Opinion ID: 1427434
Heading Depth: 1
Heading Rank: 3

Heading: summary of argument to be presented

Text: In dealing with the perspective of our standard of review for the summary judgment disposition of this case, including its aspects of fraud, overreaching and ethical misconduct, it is helpful to outline what claims were made by the widow and the estate and the evidence considered when summary judgment was granted. The majority fails to relate the lack of casualness in Zebre's conduct portrayed by the record. If we must provide another blanket of civil immunity, it is only fitting and proper that we make clear we understand what it is we are protecting. Patricia Brooks stated in her answer and counterclaim: 23. That by undertaking the activities mentioned in paragraph 22, Third-Party Defendant ZEBRE owed a duty not only to his clients, JOHN F. ARAMBEL and PETER R. ARAMBEL, but also owed a duty to these Defendant/Third-Party Plaintiffs to perform said activities in a proper, skillful, and diligent manner as would reasonably be expected of attorneys similarly situated. 24. By his acts and omissions, Third-Party Defendant ZEBRE breached the duties owed to Defendant Third-Party Plaintiffs and such negligence includes, but is not limited to, the following: A. ZEBRE failed to advise Defendant/Third-Party Plaintiffs that he could not represent the competing and conflicting interest of the ARAMBELS and the interest of these Defendant/Third-Party Plaintiffs. B. ZEBRE failed to advise Defendant/Third Party Plaintiffs that their execution of the Memorandum Contract could result in the imposition of substantial liabilities for breach of Defendants/Counterclaimants' fiduciary duties. C. ZEBRE failed to advise Defendant/Third-Party Plaintiffs of substantial tax liabilities which will result from the imposition of imputed interest on payments pursuant to the Memorandum Contract. D. ZEBRE failed to advise Defendant/Third-Party Plaintiffs to seek independent counsel when ZEBRE learned that the attorney for the estate was out of town. E. ZEBRE failed to advise as both his clients and Defendant/Third-Party Plaintiffs that execution of the Memorandum Contract should be postponed when it became apparent that Defendant/Third-Party Plaintiffs were not represented by counsel. F. ZEBRE failed to read and explain the entire contract to Defendant/Third-Party Plaintiffs before obtaining their signature thereon. G. ZEBRE failed to advise Defendant/Third-Party Plaintiffs that the estate's shares of the Rock Springs Grazing Association would ultimately be transferred to the ownership of his clients if the option was exercised pursuant to the Memorandum Contract. H. ZEBRE failed to advise Defendant/Third-Party Plaintiffs that the selling price for the ranch properties was only a small fraction of the market value of same when payments were made on 40-year or 52-year basis pursuant to said Memorandum Contract. 25. That ZEBRE owed the foregoing duties which were breached by him to these Defendant/Third-Party Plaintiffs because of special circumstances, including but not limited to the following: A. ZEBRE had previously done legal work for the Brooks family prior to the death of ISAAC N. BROOKS. B. ZEBRE had personally visited PATRICIA BROOKS at her home and personally contacted her during the negotiations leading up to the execution of the Memorandum Contract, although ZEBRE knew or should have known that the estate was represented by an attorney. C. ZEBRE is related by marriage to JOHN F. ARAMBEL and PETER R. ARAMBEL. In an amended cross-claim and third-party complaint, in view of the suggestion of the majority that consideration as a motion to dismiss might be appropriate, the claims were expanded and amplified: COMES NOW the Defendants and Third-Party Plaintiffs, Patricia A. Brooks and Saima McCurtain, and for their Amended Crossclaim and Third-Party Complaint against John A. Zebre, dba John A. Zebre, a Professional Corporation, allege and state as follows: NEGLIGENCE 1. Defendant/Third-Party Plaintiffs reallege the allegations contained in Paragraphs 1 through 19 of the Counterclaim against the Arambels previously filed herein and incorporate them herein by this reference as if fully set forth. 