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Glover v. Southard11/3/1994
Plaintiffs, Lavern and Athlyn Glover, appeal the trial court's judgment dismissing with prejudice their complaint against defendant, William Southard, for failure to state a claim. We affirm.
Defendant, an attorney employed by a Greeley bank, drafted a trust agreement by which a settlor designated a non-profit corporation as sole residual beneficiary to the trust corpus which included most of settlor's property. The agreement named the bank as trustee.
Two months later, defendant drafted a codicil to the settlor's previously executed will to add a bequest of a sum of money to plaintiffs.
Five months after the trust's creation, the settlor told a bank trust officer that she wished to leave her entire estate to plaintiffs. The trust officer contacted defendant who, without discussing the proposed change with the settlor, drafted an amendment to the trust agreement. The revision provided that all of the trust assets should be distributed to plaintiffs upon settlor's death. Defendant did not revise the settlor's will to make it consistent with the terms of the trust.
After the settlor's death, in settlement of a dispute about the validity of the trust, plaintiffs relinquished their rights under the trust instrument in exchange for a cash settlement. They then initiated a malpractice action against defendant for his failure to amend the settlor's will to conform to the amended trust.
Acting pursuant to defendant's C.R.C.P. 12(b)(5) motion, the trial court ruled that plaintiffs lacked standing to assert a claim against defendant and, accordingly, dismissed the malpractice action.
Plaintiffs contend that third parties do have standing to bring an independent action for attorney malpractice if, as here, they are the intended beneficiaries of a negligently drafted testamentary instrument. We disagree.
In passing upon a motion to dismiss a complaint, a court may consider only matters stated therein and must not go beyond the confines of the pleading. In reviewing the action of a trial court in dismissing for failure to state a claim, an appellate court is in the same position as the trial court. McDonald v. Lakewood Country Club, 170 Colo. 355, 461 P.2d 437 (1960).
Material allegations of the complaint are deemed admitted. The motion should be granted only if it appears that plaintiff would not be entitled to relief under the facts pleaded. Davidson v. Dill, 180 Colo. 123, 503 P.2d 157 (1972).
An attorney must act in his client's best interest and is not liable to a third party absent conduct that is fraudulent or malicious. Hill v. Boatright, ___ P.2d ___ (Colo. App. No. 93CA0614, Aug. 11, 1994). See Klancke v. Smith, 829 P.2d 464 (Colo. App. 1991)(attorney for spouse in wrongful death action owed no duty to decedent's children); Schmidt v. Frankewich, 819 P.2d 1074 (Colo. App. 1991) (absent fraud or malicious conduct, attorney for corporation not liable to shareholders or guarantors of corporation); McGee v. Hyatt Legal Services, Inc., 813 P.2d 754 (Colo. App. 1990) (law firm representing a mother in a custody action had no duty to child); In re Estate v. Brooks, 42 Colo. App. 333, 596 P.2d 1220 (1979)(attorney for trustee not liable to alleged beneficiary for alleged breach of trust).
The rule that an attorney's liability to third parties is strictly limited rests upon three public policy bases: the protection of the attorney's duty of loyalty to and effective advocacy for his or
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