Opinion ID: 895136
Heading Depth: 1
Heading Rank: 3

Heading: Privity Between Attorneys and Executors of the Client’s Estate

Text: An executor is a personal representative who “stands in the shoes” of the decedent. Belt , 192 S.W.3d at 787 . As a general rule, an estate’s personal representative may bring the decedent’s survivable claims on behalf of the estate. Id. at 784 ; see also Tex. Prob. Code § 233A (“Suits for the recovery of personal property, debts, or damages . . . may be instituted by executors or administrators.”). In Belt , we considered whether the executrixes’ legal malpractice claim was survivable. 192 S.W.3d at 784. At common law, actions for damage to real or personal property survive the death of the owner. Id . Thus, we held that “legal malpractice claims alleging pure economic loss survive in favor of a deceased client’s estate.” Id. at 785. Having identified these claims as survivable, we must consider whether there is any reason for an exception preventing executors from bringing them. Cox & Smith again relies on our holding in Barcelo , where we identified the longstanding privity rule barring non-clients from suing for legal malpractice. 923 S.W.2d at 577. In that case, the beneficiaries of a will and a trust agreement sued the estate-planning attorney for legal malpractice, alleging that negligent drafting had harmed their interests. Id . at 576. We refused to join the majority of states that relax the common-law privity barrier for intended beneficiaries, and held that third parties lack privity with a deceased’s attorney and cannot sue for malpractice. Id. at 577–79. We identified two policy considerations that supported our decision in Barcelo . First, allowing these suits could disrupt the attorney–client relationship. If third parties could sue for estate-planning legal malpractice, attorneys would be distracted by the threat of future lawsuits from disgruntled heirs, making them less able to serve their clients. Id. at 578. Second, third-party estate-planning malpractice suits would allow disappointed beneficiaries to seek a greater share of the estate by claiming the testator’s true intent was different from what is expressed in a formally-executed will, and thus create “a host of difficulties.” Id. Cox & Smith contends Barcelo bars all legal malpractice suits brought by non-clients, with the exception of estate-planning malpractice claims brought by executors, like that in Belt . To adopt the rule Cox & Smith suggests would place us alone among the states, and would unnecessarily immunize attorneys who commit malpractice. None of the concerns we voiced about third-party malpractice suits apply to malpractice suits brought by an estate’s personal representative. The threat of executor lawsuits will not impede the attorney–client relationship, because the estate’s suit is based on injury to the deceased client, as opposed to any third party. The estate’s suit is identical to one the client could have brought during his lifetime. An estate’s interests, unlike a third-party beneficiary’s, mirror those of the decedent. Belt , 192 S.W.3d at 787 . [2] Cox & Smith argues that the estate’s interest in this suit is not truly in line with the decedent’s because Corwin had always intended to keep the community-property stock out of the trust and treat it as his own property, and he did so without seeking the declaratory judgment Cox & Smith recommended. [3] This argument, though, goes to the weight of the legal malpractice claim and does not change the fact that O’Donnell “stands in the [deceased’s] shoes” in assessing the claim’s merit and deciding whether or not to assert it on the estate’s behalf. Id . Of course, if the evidence demonstrates that Corwin would have ignored Cox & Smith’s advice no matter how competently provided, the malpractice claim will fail for lack of proximate causation. But at this point in the proceedings, the merits of the malpractice claim are undeveloped. There is at least some evidence that Corwin would have followed his lawyers’ advice to pursue a declaratory judgment if they had clearly advised him to do so or warned him adequately of the severe consequences of mischaracterizing community assets. And although Cox & Smith suggests, and the dissenting justices assume, that O’Donnell colluded with the Denney children in settling their claims, there is nothing in the record that would support such a presumption. If Cox & Smith can in fact demonstrate collusion at trial, it would presumably negate causation and/or mitigate damages on the legal malpractice claim, and could subject O’Donnell to personal liability to Corwin’s beneficiaries for violating his fiduciary duties as executor of Corwin’s estate. We see no reason to create a rule that would deprive an estate of any remedy for wrongdoing that caused it harm by prohibiting the estate from pursuing survivable claims the decedent could have brought during his lifetime. Cox & Smith argues that the court of appeals’ decision creates an end-run around Barcelo , allowing disgruntled beneficiaries to sue to increase their inheritances. However, the Des Cygne beneficiaries’ claims were not against Corwin’s estate as beneficiaries of his will, but against Corwin as executor of their mother’s estate. Had they known during his lifetime that Corwin had misallocated their mother’s community property and brought suit while he was alive, as the dissenting justices say they should have, any judgment or settlement they might have obtained for damage to their mother’s estate would have been collectable from Corwin, who then could have asserted a claim against Cox & Smith for legal malpractice. In such a case, under Cox & Smith’s and the dissenting justices’ view, Barcelo would extinguish Corwin’s malpractice claim upon his death simply because the Des Cygne beneficiaries were also beneficiaries of Corwin’s estate. We do not believe Barcelo will bear such an expansive reading. To the contrary, when negligent legal advice depletes the decedent’s estate in a manner that does not implicate how the decedent intended to apportion his estate, Barcelo ’s concerns about quarreling beneficiaries and conflicting evidence do not arise. See Barcelo , 923 S.W.2d at 578 . Here, the beneficiaries of Des Cygne’s trust do not dispute Corwin’s intent as expressed in his will. They have already been paid a settlement out of Corwin’s estate for damage Corwin allegedly caused to their mother’s trust; the outcome of O’Donnell’s legal malpractice suit against Cox & Smith will have no impact on their recovery, and they have no interest in that suit. Adopting the broad rule Cox & Smith proposes would preclude executors from recovering for any claims the estate has to pay potential beneficiaries due to bad legal advice the decedent received during his lifetime. For example, according to Cox & Smith and the dissenting justices, if Corwin had improperly handled co-owned property based on bad legal advice and then died, his estate would be liable to the co-owner and could sue for legal malpractice so long as the co-owner was not related to Corwin and therefore a potential beneficiary of his estate. If a judgment was entered against Corwin because counsel botched his defense in a personal injury action arising out of an automobile accident, and Corwin later died, his estate could not assert a malpractice claim for damages that his estate must pay if the injured party happened to be a beneficiary of his will. We see no reason to extend the Barcelo privity bar to survivable malpractice suits brought by an executor, and declined to do so in Belt. We do not read Barcelo to bar O’Donnell’s suit against Cox & Smith. The dissent contends our decision will somehow allow disgruntled beneficiaries to employ gamesmanship to recover more than they were devised and will open up new avenues for attorney liability. Under Barcelo , beneficiaries cannot sue a decedent’s attorneys for estate-planning malpractice. Id . at 579. But this case does not involve a claim of estate-planning malpractice and it does not involve a suit by a decedent’s beneficiaries against the decedent’s attorneys. The Des Cygne beneficiaries did not sue Corwin’s attorneys and have no interest in the outcome of the legal malpractice case. They did sue Corwin’s estate, but did so in their capacity as the wronged beneficiaries of their mother’s allegedly underfunded trust, not as disgruntled beneficiaries of Corwin’s will. We see no reason to bar a completely separate lawsuit — that of the executor against Corwin’s attorneys — simply because Des Cygne’s beneficiaries sued the estate for Corwin’s mishandling of their mother’s trust.