Opinion ID: 1969771
Heading Depth: 1
Heading Rank: 1

Heading: Liability Based on the Quitclaim Deed.

Text: Because Schreiner involved malpractice in connection with a testamentary disposition, the defendants argue it must be distinguished and the elements of recovery set out in that case held to be inapposite in this case, which does not involve a testamentary transfer. (In Schreiner, we limited attorneys' liability to the direct, intended, and specifically identifiable beneficiaries of the ... testamentary instruments, and stated that a cause of action ... will arise only when ... the testator's intent as expressed in the testamentary instruments is frustrated in whole or in part). Schreiner, 410 N.W.2d at 682, 683. The plaintiffs respond that the rationale of Schreiner is as applicable to an inter vivos transfer as it is to a testamentary one. Furthermore, Schreiner did not arbitrarily limit third-party suits to testamentary dispositions merely because we said that the trend [for recognizing such a duty] is particularly evident in cases involving claims against lawyers accused of preparing testamentary instruments that are invalid.... Id. at 681 (emphasis added). We are writing on a clean slate on the issue before us. To this date we have never approved nor rejected, under the rationale of Brody and Schreiner, third-party suits arising out of the preparation of nontestimonial instruments. In deciding whether to recognize such a claim, we look to the rationale of Schreiner: the desirability of effecting the grantor's intent, the general policy of providing a remedy for a loss, and the need for an effective deterrent to future negligence. See 410 N.W.2d at 682. These concerns are as pertinent in a nontestamentary context as they were in Schreiner. On the other hand, the dangers inherent in an overbroad recognition of liability are as real in this case as they are in a testamentary disposition case, and any recognition of a claim in these circumstances must be tempered accordingly. Primarily, we must be concerned that such a claim be so circumscribed as not to expose lawyers to a virtually unlimited potential for liability. See id. at 681. Schreiner required, in order to limit the scope of recognizable third-party plaintiffs, that a plaintiff be a specifically identifiable beneficiary as expressed in the testator's testamentary instruments. Id. at 682. Thus, more than an unrealized expectation of benefits must be shown; a plaintiff must show that the testator (or here, the grantor) attempted to put the donative wishes into effect and failed to do so only because of the intervening negligence of a lawyer. We apply that requirement here. Second, under Schreiner, a cause of action ordinarily will arise only when as a direct result of the lawyer's professional negligence... the [benefit] is ... lost, [in whole or in part]. Id. at 683. We also adopt that requirement in the present context. Interpolating the requirements for a cause of action to the circumstances of this case, we hold that a plaintiff must establish that (1) the plaintiff was specifically identified, by the donor, as an object of the grantor's intent; and (2) the expectancy was lost or diminished as a result of professional negligence. The plaintiffs' petition alleged both elements, and it was error for the district court to dismiss it.