Court Opinion

ID: 8963200
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:50:50.929491+00
Date Added: 2024-06-11T17:10:14.794418
License: Public Domain

McMILLIAN, Circuit Judge,
concurring.
I agree that, even if one assumes that Mackenzie was negligent in signing the opinion letter without investigation, Greyhound’s own negligence substantially exceeded that of Mackenzie and thus, under North Dakota law, barred Greyhound from recovery. There was ample evidence in the record that Greyhound employees knew the true condition of the farm equipment and negligently prepared inaccurate and misleading documentation in connection with this transaction and negligently failed to conduct an independent investigation for liens. Accordingly, I concur in the decision to affirm the judgment of the district court. I write separately only to state my disagreement with the district court’s interpretation of the opinion letter and evaluation of the reasonableness of the attorney’s conduct under the circumstances.
As a preliminary matter, this case should caution attorneys against excessive reliance upon exemplars, form letters and other model documents, especially when those documents have been drafted by parties that are potentially adverse to their clients.
First, I do not agree with the district court’s interpretation of the opinion letter as only requiring Mackenzie to truthfully state his personal knowledge of any liens and his client’s business affairs. In my view, the district court’s interpretation is too narrow. The opinion letter called for the attorney’s professional opinion. Moreover, the opinion letter expressly prefaced the numbered “opinion” paragraphs with this sentence: “We have conducted such investigations as we have deemed necessary, in order to render the opinions set forth below.” Under these circumstances, 1 cannot agree that the attorney’s obligation under the terms of the opinion letter was limited to his personal knowledge of any liens or his client’s business affairs.
Second, and more importantly, I believe that, under these circumstances, the exercise of due diligence, or reasonable care, required Mackenzie to conduct a limited investigation. Given the involvement of the farm equipment dealer in the transaction, it would have been difficult, if not impossible, to verify Mutschler’s representation that the farm equipment was new and had not yet been delivered by contacting the farm equipment dealer. However, the existence of any liens on the farm equipment could have been easily ascertained by conducting a lien search at the county register of deeds.
I do not fault the attorney for his legal analysis. Given the facts provided to him by his client, his opinion that the farm equipment could not have been subject to liens or other encumbrances was correct. What I do find fault with is the attorney’s failure to conduct a limited investigation. Attorneys should accept very little at face value when they are called upon for professional advice.
A similar situation involving the failure to investigate was at issue in Escott v. Barchris Construction Corp., 283 F.Supp. 643 (S.D.N.Y.1968). The court’s observations in that case are particularly appropriate here.
It is claimed that a lawyer is entitled to rely on the statements of his [or her] client and that to require him [or her] to verify their accuracy would set an unreasonably high standard. This is too broad a generalization. It is all a matter of degree. To require an audit would be unreasonable. On the other hand, to require a check of matters easily verifiable is not unreasonable. Even honest clients can make mistakes_ The way to prevent mistakes is to test oral information by examining the original written record.
Id. at 690; see also Seidel v. Public Service Co., 616 F.Supp. 1342, 1361-62 (D.N.H.1985). Cf. Greycas, Inc. v. Proud, 826 F.2d 1560 (7th Cir.1987) (attorney made *1127misrepresentations re UCC lien search in opinion letter), cert. denied, — U.S. -, 108 S.Ct. 775, 98 L.Ed. 862 (1988).
APPENDIX
TO BE PLACED ON ATTORNEY’S LETTERHEAD
(Date)
Greyhound Leasing & Financial Corporation
Greyhound Tower
Phoenix, Arizona 85077
Attention: John A. Greene, Senior Attorney
Gentlemen:
We are counsel to Fred Mutschler (D/B/A Mutschler Farms) (“Lessee”) and in such capacity, we have been asked to render our opinion in connection with the transaction pursuant to which Lessee is to lease from Greyhound Leasing & Financial Corporation (“Lessor”) pursuant to an Equipment Lease Agreement dated as of March 2, 1982 (together with all schedules, supplements, riders and other documents executed in connection therewith, hereinafter the “Lease”) the Units described therein (“Equipment”) and pursuant to an Aircraft Lease Agreement dated as of March 2, 1982 (together with all schedules, supplements, riders and other documents executed in connection therewith, hereinafter the “Aircraft Lease”) the Aircraft described therein (“Aircraft”).
This opinion is being delivered in accordance with the requirements of the Lease. References herein to the “Lessee” shall mean both and each of them.
We have conducted such investigations as we have deemed necessary, in order to render the opinions set forth below.
Based upon the foregoing, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that:
1.The Lease and the Aircraft Lease both constitute valid obligations of the Lessee, binding and enforceable against the Lessee in accordance with their terms; Lessee’s performance under each will not result in a default or acceleration of any obligation under any agreement, commitment, or order, decree or judgment to which Lessee is a party or by which Lessee is bound; nor is the consent of, or registration with, any governmental authority required for either the execution of or performance under the Lease or the Aircraft Lease.
2. There is no litigation pending or threatened against the Lessee before any court or administrative agency which may have a materially adverse effect on its assets, business, financial condition or operations or which would prevent or hinder the performance by the Lessee of their obligations under the Lease.
3. We are not aware of any liens or encumbrances against the Equipment or the Aircraft created or suffered by the Lessee nor have they granted or conveyed any liens or encumbrances of any nature with respect thereto as of the date hereof.
4. Lessee has the power and authority to own its assets and to transact the business in which it is engaged.
Very truly yours,