Opinion ID: 1301652
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Heading Rank: 3

Heading: Intentional Tort Claims Against Attorney LaBudde

Text: ¶ 26 The Tensfeldt children allege that between 1980 and 1992, Attorney LaBudde assisted Robert in unlawfully violating a court order mandating that Robert make and maintain a specific will. During that time, LaBudde drafted five wills for Robert, each of them noncompliant with a divorce judgment. The circuit court determined that these actions constituted aiding and abetting as a matter of law: [12] The parties stipulate that Robert desired to violate the judgment requiring him to leave two-thirds of his net estate to the Children, an indisputably unlawful act. See Wis. Stat. § 785.01(1)(b). However, to do so, he needed help in drafting his will, and LaBudde provided this assistance. There is also no question that LaBudde intended that the will would violate the judgment. He was aware of the court's judgment and knew that the will he drafted violated it. Since there are no disputed material facts and the only inferences that can be drawn from them lead to the conclusion that LaBudde aided and abetted Robert in his violation of a court judgment and consciously intended to do so, summary judgment is appropriate. The court then scheduled trial on the issue of damages. ¶ 27 LaBudde disagrees with the court's determination. He asserts that the court order to make and maintain a will was not enforceable because the court lacked authority to impose it, and thus it was not an unlawful act for Robert to violate it. Alternatively, he argues that the judgment was no longer enforceable after 20 years had passed. Finally, LaBudde contends that he cannot be sued by a third party for actions taken to fulfill his professional obligations, absent fraud or malice. He argues that either qualified immunity or the good faith advice privilege bars the claim of aiding and abetting. We address each argument in turn.
¶ 28 LaBudde argues first that the judgment requiring Robert to create a will in favor of his children was unenforceable at its inception because the court had no authority to incorporate a stipulation for property distribution to children into a divorce judgment. Citing Vaccaro v. Vaccaro [13] and Estate of Barnes v. Hall, [14] LaBudde asserts that the statutes in effect in 1974 did not allow a court to order property division for the benefit of children of the marriage, rendering the judgment unenforceable. He further asserts that even if this court eventually concludes that it was unlawful for Robert to violate the judgment, the question of whether it was unlawful was fairly debatable. [15] ¶ 29 In both Barnes and Vaccaro, the judgment of divorce incorporated a stipulation which provided that the former husband would maintain a life insurance policy for the benefit of the minor children. In both cases, the children attempted to enforce the stipulation as a property right after they had become adults. Both this court and the court of appeals concluded that under such circumstances, the provisions were for child support rather than property division for the benefit of adult children. [16] ¶ 30 In Vaccaro, a divorce judgment obligated Mr. Vaccaro to maintain a substantial life insurance policy naming his three minor sons as beneficiaries. Vaccaro, 67 Wis.2d at 478-79, 227 N.W.2d 62. Sixteen years after the judgment was entered, Mrs. Vaccaro sought a court order requiring her former husband to withdraw money from the life insurance policies in order to pay for the sons' college tuition. In making its determination that the children did not have a property right to the funds, this court concluded that the provision was child support, rather than property division. Id. at 482, 227 N.W.2d 62. We noted that under Wis. Stat. § 247.26, [a] final property division can be made only between husband and wife. Id. at 483, 227 N.W.2d 62. ¶ 31 The analysis of Estate of Barnes relies heavily on the above quoted sentence from Vaccaro. In Barnes, the divorce judgment obligated the husband to maintain an insurance policy for the benefit of the two youngest children of the marriage. Barnes, 170 Wis.2d at 5, 486 N.W.2d 575. The court of appeals concluded that the language was ambiguous as to whether the provision was intended as child support or property division. Ultimately, the court interpreted it as one for child support: [B]ecause the law does not allow estate planning in a divorce for purposes of creating a property benefit for adult children, the clause at issue, as a matter of law, must be treated as one relating to child support. Id. at 13, 486 N.W.2d 575. ¶ 32 Both Vaccaro and Barnes conclude that because divorce is created by statute, divorce courts had the authority to order only what was allowed for under § 