505 P.3d 26
Or. Ct. App.2021Background
- Plaintiffs (several children and grandchildren of Thomas P. Moyer Sr.) allege defendants (Columbia State Bank; law firms Miller Nash and Duffy Kekel; First Republic was named below) promised to develop and implement estate‑planning/gifting to minimize transfer taxes for the benefit of trust beneficiaries.
- A Stipulated Limited Judgment in the conservatorship appointed Columbia State as court‑authorized Special Fiduciary / Special Representative with power to make gifts (aggregate cap $60,000,000), to engage Miller Nash for legal services, and to receive distributions from First Republic for gifting.
- Plaintiffs claim direct promises (to them) and that they were intended third‑party beneficiaries of promises made to the trustee and fiduciary; alleged tax‑saving plan scope was roughly $38–60M in gifts and $9.6–20M in tax savings.
- Plaintiffs sued for negligence and breach of contract; the trial court dismissed the third amended complaint under ORCP 21 A(8) with prejudice and entered a limited judgment dismissing defendants.
- On appeal, the court reversed and remanded only as to plaintiffs’ breach‑of‑contract claim against Columbia State (sixth claim); it affirmed dismissal of all other claims against Columbia State and the law‑firm defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Direct breach of contract vs Columbia State | Columbia State expressly/impliedly promised to develop and implement tax‑saving estate plans; plaintiffs accepted appointment in reliance (consideration) | No offer/acceptance; insufficient pleading of contract formation, consideration, or damages | Reversed as to this claim — complaint alleges sufficient ultimate facts to survive ORCP 21 A(8); remanded |
| Direct breach of contract vs Duffy Kekel | Duffy Kekel promised legal services to assist trustee and plaintiffs; was to be paid from the Trust | No consideration from plaintiffs; Duffy Kekel was retained by trustee and did not bargain with plaintiffs | Affirmed dismissal — plaintiffs did not plead consideration for a contract with Duffy Kekel |
| Third‑party beneficiary contract and negligence claims | Defendants promised clients (trustee/fiduciary) specific estate‑planning results intended to benefit plaintiffs | Promises were general commitments to use professional skill, not specific promises to accomplish particular gifts/results | Affirmed dismissal — alleged promises not sufficiently specific for third‑party beneficiary contract or liability |
| Negligence based on a "special relationship" | Plaintiffs were dependent on trustee/lawyers, creating a special duty to plaintiffs | No developed argument or facts establishing such a special relationship/duty | Not reached on the merits; assignment rejected for lack of developed argument; dismissal stood |
Key Cases Cited
- Hale v. Groce, 304 Or 281 (1987) (attorney promise sufficiently specific to client can create an enforceable duty to intended third‑party beneficiaries)
- Caba v. Barker, 341 Or 534 (2006) (an implied promise to achieve a general objective is insufficient to create a third‑party beneficiary contract)
- Deberry v. Summers, 255 Or App 152 (2013) (lawyer must promise specific results or objectives to create contractual duty to nonclient)
- Frakes v. Nay, 254 Or App 236 (2012) (close case where attorney agreed to create testamentary plan to effect client’s intent benefiting a specific third party)
- Slover v. State Board of Clinical Social Workers, 144 Or App 565 (1996) (elements of breach of contract; complaints survive dismissal if they plead ultimate facts, even vaguely)
- Piazza v. Kellim, 360 Or 58 (2016) (standard of review for ORCP 21 A(8): assume well‑pleaded facts true and draw favorable inferences)
- Homestyle Direct, LLC v. DHS, 354 Or 253 (2013) (definition and role of consideration in contract formation)