Opinion ID: 3170832
Heading Depth: 3
Heading Rank: 1

Heading: Strict Privity

Text: Â¶20Â Â Â Â Â Â Â As this court has recognized, â[t]he attorney-client relationship is distinctly a fiduciary relationship arising as aÂ matter of law and founded upon a special trust and confidence.â Accident & Injury Med. Specialists, P.C. v. Mintz, 2012 CO 50, Â¶ 25, 279 P.3d 658, 663. In light of this relationship, an attorneyâs obligation is generally to his or her client and not to a third party. Sav. Bank v. Ward, 100 U.S. 195, 200 (1879); see also Allen, 252 P.3d at 482 (noting that attorneys generally do not owe duties of reasonable care to non-clients and that subject to limited exceptions, â[a]n attorney may be liable for legal malpractice only if the plaintiff has proven the existence of an attorney-client relationshipâ); Chem-Age Indus., Inc. v. Glover, 652 N.W.2d 756, 770 (S.D. 2002) (noting that because trust and confidence between an attorney and his or herÂ client are essential, the attorney-client relationship requires greater protection from third-party claims than do nonconfidential relationships). Â¶21Â Â Â Â Â Â Â Accordingly, we have concluded that â[w]here non-clients are concerned, an attorneyâs liability is generally limited to a narrow set of circumstances in which the attorney has committed fraud or a malicious or tortious act, including negligent misrepresentation.â Allen, 252 P.3d at 482; see also id. at 484 (â[T]o state a claim of negligent misrepresentation, the misrepresentation must be given for the plaintiffâs business or commercial purposes.â). Â¶22Â Â Â Â Â Â Â This court, divisions of our court of appeals, and our sister courts have recognized several sound policy reasons justifying this limitation on attorney liability. Â¶23Â Â Â Â Â Â Â First, limiting an attorneyâs liability to his or her clients protects the attorneyâs duty of loyalty to and effective advocacy for the client. See, e.g., Mintz, Â¶ 26, 279 P.3d at 663-64; Glover v. Southard, 894 P.2d , 23 (Colo. App. 1994); Shoemaker v. Gindlesberger, 887 N.E.2d 1167, 1171 (Ohio 2008); Chem-Age Indus., Inc., 652 N.W.2d at 769; Barcelo v. Elliott, 923 S.W.2d 575, 578 (Tex. 1996). As the Maryland Court of Appeals explained in Noble v. Bruce, 709 A.2d 1264, 1270 (Md. 1998) (citations omitted) (quoting Lewis v. Star Bank, N.A., 630 N.E.2d 418, 4 (Ohio Ct. App. 1993)): While the testator/client is alive, the lawyer owes him or her a âduty of complete and undivided loyalty.â The strict privity rule protects an attorneyâs obligation to direct his or her full attention to the needs of the client. An attorneyâs preoccupation or concern with potential negligence claims by third parties might result in a diminution in the quality of the legal services received by the client as the attorney might weigh the clientâs interests against the attorneyâs fear of liability to a third party. Such a result, in turn, would tend to undermine the purpose of the attorney-client relationship, which requires that an attorney act in his or her clientâs best interest. Glover, 894 P.2d at 23. Â¶24Â Â Â Â Â Â Â Second, expanding attorney liability to non-clients could result in adversarial relationships between an attorney and third parties and thus give rise to conflicting duties on the part of the attorney. See, e.g., Mintz, Â¶ 26, 279 P.3d at 663â64; Glover, 894 P.2d at 23; see also Noble, 709 A.2d at 1270 (â[T]here exists the danger of placing conflicting duties on an attorney during the estate planning process if a nonclient is permitted to maintain a cause of action against a testatorâs attorney.â); Barcelo, 923 S.W.2d at 578 (recognizing a conflict of interest when a beneficiary sues the testatorâs attorney for negligence because the alleged deficiencies may well have existed pursuant to instructions issued by the testator after receiving the advice of counsel). Such conflicting duties and loyalties, in turn, could constrain the attorneyâs ability to represent his or her client properly. See Blair v. Ing, Â P.3d 452, 459 (Haw. 2001); see also Barcelo, 923 S.W.2d at 578 (noting that an attorneyâs ability to render advice would be severely compromised if the advice could be second-guessed in the future by disappointed beneficiaries). Â¶25Â Â Â Â Â Â Â Moreover, â[a]llowing a nonclient beneficiary to maintain a cause of action against an attorney for professional malpractice may require the attorney to reveal confidences the testator would never want revealed.â Noble, 709 A.2d at 1278. By way of example, the court in Noble envisioned a scenario in which the testator tells a relative that he or she will inherit part of the testatorâs estate, but, in reality, the testator does notÂ intend to leave anything to this relative because the testator secretly believes that the relative is an evil person. Id. If the testator confides this secret belief to his or her attorney and requests that the attorney draft a will leaving nothing to the relative, and if the relative has standing after the testatorâs death to sue the attorney for malpractice, then the attorney may be forced to reveal confidences that the testator never would have wanted to be revealed. Id. Â¶26Â Â Â Â Â Â Â Third, if an attorneyâs duty of care were extended to third parties, then the attorney could be liable to an unforeseeable and unlimited number of people. See, e.g., Mintz, Â¶ 26, 279 P.3d at 663; Allen, 252 P.3d at 482; accord Robinson v. Benton, 842 So. 2d 631, 637 (Ala. 2002); Chem-Age Indus., Inc., 652 N.W.2d at 769. Thus, as the Supreme Court stated in Ward, 100 U.S. at 202, requiring strict privity âis plainly necessary to restrain the remedy from being pushed to an impracticable extreme.â See also id. at 203 (âThe only safe rule is to confine the right to recover to those who enter into the contract; if we go one step beyond that, there is no reason why we should not go fifty.â). Â¶27Â Â Â Â Â Â Â The impact of an expansion of attorney liability to third parties would not be limited to the attorneys. As other courts have recognized, an expansion of attorney liability to allow claims by non-clients could deter attorneys from undertaking certain legal matters, thus compromising the interests of potential clients by making it more difficult for them to obtain legal services. See Chem-Age Indus., Inc., 652 N.W.2d atÂ 770; see also Noble, 709 A.2d at 1270 (noting that an attorneyâs preoccupation or concern with potential liability to non-parties might result in a diminution in the quality of legal services provided because the attorney would need to weigh the clientâs interests against his or her liability risk). As important, in such an environment, the testator/client could potentially lose control over his or her contract for legal services. See Noble, 709 A.2d at 1270. Â¶28Â Â Â Â Â Â Â Finally, extending attorney liability to non-client beneficiaries risks suits by disappointed beneficiaries that would cast doubt on the testatorâs intentions long after the testator is deceased and unavailable to speak for himself or herself. See Blair,Â Â P.3d at 459. Such a result would be contrary to the âcardinal rule in the interpretation of wills or other testamentary documents,â namely, that âthe testatorâs intent should be ascertained from the instrument itself and given effect.â In re Estate of McCreath, 240 P.3d 413, 422â23 (Colo. App. 2009). Allowing disappointed beneficiaries to question a deceased testatorâs intentions would also contradict the policy underlying Coloradoâs dead manâs statute, Â§ 13-90-102, C.R.S. (2015). That statute limits the admissibility of statements made by persons who are incapable of testifying, see id., and thereby seeks âto guard against perjury by living interested witnesses when deceased persons cannot refute the testimony, thus protecting estates against unjust claims,â In re Estate of Crenshaw, 100 P.3d 568, 569 (Colo. App. 2004).