247.26 at that timedivision of the estate between the spouses, alimony, and child support. [17] In both cases, the provisions could reasonably have been interpreted as either property division for the benefit of the children of the marriage or child support intended to expire when the children reached the age of majority. In both cases, the courts chose the interpretation that was expressly provided for in § 247.26child support for the minor children. ¶ 33 Here, however, we do not face the same dilemma. Given that there were no minor children to support at the time of the divorce, the divorce stipulation could not have been intended as child support. Instead, this stipulation and judgment must have been an attempt to divide the estate for the benefit of the adult children. ¶ 34 To the extent that Barnes can be read to imply that a property benefit for adult children cannot be incorporated into a court order, we reject the premise. It is not a complete statement of the law. The 1973-74 statutes explicitly provided for the parties to stipulate to a division of the estate, and for the court to accept the parties' stipulation and incorporate it into the divorce judgment: ... the parties may, subject to the approval of the court, stipulate for a division of estate, for alimony, or for the support of children, in case a divorce or legal separation is granted.... Wis. Stat. § 247.10 (1973-74) (emphasis added). Unlike § 247.26, which permitted the court to finally divide and distribute the estate ... between the parties,  there is no restriction on who can be the beneficiary of the parties' voluntary stipulation for a division of the estate under § 247.10. (Emphasis added.) ¶ 35 Although the court on its own initiative does not have the authority to impose an order for property division to adult children, the parties may voluntarily stipulate to do so. The parties may freely and knowingly stipulate to an overall settlement that is fair and equitable and not against public policy, and the court can incorporate their voluntary stipulation into its judgment. See Bliwas v. Bliwas, 47 Wis.2d 635, 637-38, 178 N.W.2d 35 (1970); Rintelman v. Rintelman, 118 Wis.2d 587, 348 N.W.2d 498 (1984); Ross v. Ross, 149 Wis.2d 713, 439 N.W.2d 639 (Ct.App. 1989). [18] In such a case, violation of the judgment is unlawful and can subject the violator to sanctions for contempt of court. Bliwas, 47 Wis.2d at 641, 178 N.W.2d 35. ¶ 36 Even if the interpretation of Vaccaro and Barnes was fairly debatable, as LaBudde asserts, it was not fairly debatable that a client must follow a court judgment. By asserting that the judgment was unenforceable, LaBudde misses the mark. ¶ 37 Robert was obligated to follow the court's judgment unless it was modified in a proceeding in the circuit court or on appeal. See State v. Ramsay, 16 Wis.2d 154, 165, 114 N.W.2d 118 (1962); Cline v. Whitaker, 144 Wis. 439, 439, 129 N.W. 400 (1911). A judgment imposes a legal obligation and violating it can subject an individual to contempt proceedings. This is true even if the judgment was entered in error, unless the court lacked jurisdiction to impose the judgment. The exceptions to this proposition prove the rule. ¶ 38 In State v. Ramsay , the dispute surrounded a court order issued in a divorce proceeding between two spouses, Mr. and Mrs. Bowser. Ramsay, the superintendent of the Milwaukee County Children's Home, was not a party in the divorce action. The court gave custody of the Bowsers' sons to the Milwaukee department of public welfare and ordered the Milwaukee County Children's Home to accept the boys. When Ramsay refused to do so, the circuit court determined that Ramsay was in contempt. ¶ 39 This court reversed, concluding that the circuit court did not have jurisdiction to impose an order on Ramsay, who was not a party in the divorce action. We stated: The universal rule is that the failure of a person to obey an order that is void for want of jurisdiction in the issuing court is not punishable as contempt.... .... On the other hand, disobedience of an order made by a court within its jurisdiction and power is a contempt, although the order may be clearly erroneous. Ramsay, 16 Wis.2d at 165, 114 N.W.2d 118. ¶ 40 As explained above, a court order or judgment must be complied with even if the partyor his attorneydisagrees with the order. LaBudde cites a United States Supreme Court case, Maness v. Meyers, 419 U.S. 449, 95 S.Ct. 584, 42 L.Ed.2d 574 (1975), but that case lends further support to the proposition that under these circumstances, it was unlawful for Robert to violate the divorce judgment. ¶ 41 In Maness, the attorney advised his client on Fifth Amendment grounds to violate a court order to produce documents. The court imposed contempt sanctions against the attorney. Ultimately, the Maness