withdrawal of counsel from representation, and (2) defendants' negligent failure to Foreclose the mechanic's lien. Defendants filed a motion for summary judgment citing five independent and separate grounds for dismissing theaction. The District Court,having reviewed the entire file and heard oral arguments,held therewere no relevant factual matters in dispute and that defendants were entitled to judgmentas amatter of lawonboth counts. Rule 56(c)

### ,M.R.Civ.P.

## ,provides that summary judgment is appropriate when "[tlhepleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits,if any, show that there isno genuine issue as to any material fact and that themoving party is entitled to a judgment as a matter of law." Generally negligence issues will not he susceptible to summary judgment because of the factual issues involved in such cases. See Brohman

### v. State of Montana (Mont. 1988), 749 P.2d 67, 69, 45 St.Rep. 139, 141, and cases cited therein. In a summary judgment proceeding, plaintiffs are entitled to all reasonable inferences which may be drawn from the offered proof and which indicate any issue of fact which would thereby defeat the summary judgment motion. Brown v. Merrill, Lynch, Pierce, Fenner and Smith, Inc. (1982),197Mont. 1, 640P.2d 453. Rowever, an issue of negligence cannot be inferred merely from the fact that a loss has occurred. Carlson v. Morton (Mont. 1987), 745 P.2d 1133, 44 St.Rep. 1929. To establish a professional negligence action "the plaintiff must prove that the professional owed him a duty, [and]that the professional failed to liveup to thatduty, thus causing damages to theplaintiff." Carlson,745 P.2d at 1136. In pursuing a negligence or breach of contract action against an attorney, the plaintiff must initially establish the existence of an attorney-client relationship. The plaintiff must then establish that the acts constituting the negligence or breach of contract occurred, proximately causing damages to the plaintiff. The final requirement for the plaintiff is theneed to establish "[tlhat 'but for' such negligence or breach of contract the client would have beensuccessful in the prosecution or defense of the action." Christy v. Saliterman (Minn. 1970), 179N.W.2d 288, 293-294.

A. Duty to Foreclose the Mechanic's Lien The plaintiff in the case at bar has simply failed to establish an attorney-client re!.ationship whichwould require the defendants to foreclose the mechanic's lien. Montana has not recognized the doctrine of continuous representation, which may have required the defendants to continue to representplaintiff regarding the mechanic's lien. Schneider

v. Leaphart (Mont. 1987), 743 P.2d 613, 617, 44 St.Rep. 1699, 1703. To establish a duty owed to continue to represent the plaintiff, the plaintiff would need to show the existence of
a retainer agreement or a specific agreement between the parties that the defendants would foreclose the mechanic's lien. We note that neither party cites any specific authority on the question of whether or not an attorney who drafts a mechanic's lien has a duty to foreclose that lien. Appellant claims he had used defendants' law firm for various dealings over a period of several years,both before and after the mechanic's lien was drawn. However, the appellant's deposition states he was not sure he "had call" to have an attorney prior to the drafting of the partnership agreement. Further, the first time he met defendant Epstein
on a professional basis was when he contacted him regarding the drafting of themechanic's lien. The appellant stated in his deposition he had no further contact with Mr. Epstein from the time he signed the lien, until he contacted him regarding the error in the property description, in early 1985.Also, appellant's deposition showsa retainer agreement did not existbetween himself and the law firm. Q. The law firm of Werner, Nelson & Epstein were not on retainer to you or anything; it was just simply when youneeded work done you called and asked if they could do it foryou?
A. Yes. That's correct. Even under the continuous representation doctrine, such an on and off history of representation would not establish a duty
on thepart of an attorney to monitor the activities of their clients. See, Shaperov. Fliegel (1987), 236 Cal.Rptr. 696, 699. This isparticularly sowhere the attorneyhad acted as
a scrivener in preparing documents which a client inferred they did not intend touse. Q. When you filed this Mechanic's Lien did you intend to foreclose on the lien?
A. As a last resort,yes, 

### Idid. Q. Why did youwait until March of 1985 tobegin any action on the foreclosureof the lien?
A. Because I didn't want to use--- I didn't want that to keep him from being able to borrow the money to pay me off.
Based upon the foregoingdeposition testimonywhich the District Court had before it, we find the order granting summary judgment was proper. Appellant failed to establish the existence of a duty owing by the defendamts to the appellant to foreclose themechanic's lien. B. Negligent Withdrawal ofCounsel Appellant contends that the defendants negligently withdrew from their representation of appellant. This contention is fatally flawed, however, in light of the fact that no representation existed. Appellant asserts that this
case involved a collection action and that the defendants
were obligated to pursue the collection action to a conclusion once they accepted representation. 

### 7Arn.Jur.Zd, Attorneys at Law, S 211. This contention ignores the fact that the appellant himself forestalled the foreclosureof the 

### mechanic's lien. Mr. Lorash acknowl-edgeshe did not intendto foreclose the 1.j-en except as a last resort. Further,he did not communicate a desire to foreclose the lien until he
was notified that Mr. Standish was in bankruptcy. As Mr. Lorash had been informed of the two year statute of limitationswhich applied to themechanic's lien,andwas the partywho forestalled its foreclosure,we find the defendants did not have a duty to foreclose the mechanic's lien. Further, representation had been terminated as to the mechanic's lien,pending further action onMr. Lorash'spart, and there could notbe anegligent withdrawal. Having found thatnoduty existed for the defendants to foreclose the mechanic's lien,theparties' arguments whether
or not the mechanic's lien involved in this case was valid and enforceablebecomemoot. The decision of the District Court is affifmed.

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We concur: -17'