2. Third-Party Defendant, JOHN A. ZEBRE, is, and at all times pertinent herein, was an attorney at law duly licensed to practice in the State of Wyoming. Third-Party Defendant is and was at all perti[n]ent times herein a resident of Sweetwater County, Wyoming. 3. That, prior to August 12, 1983, JOHN [A.] ZEBRE, was employed by JOHN F. ARAMBEL and PETER R. ARAMBEL to represent them in the negotiations with PATRICIA A. BROOKS. That JOHN A. ZEBRE undertook to conduct negotiations, prepare documents, advise the parties to the Memorandum Contract and to preside over the execution of the Memorandum Contract on August 12, 1983. 4. That, by undertaking the activities mentioned in Paragraph 22, Third-Party Defendant ZEBRE owed a duty not only to his clients, JOHN F. ARAMBEL and PETER R. ARAMBEL, but also owed a duty to these Defendant/Third-Party Plaintiffs to perform said activities in a proper, skillful, and diligent manner as would reasonably be expected of attorneys similarly situated. 5. By his acts and omissions, Third-Party Defendant ZEBRE breached the duties owed to Defendant/Third-Party Plaintiffs and such negligence includes, but is not limited to, the following: (a) ZEBRE failed to advise Defendant/Third-Party Plaintiffs that he could not represent the competing and conflicting interest of the ARAMBELS and the interests of these Defendant/Third-Party Plaintiffs. (b) ZEBRE failed to advise Defendant/Third-Party Plaintiffs that their execution of the Memorandum Contract would result in the imposition of substantial liabilities for breach of Defendants/Counterclaimants' fiduciary duties. (c) ZEBRE failed to advise Defendant/Third-Party Plaintiffs of substantial tax liabilities which will result from the imposition of imputed interest on payments pursuant to the Memorandum Contract. (d) ZEBRE failed to advise Defendant/Third-Party Plaintiffs to seek independent counsel when ZEBRE learned that the attorney for the estate was out of town. (e) ZEBRE failed to advise both his clients and Defendant/Third-Party Plaintiffs that execution of the Memorandum Contract should be postponed when it became apparent that Defendant/Third-Party Plaintiffs were not represented by counsel. (f) ZEBRE failed to read and explain the entire Contract to Defendant/Third-Party Plaintiffs before obtaining their signature thereon. (g) ZEBRE failed to advise Defendant/Third-Party Plaintiffs that the estate's shares of the Rock Springs Grazing Association would ultimately be transferred to the ownership of his clients, if the option was exercised pursuant to the Memorandum Contract. (h) ZEBRE failed to advise Defendant/Third-Party Plaintiffs that the selling price for the ranch properties was only a small fraction of the market value of same when payments were made on a 40-year or 52-year basis pursuant to said Memorandum Contract. 6. That ZEBRE owed the foregoing duties which were breached by him to these Defendant/Third-Party Plaintiffs because of special circumstances, including but not limited to, the following: (a) ZEBRE had previously done legal work for the Brooks family prior to the death of ISAAC N. BROOKS. (b) ZEBRE had personally visited PATRICIA BROOKS at her home and personally contacted her during the negotiations leading up to the execution of the Memorandum Contract, although ZEBRE knew or should have known that the estate was represented by an attorney. (c) ZEBRE is related by marriage to JOHN F. ARAMBEL and PETER R. ARAMBEL. GROSS NEGLIGENCE 7. Defendant/Third-Party Plaintiffs reallege the allegations contained in Paragraphs 1 through 6 of the Crossclaim and Third-Party Complaint and incorporate them herein by reference as if fully set forth. 8. ZEBRE has been grossly negligent and ZEBRE's entire course of conduct in regard to BROOKS and McCURTAIN has been in bad faith, is outrageous, and evinces a wanton, willful, reckless and wrongful disregard for the rights and interests of these Third-Party Plaintiffs, and as such, entitles Third-Party Plaintiffs to recover punitive and exemplary damages from ZEBRE in an amount to be determined at trial. THIRD-PARTY BENEFICIARIES 9. Defendants/Third-Party Plaintiffs reallege the allegations contained in Paragraphs 1 through 8 of their Crossclaim and Third-Party Complaint against ZEBRE heretofore filed herein and incorporate them herein by this reference as if fully set forth. 