Opinion ID: 1403570
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: In reviewing a trial court's grant of summary judgment, we can uphold the summary judgment only if the party opposing summary judgment could not prevail under any circumstances at trial, viewing the evidence in the light most favorable to that party. [10] Because factual findings are not at issue and because the trial court's grant of summary judgment was based on its determination of the legal issue of duty, [11] its judgment is entitled to no deference but must be reviewed under the de novo standard. [12]
Under Kentucky law, a next friend may bring an action on behalf of a minor. [13] The next friend is the minor's agent [14] under Kentucky law. [15] And the minor is the real party in interest in any lawsuit filed on the minor's behalf by the minor's next friend. Kentucky case law has long boldly proclaimed that the minor himself is the plaintiff in cases filed by the minor's next friend. [16] Unlike a next friend, whose authority is limited to filing suit on the minor's behalf and who lacks the authority to settle the lawsuit, a statutorily appointed guardian has a broader scope of authority and may settle a lawsuit on the ward's [17] behalf with court approval. [18] A guardian is the ward's agent under Kentucky law [19] and, thus, actually represents the ward in any litigation in which the guardian retained the attorney in the capacity as guardian of the ward. And a guardian's statutory authority to prosecute or defend claims is expressly intended to protect the ward's estate. But the guardian's authority to settle litigation is intended to be on behalf of the ward, not on behalf of the guardian's own interests. [20] In other words, any legal action by the guardian must be to help the ward, not necessarily the guardian. There are other theories, such as recognizing a duty to the next friend's or guardian's minor or ward as a third-party beneficiary; but it seems clear to us that an attorney in this situation has an attorney-client relationship with, and owes professional duties to, the minor or ward. Perhaps the Georgia Court of Appeals said it best in rejecting an argument that an attorney for a minor plaintiffs guardian ad litem [21] owed no duties to the minor plaintiff: In this case, defendant acted as the attorney for plaintiffs guardian ad litem. But in doing so, he clearly undertook to represent plaintiffs interests. Plaintiff was the real party with the legal interest warranting representation. As the intended beneficiary of the relationship between her guardian ad litem and defendant, plaintiff also was in privity with defendant, despite her minority. In cases like this, to suggest that the guardian alone is the attorney's client, and not the minor, is to ignore the guardian ad litem's representative capacity and the minor's direct interest. [22] And we perceive no conflict between an attorney furthering the interests of the minor or ward and any duties the attorney would owe the person who retained the attorney in the capacity as next friend or guardian. The role of both the next friend and the guardian is to protect and further the minor's or ward's interests. [23] Indeed, not protecting the ward's interests exposes the guardian to potential liability for breach of fiduciary duty and other claims, such as those stated in the Arkansas lawsuit filed against Backus. [24] While we perceive no conflict between the interests of Stewart as beneficiary and ward and the interests of Backus as next friend and guardian, we recognize the existence of potential conflicts in this case between Stewart's interests and Backus's interests as an individual and as administrator of her deceased son's estate. But the fact that Branham accepted legal representation of these potentially conflicting interests does not negate the duties he owed to Stewart. [25] Branham argues that finding that attorneys owe duties to the minor wards of their clients serving as next friends or guardians is unnecessary because of the statutory protections provided in these situations. Namely, he points to the necessity of court approval for any settlement of the ward's claim by a guardian [26] and bonding requirements to be set by the courts. [27] Essentially, he argues that given these statutory protections for minors, he was not at fault for not demanding that Backus post a larger bond or provide a surety because it was the district judge's responsibility to require a surety for the protection of the minor. We agree that courts have responsibilities to protect minors; and, perhaps at least in hindsight, the district judge erred in not setting a larger bond or requiring a surety. [28] But the fact that a court and the next friend or guardian also have responsibilities does not relieve an attorney of the duties owed to the real party in interest in the litigation. Rather, these various responsibilities may simply present a factual question as to causation of damages. Branham also argues that recognizing that attorneys have attorney-client relationships with, and owe duties to, the minors or wards of guardians or next friends may result in representation by two attorneys who may not agree on whether to accept a settlement if the child also has a guardian ad litem appointed under KRS 387.305. To be sure, guardians ad litem have been