court concluded under the circumstances of that case that [c]ompliance could cause irreparable injury because appellate courts cannot always `unring the bell' once the information has been released. Id. at 460, 95 S.Ct. 584. In reversing, the Supreme Court emphasized the rule that court orders and judgments are to be obeyed unless subsequently modified in court proceedings: We begin with the basic proposition that all orders and judgments must be complied with promptly. If a person to whom a court directs an order believes that order is incorrect the remedy is to appeal, but, absent a stay, he must comply promptly with the order pending appeal. Persons who make private determinations of the law and refuse to obey an order generally risk criminal contempt even if the order is ultimately ruled incorrect.... [A]n order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings. Id. at 458-59, 95 S.Ct. 584 (citations and quotations omitted). ¶ 42 Here, there is no claim that the divorce court lacked jurisdiction [19] or that obeying the judgment would irrevocably release information that could be used against Robert. Even if LaBudde believed that the judgment exceeded the divorce court's authority under the 1974 statutes, the only lawful courses of action were to follow the judgment, to ask the court to modify it, or to appeal the judgment. ¶ 43 Although LaBudde has not advanced an issue about jurisdiction in this court or any other, we digress to address it here because the concurrence/dissent has raised the issue on its own and assembled an argument on LaBudde's behalf. Likely this jurisdictional issue was not raised here or below because it overlooks Wis. Stat. § 247.10 (1973-74), which was in effect at the time of the judgment, and because it is inconsistent with our case law. Without the benefit of any briefs or arguments by the parties on a jurisdictional issue, the concurrence/dissent incorrectly asserts that the divorce judgment was void from its inception because the court lacked subject matter jurisdiction to incorporate into the judgment a stipulation for the benefit of adult children. See concurrence/dissent, ¶ 112. ¶ 44 As the concurrence/dissent states, the subject matter jurisdiction of a court must be construed at the time of the entry of a judgment. See concurrence/dissent, ¶ 108. The statutes in force at the time of the Tensfeldts' divorce provided that the court may finally divide and distribute the estate ... between the parties. Wis. Stat. § 247.26 (1973-74). However, they also provided that a court could accept the parties' stipulation for a division of estate. Wis. Stat. § 247.10 (1973-74). ¶ 45 Section 247.10 did not restrict stipulations for division of the estate to a division between the parties to the divorce. It permitted the court to incorporate into the judgment any stipulation for division of the estate, provided the court determined that it was fair and reasonable. Id.; see also Bliwas, 47 Wis.2d at 637-38, 178 N.W.2d 35. Under the relevant case law at the time, it was apparent that the court had subject matter jurisdiction to incorporate the Tensfeldts' stipulation into its judgment. See Bliwas, 47 Wis.2d at 637-38, 178 N.W.2d 35. [20] ¶ 46 In addition to the clear statutory authority which undermines the argument advanced by the concurrence/dissent, our case law also thwarts the argument. In Bliwas, the parties stipulated that Mr. Bliwas would contribute to the education of his son beyond his twenty-first birthday. Id. This stipulation was entered into the divorce judgment, even though the statutes in force permitted the court to order support of minor children only. Id. at 638, 178 N.W.2d 35. When Mr. Bliwas failed to comply with this stipulation, Mrs. Bliwas sought contempt sanctions. Id. at 637, 178 N.W.2d 35. ¶ 47 Mr. Bliwas protested that contempt sanctions could not be imposed because the divorce court lacked jurisdiction to enter the stipulation into the divorce judgment. Id. The parties agreed that if there had been no stipulation or agreement of the parties involved, the family court would have been without jurisdiction to enter an order requiring the father to contribute to the education of his son beyond the son's twenty-first birthday. Id. at 637-38, 178 N.W.2d 35. ¶ 48 In concluding that the judgment was enforceable, the Bliwas court repudiated the same lack of jurisdiction argument advanced by the concurrence/dissent today. We stated, A party cannot invoke the jurisdiction and power of a court for the purpose of securing important rights from his adversary through its judgment, and, after having obtained the relief desired, repudiate the action of the court on the ground that it was without jurisdiction. Id. at 641, 178 N.W.2d 35. Because the parties had agreed to the stipulation and the divorce court accepted it and incorporated it into the judgment, we concluded that the judgment was enforceable. [21] Id. at 638-39, 178 N.W.2d 35. ¶ 49 Further, in Ross, the court incorporated into the judgment the provisions of a lengthy marital settlement agreement negotiated by the parties and their attorneys. 