Thursday, April 09, 2015

Paul v. Patton (Cal. Ct. App. - April 9, 2015)

I'm surprised this is as close as it appears to be.

Guy has four kids with a wife who dies.  Guy remarries.  Guy's got a lot of money, including lots of separate property.  Guy writes a trust that says that Second Wife gets to life in House for the rest of her life and will get all the net income from Store, but everything else gets split up between the four kids when he dies.

Pretty straightforward.

Then things between Guy and Second Wife start to go south.  Guy amends Trust to say that Second Wife no longer gets to stay in House forever, and instead that House will be sold and Second Wife given her marital share (half), plus Second Wife no longer gets all the net income from Store but only $4,000/month.

Pretty straightforward as well.

With one problem.  When Guy's attorney drafted the amendment to the trust, he accidentally wrote the thing (using the term "beneficiaries" in an inapposite way) such that under the amendment, Second Wife also now got a fifth of the entire estate.  Which she never even got when things were good between her and Guy, and which Guy didn't actually intend to do.


Kids and Second Wife then litigate.  Attorney repeatedly says very candidly that there was a scrivener's error and that Guy didn't intend to give Second Wife that extra money.

Ultimately there's a settlement.

Kids then sue Attorney for malpractice in screwing up the amendment to the trust.

Seems like a pretty good claim to me.  But the trial court dismisses the lawsuit on a demurrer.  Holding that Attorney had no duty to Kids.

The Court of Appeal reverses, holding that Attorney may well have had a duty to Kids since they were intended beneficiaries.  To which I'd say:  "Duh!"  To me, if there's ever a case where the Kids should be able to sue, it's this one.  Attorney writes a trust.  Attorney admits that the trust is screwed up and that the intended allocation isn't what's reflected therein.

Sounds like exactly why we have lawsuits.  As well as malpractice insurance.

The Court of Appeal nonetheless thinks the case is a close one.  And there's indeed some real authority on the other side.

But to me, it's a no-brainer.  Of course the kids should be able to sue.  Of course there's a duty.  To leave the kids out in the cold on this one, with no remedy whatsoever, would be absurd.

Admittedly, I feel a little bad about the policy consequences of such a result.  I'm a little worried about incentivizing Attorney to lie in the underlying litigation in order to cover his own butt.  The lawyer here, Santa Cruz lawyer Richard Patton, forthrightly testified in favor of Kids in the underlying suit that Guy didn't intend to benefit Second Wife in the amendment and that to the extent the amended trust did so (which it certainly seems to do), it was a scrivener's error; i.e., his bad.  That's commendable.  It'd have been fairly easy to instead say "Oh, no, he wanted exactly what I put down; we were all very clear on that."  That way Kids would have a much harder time suing him.

But Attorney did the right thing.  And now he gets sued.  Hoisted, in part, on his own petards.

But, in the end, I'm willing to tolerate that.  He's being sued because he (allegedly) screwed up.  Not just because he admitted it.  To hold that there's no duty would be a bigger problem than a rule that admits that there's a duty and that just hopes that we can get the truthful testimony we need to figure out who, if anyone, is liable in a given setting.

In short, Justice Premo's opinion is right.  Perhaps even more than he thinks.