ATTORNEY’S DUTIES: BAKER V. COOMBS (COA 3/23/2007)

BAKER V. COOMBS
ATTORNEYS:  PROFESSIONAL NEGLIGENCE; PROPERTY SETTLEMENT AGREEMENT; BREACH OF FIDUCIARY DUTY;
FAMILY LAW: Attorneys and duty for property

2005-CA-001993
PUBLISHED: AFFIRMING (COMBS)
DATE RENDERED: 3/23/2007

CA affirms TC grant of summary judgment dismissing professional negligence claim based upon attorney’s failure to obtain and hold stock certificates for the benefit of an adverse client. (Jefferson Cir. Ct., Hon. Judge Stephen K. Mershon, judge, presiding).

Attorney Coombs represented husband Collins against Baker in a divorce action. The Property Settlement Agreement required husband to pay wife ten annual payments plus a balloon payment. As security, wife was given liens on husband’s stock holdings. The agreement also stated that “the certificates shall be held” by the husband’s attorney. Husband never gave his attorney the certificates, and when husband died nine years after the agreement, wife discovered he had sold his largest interest without perfecting the lien or paying wife. None of his corporations was listed on his estate’s inventory. Attorney testified he had asked his client for the certificates when the agreement was negotiated and after, but they were never provided. Wife sued attorney, claiming that the failure was a deliberate effort to prevent payment and reduce inheritance to husband’s minor child. She claimed that attorney failed to follow the terms of the agreement and that he had a fiduciary duty to her.

CA affirms TC SJ, holding that attorney merely signed the agreement as an attorney signing a pleading under CR 11, not a party, but even if he were a party, as de facto escrow agent, attorney did not have an affirmative duty to the adverse party to obtain the certificates because his only affirmative duty would have been to keep and secure the certificates once they came into his possession. Additionally, CA rejected wife’s claim that she was a third-party beneficiary of attorney’s contract with his client, because the contract was to represent the client against the putative third-party beneficiary.

Finally, the CA chastised the attorney for allowing himself to become embroiled in a situation in which there was a potential for him to become conflicted with his own client.

By John Hamlet

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