149 Wis.2d at 714, 439 N.W.2d 639. In part, it provided that Mr. Ross would make periodic payments to Mrs. Ross, and that neither the term nor the amount of the ... payments shall be subject to change by further agreement or Court order. Id. Several years after the divorce judgment was entered, Mr. Ross filed a motion in court to modify the provision. ¶ 50 We rejected Mr. Ross's contention that the provision was unenforceable because the court's authority to order such a provision was not expressly conferred by statute: We agree with [Mr. Ross] that divorce is a statutory procedure and that the divorce court's authority is limited to those express and incidental powers that are conferred by statute. We also agree that no statute expressly provides for the type of unamendable spousal support ordered in this case and, further, that the court could not order such payments absent the parties' agreement. But the court's authority to impose an obligation on one or both of the parties without their consent is one thing, and the authority to do so upon their agreement and at their request is quite another. In the latter situation, the supreme court has had little trouble approving and enforcing divorcing parties' agreements even when those agreements transcend the provisions of the applicable statutes. Id. at 716, 439 N.W.2d 639 (emphasis added). ¶ 51 In support of its argument to the contrary, the concurrence/dissent cites just one case for the proposition that the court lacked subject matter jurisdiction to incorporate the parties' stipulation into the divorce judgment. See Stasey v. Miller, 168 Wis.2d 37, 483 N.W.2d 221 (1992). That case is readily distinguishable. First, it involved an extraneous issuea dispute between an attorney and a client for fees owed rather than a dispute between the divorcing parties. See Id. at 59-60, 483 N.W.2d 221. Second, it did not involve a voluntary stipulation between the parties that was deemed fair and reasonable and not against public policy. ¶ 52 Here, by contrast, the legislature expressly permitted a divorce court to incorporate the parties' stipulation for division of the estate into a divorce judgment, and this court has concluded that such a judgment is enforceable by contempt sanctions. See Wis. Stat. § 247.10 (1973-74); Bliwas, 47 Wis.2d at 638, 178 N.W.2d 35. ¶ 53 The law in 1974 was clear that when a party agreed to a stipulation for division of the estate that was incorporated into a divorce judgment, the judgment was enforceable. The concurrence/dissent's assertion to the contrary is simply erroneous. [22] ¶ 54 Thus, we conclude that the court judgment requiring Robert to maintain a will giving two-thirds of his net estate outright to his children was enforceable. We further determine that it was unlawful for Robert to violate the judgment and that his obligation to abide by the judgment was not fairly debatable.
¶ 55 LaBudde also asserts that, even if the judgment was enforceable at the time it was entered, it was subject to the 20-year statute of repose for actions to enforce a judgment. [23] As such, he claims that after December 5, 1994, the divorce judgment no longer had any force or effect and Robert had broad authority to revise or replace his will at any time prior to his death. He concludes that there is no basis for the Tensfeldt children to argue that Robert's estate plan was unlawful in 2000, at the time of his death. ¶ 56 Again, LaBudde's argument misses the mark. The issue is not whether the judgment survives an asserted statute of repose for enforcement of judgments. Rather, the focus is on when the tortious conduct occurred. ¶ 57 Because the alleged tortious conduct at issue in this casethe drafting of the noncompliant estate plansoccurred between 1980 and 1992, we find no occasion to determine whether the court order to make a will continued to be enforceable in 2000, when Robert died. To resolve this dispute, it is sufficient to conclude that it was unlawful for Robert to violate the court order between 1980 and 1992. [24] ¶ 58 The parties acknowledge that the discovery rule, Wis. Stat. § 893.04, applies to this action. See Hansen v. A.H. Robins, Inc., 113 Wis.2d 550, 335 N.W.2d 578 (1983). However, we do not decide here whether any other statute of limitations bars this tort claim or when the causes of action accrued. Those issues were not briefed to this court and it is properly within the province of the circuit court upon remand to address such issues if argued by the parties.