regarded as both attorneys and fiduciaries under Kentucky law. [29] But Branham's suggested scenario could not arise under Kentucky law because KRS 387.305(1) makes clear that a guardian ad litem is not to be appointed for a person who already has a guardian, [30] and next friends lack authority to settle claims. [31] On the other hand, were we to hold that the attorney retained by the individual acting in the capacity as next friend or guardian was not the attorney for the minor or ward, the minor or ward would be unrepresented, which would be contrary to the clear legislative intent to protect minors. Surely the Kentucky General Assembly did not enact a comprehensive legislative scheme concerning appointing guardians to further the best interest of minors, [32] yet, intend for these minors to be unrepresented in litigation filed or settled on their behalf. Branham also argues that since a guardian is a fiduciary, a Kentucky Bar Association ethics opinion (KBA E-401, issued September 1997) stating that the attorney represents the fiduciary, not the estate or beneficiaries, is applicable. But this ethics opinion specifically addresses the lawyer's responsibilities to the beneficiaries of estates and trusts and does not specifically apply to a minor's guardian or next friend. This ethics opinion is not binding on us in this context; [33] and we think that Stewart raises a valid point that guardians are only obligated to work for the benefit of one person (the ward), rather than trustees or executors who may owe duties to beneficiaries with conflicting interests. So despite Branham's arguments to the contrary, we hold that the attorney retained by an individual in the capacity as a minor's next friend or guardian establishes an attorney-client relationship with the minor and owes the same professional duties to the minor that the attorney would owe to any other client. [34] Branham urges us to adopt the test stated in RESTATEMENT (THIRD) GOVERNING LAWYERS § 51 [35] for determining if lawyers owe duties to minors in these situations. But this test expressly applies to determining if a lawyer owes a duty to a non-client, third-party beneficiary. Because we have found that the attorney in these situations does have an attorney-client relationship with the minor ward, this test is not applicable.
This is a matter of first impression in Kentucky, but we see no reason to limit our holding to apply prospectively as Branham argues. Rather, we find it clear that Branham owed, and should have known he owed, duties to the minor whose interests he and the next friend and guardian were obligated to advance and protect. While we may occasionally exercise our discretion to make application of a holding prospective only, [36] we, nonetheless, generally embrace the idea that although legislation may only apply prospectively, judicial decisions generally apply retroactively. [37] And we have generally made decisions prospective only when overruling old precedent upon which the losing party has relied. [38] This case does not overrule precedent so we see no reason to limit application prospectively. In fact, under longstanding precedent regarding next friends and guardians as minors' agents and the minors involved as the real parties in interest in lawsuits filed or settled on their behalf, we think it was abundantly clear that an attorney retained by an individual in the capacity as the next friend or guardian of a minor owed professional duties to that minor. So we decline to hold this opinion operates only prospectively.
Because the existence of an attorney-client relationship between Branham and Stewart is the principal issue addressed by the parties to this appeal, the parties did not address arguments to the duration of the attorney-client relationship that we, by today's holding, have found to exist. We will attempt, nevertheless, to address briefly any concern about the terminus of the attorney's duties to any minor or ward retained by a next friend or guardian to pursue legal action on behalf of the minor or ward. While we reject the argument that no attorney-client relationship was ever formed between Branham and Stewart, we do not hold that the attorney-client relationship in this or similar cases automatically continues indefinitely; and we express no opinion whether the attorney-client relationship had ceased by the time of any of the alleged actions for which Stewart aims to hold Branham responsible. In granting summary judgment for Branham based on its perception of a lack of recognition of a cause of action for a minor or ward against the attorney retained by the next friend or guardian to pursue legal action on behalf of the minor or ward, the trial court seemingly found that no attorney-client relationship ever existed. Accordingly, the trial court never issued any explicit findings about whether or when such an attorney-client relationship had ceased. It would be improper for this Court to make any factual findings concerning whether or when the attorney-client relationship ceased. Rather, cessation of the attorney-client relationship is a matter of proof [39] for the trial court. While we express no opinion on whether or when the attorney-client relationship ceased because the issue is not properly before us, in no way does our opinion foreclose inquiry into this issue upon remand.