10. ZEBRE knew, or should have known, that Defendants/Third-Party Plaintiffs entered into the Memorandum Contract for the benefit of the heirs of ISAAC N. BROOKS, deceased, and for the benefit of the beneficiaries of the Testamentary Trusts established by the Last Will and Testament of the late ISAAC N. BROOKS, namely: PATRICIA A. BROOKS, ELIZABETH BROOKS KAUMO, KATHY ANN BROOKS, ISAAC N. BROOKS, JR., IDA JENNIE BROOKS and SAIMA BROOKS, and the damages described in Paragraph 15 below would be sustained by said heirs and said Trust beneficiaries. FRAUD 11. Defendants/Third-Party Plaintiffs reallege the allegations contained in Paragraphs 1 through 10 of their Crossclaim and Third-Party Company against ZEBRE heretofore filed herein and incorporate them herein by this reference as if fully set forth. 12. In addition to undertaking the activities mentioned in Paragraph 22 of the Crossclaim and Third-Party Complaint, and commit[t]ing the acts and omissions enumerated in Paragraph 24 of the Crossclaim and Third-Party Complaint, ZEBRE violated DR 7-104(A)(1) when he communicated with Patricia A. Brooks about the Memorandum Contract when he knew, or should have known, she and the Brooks Estate were represented by Galen West, an attorney-at-law, practicing in Rock Springs, Wyoming. 13. ZEBRE further violated DR 7-104-(A)(2) when he gave legal advice, other than to secure counsel, to Patricia A. Brooks on August 11, 1983 and on August 12, 1983 when he knew that there was a reasonable possibility that the interests of Patricia A. Brooks and the Brooks Estate would be in conflict with the interests of his clients, John F. Arambel and Peter R. Arambel. 14. In rendering legal advice to Patricia A. Brooks, ZEBRE commit[t]ed the following specific fraudulent acts and omissions: (a) On August 11, 1983, at his law office while meeting with the Arambels and Patricia A. Brooks and while discussing terms and conditions of the proposed Memorandum Contract, he called his brother, MICHAEL ZEBRE, into the meeting on the pretext of explaining the tax consequences of not including interest in an installment sales agreement. (b) ZEBRE and his brother purposely failed to fully disclose the adverse effect that imputed interest would have upon the interests of Patricia A. Brooks and the Brooks Estate heirs as sellers, in the Memorandum Contract. (c) On August 12, 1983 at approximately 7:00 o'clock, A.M., ZEBRE and the ARAMBELS met with LES HENDERSON, a Certified Public Accountant, who explained the tax consequences of imputed interest as it would relate to the proposed Memorandum Contract. (d) On August 12, 1983, ZEBRE met with PATRICIA A. BROOKS, SAIMA McCURTAIN and the ARAMBELS at his law office and conducted the closing of the sale of the Brooks Ranch property and witnessed the execution of the Memorandum Contract. At said closing, he purposely and intentionally failed to make another disclosure of the tax consequences of imputed interest to PATRICIA A. BROOKS and SAIMA McCURTAIN. (e) On August 11, 1983, at the meeting described in Paragraph 5(a) above, ZEBRE purported to render legal advice to PATRICIA A. BROOKS and represented to her that his brother, who is a graduate accountant and a practicing attorney in the State of Wyoming, would be able to render competent advice with respect to the tax consequences to the imputed interest, knowing that PATRICIA A. BROOKS would rely upon such advice. On August 12, 1983, ZEBRE, after having discussed the tax consequences of imputed interest with a Certified Public Accountant, purposely and intentionally withheld the full explanation thereof from PATRICIA A. BROOKS and SAIMA McCURTAIN prior to and at the execution of the Memorandum Contract. (f) PATRICIA A. BROOKS justifiably relied upon the representations made to her by ZEBRE and his brother on August 11, 1983 and since no further disclosures were made regarding the consequences of imputed interest on August 12, 1983, she and SAIMA McCURTAIN did execute the Memorandum Contact. 