Nielsen v. LebaronNielsen v. Lebaron
Bruce M. Pritchett Jr., Attorney for Appellant
Gary T. Wight and Blake A. Hallock, Attorneys for Appellees
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGE RYAN D. TENNEY and SENIOR JUDGE KATE APPLEBY
CHRISTIANSEN FORSTER, Judge:
¶1 Kylie Nielsen appeals the district court‘s dismissal of her complaint asserting legal malpractice against her attorney, L. Miles LeBaron, and his law firm, LeBaron & Jensen, PC (collectively, LeBaron). Based on a safe harbor provision in the Utah Uniform Probate Code, see
BACKGROUND
¶2 In May 2014, Kylie, a minor child, tripped during a school safety demonstration, severely injuring her ankle.2 Her parents,
¶3 As a result of the agreement, the district court issued an order approving the settlement (the Order). The Order provides, in part,
The balance of $61,246.85 [after deducting costs, fees, and medical expenses] shall be placed into a restricted Minor Child Trust Account, which is insured by either the NCUA or FDIC with ownership of the account to revert to [Kylie] without restriction on her 18th birthday. Prior to that time, NO MONEY MAY BE WITHDRAWN FROM THE ACCOUNT WITHOUT THIS COURT‘S APPROVAL AND ORDER and the account must be marked as such.
[Mr.] Nielsen and [Ms.] Nielsen are hereby appointed as co-conservators of the Estate of the minor child for the purpose of executing the Releases and administering the funds recovered in this matter.
¶4 Several months later, LeBaron sent a check for $61,246.85 made out to “Andrew or Camille Nielsen” in their capacity as co-conservators. Sometime after LeBaron dispersed these settlement funds, Mr. Nielsen absconded with them.3
¶5 In September 2020, Kylie filed suit against LeBaron, asserting a claim of legal malpractice.4 Kylie alleged that LeBaron, as Kylie‘s attorney, breached its fiduciary duty to safeguard her funds by failing to “deposit[] [the funds] into a Minor Child Trust Account” in compliance with the Order. Kylie asserted that this conduct fell “outside the ordinary standard of professional competence.”5
¶6 In response to Kylie‘s complaint, LeBaron filed a motion under rule 12(b)(6) of the Utah Rules of Civil Procedure to dismiss for failure to state a claim upon which relief can be granted, contending that Kylie could not establish either the duty element or the causation element of a legal malpractice claim. Specifically, LeBaron asserted “the Utah Uniform Probate Code insulates [LеBaron] from liability by eliminating any duty to ensure a conservator properly expends funds in his or her care.” Citing section 75-5-423 of the Utah Code—which states, “A person is not bound to see to the proper application of estate assets paid or delivered to a conservator“—LeBaron alleged “the Utah Code plainly puts the responsibility of proper estate administration on the minor‘s conservators, not attоrneys.”6 See
¶7 LeBaron also alleged that “even assuming there was a duty beyond merely issuing the check to [Kylie‘s] conservators,” Kylie‘s claim should be dismissed because “it is clear that [LeBaron] did not cause [Kylie‘s] injuries.”
¶8 Kylie opposed LeBaron‘s 12(b)(6) motion, asserting that her initial complaint pleaded “sufficient facts to establish the elements of legal malpractice.” On the issue of duty, Kylie asserted LeBaron was bound by “the broad duties owed by an attorney to his minor client,” as well as by those duties the Order imposed, and that the Utah Uniform Probate Code did not absolve LeBaron of these duties.
¶9 On the issue of causation, Kylie alleged, “[Mr.] Nielsen‘s criminаl conduct does not sever the causal connection between [LeBaron‘s] actions and [Kylie‘s] damages,” because Mr. Nielsen‘s conduct was “foreseeable.” Specifically, Kylie asserted, “If the court did not reasonably foresee the possibility of one or both of [Kylie‘s] parents—as her conservators—absconding with the settlement proceeds, the court would not have included [the withdrawal restriction] requiring а court order to remove funds.”
¶10 The district court granted LeBaron‘s motion to dismiss. Relying on section 75-5-423 of the Utah Uniform Probate Code, the court concluded LeBaron “did not owe [Kylie] a duty to ensure the conservators properly applied the settlement funds,” reasoning that “once estate assets are paid or delivered to a conservator by a third party, that third party has no continuing duty to ensure the estate assets аre properly applied.” From there, the court concluded Kylie could not establish the element of duty generally and dismissed the case with prejudice. It did not reach the causation issue.
