Court Opinion

ID: 9395860
Source: CourtListenerOpinion
Date Created: 2023-05-18 18:13:28.707881+00
Date Added: 2024-06-11T17:19:12.138997
License: Public Domain

2023 UT App 29

               THE UTAH COURT OF APPEALS

                       KYLIE NIELSEN,
                         Appellant,
                             v.
        L. MILES LEBARON AND LEBARON AND JENSEN PC,
                         Appellees.

                            Opinion
                       No. 20210357-CA
                      Filed March 23, 2023

         Second District Court, Farmington Department
                 The Honorable Rita Cornish
                         No. 200700783

           Bruce M. Pritchett Jr., Attorney for Appellant
          Gary T. Wight and Blake A. Hallock, Attorneys
                          for Appellees

   JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this
  Opinion, in which JUDGE RYAN D. TENNEY and SENIOR JUDGE
                  KATE APPLEBY concurred.1

CHRISTIANSEN FORSTER, Judge:

¶1      Kylie Nielsen appeals the district court’s dismissal of her
complaint asserting legal malpractice against her attorney, L.
Miles LeBaron, and his law firm, LeBaron & Jensen, PC
(collectively, LeBaron). Based on a safe harbor provision in the
Utah Uniform Probate Code, see Utah Code § 75-5-423, the district
court determined that Kylie could not establish that LeBaron
owed her a duty to safeguard funds she received from a
settlement and dismissed the case. Because Kylie pleaded certain

1. Senior Judge Kate Appleby sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(7).
                         Nielsen v. Lebaron

facts that may entitle her to relief, we reverse the district court’s
dismissal and remand for further proceedings.

                         BACKGROUND

¶2      In May 2014, Kylie, a minor child, tripped during a school
safety demonstration, severely injuring her ankle.2 Her parents,
Andrew and Camille Nielsen (Mr. and Ms. Nielsen, respectively),
retained LeBaron to bring a personal injury action against the
school district on Kylie’s behalf. The parties eventually agreed to
settle the case for $100,000.

¶3     As a result of the agreement, the district court issued an
order approving the settlement (the Order). The Order provides,
in part,

       The balance of $61,246,85 [after deducting costs,
       fees, and medical expenses] shall be placed into a
       restricted Minor Child Trust Account, which is
       insured by either the NCUA or FDIC with
       ownership of the account to revert to [Kylie]
       without restriction on her 18th birthday. Prior to
       that time, NO MONEY MAY BE WITHDRAWN
       FROM THE ACCOUNT WITHOUT THIS COURT’S
       APPROVAL AND ORDER and the account must be
       marked as such.

       [Mr.] Nielsen and [Ms.] Nielsen are hereby
       appointed as co-conservators of the Estate of the

2. The demonstration was about the effects of alcohol
consumption. Following her teacher’s instructions, Kylie moved
around the classroom while wearing vision-impairing goggles.
Kylie tripped over a desk, injuring her ankle. Kylie’s injuries
resulted in multiple fractures resulting in two ankle surgeries,
continued pain and suffering, and a diminished quality of life.

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                         Nielsen v. Lebaron

       minor child for the purpose of executing the
       Releases and administering the funds recovered in
       this matter.

¶4     Several months later, LeBaron sent a check for $61,246.85
made out to “Andrew or Camille Nielsen” in their capacity as co-
conservators. Sometime after LeBaron dispersed these settlement
funds, Mr. Nielsen absconded with them.3

¶5     In September 2020, Kylie filed suit against LeBaron,
asserting a claim of legal malpractice.4 Kylie alleged that LeBaron,
as Kylie’s attorney, breached its fiduciary duty to safeguard her
funds by failing to “deposit[] [the funds] into a Minor Child Trust
Account” in compliance with the Order. Kylie asserted that this
conduct fell “outside the ordinary standard of professional
competence.”5

¶6     In response to Kylie’s complaint, LeBaron filed a motion
under rule 12(b)(6) of the Utah Rules of Civil Procedure to dismiss
for failure to state a claim upon which relief can be granted,

3. Mr. Nielsen has since been charged with Unlawful Dealing of
Property by Fiduciary. See generally Utah Code § 76-6-513(3).