15. As a direct and proximate cause of the negligence, gross negligence and fraudulent acts of ZEBRE and of his failing to fully disclose the tax consequences of imputed interest to PATRICIA A. BROOKS and SAIMA McCURTAIN prior to the execution of the Memorandum Contract, PATRICIA A. BROOKS and the BROOKS' HEIRS have suffered the following damages: (a) Attorneys' fees and costs in successfully having the Memorandum Contract set aside in the sum of $83,292.01. (b) Loss of the use, rents and profits of the cattle, sheep, farm vehicles, machinery and equipment [of] the BROOKS RANCH from the date of the execution of the Memorandum Contract to the date said Contract was set aside. (c) The loss of the opportunity to sell the BROOKS RANCH in the amount of $1,100,000. (d) Restitution required to be paid to the ARAMBELS by Court Order in the sum of $440,000. (e) Other cost and expenses in an amount to be proved at trial. The history between the families was related in Patricia Brooks' brief: For over two generations there was a close relationship between the Arambels and Isaac N. Brooks. John Arambel and Ike Brooks grew up together, were neighboring ranchers and lived one block from each other in Rock Springs, Wyoming. John Arambel considered Ike Brooks to be his closest friend.    Zebre, who is related to the Arambels by marriage, also was well acquainted with Ike and Pat Brooks.    In November of 1982, Zebre visited Ike Brooks at his home during his last illness. During that visit Zebre reviewed Ike's Will in the presence of Pat Brooks. Zebre told them that he saw potential tax problems with the Will, as drafted at that time, in terms of tax consequences that would occur at such time as Ike would pass away. Zebre suggested a more detailed review of the Will and the possible use of other estate planning vehicles such as a series of trusts. A subsequent meeting between Pat Brooks and Zebre at his law office was discussed. Several days later Zebre called Pat Brooks to arrange for an office appointment. No further estate planning discussion or meetings were held because Pat Brooks was preoccupied with her husband's deteriorating health.    On March 29, 1983, Isaac N. Brooks died. On April 15, 1983, the Last Will and Testament of Isaac N. Brooks was admitted to Probate in the District Court of Sweetwater County, Wyoming in Probate No. P-83-32   . Patricia A. Brooks, widow of the decedent, was appointed Personal Representative of said Estate.          The principal asset of the Brooks Estate was a complete working ranch located in Sweetwater County, Wyoming. The Brooks Ranch consisted of the following real and personal property: Appraisal    Item Deeded land, shares of common stock of the Rock Springs Grazing Association, grazing and agricultural leases and permits issued by the State of Wyoming, U.S. Bureau of Land Management, and Union Pacific Land Resources Corporation $2,100,000 Cattle and sheep $ 830,831 Vehicles, trailers, tractors, motorized implements other implements, bailers and mowers, corrals and wire, household items, power tools and motors, and tanks and wagons 112,222 __________ TOTAL $3,043,053 EARLY NEGOTIATIONS In the latter part of May, 1983, approximately two months after the death of Isaac N. Brooks, the Arambels began a series of frequent, almost daily, visits with Mrs. Brooks at her home or by telephone, which continued through the first part of August, 1983.    During these visits and conversations, Mrs. Brooks expressed an interest in leasing the Brooks Ranch. She communicated her concern to the Arambels about the future of Isaac N. Brooks, Jr. She indicated her desire to keep the minerals for her daughters. She was definite about retaining the Rock Springs Grazing Association Stock for her son. She told Arambels she thought the Brooks Ranch operation was worth 4.5 million dollars.    Mrs. Brooks testified at the trial as to what happened next as a result of the Arambel visits: Well, they just kept coming and telling me what they were going to do for Newt and how they were going to help me out, and that my kids and that could go out there and we could and stay at the summer ranch anytime we wanted to... . Well, I just decided I thought I would lease it to them because I felt I could trust John. I didn't know who else I could trust. And so I decided that I would lease it to him, and then they called me to Zebre's office.    