Nigel L. Scott v. Janice Burgin , 97 A.3d 564 ( 2014 )

Notice: This opinion is subject to formal revision before publication in the
Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the
Court of any formal errors so that corrections may be made before the bound
volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 12-CV-1474
NIGEL L. SCOTT, et al., APPELLANTS,
V.
JANICE BURGIN, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(CAM-8295-09)
(Hon. Gregory E. Jackson, Trial Judge)
(Argued November 22, 2013 Decided August 14, 2014)
Donald M. Temple for appellants.
Kenneth H. Rosenau, with whom Kimberly K. Fahrenholz was on the brief,
for appellee.
Before GLICKMAN and FISHER, Associate Judges, and STEADMAN, Senior
Judge.
STEADMAN, Senior Judge: Appellants Nigel L. Scott and the Yallery and
Scott Law Firm (collectively, “Scott”) appeal from a jury malpractice award in
favor of appellee Janice Burgin, who was not a client of the firm. We hold that, as
a matter of law, appellants’ duty of care did not extend to Burgin and, accordingly,
reverse the judgment.
2
I. Factual Background
Kenneth Woodruff (“Woodruff” or the “decedent”) was married to, but
separated from, Patricia Woodruff when he met Burgin in 1983. He proposed to
her in that year and again in 1996. In 1986 Burgin moved in with Woodruff, and
they carried on a long-standing close relationship. In January 2006, Burgin had a
meeting with Scott in which she asked if Scott would help Woodruff obtain a
divorce. Scott’s brief handwritten jottings from the meeting contain the notation
“(Pension?)”. Scott told Burgin that he would help Woodruff obtain a divorce if
Woodruff chose to retain him. Woodruff did not attend the meeting because he
was in failing health with terminal bone cancer. In her complaint, Burgin asserts:
“Woodruff wished to obtain a divorce so that he may marry Plaintiff. Although he
had previously designated Plaintiff as the beneficiary of his federal benefits, he
was aware that Plaintiff may not receive them unless their union was made
official.”
Woodruff did not meet with Scott until one year later in January 2007.
Burgin escorted Woodruff to the meeting, and she filled out a divorce
questionnaire on his behalf while Woodruff and Scott spoke alone. Shortly
thereafter, Woodruff signed a retainer agreement for Scott’s representation in his
3
“Divorce Proceedings.” Burgin later contacted Scott on six occasions to ask
whether the complaint had been served on Patricia Woodruff. Scott did not serve
Patricia Woodruff with the complaint until November 2007. Woodruff died in
April 2008, and a divorce was never secured prior to his death.
Woodruff had been employed by the United States Postal Service. His
retirement benefits were administered by the Civil Service Retirement System. On
a “Designation of Beneficiary” form dated January 15, 2007, Woodruff designated
Burgin as his beneficiary for any lump-sum payout of his retirement benefits,
indicating that Burgin was his “fiancée.”1 Woodruff also designated Burgin as his
beneficiary for his Federal Employees’ Group Life Insurance on a form dated
December 21, 2007. After Woodruff’s death, Burgin filed a claim with United
States Office of Personnel Management (“OPM”) for Woodruff’s “survivor
benefits.” OPM denied Burgin’s claim for survivor benefits on May 4, 2009,
1
The form specifically states: “I understand that this designation of
beneficiary will not affect the rights of any survivors who may qualify for annuity
benefits after my death.” As we understand it, the survivor annuity benefits that
Burgin seeks are dependent upon marriage. See 5 U.S.C. § 8341. The May 4,
2009, letter denying Burgin’s claim is not proof to the contrary but instead, read as
a whole, appears to reflect the marriage requirement. In any event, as Scott argues,
Burgin has failed to meet her evidentiary burden of showing that, without more,
she would automatically have been entitled to the claimed survivor annuity
benefits under the provisions of the retirement system if the divorce had been
perfected prior to Woodruff’s death.
4
“based on evidence provided by another claimant showing that an earlier marriage
between the claimant and the deceased was never terminated.”
Burgin subsequently brought this suit against Scott for legal malpractice and
the related breach of contract as a third-party beneficiary. The jury awarded her
damages of $249,600, the amount she assertedly would have received had she been
the survivor annuity beneficiary of his pension, plus $5,000 for malpractice
damages and $275 in punitive damages. At this point, Scott no longer contests that
Woodruff’s divorce action was handled negligently. Instead, Scott argues that
Burgin lacked standing to sue for malpractice or breach of contract.
