Opinion ID: 1258903
Heading Depth: 1
Heading Rank: 1

Heading: attorney-client representation

Text: The Atkinsons claim that attorney Steve Morgan represented them throughout the probate hearings to approve the settlement and management of Chad's estate. The Atkinsons present four theories upon which they believe that Mr. Morgan assumed the duty to represent their interests: (1) implied contract, (2) limited attorney-client relationship, (3) third-party liability, and (4) volunteer legal advice.
The record is clear that the Atkinsons did not consider Morgan their attorney at any time during his involvement in the probate proceedings. Despite the fact that Scott Olsen, manager of Wetzel, suggested that Morgan's services be utilized to prepare the necessary documents for the probate hearing, there are a number of indicators which confirm that the Atkinsons did not rely on Morgan's experience, skill, or expertise with regard to the adequacy of the settlement. First, all of the pleadings and documents that were prepared and filed by Morgan indicated clearly that Morgan was representing IHC, not the Atkinsons. The Atkinsons had an opportunity to review the documents and apparently did discuss the settlement with an attorney of their choosing. Second, there was no contract of employment or retainer agreement between the Atkinsons and Morgan. They did not hire Morgan, nor did they pay for any services performed. Rather, it is clear from the record that Morgan was hired by IHC, which in turn paid for his services. Third, the probate judge asked Mrs. Atkinson directly about her legal representation while Morgan was in the courtroom participating in the hearing: THE COURT: Have you sought the advice of legal counsel in this matter? MRS. ATKINSON: I have talked to someone about it, but we are not planning on getting a lawyer. THE COURT: Have you talked to a lawyer? MRS. ATKINSON: Yes. I've just asked him a few things about it, and he said that we really should not  we shouldn't have to sue them if they are giving us an offer. It is thus clear that the Atkinsons exercised the right which was theirs to represent themselves and to proceed without the benefit of counsel. It is equally clear that they did not consider Morgan to be their attorney and that they did not seek his advice with respect to the merits of the settlement agreement. In the absence of an attorney-client relationship, Morgan owed no implied contractual duty to the Atkinsons, nor did there exist a limited attorney-client relationship.
The Atkinsons next claim is that Morgan owed them a duty under a theory of third-party liability. We have yet to fully address the theory of third-party liability, and we have not allowed recovery in any of the cases where third-party liability was in issue. [4] Cases cited by the Atkinsons from other jurisdictions state that in order to establish a cause of action under this theory, the Atkinsons must allege and prove that the intent of the client to benefit the nonclient was a direct purpose of the transaction or relationship. In this regard, the test for third party recovery is whether the intent to benefit actually existed, not whether there could have been an intent to benefit the third party. [5] Indeed, the third-party liability theory does not supplant entirely the strict privity rule, but instead operates as a limited exception to that rule. [6] Cases utilizing the third-party liability theory involve drafting and administering wills and estates, [7] fraudulent misrepresentations, [8] creditors of a corporation in receivership, [9] purchasers at a foreclosure sale where attorneys conducted the sale improperly, [10] and giving a legal opinion on a bond. [11] Indeed, any duty owed by an attorney to a third party is derivative of the duty owed by that attorney to his client. [12] The instant case is nothing like the other cases adopting the third-party liability theory. The settlement of a potential claim or a lawsuit is not the kind of benefit envisioned in the third-party liability theory. Despite the fact that IHC and the Atkinsons had reached a settlement agreement, they were still potential adversaries in litigation. Morgan, who had a contractual duty to represent IHC, had no corresponding duty to assure that the settlement for the Atkinsons was sufficient to fit their needs. The basis of our judicial system is the adversarial model, a concept which is foreign to the placement of a duty upon counsel to represent the best interests of both sides. The third-party liability theory is thus inapposite to the factual context of the instant case.
The Atkinsons' final claim against Morgan is that by offering volunteer legal advice he undertook a duty to act in their best interests. The legal advice Morgan gave was an explanation of the probate documents, specifically the order approving settlement of a minor's claim. Morgan testified: I read that document to them and explained to them that in order for the court to approve and sign this Order, that the court would have to find that the settlement in all respects was fair. Not only is the above a true statement of the law, [13] but also the court approved the settlement upon Mr. Atkinson's statement that he believed it to be fair: THE COURT: And your name, sir? MR. ATKINSON: Roger W. Atkinson. THE COURT: Are you the father of the child? MR. ATKINSON: Yes. THE COURT: Do you believe that you, on behalf of the child, have a claim against Intermountain Health Care? MR. ATKINSON: Yes, I do. THE COURT: It's my understanding that there's a structured settlement of a total payout of $900,000? MR. ATKINSON: Yes, sir. THE COURT: Do you feel that this is adequate? MR. ATKINSON: Yah, I do, considering the hospitalization and everything like that will be covered. THE COURT: Do you feel this is in the best interest of the child? MR. ATKINSON: I do. THE COURT: All right. I will approve the settlement. The Atkinsons cite no cases on point for the proposition that [a]n attorney who gives gratuitous advice will be held to the same standard of care as if he were under formal retainer. [14] While some jurisdictions have recognized a cause of action when legal advice was volunteered, we have yet to address this issue. Nevertheless, we find the cases cited by the Atkinsons to be easily distinguishable from the present case, where an explanation of the probate proceedings was incumbent upon Morgan. Morgan's explanation of the probate proceedings, when viewed in the concept of this case, did not constitute the rendering of legal advice. It is clear that the Atkinsons did not consider Morgan to be their attorney, nor did they rely upon Morgan or the probate judge to evaluate the fairness of the settlement. The Atkinsons made an independent evaluation of the settlement and concluded that it was fair. We therefore affirm the trial court's determination that there is no genuine issue of material fact with regard to a legal malpractice claim against Morgan.