4. Kylie’s legal malpractice claim rests on two theories: fiduciary
duty and ordinary negligence. Because “the elements required to
prove both theories . . . are substantially the same,” Christensen
& Jensen, PC v. Barrett & Daines, 2008 UT 64, ¶ 23, 194 P.3d 931, we
refer—for simplicity—only to Kylie’s overarching legal
malpractice claim.

5. Kylie also asserted LeBaron breached its fiduciary duty to her
“by providing a check which either [Mr.] Nielsen or [Ms.] Nielsen
could individually cash[] rather than requiring both [Mr.] Nielsen
and [Ms.] Nielsen . . . [to cash the check together].” But Kylie does
not raise this issue on appeal, so we do not address it.

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                         Nielsen v. Lebaron

contending that Kylie could not establish either the duty element
or the causation element of a legal malpractice claim. Specifically,
LeBaron asserted “the Utah Uniform Probate Code insulates
[LeBaron] from liability by eliminating any duty to ensure a
conservator properly expends funds in his or her care.” Citing
section 75-5-423 of the Utah Code—which states, “A person is not
bound to see to the proper application of estate assets paid or
delivered to a conservator”—LeBaron alleged “the Utah Code
plainly puts the responsibility of proper estate administration on
the minor’s conservators, not attorneys.”6 See Utah Code § 75-5-
423.

¶7     LeBaron also alleged that “even assuming there was a duty
beyond merely issuing the check to [Kylie’s] conservators,”
Kylie’s claim should be dismissed because “it is clear that
[LeBaron] did not cause [Kylie’s] injuries.” Specifically, LeBaron
alleged that “the unforeseeable, intervening criminal conduct of
Mr. Nielsen completely severed the causal chain between
[LeBaron’s] delivery of the Settlement Proceeds and [Kylie’s]
injury.”

¶8     Kylie opposed LeBaron’s 12(b)(6) motion, asserting that
her initial complaint pleaded “sufficient facts to establish the

6. LeBaron also cited, as a source of immunity, section 75-5-102 of
the Utah Uniform Probate Code. See Utah Code § 75-5-102(6)
(“Any person who pays or delivers in accordance with provisions
of this section is not responsible for the proper application
thereof.”). But as the district court correctly determined, section
75-5-102 is inapplicable for two sound reasons: first because the
payment in question ($61,246.85) well exceeds the $15,000
statutory limit, see id. § 75-5-102(1), and second because section 75-
5-102, by its own terms, does not apply if the person delivering
funds “has actual knowledge that a conservator has been
appointed,” id. § 75-5-102(2)—knowledge of which LeBaron has
at most conceded and at least cannot deny.

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                           Nielsen v. Lebaron

elements of legal malpractice.” On the issue of duty, Kylie
asserted LeBaron was bound by “the broad duties owed by an
attorney to his minor client,” as well as by those duties the Order
imposed, and that the Utah Uniform Probate Code did not
absolve LeBaron of these duties.

¶9     On the issue of causation, Kylie alleged, “[Mr.] Nielsen’s
criminal conduct does not sever the causal connection between
[LeBaron’s] actions and [Kylie’s] damages,” because Mr. Nielsen’s
conduct was “foreseeable.” Specifically, Kylie asserted, “If the
court did not reasonably foresee the possibility of one or both of
[Kylie’s] parents—as her conservators—absconding with the
settlement proceeds, the court would not have included [the
withdrawal restriction] requiring a court order to remove funds.”

¶10 The district court granted LeBaron’s motion to dismiss.
Relying on section 75-5-423 of the Utah Uniform Probate Code,
the court concluded LeBaron “did not owe [Kylie] a duty to
ensure the conservators properly applied the settlement funds,”
reasoning that “once estate assets are paid or delivered to a
conservator by a third party, that third party has no continuing
duty to ensure the estate assets are properly applied.” From there,
the court concluded Kylie could not establish the element of duty
generally and dismissed the case with prejudice. It did not reach
the causation issue.