II. Legal Analysis
As an initial matter, Burgin never argued at trial, and does not argue in her
brief on appeal, that she was Scott’s client. To the contrary, she testified at trial
that her understanding was that Woodruff alone was the client. 2 Therefore, if she
is to prevail, she must fall within the ambit of Scott’s duty of care.3
2
At oral argument, appellant suggested that since Scott knew that the
primary reason for the divorce was to enable Burgin to secure survivor benefits in
Scott’s pension, that fact alone was enough to make Burgin a client. Such an
(continued…)
5
In this jurisdiction, whether a plaintiff falls into the class of persons who
may sue an attorney for malpractice has been resolved as “a matter of law.”
Hopkins v. Akins, 637 A.2d 424, 428 (D.C. 1993) (beneficiaries of an estate may
not sue attorney for estate’s personal representative); Needham v. Hamilton, 459
A.2d 1060 (D.C. 1983) (intended beneficiaries of estate may sue attorney who
drafted the decedent’s will).4 “It is well established that ‘the general rule is that the
(…continued)
argument, made for the first time at oral argument, comes far too late. See, e.g.,
Bliss v. Bliss, 733 A.2d 954, 960 n.13 (D.C. 1999) (court normally will not
consider arguments raised for first time at oral argument); D.D. v. M.T., 550 A.2d
37, 48 (D.C. 1988) (parties may not assert one theory at trial and another theory on
appeal).
3
We do not think, at least in the circumstances of this case, any meaningful
distinction exists between an analysis of a duty of care as a tort concept and of a
third-party beneficiary as a contract concept. While Scott may well have known
why Woodruff wanted to obtain a divorce and the jury was instructed on third-
party beneficiary law, there is no real evidence here that Scott himself intended to
incur any liability beyond that imposed by law as part of his duty of care. Both
contracting parties must intend a direct benefit which the third party can enforce
against the promisor for classic third-party liability. See Fort Lincoln Civil Ass’n
v. Fort Lincoln New Town Corp., 944 A.2d 1055, 1064 (D.C. 2008). The reference
to “(Pension)?” in Scott’s notes from the initial meeting with Burgin was plainly
inadequate.
4
In our previous cases we have variously described this issue as a question
of the plaintiff’s “standing” to bring the claim, see Teasdale v. Allen, 520 A.2d
295, 296 (D.C. 1987), a question of whether the right of action is “available” to the
plaintiff, see Needham, 459 A.2d at 1063, or a question of whether, as a matter of
law, the attorney owed a duty to the plaintiff, see Hopkins, 637 A.2d at 428.
Resolution of the specific terminology applicable is not required in this opinion.
(continued…)
6
obligation of the attorney is to his client, and not to a third party . . . .’” Needham,
459 A.2d at 1061 (quoting National Savings Bank v. Ward, 100 U.S. 195, 200
(1880)). However, “[t]he rule requiring privity is not . . . without exception.” Id.
at 1062. We may allow legal malpractice suits by “third parties notwithstanding a
lack of privity where the impact upon the third party is ‘not an indirect or collateral
consequence,’ but the ‘end and aim of the transaction.’” Id. (quoting Glanzer v.
Shepard, 135 N.E. 275, 275 (N.Y. 1922) (Cardozo, J.)). Otherwise put, third party
claims may be sustained where the plaintiffs were “the direct and intended
beneficiaries of the contracted for services.” Id.The classic situation that meets these criteria is the failure of an attorney to
properly draft a will. Comparing the case before us with that of a negligently
omitted beneficiary demonstrates why we must reject Burgin’s claim. “‘[T]he
main purpose of a contract for the drafting of a will is to accomplish the future
transfer of the estate of the testator to the beneficiaries named in the will . . . .’”
Needham, 459 A.2d at 1063 (quoting Lucas v. Hamm, 364 P.2d 685, 688 (Cal.
1961)). In such a situation, the duty of care runs to the intended legatee as a
(…continued)
No matter how Scott’s appellate argument is characterized, as a matter of law,
Burgin may not recover from him.
7
“direct and intended” beneficiary of the attorney-client relationship.
