Opinion ID: 2425009
Heading Depth: 1
Heading Rank: 1

Heading: Claims Brought by the Children

Text: First, the children contend that the trial court erred when it ruled in its first order of summary judgment that they did not have standing, on their own behalf, to bring a legal-malpractice claim against Mr. Pettus under the lawyer-immunity statute, Ark. Code Ann. § 16-22-310 [1] (Repl.1994). The Arkansas lawyer-immunity statute provides that: (a) No person licensed to practice law in Arkansas and no partnership or corporation of Arkansas licensed attorneys or any of its employees, partners, members, officers, or shareholders shall be liable to persons not in privity of contract with the person, partnership, or corporation for civil damages resulting from acts, omissions, decisions, or other conduct in connection with professional services performed by the person, partnership, or corporation, except for: (1) Acts, omissions, decisions, or conduct that constitutes fraud or intentional misrepresentations; or (2) Other acts, omissions, decisions, or conduct if the person, partnership, or corporation was aware that a primary intent of the client was for the professional services to benefit or influence the particular person bringing the action. For the purposes of this subdivision, if the person, partnership, or corporation: (A) Identifies in writing to the client those persons who are intended to rely on the services, and (B) Sends a copy of the writing or similar statement to those persons identified in the writing or statement, then the person, partnership, or corporation or any of its employees, partners, members, officers, or shareholders may be held liable only to the persons intended to so rely, in addition to those persons in privity of contract with the person, partnership, or corporation. (Emphasis added.)
Our analysis begins with the basic premise of statutory construction that we construe the statute just as it reads giving the words their ordinary and usually accepted meaning in common language. Lawhon Farm Servs. v. Brown, 335 Ark. 276, 984 S.W.2d 1 (1998); Vanderpool v. Fidelity & Cas. Ins. Co., 327 Ark. 407, 939 S.W.2d 280 (1997). The plain language of Ark.Code Ann. § 16-22-310 requires the plaintiff to have direct privity of contract with the person, partnership, or corporation he or she is suing for legal malpractice. Likewise, we have narrowly construed the privity requirement to require direct privity between the plaintiff and the attorney or entity to be held liable for legal malpractice. See Clark v. Ridgeway, 323 Ark. 378, 914 S.W.2d 745 (1996); Wiseman v. Batchelor, 315 Ark. 85, 864 S.W.2d 248 (1993). In particular, in Clark we said that the language of this section [Ark.Code Ann. § 16-22-310(a)] is precise and clear and reveals that the contract contemplated by the statute relates to a contract for professional services performed by the attorney for the client. Clark, supra (emphasis added).
It is undisputed that the children in this case did not have a contract for legal representation with Mr. Pettus. Hence, the trial court dismissed the children's claims for lack of privity as required by section 16-22-310. On appeal, the children raise two arguments in an attempt to satisfy the privity requirement. First, the children claim that they were in privity with the decedent, James McDonald, who in turn was in privity with Mr. Pettus. We find no basis for this argument of indirect privity in the plain language of the lawyer-immunity statute or in our cases interpreting the Act. Furthermore, the two Arkansas cases cited by the children are unpersuasive because both merely dealt with the issue of whether heirs are in privity with a decedent, and not with the second and more important issue of whether this connection is enough to create privity with the decedent's attorney under the lawyer-immunity statute. See Hardie v. Estate of Davis, 312 Ark. 189, 848 S.W.2d 417 (1993); Brown v. Imboden, 28 Ark.App. 127, 771 S.W.2d 312 (1989). In fact, neither case even mentions the lawyer-immunity statute. We are equally unpersuaded by the children's citations to cases from other jurisdictions because Arkansas has a specific statute, which we have narrowly interpreted to require direct privity. How other jurisdictions have interpreted their immunity statutes that may or may not be similar to our statute is simply irrelevant. For these reasons, we reject the children's indirect-privity argument and hold that under the lawyer-immunity statute, Ark.Code Ann. § 16-22-310, a plaintiff must be in direct privity with the attorney or entity being sued for legal malpractice.
Next, the children argue that the trial court erred when it dismissed their legal-malpractice claim against Mr. Pettus because they have standing to bring the claim as intended third-party beneficiaries of the contract for legal representation between Mr. Pettus and James McDonald. Again, this argument is contrary to the plain language of the lawyer-immunity statute, Ark.Code Ann. § 16-22-310, which clearly requires direct privity between the client and the attorney or business entity being sued for legal malpractice. Likewise, in Swink v. Ernst & Young, 322 Ark. 417, 908 S.W.2d 660 (1995), we held that an employee did not have standing as a third-party beneficiary to bring a malpractice claim against his employer's accounting firm for injuries he allegedly suffered as a result of the accounting firm's malpractice. Although Swink dealt with the accountant-immunity statute, Ark.Code Ann. § 16-114-302 (Supp.1997), instead of the lawyer-immunity statute, Ark.Code Ann. § 16-22-310 (Repl. 1994), we hold that it is applicable to the case at hand because the language of the two acts is virtually identical. [2] Consequently, we reject the children's argument that they have standing, as third-party beneficiaries, to bring a legal-malpractice claim against Mr. Pettus under Ark.Code. Ann. § 16-22-310.
This conclusion, however, does not end our analysis because the lawyer-immunity statute contains two exceptions to the privity requirement. First, no privity is required for [a]cts, omissions, decisions, or conduct that constitutes fraud or intentional misrepresentations. Ark.Code Ann. § 16-22-310(a)(1). This section is clearly inapplicable because the children did not assert fraud or intentional misrepresentations in their original or amended complaints. The second exception to the privity requirement provides that: (2) Other acts, omissions, decisions, or conduct if the person, partnership, or corporation was aware that a primary intent of the client was for the professional services to benefit or influence the particular person bringing the action. For the purposes of this subdivision, if the person, partnership, or corporation: (A) Identifies in writing to the client those persons who are intended to rely on the services, and (B) Sends a copy of the writing or similar statement to those persons identified in the writing or statement, then the person, partnership, or corporation or any of its employees, partners, members, officers, or shareholders may be held liable only to the persons intended to so rely, in addition to those persons in privity of contract with the person, partnership, or corporation. Ark.Code Ann. § 16-22-310(a)(2) (emphasis added). Even if we were to assume that Mr. Pettus was aware that a primary intent of drafting the codicils was to benefit or influence the children, and that the codicil was a writing to the client identifying those persons who are intended to rely on the services, there is no evidence in the record that Mr. Pettus ever sent the codicil to the children as required by section 16-22-310(a)(2)(B). The children attempt to avoid this problem by arguing that it is inequitable and against public policy to allow an attorney to avoid liability by not sending notice of his duty to the intended beneficiaries. It, however, is well settled that the determination of public policy lies almost exclusively with the legislature, and the courts will not interfere with that determination in the absence of palpable error. Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998); Owen v. Wilson, 260 Ark. 21, 537 S.W.2d 543 (1976). The legislature has clearly spoken in section 16-22-310(a)(2) as to when and under what circumstances an intended beneficiary may bring a legal-malpractice claim. The children have simply failed to meet those statutory requirements. Because the children have failed to satisfy the privity requirement or the exceptions contained in the lawyer-immunity statute, Ark.Code Ann. § 16-22-310, we affirm the trial court's dismissal of the children's malpractice claims against Mr. Pettus.