              ISSUE AND STANDARD OF REVIEW

¶11 On appeal, Kylie contends that the district court erred in
dismissing her legal malpractice claim. “We review the grant of a
motion to dismiss for correctness, granting no deference to the
decision of the district court.” Hudgens v. Prosper, Inc., 2010 UT 68,
¶ 14, 243 P.3d 1275. “A motion to dismiss should be granted only
if, assuming the truth of the allegations in the complaint and
drawing all reasonable inferences therefrom in the light most
favorable to the plaintiff, it is clear that the plaintiff is not entitled

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                         Nielsen v. Lebaron

to relief.” Id. (quotation simplified). “We will affirm the dismissal
of a complaint only where it clearly appears that the plaintiff
would not be entitled to relief under the facts alleged or under any
state of facts they could prove to support their claim.” Id.
(quotation simplified).

                            ANALYSIS

¶12 To succeed in a legal malpractice action, a plaintiff must
prove five elements: first, an attorney-client relationship existed;
second, the attorney owed a duty to the client; third, the attorney
breached this duty; fourth, this breach caused injury to the client;
and fifth, actual damages exist. Christensen & Jensen, PC v. Barrett
& Daines, 2008 UT 64, ¶¶ 22–23, 194 P.3d 931. An attorney-client
relationship exists between Kylie and LeBaron; this much is
undisputed. The court did not reach the issues of breach,
causation, or damages because it determined that LeBaron owed
Kylie no duty. Kylie argues on appeal that the court erred in its
duty determination. LeBaron defends the court’s ruling and
argues, alternatively, that if the court erred in its duty analysis,
then we should affirm on the alternative ground that Kylie failed
to state a claim with respect to causation.

                              I. Duty

¶13 Kylie challenges the district court’s conclusion that
LeBaron did not owe her a duty in disbursing the settlement
proceeds. Kylie identifies several potential sources of LeBaron’s
duty—the common law, the Order, and rule 1.15 of the Rules of
Professional Conduct.7 Because we agree that the common law

7. LeBaron alleges Kylie has not preserved her argument that rule
1.15 supports her assertion that an attorney has a duty to
safeguard client funds. Although our analysis is independent of
rule 1.15, we note at least two reasons why there is no
                                                   (continued…)

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                         Nielsen v. Lebaron

imposes a duty of reasonable diligence with respect to the
management of client funds, we need not decide whether the
Order or the Rules of Professional Conduct likewise imposed a
duty on LeBaron.8

preservation issue here. First, although it is true that Kylie did not
cite rule 1.15 in her complaint or motion opposing dismissal, she
twice referenced rule 1.15 before the district court during the
motion hearing, and the court considered and orally ruled on it.
See Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 14, 48
P.3d 968 (“[O]nce trial counsel has raised an issue before the trial
court, and the trial court has considered the issue, the issue is
preserved for appeal.”). Second, even if Kylie had not cited rule
1.15 during the motion hearing, we would still consider her rule
1.15 argument preserved. “[P]reservation occurs on an issue-by-
issue or claim-by-claim basis,” State v. Flora, 2020 UT 2, ¶ 17, 459
P.3d 975, meaning that new arguments—such as “citing new
authority or cases”—”when brought under a properly preserved
issue or theory, do not require an exception to preservation,” State
v. Johnson, 2017 UT 76, ¶ 14 n.2, 416 P.3d 443. And Kylie preserved
the general issue of whether her attorney had a duty to safeguard
her funds, as this was precisely the issue on which the district
court dismissed the case. Thus, Kylie did not need to explicitly
raise rule 1.15 to address it on appeal. The district court noted as
much during the motion hearing. After LeBaron objected to a lack
of briefing on rule 1.15, the court explained that “the content of
[the rule 1.15] argument has always been in [Kylie’s] brief.”
(Emphasis added.)