¶ 59 Finally, LaBudde raises the defenses of qualified immunity and good faith advice. He argues that an attorney is not liable to third parties for acts committed on behalf of his client in the exercise of his professional responsibilities as an attorney. He cites Yorgan v. Durkin for the proposition that [t]he well established rule of law in Wisconsin is that absent fraud or certain public policy considerations, an attorney is not liable to third parties for acts committed in the exercise of his duties as an attorney. 2006 WI 60, ¶ 27, 290 Wis.2d 671, 715 N.W.2d 160. ¶ 60 We agree that in most cases, an attorney is immune from liability to third parties based on the attorney's failure to perform a duty owed to a client. However, failure to perform an obligation to a client is entirely distinct from conduct that assists the client committing an unlawful act to the detriment of a third party. ¶ 61 In Yorgan v. Durkin , we refused to hold an attorney personally liable for the fees his client owed to a chiropractor. The client had directed Attorney Durkin to pay the chiropractor's fees out of the proceeds she received from a personal injury lawsuit, but Durkin failed to follow his client's instructions. The chiropractor brought suit against Durkin, alleging that Durkin was liable to third party creditors for failing to properly settle his client's obligations. Id., ¶ 23. We concluded that the public policy factors implicated by the nature of the situation at hand did not weigh in favor of imposing liability to third party creditors. Id., ¶¶ 29, 35. ¶ 62 The public policy implicated by the nature of this case weighs differently. Under these facts, the public policy balance favors liability. Unlike in Yorgan v. Durkin , the theory of liability advanced by the Tensfeldt children is not vicarious. It is not based on LaBudde's failure to fulfill a professional obligation to Robert to the detriment of the Tensfeldt children. Indeed, the parties agree that Robert asked LaBudde to draft the will in violation of the court judgment, and LaBudde was not negligent in performing this service. In contrast to Yorgan v. Durkin , the basis for liability here is that LaBudde knowingly assisted the commission of the unlawful act. [25] ¶ 63 A thorough discussion of an attorney's liability to third parties is found in Strid v. Converse, 111 Wis.2d 418, 331 N.W.2d 350 (1983). In that case, we stated that immunity is not available when the attorney engages in fraudulent or unlawful acts: [An attorney] is duty bound ... to exercise good faith. He must not be guilty of any fraudulent acts, and he must be free from any unlawful conspiracy with either his client, the judge, or any other person, which might have a tendency to either frustrate the administration of justice or to obtain for his client something to which he is not justly and fairly entitled. Id. at 429, 331 N.W.2d 350 (quoting Langen v. Borkowski, 188 Wis. 277, 206 N.W. 181 (1925)). Further, the court concluded: [T]he immunity of an attorney who is acting in a professional capacity is qualified rather than absolute. The immunity from liability to third parties extends to an attorney who pursues in good faith his or her client's interest on a matter fairly debatable in the law. However, the immunity does not apply when the attorney acts in a malicious, fraudulent or tortious manner which frustrates the administration of justice or to obtain something for the client to which the client is not justly entitled. Id. at 429-30, 331 N.W.2d 350. ¶ 64 Here, LaBudde drafted documents that obtained for Robert something he was not legally entitled toan estate plan that violated a court judgment requiring Robert to leave two-thirds of his net estate to his children outright. Under these circumstances, LaBudde is not entitled to qualified immunity. ¶ 65 LaBudde cites several cases from other jurisdictions for the proposition that an attorney is entitled to qualified immunity for aiding his client in committing an unlawful act. After reading these cases carefully, we determine that they do not support this proposition. [26] None of these cases involves the client's commission of an unlawful act. Instead, they involve the client's breach of a contract or fiduciary duty. We reject LaBudde's assertion that cases involving fiduciary duty are analogous to this case, which involves a client's court-imposed obligations. ¶ 66 LaBudde also argues that he is entitled to the good faith advice privilege. This privilege is based on the Restatement (Second) of Torts § 772 (1979), which this court has neither adopted nor rejected as applied to attorneys. Notably, this section of the Restatement focuses on advice leading to a breach of contract: One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the third person (a) truthful information, or (b) honest advice within the scope of a request for the advice. Id. We acknowledge that in some circumstances, an attorney may in good faith advise a client to breach a contract. That is not the situation before us today. ¶ 67 The action here is not for breach of contract. Rather, it is an action in tort for assisting a client to unlawfully violate a court judgment. Further, LaBudde did not merely give advice. He drafted an estate plan that violated the judgment. We conclude that, under these facts, LaBudde is not entitled to this privilege. ¶ 68 In sum, we determine that the circuit court properly concluded that LaBudde is liable as a matter of law for aiding and abetting his client's unlawful act. The divorce judgment was enforceable at the time it was entered and at the time Robert asked LaBudde to draft an estate plan that violated the judgment. Under these facts, LaBudde is not entitled to either qualified immunity or the good faith advice privilege.