Frakes v. Nay, 254 Or. App. 236

Background

Nay, an attorney, prepared the Salings' revocable trust and later served as successor trustee of the 1996 Saling Family Trust; Raymond Frakes, a trust beneficiary, sued Nay for inspection of Nay's estate-planning files, accounting, and reimbursement of expenses Frankes incurred as Velma Saling's health care agent.
Frakes asserted claims against Nay individually (breach of contract, professional malpractice, and intentional interference with Frakes’s expectancy) and Nay, as trustee, counterclaimed that Frakes violated a no-contest clause, seeking disgorgement of distributions and forfeiture of remaining amounts.
Jury found Nay as attorney liable on individual claims while Frakes prevailed on some trustee-claims; the court entered judgment denying Frakes on the attorney-claims and ruling in Nay’s favor as to the no-contest counterclaim.
Discovery disputes centered on Nay’s estate-planning file; the trial court ordered production, rejecting attorney-client privilege objections for at least part of the file due to an attested-document exception.
The trial court permitted Frakes to obtain an accounting and inspect the estate-planning file; it later awarded Frakes $50,000 in attorney fees under former ORS 128.155 for the third claim, and left other fee issues for later resolution.
Frakes and Nay both appealed/cross-appealed; the appellate court affirmed the trustee-claims, reversed and remanded the attorney-tort claims due to an erroneous verdict form, and remanded for greater explanation of the fee award basis.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the no-contest clause apply to Frakes’s claims against Nay-as-attorney?	Frakes: clause does not bar claims against Nay-as-attorney.	Nay-as-trustee: clause bars any contest implicating the trust.	No-contest clause does not apply to Nay-as-attorney.
Was Nay required to disclose the estate-planning file notwithstanding privilege?	Frakes: file contains non-privileged materials; disclosure required.	Nay: file is privileged as attorney-client; exceptions do not apply.	Discovery ruling upheld; privilege issue resolved based on document-specific exceptions.
Did the timing bar Frakes’s breach-of-contract claim and dismiss it as time-barred?	Frakes: contract claim arose from Nay’s duties in 1990/1996 and survived to 2005.	Nay: accrual occurred at breach long before 2005; statute barred.	Breach-of-contract claim barred; affirmed dismissal on statute of limitations grounds.
Is Frakes’s negligence claim viable against Nay-as-attorney, and was the verdict form proper?	Frakes: Hale/Caba third-party beneficiary theory supports negligence; form should not foreclose.	Nay: no duty to a non-client; statute of limitations and mootness concerns apply.	Negligence claim viable under third-party beneficiary theory; but verdict form error requires reversal and remand.
Did the trial court err in the special verdict form by conditioning consideration of breaches on testamentary capacity/undue influence findings?	Frakes: form improperly tied contract/tort issues to capacity/undue influence findings.	Nay: pleaded allegations tied to capacity/undue influence; form appropriate.	Special verdict form erroneous and prejudicial; remand for proper adjudication.

Key Cases Cited

Hale v. Groce, 304 Or. 281 (Or. 1987) (third-party beneficiary theory supporting negligent liability to intended beneficiaries)
Caba v. Barker, 341 Or. 534 (Or. 2006) (third-party beneficiary doctrine limits negligence claims to intended beneficiaries with promise to testator)
Butcher v. McClain, 244 Or. App. 316 (Or. App. 2011) (probat(e) remedies do not preclude related tort claims)
Allen v. Hall, 328 Or. 276 (Or. 1999) (extension of intentional interference to prospective inheritance claims)
Yancy v. Shatzer, 337 Or. 345 (Or. 2004) (mootness/justiciability governs whether relief remains possible)
McCarthy v. Oregon Freeze Dry, Inc., 327 Or. 185 (Or. 1998) (attorney-fee award findings must be adequate for meaningful appellate review)