Id. A properly drafted and executed will provides beneficiaries with legally
enforceable rights upon the testator’s death. A divorce decree, on the other hand,
does not provide the same “direct” benefit to the fiancée of a divorcing client. The
divorce does not, of its own force, redistribute the client’s assets to the fiancée, nor
does it affect a change in the fiancée’s legal status. Rather, the “end and aim” of a
divorce proceeding is the dissolution of a marriage and the distribution of marital
assets. See generally D.C. Code §§ 16-910 (assignment of property), -913
(alimony), -914 (custody of children), -920 (a decree of absolute divorce “shall
become effective to dissolve the bonds of matrimony 30 days after the docketing of
the decree”). The only parties directly concerned with a divorce proceeding are the
married couple and their minor offspring. A fiancée of either party is a complete
stranger to the transaction, legally speaking, and the divorce itself does nothing to
change that status. Rather, the newly divorced person must take at least one
further positive and completely distinct step to achieve what Burgin is seeking here
and on which she bases her claim of damages; namely, entering into the new
marriage itself.5
5
In similar cases, courts from other jurisdictions have declined to extend
attorneys’ liability to third parties like children who are potentially impacted by
divorce proceedings. See In re Estate of Drwenski, 83 P.3d 457, 465-66 (Wyo.
(continued…)
8
We further note that permitting malpractice suits in this situation would
undermine the “the rationales supporting the requirement of privity” identified in
Needham, 459 A.2d at 1062. The basic theory pursued by Burgin in this case was
that Scott’s failure to obtain the divorce prevented her from receiving funds the
decedent intended her to have. “With little imagination (and subject only to the
demands of ethical pleading),” a similar argument could be advanced by any
hypothetical frustrated creditor whose debtor would be enriched but for a bungled
divorce. Hopkins, 637 A.2d at 430. The fact that only Burgin had such a claim in
this case cannot be “the basis” for “a principled exception to the privity
requirement.” Id. at 429. Accordingly, permitting Burgin’s suit in this case would
frustrate one of the primary goals of the privity rule: “avoiding exposure of the
(…continued)
2004) (finding that daughter was not a third-party beneficiary of a contract
between attorney and father to pursue divorce despite father’s death before the
divorce was procured, resulting in father’s widow inheriting money the daughter
would have inherited had the divorce been finalized); Pelham v. Griesheimer, 440
N.E.2d 96, 99-101 (Ill. 1982) (finding that attorney hired to secure divorce owed
no duty of care to children of client as third-party beneficiaries, where children
claimed that attorney’s negligence resulted in children not being able to benefit
from divorce decree); Strait v. Kennedy, 13 P.3d 671, 676-77 (Wash. App. 2000)
(holding that children had no standing as third-party beneficiaries to bring
malpractice claim against mother’s divorce attorney claiming that attorney failed to
timely finalize client’s divorce prior to her death, thereby causing children to lose
portions of their inheritance); Wilson-Cunningham v. Meyer, 820 P.2d 725, 730-31
(Kan. Ct. App. 1991) (holding that attorneys owe no legal duty to divorcing
parties’ adult children).
9
attorney ‘to a liability in an indeterminate amount . . . to an indeterminate class.’”
Id. (quoting Needham, 459 A.2d at 1062). Extending permission to sue an attorney
for malpractice to those who would indirectly benefit from the dissolution of a
client’s marriage introduces precisely this risk of unforeseen and unmanageable
liability.
These concerns also demonstrate why permitting this suit would undermine
the other objective of the privity rule: protecting the ability of the attorney and the
client to exercise “control over the contractual agreement.” Needham, 459 A.2d at
1062. “Implicit in the concern underlying the privity concept that attorney and
client be able to control . . . their own agreement is an attorney’s difficulty in
perceiving the consequences of a duty to a third person so that these can be
considered and declined if the conflicts or financial exposure is too great.”
Hopkins, 637 A.2d at 429 (internal quotation marks and brackets omitted). In the
case of beneficiaries under a will, the aims and purposes of the testator and
beneficiaries are identical. In the divorce context, a number of questions and
decisions may arise with respect, for example, to the settlement of disputes over
property division, the payment of alimony, or other matters relating to the
10
termination of the marital state.6 In such a context, it is not difficult to envision
situations where the interests of the client seeking the divorce and his fiancée
waiting in the wings could come into conflict, which argues against any dilution of
the attorney’s obligation to serve the interests of his or her client alone.
For all these reasons, we hold that Burgin’s suit against Scott must fail.
Accordingly, the judgment is
Reversed.
6
Indeed, in this very case, rights to the pension with its survivor benefits
may very well have been the subject of controversy on which Woodruff might
have been persuaded to yield to the disadvantage of Burgin. We do not address on
this appeal appellants’ challenge to the computation of damages. But we note that
the jury awarded damages on the assumption that control over the survivor benefits
would remain intact in Woodruff after the divorce proceeding, at best a
questionable assumption. Woodruff and his wife were married in 1961 and had
four children. See Barbour v. Barbour, 464 A.2d 915 (D.C. 1983) (pension
benefits are marital property subject to equitable division on divorce).