Legal loophole leaves upset heir at a loss Man can't sue lawyer who did aunt's will


Dr. Thomas W. Fauntleroy Jr. is convinced that a lawyer's mistake cost him and his family almost $1 million in inheritance taxes.

But when the family sued the lawyer, their suit was thrown out because of a little-known legal loophole: When it comes to wills, you have to be the one who hired the lawyers to sue them.

Even if it is obvious that the lawyer's negligence shortchanged the heirs, they are out of luck, according to a May 21 ruling from the Maryland Court of Appeals. The Fauntleroys and other plaintiffs have asked the court to reconsider its ruling, but it's not known when the seven-member panel will act on the appeal. Such motions are rarely granted by the state's highest court.

"It's kind of mind-boggling," said Fauntleroy, an Easton cardiologist and one of the plaintiffs whose suit was first dismissed in Talbot County Circuit Court on April 4, 1997.

Doctors, engineers and other professionals are often sued for negligence by clients who claim to be harmed, whether they employ those professionals or not, legal experts say.

Fauntleroy said that in medical mal- practice cases, there is no requirement that the physician had to work for surviving relatives who sue after a patient's death.

"I find it incredibly ironic that we have this remarkably litigious society, in which lawyers make it possible for anybody to sue anybody, with apparently one exception -- the lawyers who draw up wills," Fauntleroy said. "It seems to me there's a double standard when lawyers look at their own profession."

The Maryland Court of Appeals last month barred Fauntleroy's family and five heirs in another case from suing the lawyers who handled relatives' wills, saying that it could open a floodgate of suits against lawyers and make attorneys overly concerned about being sued when they write up a will.

"Adopting a new rule that would subject an attorney to liability to disappointed beneficiaries interferes with the attorney's ability to fulfill his or her duty of loyalty to the client," Judge Howard S. Chasanow wrote in a unanimous decision.

Stock worth $1.4 million

The Fauntleroy case is centered on the will that Sue M. Jackson signed in 1983 leaving 44,816 shares of Pittsburgh Des Moines Steel Co. (PDM) stock, worth $1.4 million, to her nieces and nephews, who included Fauntleroy.

But because the will directed that the taxes be paid out of the estate and failed to include a tax apportionment clause, the four relatives were hit with approximately $910,000 in estate and inheritance taxes when Jackson died in 1994.

The beneficiaries sued the estate of T. Hughlett Henry Jr., the lawyer Jackson had hired to handle her will before he died, in Talbot County in 1997. They alleged that the will Henry drafted was inconsistent with Jackson's intent, and that she never wanted to leave them with the tax bill. "It just didn't make any sense for that to happen," Fauntleroy said.

But the suit was thrown out three months later, and last month the state's highest court said allowing such suits would open the door to anyone who felt cheated out of an inheritance.

The court said there are exceptions if fraud, collusion or malice occurs.

But the court said that ordinarily, there must be "privity" -- a contract -- between the person who sues and the lawyer.

'Strict privity rule'

"Courts fear that absent the strict privity rule, there would be no limit as to whom a lawyer would be obligated," Chasanow wrote.

Legal experts say there are reasons the U.S. Supreme Court carved out an exception for lawyers writing wills in 1879.

Edwin G. Fee Jr., a lawyer who specializes in estates and trusts, said in many cases the beneficiary's interests conflict with the client's wishes.

"What the court is saying is that the attorney's duty is to the client and not to the heirs," he said.

But other experts say it may be time to change a rule adopted 120 years ago. They say the complexity of federal tax codes and the estate planning laws means more lawyers are making more mistakes when they write wills.

"It's a whole area of law that has grown and that many practitioners are not familiar with or aware of," said A. Macdonough Plant, a Baltimore lawyer who drafts wills and works as an estate planner.

The American Law Institute, which is made up of some of the nation's top law professors, judges and practicing lawyers, called last month for allowing suits if the heirs could prove their case by "clear and convincing evidence," a higher standard than what is required to win most civil cases.

Shale D. Stiller, the heirs' lawyer, argues in a motion filed with the appeals court that the ruling should be reversed to protect the public from bad lawyers.

"As a result of the opinion, no matter how egregious the negligence, no matter how incompetent the lawyer, those who bear the economic loss resulting from the negligence and the incompetence of the estate planning lawyer have no remedy," Stiller wrote.

Pub Date: 6/27/98

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