The California Courts of Appeal are typically pretty stingy with their published opinions – only about 10% of Court of Appeal decisions are published in the Official Reports. And per Rule 8.1105 of the California Rules of Court, appellate decisions are supposed to be published only if they meet one of a certain set of criteria, such as establishing a new rule of law, applying an existing rule of law to a sufficiently unique set of circumstances, addressing an apparent conflict in the law, or something else in that vein.
That’s why I was a bit confused about the forthcoming publication of Grossman v. Wakeman (2024) ___Cal.App.5th ___. Grossman presents facts that are remarkably similar to those in Gordon v. Ervin, Cohen & Jessup LLP (2023) 88 Cal.App.5th 543: in both cases, spurned family members brought legal malpractice claims against their deceased relative’s estate planning attorneys, claiming that the attorneys had negligently failed to honor their relative’s intent by not including the plaintiffs in their estate plans. Both cases also have similar outcomes (spoiler: the claims failed). And what’s more, very little time separated the two decisions – Gordon was decided just over a year and a half ago (as discussed on this very blog).
So why bother publishing Grossman? Was it solely to give me an interesting topic to blog on? Maybe!
The Specifics
The very familiar details of Grossman are as follows: wealthy physician Richard Grossman told friends and family that he planned to divide his $18 million estate between his son Jeffrey and his two grandchildren Alexis and Nicholas (children of Jeffrey’s brother). But he told his estate planning attorney John Wakeman something entirely different: Jeffrey and the grandchildren were to get nothing, and instead the entirety of the estate was to go to Grossman’s fourth wife Elizabeth, herself already the owner of a fortune of around $100 million. Wakeman prepared estate documents for Grossman that reflected this intent.
Following Grossman’s death, Jeffrey and the grandchildren sued Wakeman for malpractice, contending that he had been negligent in preparing an estate plan that left out Grossman’s intended beneficiaries: themselves. The jury found Wakeman liable and awarded the plaintiffs more than $4 million. Wakeman appealed.
The Court of Appeal reversed, finding that Wakeman could not be liable for malpractice as to Jeffrey and the grandchildren, because Jeffrey and the grandchildren were not his clients, and he owed no duty to them in the absence of “clear, certain, and undisputed” evidence that Grossman intended to benefit them: “[a] lawyer has no duty to a nonclient plaintiff beyond implementing the client’s clear directive to ‘Do X’ (when . . . X benefits that nonclient plaintiff).” And it didn’t matter that Grossman had told others that he wanted to benefit Jeffrey and the grandchildren: “the issue is not what Richard told his friends and family members. The issue is what he told Wakeman.”
The Court’s decision closely mirrored the Gordon opinion. In fact, the bulk of its determinative language was pulled directly from Gordon.
The Policy
The Gordon and Grossman courts probably got it right that an estate planning attorney should not owe duties to nonclients absent explicit direction otherwise from the client. Owing duties to both the client and the client’s potential beneficiaries would impose an immeasurable burden on estate planning attorneys, including but not limited to the difficulties inherent in juggling the conflicting interests of the client and their ostensible heirs.
What caught my eye, however, was a seemingly stray comment made by the Grossman court: “a lawyer who is persuaded of his client’s intent to dispose of her property in a certain manner, and who drafts the will accordingly, fulfills his duty of loyalty to his client and is not required to urge the testator to consider an alternative plan in order to forestall a claim by someone thereby excluded from the will.”
This statement addressed an estate planner’s duty to the client, not the client’s potential heirs, and thus does not appear to be necessary to the Court’s decision. In making the statement, the Court seemingly addressed testimony offered by the plaintiffs’ expert witness Robert Kehr, who testified that “the job of a competent lawyer is not simply to document what the client thinks should be done . . . The lawyer’s an advisor, and where there are alternatives, they need to be suggested, with their pros and cons, their costs, and their risks.” Kehr opined that Wakeman’s work fell below the standard of care because he saw nothing to indicate that Wakeman has advised Grossman of the risks or presented alternatives, but instead simply “took dictation” from Grossman.
The Thought Exercise
The Court did not adopt Kehr’s opinion, and so it did not become a helpful precedent for estate litigators. It remains, however, an extremely interesting thought exercise for estate planners. Namely, does an estate planner always fulfill their duty to their client by “taking dictation” and drafting the exact estate plan that the client directs? Or is there a point at which a planner breaches a duty to his client by not suggesting an alternative course?
I am not talking here about advising a client re tangible pitfalls, such as negative tax consequences. I am speaking instead about more intangible, moral implications. In Grossman, the testator’s son Jeffrey was disabled and unable to care for himself. The testator, however, chose not to make Jeffrey a beneficiary, but instead to leave everything to his already-wealthy wife. Despite the seeming moral inadvisability of the plan, the Court of Appeal’s language appears to suggest that an estate planning attorney has no duty to steer the client in a different direction in such a scenario.
But for the sake of our thought exercise, imagine a more extreme scenario, one with more obviously horrific consequences. Certainly ethical duties prohibit an estate planner from facilitating an illegal conspiracy – the planner would not draw up a will establishing a fund to purchase illegal drugs for a known drug dealer. But what if the testator wishes to create a fund to purchase (perfectly legal) weapons for the drug dealer? What if the testator wishes to leave property to be used as a compound by a white supremacist militia? What if the testator wishes to create a legal defense fund for an unrepentant serial killer?
For each of the foregoing scenarios, assume that the testator has full testamentary capacity, has not been subjected to undue influence, and is in fact a fundamentally good person that is somehow unable to understand the horrifying consequences of their testamentary wishes. When does the estate planner breach a duty to the client by not telling the client that he is making a terrible mistake? If the client doesn’t take that advice, when does the planner breach a duty to the client by not refusing to draft up the requested estate plan? In short, what, exactly, do we owe to our clients?
I’m open to suggestions.
[View source.]