ISSUE AND STANDARD OF REVIEW
¶11 On appeal, Kylie contends that the district court erred in dismissing her legal malpractice claim. “We review the grant of a motion to dismiss for correctness, granting no deference to the decision of the district court.” Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 14, 243 P.3d 1275. “A motion to dismiss shоuld be granted only if, assuming the truth of the allegations in the complaint and drawing all reasonable inferences therefrom in the light most favorable to the plaintiff, it is clear that the plaintiff is not entitled to relief.” Id. (quotation simplified). “We will affirm the dismissal of a complaint only where it clearly appears that the plaintiff would not be entitled to relief under the facts alleged or under any state of facts they could prove to supрort their claim.” Id. (quotation simplified).
ANALYSIS
¶12 To succeed in a legal malpractice action, a plaintiff must prove five elements: first, an attorney-client relationship existed; second, the attorney owed a duty to the client; third, the attorney breached this duty; fourth, this breach caused injury to the client; and fifth, actual damages exist. Christensen & Jensen, PC v. Barrett & Daines, 2008 UT 64, ¶¶ 22–23, 194 P.3d 931. An attorney-client relationship exists between Kylie and LeBaron; this much is undisputed. The court did not reach the issues of breаch, causation, or damages because it determined that LeBaron owed Kylie no duty. Kylie argues on appeal that the court erred in its duty determination. LeBaron defends the court‘s ruling and argues, alternatively, that if the court erred in its duty analysis, then we should affirm on the alternative ground that Kylie failed to state a claim with respect to causation.
I. Duty
¶13 Kylie challenges the district court‘s conclusion that LeBaron did not owe hеr a duty in disbursing the settlement proceeds. Kylie identifies several potential sources of LeBaron‘s duty—the common law, the Order, and rule 1.15 of the Rules of Professional Conduct.7 Because we agree
¶14 Whether a duty exists is “a matter of law” determined “on a categorical basis for a given class of tort claims.” Mower v. Baird, 2018 UT 29, ¶ 16, 422 P.3d 837 (quotation simplified). Because duty “should be articulated in relatively clear . . . bright-line rules of law applicable to a general class of cases,” B.R. ex rel. Jeffs v. West, 2012 UT 11, ¶ 23, 275 P.3d 228 (quotation simplified), “case-specific analyses are unwarranted at the duty stage of the negligence inquiry,” Davis v. Wal-Mart Stores Inc., 2022 UT App 87, ¶¶ 18–19, 514 P.3d 1209. Duty “relates to the general relationship between the alleged tortfeasоr and the victim and the general foreseeability of harm” rather than “the specifics of the alleged tortious conduct such as the specific mechanism of the harm.” Id. ¶ 18 (quotation simplified). When “the existence of the duty in question has already been established,” the duty inquiry ends; there is no need for the court to reach a case-specific, fact-dependent conclusion regarding the existence of a duty. Id. ¶ 15. It is only at “the next steps of the negligence analysis—reach and proximate cause“—that “case-specific” factors may be analyzed, and at that stage, such matters are typically “questions for the fact finder.” Id. ¶ 19 (quotation simplified).
¶15 For example, in Davis v. Wal-Mart Stores Inc., 2022 UT App 87, 514 P.3d 1209, the district court granted defendant Wal-Mart‘s motion for summary judgment on the ground that it “owed no duty” to the plaintiff, a customer injured while shopping at a Wal-Mart. Id. ¶ 1. To reach this conclusion, the court focused on facts such as “whethеr it would be foreseeable that Davis would move within inches of Wal-Mart‘s employee, stoop below the employee‘s field of vision, and do so without alerting the employee to her presence or waiting for the employee to finish returning merchandise to the top shelf.” Id. ¶ 17 (quotation simplified). This court concluded that such a “case-specific” analysis was “unwarranted at the duty stage of the negligence inquiry.” Id. ¶ 18. It explained that “[b]ecause [the plaintiff] was Wal-Mart‘s invitee, it‘s settled that Wal-Mart owed [her] a duty of care” as a matter of law because “a business . . . owe[s] a duty of reasonable care to its invitees.” Id. ¶¶ 12, 15. The facts on which the court relied to conduct its duty analysis pertained to “questions of breach, not duty,” and while Wal-Mart theoretically could have argued that the “accident was so unforeseeable that no reasonable mind could conclude that Wal-Mart had breached the duty of reasonable care . . ., the district court‘s analysis turned on duty, not breach,” and its conclusion that Wal-Mart owed no duty was therefore incorrect. See id. ¶ 28.
