The Court of Appeal of the State of California holds that an attorney is not liable to the disinherited beneficiaries of his client because his client did not show a clear, certain, and undisputed intent to benefit them in his estate plan. In Grossman v. Wakeman (Cal. Ct. App. No. B329459, September 4, 2024).
Attorney John Wakeman drafted Richard Grossman’s estate plan. Mr. Grossman was a high-net-worth client. He had two sons, Peter and Jeffrey Grossman. Although his relationship with Peter had deteriorated, he told his friends and family members that he wanted to provide for Peter’s children, Alexis and Nicholas Grossman, as well as his son Jeffrey, a person with special needs. Mr. Grossman created trusts for his grandchildren and son Jeffrey, but they remained unfunded at the time of his death.
He instructed his attorney to leave his entire estate to his fourth wife, Elizabeth. His wife was independently wealthy and had a significantly greater net worth than him. They had a prenuptial agreement allowing them to leave their estates to whomever they wished. Mr. Grossman told his attorney he wanted everything to go to his wife so that she could decide what, if anything, would go to fund the trusts.
Anticipating legal challenges, Mr. Wakeman instructed his client to get a neurological evaluation. The evaluation established that he was of sound mind and capable of making financial and estate planning decisions.
After Mr. Grossman died, his son Jeffrey and his grandchildren sued Mr. Wakeman and his law firm for legal malpractice. They asserted that Mr. Grossman owed them a duty of care as intended beneficiaries.
The jury found that Mr. Wakeman and his firm owed the potential beneficiaries a duty of care and was liable for negligence. This appeal followed.
The appellate court considers whether the lawyer and his firm owed a duty of care to the nonclient litigants.
A California decision published three months after the jury verdict sheds light on this issue. Under Gordon v. Cohen, a lawyer owes a duty to a nonclient only if the client’s intent to benefit the nonclient is clear, certain, and undisputed. This high standard ensures that a lawyer does not owe conflicting duties of care to clients and potential beneficiaries. For there to be a clear, certain, and undisputed intent, the client must explicitly tell the lawyer to do something that benefits the nonclient.
Regardless of what Mr. Grossman told his friends and family, what matters under Gordon is what he told his lawyer. He told Mr. Wakeman to leave everything to his wife, and Mr. Wakeman followed this directive, concluding that his client had testamentary capacity. Gordon did not require Mr. Wakeman to consider the effect on other past or potential beneficiaries.
Mr. Wakeman did not owe a duty to the nonclients to draft his client’s estate plan in a way that would benefit them. This kind of duty would be too much of a burden on attorneys. Many conflicting duties could arise.
As Mr. Grossman got a neurological evaluation to establish his capacity, imposing liability on Mr. Wakeman would be especially unjust. It would also place an intolerable burden on the legal profession, making few attorneys want to offer estate planning services.
The California appellate court reverses the decision and remands it to the trial court to issue a judgment in favor of the attorney and firm.
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