8. LeBaron asserts the common law source of an attorney’s
fiduciary duty is an unpreserved issue. Although Kylie did not
assert below the common law as a source of duty, she preserved
the general duty issue, so there is no preservation issue here. See
supra note 7.

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                          Nielsen v. Lebaron

¶14 Whether a duty exists is “a matter of law” determined “on
a categorical basis for a given class of tort claims.” Mower v. Baird,
2018 UT 29, ¶ 16, 422 P.3d 837 (quotation simplified). Because
duty “should be articulated in relatively clear . . . bright-line rules
of law applicable to a general class of cases,” B.R. ex rel. Jeffs v.
West, 2012 UT 11, ¶ 23, 275 P.3d 228 (quotation simplified), “case-
specific analyses are unwarranted at the duty stage of the
negligence inquiry,” Davis v. Wal-Mart Stores Inc., 2022 UT App
87, ¶¶ 18–19, 514 P.3d 1209. Duty “relates to the general
relationship between the alleged tortfeasor and the victim and the
general foreseeability of harm” rather than “the specifics of the
alleged tortious conduct such as the specific mechanism of the
harm.” Id. ¶ 18 (quotation simplified). When “the existence of the
duty in question has already been established,” the duty inquiry
ends; there is no need for the court to reach a case-specific, fact-
dependent conclusion regarding the existence of a duty. Id. ¶ 15.
It is only at “the next steps of the negligence analysis—breach and
proximate cause”—that “case-specific” factors may be analyzed,
and at that stage, such matters are typically “questions for the fact
finder.” Id. ¶ 19 (quotation simplified).

¶15 For example, in Davis v. Wal-Mart Stores Inc., 2022 UT App
87, 514 P.3d 1209, the district court granted defendant Wal-Mart’s
motion for summary judgment on the ground that it “owed no
duty” to the plaintiff, a customer injured while shopping at a Wal-
Mart. Id. ¶ 1. To reach this conclusion, the court focused on facts
such as “whether it would be foreseeable that Davis would move
within inches of Wal-Mart’s employee, stoop below the
employee’s field of vision, and do so without alerting the
employee to her presence or waiting for the employee to finish
returning merchandise to the top shelf.” Id. ¶ 17 (quotation
simplified). This court concluded that such a “case-specific”
analysis was “unwarranted at the duty stage of the negligence
inquiry.” Id. ¶ 18. It explained that “[b]ecause [the plaintiff] was
Wal-Mart’s invitee, it’s settled that Wal-Mart owed [her] a duty of
care” as a matter of law because “a business . . . owe[s] a duty of

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                          Nielsen v. Lebaron

reasonable care to its invitees.” Id. ¶¶ 12, 15. The facts on which
the court relied to conduct its duty analysis pertained to
“questions of breach, not duty,” and while Wal-Mart theoretically
could have argued that the “accident was so unforeseeable that
no reasonable mind could conclude that Wal-Mart had breached
the duty of reasonable care . . . , the district court’s analysis turned
on duty, not breach,” and its conclusion that Wal-Mart owed no
duty was therefore incorrect. See id. ¶ 28.

¶16 The district court in this case made the same error that the
district court made in Davis—namely, considering specific facts
that were more appropriate to a breach analysis when it
erroneously concluded that LeBaron owed Kylie no duty. Rather
than consider an attorney’s categorical duties to a client, the court
assessed whether LeBaron had a narrower duty “to ensure the
conservators properly applied the settlement funds.”9 It
concluded that LeBaron owed no such duty by relying on section
75-5-423 of Utah’s Uniform Probate Code, which limits the
liability of certain third parties for the actions of a conservator.10

9. Not only was this conclusion based on the wrong legal
standard, but it appears to have overlooked Kylie’s actual
argument. Kylie did not assert that LeBaron had a duty to
somehow prevent her parents from using her funds
inappropriately once it transferred those funds; rather, she asserts
that LeBaron’s duty precluded it from transferring the funds to
her parents in the first place.