¶16 The district court in this case made the same error that the district court made in Davis—namely, considering specific facts that were more appropriate to a breach analysis when it erroneously conсluded that LeBaron owed Kylie no duty.9 Rather than consider an attorney‘s categorical duties to a client, the court assessed whether LeBaron
¶17 But when it comes to the attorney-client relationship, an attorney owes a general “duty to act with reasonable diligence” toward their client, Brown v. Glover, 2000 UT 89, ¶ 37, 16 P.3d 540, employing “such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake,” Watkiss & Saperstein v. Williams, 931 P.2d 840, 846 (Utah 1996) (quotation simplified); see also Harline v. Barker, 854 P.2d 595, 599 n.3 (Utah Ct. App. 1993) (“The duty of [an attorney] [is] to represent [a client] with ‘competence and diligence.‘“). Appropriately safeguarding client property falls within an attorney‘s general duty of reasonable diligence. See In re Discipline of Bates, 2017 UT 11, ¶ 47, 391 P.3d 1039 (“[T]he duty to protect client property is significant. . . . Clients trust their attorney to safeguard the property they leave in their attorney‘s possession.“). Thus, if Kylie can present facts demonstrating that a lawyer of “ordinary skill and capacity” would not have transferred the funds directly to the Nielsens, she could successfully prove a claim for legal malpractice or negligence.
¶18 Although section 75-5-423 might support the conclusion that LeBaron did not breach its duty to Kylie, it could not entirely negate LeBaron‘s broad common law duty of reasonable diligence. Indeed, LeBaron‘s duty exists as a matter of law, and any facts that could negate this bright-line duty must be considered at the breach stage of the analysis. See Jeffs, 2012 UT 11, ¶ 24. Even assuming the district court correctly found LeBaron was not specifically required, either by court order or otherwise,11 to deposit Kylie‘s settlement funds directly into a trust account—a case-specific determination to be made by the finder of fact at the breach
II. Causation
¶19 Alternatively, LeBaron asks this court to “affirm the distriсt court‘s order of dismissal because [Kylie] cannot establish . . . the . . . causation element[] of her malpractice claims.” LeBaron asserts that Kylie “cannot show that [LeBaron‘s] actions were the proximate cause of her damages” because Mr. Nielsen was an “unforeseeable, intervening cause” that “broke the chain of causation.” Although the district court did not “reach the question” of causation, LeBaron asks this court to affirm the district court‘s decision to dismiss on this alternative ground. See generally Buehner Block Co. v. UWC Assocs., 752 P.2d 892, 895 (Utah 1988) (“[W]e may affirm trial court decisions on any proper ground(s), despite the trial court‘s having assigned another reason for its ruling.“).
¶20 Our decision to affirm the district court on an alternative ground, even one that “presents a question purely of law,” is discretionary. Croft v. Morgan County, 2021 UT 46, ¶ 43, 496 P.3d 83. “In some circumstances, we may benefit from the district court‘s analysis of the alternate grounds in the first instance.” Id. Such is the case here, where there is a “vacuum of factual development,” see id. ¶ 48, on the foreseeability question.
¶21 This vacuum is especially concerning in the context of causation, which is a “highly fact-sensitive element of any cause of action” and one that may be resolved as a matter of law only “when the facts are so clear that reasonable persons could not disagree.” Breton v. Clyde Snow & Sessions, 2013 UT App 65, ¶ 10, 299 P.3d 13 (quotation simplified). In short, rarely сan proximate cause be resolved without a finder of fact making that determination, see Steffensen v. Smith‘s Mgmt. Corp., 820 P.2d 482, 486 (Utah Ct. App. 1991), aff‘d, 862 P.2d 1342 (Utah 1993), and we see no reason why this case should be the outlier.
¶22 Indeed, based on the record before us, we do not believe causation could be resolved without a fact finder. LeBaron contends that the court‘s entrusting Mr. Nielsen as conservator in the first place suggests it was unforeseeable that Mr. Nielsen would abscond with the funds, while Kylie contends that the Order would not have included a withdrawal restriction had the court not foreseen a conservator absconding with the funds. Both positions seem reasonable to us. Accordingly, it does not seem to us that the facts are “so clear” that reasonable minds could not disagree, see Breton, 2013 UT App 65, ¶ 10 (quotation simplified), and so we decline to affirm the district court‘s dismissal on this alternative theory.
CONCLUSION
¶23 Because an attorney-client relationship existed between Kylie and LeBaron, LeBaron owed Kylie a duty of reasonable diligence. Thus, the district court erred in dismissing Kylie‘s complaint on the ground that LeBaron owed Kylie no duty. We therefore reverse the district court‘s dismissal and remand for further proceedings.
MICHELE M. CHRISTIANSEN FORSTER
JUDGE
Notes
A person who in good faith either assists a conservator or deals with him for value in any transaction, other than those requiring a court order as provided in Section 75-5-408, is protected as if the conservator properly exercised the power. The fact that a person knowingly deals with a conservator does not alone require the person to inquire into the existence of a power or the propriety of its exercise, except that restrictions on powers of conservators which are endorsed on letters as provided in Section 75-5-426 are effective as to third persons. A person is not bound to see to the proper application of estate assets paid or delivered to a conservator.