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Nesvig v. Nesvig2/25/2004
so I think the attorney has to fulfill his obligation, has a strong obligation to make some inquiry or be informed as to where this money is going to go and to at least advise or assist the client as to what has to be done to accomplish that goal of having lifetime assets for support. And quite frankly, the attorney, you know, does not have the expertise for that to say how you do this, but the attorney has the obligation to say you need to find out how to do this. Maybe the attorney becomes a facilitator, but that certainly is part of the obligation to give advice that the client can then say, okay, this is what you need to do. You need to talk to an investment person or someone else that can tell you where you need to be so that these funds will survive your lifetime.
[ ] The essence of Richard Nesvig's action is that he entrusted the net proceeds of his recovery in prior litigation to his attorney to properly invest, safeguard, and manage, and his attorney had an obligation to properly advise him. We conclude his action is in professional malpractice and breach of a fiduciary duty to properly advise.
[ ] The trial court's instructions about fiduciary duty and safekeeping property and the special verdict effectively limited the jury's inquiry to whether Gordon Nesvig acted in good faith in failing to return the money to Richard Nesvig and whether there was an agreement between Richard and Gordon Nesvig to invest the money in something other than the money market account. However, an attorney who undertakes to manage or invest a client's money assumes broader responsibilities than merely establishing an agreement with the client and acting in good faith regarding return of the money.
[ ] An attorney must employ the degree of skill, care, diligence, and knowledge commonly possessed and exercised by a reasonable, careful, and prudent lawyer, see Wastvedt v. Vaaler, 430 N.W.2d 561, 565 (N.D. 1988), and an honest belief, or good faith, is not a defense in a malpractice action. Olson v. Fraase, 421 N.W.2d 820, 830 (N.D. 1988). See Cosgrove v. Grimes, 774 S.W.2d 662, 664-65 (Tex. 1989) (holding subjective good faith is not defense to legal malpractice action). See generally 3 R. Mallen & J. Smith, Legal Malpractice § 19.8, at page 112-13 (5th ed. 2000). An attorney-client relationship is a fiduciary relationship. See Meyer v. Maus, 2001 ND 87, 14-15, 626 N.W.2d 281. A fiduciary relationship is "`something approximating business agency, professional relationship, or family tie impelling or inducing the trusting party to relax the care and vigilance . . . ordinarily exercise .'" Matter of Estate of Lutz, 1997 ND 82, 32, 563 N.W.2d 90, (quoting Asleson v. West Branch Land Co., 311 N.W.2d 533, 539 (N.D. 1981)). In a fiduciary relationship, the superior party has a duty to act in the dependent party's best interest. Lutz, at 32. A fiduciary relationship exists when one is under a duty to act for, or to give advice for the benefit of another upon matters within the scope of the relationship. Id. at 32, (citing Restatement (Second) of Torts § 874, cm. a (1979)). One leading commentator explains that, in various contexts, an attorney may undertake to manage or invest a client's property, and in doing so, the attorney not only must conform to the applicable standard of care and comply with fiduciary obligations, but also may assume the responsibilities of a trustee. 3 R. Mallen & J. Smith at § 25.4. Although an attorney and a client may reach an agreement about the client's funds, an attorney has an obligation as a reasonable, careful, and prudent lawyer to adequately advise the client before the agreement is reached. See Wastvedt, 430 N.W.2d at 566.
[ ] We reject Gord
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