FIRST MEETING AT ZEBRE'S OFFICE A meeting was held in Zebre's law office on August 11, 1983. Those persons in attendance were John Zebre, John Arambel, Sr., Peter Arambel, Pat Brooks and her daughter, Kathy Brooks.    Zebre, who was related by marriage to John Arambel, represented the Arambels throughout this transaction.    At the outset of the meeting, Pat Brooks advised Zebre that Galen West, a local Rock Springs attorney, was handling the probate of her deceased husband's estate, and that the will being probated was a new and different will than the one Zebre reviewed for Ike Brooks at his home in November, 1982.    Zebre, at this point in the meeting, claims that he attempted to call Galen West. He stated that he was informed that Mr. West was not in his office, he left word for Mr. West to return his call, but that he did not talk to Galen West that day.    Pat Brooks suggested to Zebre that Mr. West be involved in the negotiations.    In response to this suggestion, John Arambel told her, You don't need to talk to Galen West because he won't let you do it because he wants all the money. She further states that Zebre told her, Don't tell Galen [West] because he'll just tell you not to lease that ranch.    In all events, the meeting held in Zebre's law office on August 11, 1983 proceeded without West or any other attorney representing Pat Brooks, the Brooks children, or the Brooks Estate. The entire meeting, which lasted about one hour, consisted of oral conversations. There were no minutes or records of the meeting taken, and there were no drafts of any agreements or other documents reviewed or discussed at the meeting. Mrs. Brooks testified that she did not understand all of what was being discussed.    Her recollection of the nature and contents of the matters discussed at the meeting were extremely vague. She stated that she could recall no discussions about an option to purchase the ranch, about a forty year lease, about a sale of all the cattle and sheep, and other essential terms and conditions of the final agreement.          Zebre, however, recalls that Mrs. Brooks was very poised, confident, and that she was very certain and very positive, confident about what she was there about, what was happening.    He further recalled with great detail and specificity the items discussed at the meeting. He stated that some terms were dictated to me by Mrs. Brooks, some terms were dictated to me by Arambels.    Zebre recalls that one of the matters discussed was the question of interest.          At this point Michael Zebre entered the meeting at the request of his brother, John Zebre. Mike Zebre has impressive credentials as a graduate accountant, a lawyer, a licensed real estate salesman, IRS tax practitioner, and a CPA candidate.    Mike Zebre recalls his participation in the meeting as follows: I was buzzed on the phone and John asked me to come in and answer a question about imputed interest.    He then stated: I said that if anyone doesn't include  generally, if one doesn't have 9% interest in a contract the IRS will impute 10% interest. And I believe that I said after that that some portion of whatever payments Mrs. Brooks would receive would be considered interest income... . I expressed that that would be an adverse type of thing to have the IRS do to someone... . I said that instead of it being a principle reduction it would be interest income.    Mike Zebre further recalls that he was in the meeting approximately five to ten minutes, he did not give any examples of the consequences of imputed interest, and no one in the meeting, including Mrs. Brooks, asked any questions of him.    Mike Zebre did not advise Mrs. Brooks to talk to an attorney or to talk to an accountant about imputed interest.    Mike Zebre freely admits that he was called into the meeting by his brother, John Zebre, for the purpose of giving advice and explaining the tax consequences of imputed interest. He stated in his deposition as follows: Q. You did in fact give her advice, though, didn't you? A. Yes.