Opinion ID: 885086
Heading Depth: 1
Heading Rank: 7

Heading: Partnership Formation/Estate Claims

Text: ¶ 105 Clark next argues that the Accounting Defendants committed acts of professional negligence in their handling of Charles' estate and the formation of the partnership between Clark and Joan. Clark claims that Malnaa did not advise him that pursuant to the express language of the partnership agreement he could have bought out Charles' interest in the ranch after his death and could have used Charles' life insurance proceeds to do so. Specifically, Clark alleges that Malnaa wrongly advised him that the life insurance proceeds from Charles' death, which were payable to Clark as the beneficiary, had to be split with Joan because they passed under Charles' will. Finally, Clark contends that Malnaa incorrectly prepared and filed both federal and state tax forms showing the 50/50 treatment of Charles' insurance proceeds. ¶ 106 The District Court stated four separate grounds for granting the Accounting Defendants summary judgment on the claims relating to the resolution of the estate and the formation of the partnership between Joan and Clark. First, the court concluded as a matter of law that Clark is presumed to know the contents of the written partnership agreement that he executed with Charles on July 30, 1982, including its purchase on death provision. Second, the court ruled that Malnaa does not have a duty to advise Clark about a partnership agreement that Malnaa was not responsible for drafting. Third, the court concluded that Clark cannot demonstrate that he had suffered any damages as a result of Malnaa's alleged mishandling of the life insurance proceeds on the tax form filings. Finally, the court concluded that Clark's claims regarding the handling of Charles' estate and the partnership formation are barred by the three-year statute of limitations applicable to negligence actions. ¶ 107 The District Court's first basis for summary judgment on these claims was that Clark was presumed to know the contents of the written partnership agreement that he executed with his father on July 30, 1982. The agreement included a purchase on death provision. Therefore, the court reasoned that regardless of any advice by Malnaa, Clark should have been aware that he had the right to purchase Charles' interest in the ranch which would have precluded the property from passing through the will. ¶ 108 Viewing the record in a light favorable to the party opposing summary judgment, however, we conclude that a jury might believe it reasonable for Clark to follow his professional's advice, despite the provisions of the partnership agreement. Clark offered expert testimony by affidavit to support his claims. Among other things, Clark maintains that Malnaa gave him bad advice indicating that the insurance proceeds had to be split with Joan because they passed under the will. ¶ 109 If anything is clear from this record, it is that everyone involved in these transactions was confused at some time or another about what was really going to happen with Charles' assets, the ranch and the estate. It is unclear if any of the parties involved in the multiple transactions had any understanding of the nature of the legal documents which were executed at various times. Therefore, we conclude that, as a matter of law, Clark's presumed knowledge of the purchase on death provision in the partnership agreement would not have been a proper basis to grant summary judgment in favor of the Accounting Defendants. ¶ 110 The District Court's second reason for granting summary judgment is that Malnaa had no duty to advise Clark concerning the partnership agreement which he did not draft. In our view, this is an overly restrictive view of Malnaa's involvement. It is clear that Malnaa was directly involved in the estate planning decisions of the Brevig family. Again, a jury may reasonably conclude that Malnaa breached his duties to Clark with regard to these claims. ¶ 111 The third reason cited by the District Court for granting the Accounting Defendants summary judgment regarding this category of claims is that Clark cannot demonstrate that he suffered any damages as a result of Malnaa's mishandling of the life insurance proceeds on the tax form filings. Again, a jury may properly view this differently. Clark argues that Malnaa negligently advised him that the life insurance proceeds had to be split equally with Joan and that he did not have any choice but to enter into a partnership with her. Even though Clark ultimately received credit for the life insurance proceeds in the partnership account, he claims that Malnaa initially advised him that they had to be split. Clark maintains that had he known that the life insurance proceeds were legally his, he would have had enough money to purchase Charles' partnership interest and would not have entered into the partnership with Joan. ¶ 112 The last basis for supporting summary judgment in favor of the Accounting Defendants was that these claims are time barred. The statute of limitations began to run sometime in late 1983. At that time, Clark had three years in which to file an action against the Accounting Defendants for professional negligence with regard to the handling of Charles' estate and the formation of the partnership with Joan. However, Clark did not commence his third-party action against the Accounting Defendants until June 30, 1995. ¶ 113 The same reasoning that we applied to the trust claims pertains to these claims as well. The statute of limitations would be tolled if Clark can establish that Malnaa withheld information, or failed to disclose material facts to him during the relationship pursuant to § 27-2-102(3)(a), MCA. As we stated in Blackburn [n]ondisclosure of information is, by its nature, self-concealing. Blackburn, 286 Mont. at 79, 951 P.2d at 12. Clark alleges that Malnaa did not advise him that pursuant to the partnership agreement he could have bought out Charles' interest in the ranch after his death and that he could have used the insurance proceeds to do so. Once again, we conclude that a jury must determine when Clark, through due diligence, should have discovered the nondisclosure of this information in order to calculate the date upon which the statute of limitations for this action began to run. Therefore, we reverse this District Court's grant of summary judgment in favor of the Accounting Defendants with regard to this category of claims as well.