10. Section 75-5-423 provides,
       A person who in good faith either assists a
       conservator or deals with him for value in any
       transaction, other than those requiring a court order
       as provided in Section 75-5-408, is protected as if the
       conservator properly exercised the power. The fact
                                                     (continued…)

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                         Nielsen v. Lebaron

¶17 But when it comes to the attorney-client relationship, an
attorney owes a general “duty to act with reasonable diligence”
toward their client, Brown v. Glover, 2000 UT 89, ¶ 37, 16 P.3d 540,
employing “such skill, prudence, and diligence as lawyers of
ordinary skill and capacity commonly possess and exercise in the
performance of the tasks which they undertake,” Watkiss
& Saperstein v. Williams, 931 P.2d 840, 846 (Utah 1996) (quotation
simplified); see also Harline v. Barker, 854 P.2d 595, 599 n.3 (Utah
Ct. App. 1993) (“The duty of [an attorney] [is] to represent [a
client] with ‘competence and diligence.’”). Appropriately
safeguarding client property falls within an attorney’s general
duty of reasonable diligence. See In re Discipline of Bates, 2017 UT
11, ¶ 47, 391 P.3d 1039 (“[T]he duty to protect client property is
significant. . . . Clients trust their attorney to safeguard the
property they leave in their attorney’s possession.”). Thus, if Kylie
can present facts demonstrating that a lawyer of “ordinary skill
and capacity” would not have transferred the funds directly to the
Nielsens, she could successfully prove a claim for legal
malpractice or negligence.

¶18 Although section 75-5-423 might support the conclusion
that LeBaron did not breach its duty to Kylie, it could not entirely
negate LeBaron’s broad common law duty of reasonable
diligence. Indeed, LeBaron’s duty exists as a matter of law, and
any facts that could negate this bright-line duty must be
considered at the breach stage of the analysis. See Jeffs, 2012 UT 11,

      that a person knowingly deals with a conservator
      does not alone require the person to inquire into the
      existence of a power or the propriety of its exercise,
      except that restrictions on powers of conservators
      which are endorsed on letters as provided in Section
      75-5-426 are effective as to third persons. A person
      is not bound to see to the proper application of
      estate assets paid or delivered to a conservator.
Utah Code § 75-5-423.

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                         Nielsen v. Lebaron

¶ 24. Even assuming the district court correctly found LeBaron
was not specifically required, either by court order or otherwise,11
to deposit Kylie’s settlement funds directly into a trust account—
a case-specific determination to be made by the finder of fact at
the breach stage of the analysis—it does not follow that LeBaron
owed no legal duty to Kylie. Whether LeBaron’s delivery of the

11. We note also that while Kylie is correct that attorneys have a
professional duty to obey “all lawful orders of the court,” see, e.g.,
Gilbert v. Utah State Bar, 2016 UT 32, ¶ 35, 379 P.3d 1247 (“[A]n
attorney has a professional obligation to comply with a court
order . . . .”), her assertion that the Order creates a fiduciary duty
in the first instance is not obvious. As a source of duty, the Order
is ambiguous. Although it directs that the balance of Kylie’s
settlement funds “shall be placed into a restricted Minor Child
Trust Account,” it does not indicate who would be responsible for
completing that transaction. Kylie concedes as much, and the
district court found the Order “placed no separate duty on
[LeBaron] to deposit the funds in a minor child trust account.”
Kylie contends the district court’s interpretation was improper,
asserting (in tension with her earlier argument) that, because “the
funds were already in LeBaron’s trust account, . . . [the Order] was
sufficiently clear that LeBaron should have deposited the funds in
a protected account.” Kylie further asserts that “LeBaron
conceded by its actions that it could have protected its client
funds,” insofar as LeBaron held Kylie’s funds “in the firm’s trust
account” for four months before releasing them to the
conservators. But we find both arguments unpersuasive. We fail
to see how the location of the funds resolves the Order’s
ambiguity. Moreover, that LeBaron could have protected client
funds does not illuminate whether LeBaron had a duty to do so.
And more to the point, LeBaron’s concession of a duty—or its
denial, for that matter—has no bearing on whether a categorical
duty exists. Our common law is clear that it does. We thus decline
to resolve the Order’s ambiguity or to analyze the district court’s
finding, because the common law provides a valid source of duty.

