Court Opinion

ID: 9568721
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:06:56.595316+00
Date Added: 2024-06-11T10:47:21.249883
License: Public Domain

DONIELSON, Judge
(dissenting).
I respectfully dissent. Although I concur with the majority’s discussion of the *920applicable legal standards, I would find that the trial court erred in granting summary judgment. The record reveals that the Meyer Law Firm had represented the Steinbachs since approximately 1974, when Virgil Meyer incorporated the Steinbachs’ business, Model Enterprises, Inc. Members of the firm had performed some tax work for the Steinbachs. In 1978, Virgil Meyer drafted papers for the plaintiffs concerning the bank and a slaughterhouse. In 1979, James Meyer made changes in the corporation between the Steinbachs and Mr. Steinbach’s parents. In 1983, two days before Virgil Meyer voted with the other directors of the bank to cut off the Stein-bach’s line of credit, the Steinbachs picked up a cattle feeding contract drawn up by Jim Meyer, intended to implement a debt restructuring agreement that had been made with the bank.
In their deposition testimony and affidavits, the Steinbachs expressed their belief that the Meyer firm represented them at all relevant times. The record also reveals that there was no express disclosure of the law firm’s relationship with the bank made to the Steinbachs. Virgil and Jim Meyer both stated in their depositions that it was common knowledge within the Chariton community that the Meyer firm did legal work for the bank, but neither could state any specific basis for their belief that the Steinbachs were aware of that fact. Tom Steinbach stated that he knew Virgil Meyer was on the bank’s board of directors. The Steinbachs did not present any direct evidence that any members of the Meyer firm gave the bank any confidential information. Affidavits of the other directors of the bank were submitted stating that they would have voted to terminate the Stein-bachs’ line of credit regardless of how Virgil Meyer voted.
From these facts, I cannot say that a rational trier of fact could not find that an attorney-client relationship existed between the Steinbachs and the Meyer Law Firm. Viewing the underlying facts and inferences to be drawn therefrom in a light most favorable to the Steinbachs, I find that a rational trier of fact could find that conduct of the parties evidence a long, on-going attorney-client relationship between the Steinbachs and the Meyer firm or at least at the time James Meyer completed the cattle feeding contract for the debt restructuring program, despite the fact that no retainer had been paid. Considering the fact that the Meyer Law Firm knew of the Steinbachs’ debt restructuring plan and had drafted a cattle feeding contract necessary to implement that plan only several days before Virgil Meyer and the other bank directors voted to cut off the Stein-bachs’ credit, I believe a finder of fact could reasonably infer that the bank’s board of directors was influenced by Virgil Meyer’s knowledge of the Steinbachs’ debt restructuring plan. Even though the underlying facts may not be disputed, since a rational trier of fact could draw different inferences and reach different conclusions from the facts in the present case, I find summary judgment was inappropriate in the present case, and the question of whether an attorney-client relationship existed between the parties should have been submitted to a trier of fact.
The Meyer firm, however, contends that a violation of the canons of ethics does not create a cause of action for civil liability and that, furthermore, the Meyer firm owed no duty to the Steinbachs. In support of their position, the defendants cite to Brody v. Ruby, 267 N.W.2d 902, 907 (Iowa 1978). The Brody case is, however, factually distinct from the present case. In Brody, a physician sued a former patient and her lawyers in a prior action for malpractice against the physician. 267 N.W.2d at 903. The physician alleged that plaintiff’s lawyers negligently failed to investigate the facts and circumstances surrounding the malpractice claim before filing suit. Id. at 906. In holding that the physician had no cause of action against the plaintiff’s attorneys, the Iowa Supreme Court stated that “[ajbsent special circumstances it generally is held an attorney can be liable for consequences of professional negligence only to a client.” Id. (emphasis added). In discussing the applicability of the Code of Professional Responsibility for Lawyers, the court opined that the *921Code does not “create grounds for imposing liability to a third party for negligence.” Id. at 907 (emphasis added). The Brody court ultimately held that the Iowa Code of Professional Responsibility for Lawyers does not furnish a basis for a private cause of action for negligence “in the circumstances of this case.” Id. I therefore read the opinion in Brody as holding that a successful adverse or third-party litigant may not later file suit for negligence against opposing attorneys pursuant to the provisions of the Iowa Code of Professional Responsibility for Lawyers. I do not read the Brody opinion as prohibiting a legal malpractice suit by a client against his or her attorneys in negligently failing to protect the client’s interests.
Iowa law generally holds that issues of negligence are not ordinarily susceptible of summary adjudication but should be resolved by trial in an ordinary manner. Schermer, 380 N.W.2d at 687. In the present case, the Steinbachs allege that Virgil Meyer and the Meyer firm was negligent in failing to adequately disclose their connections with the bank. I note that in Woodruff v. Tomlin, 616 F.2d 924, 936 (6th Cir.1980), the sixth circuit recognized that the Code of Professional Responsibility does not undertake to define standards for civil liability of lawyers for professional conduct. The Woodruff court, however, further stated that the Code nevertheless constitutes some evidence of the standards required of attorneys. Id. The Woodruff court ultimately opined that the trial court erred in declining to submit to a jury the issue of whether the attorney’s failure to advise the plaintiffs fully of a conflict of interest in representation of the plaintiffs and an adverse insurance company was legal malpractice. Id. The court additionally noted that the remoteness of the possibility of recovery was not controlling, but rather that an opportunity for recovery was denied. Id. Given my earlier analysis of the facts, I believe a rational trier of fact could draw a conclusion that the Meyer firm failed to adequately disclose their relationship with the bank to the Stein-bachs.
I also believe the trial court was incorrect in ruling that as a matter of law the bank directors would not have voted differently had Virgil Meyer abstained from voting or voted in favor of maintaining the Steinbachs’ line of credit, based upon the bank directors’ affidavits. In determining, on motion for summary judgment, whether there is a factual issue precluding summary judgment, the courts can no longer safely rely upon statements in the affidavits of either party to resolve the question. Northwestern National Bank of Sioux City v. Steinbeck, 179 N.W.2d 471, 475-76 (Iowa 1970). Since the Steinbachs stated in depositions that they did not know whether Virgil Meyer actually influenced the board of directors’ vote, but believed that there was a possibility such influence had been exerted, this issue should have been left for the jury to determine.