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                         Nielsen v. Lebaron

settlement funds directly to the Nielsens was a breach of its
general duty of reasonable diligence is a determination that
requires further factual development.12

                            II. Causation

¶19 Alternatively, LeBaron asks this court to “affirm the district
court’s order of dismissal because [Kylie] cannot establish . . . the
. . . causation element[] of her malpractice claims.” LeBaron asserts
that Kylie “cannot show that [LeBaron’s] actions were the
proximate cause of her damages” because Mr. Nielsen was an
“unforeseeable, intervening cause” that “broke the chain of
causation.” Although the district court did not “reach the
question” of causation, LeBaron asks this court to affirm the
district court’s decision to dismiss on this alternative ground. See
generally Buehner Block Co. v. UWC Assocs., 752 P.2d 892, 895 (Utah
1988) (“[W]e may affirm trial court decisions on any proper
ground(s), despite the trial court’s having assigned another
reason for its ruling.”).

¶20 Our decision to affirm the district court on an alternative
ground, even one that “presents a question purely of law,” is
discretionary. Croft v. Morgan County, 2021 UT 46, ¶ 43, 496 P.3d
83. “In some circumstances, we may benefit from the district
court’s analysis of the alternate grounds in the first instance.” Id.

12. During oral argument before this court, counsel for LeBaron
argued that it is customary for an attorney to deliver settlement
funds directly to conservators rather than to deposit them into
specific accounts. This seems to us to be a factual question
regarding breach that is not properly decided at the motion to
dismiss stage. Again, at this stage, the court must “accept the
factual allegations in the complaint as true and consider them and
all reasonable inferences to be drawn from them in a light most
favorable to the plaintiff.” St. Benedict’s Dev. Co. v. St. Benedict’s
Hosp., 811 P.2d 194, 196 (Utah 1991).

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                        Nielsen v. Lebaron

Such is the case here, where there is a “vacuum of factual
development,” see id. ¶ 48, on the foreseeability question.

¶21 This vacuum is especially concerning in the context of
causation, which is a “highly fact-sensitive element of any cause
of action” and one that may be resolved as a matter of law only
“when the facts are so clear that reasonable persons could not
disagree.” Breton v. Clyde Snow & Sessions, 2013 UT App 65, ¶ 10,
299 P.3d 13 (quotation simplified). In short, rarely can proximate
cause be resolved without a finder of fact making that
determination, see Steffensen v. Smith’s Mgmt. Corp., 820 P.2d 482,
486 (Utah Ct. App. 1991), aff’d, 862 P.2d 1342 (Utah 1993), and we
see no reason why this case should be the outlier.

¶22 Indeed, based on the record before us, we do not believe
causation could be resolved without a fact finder. LeBaron
contends that the court’s entrusting Mr. Nielsen as conservator in
the first place suggests it was unforeseeable that Mr. Nielsen
would abscond with the funds, while Kylie contends that the
Order would not have included a withdrawal restriction had the
court not foreseen a conservator absconding with the funds. Both
positions seem reasonable to us. Accordingly, it does not seem to
us that the facts are “so clear” that reasonable minds could not
disagree, see Breton, 2013 UT App 65, ¶ 10 (quotation simplified),
and so we decline to affirm the district court’s dismissal on this
alternative theory.

                         CONCLUSION

¶23 Because an attorney-client relationship existed between
Kylie and LeBaron, LeBaron owed Kylie a duty of reasonable
diligence. Thus, the district court erred in dismissing Kylie’s
complaint on the ground that LeBaron owed Kylie no duty. We
therefore reverse the district court’s dismissal and remand for
further proceedings.

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