Link: http://courtofappeals.mijud.net/documents/OPINIONS/FINAL/COA/20070320_C263446_36_263446.OPN.PDF
Underlying Case or Transaction: Personal Injury Litigation
Key Concepts: (1) attorney-judgment rule
Plaintiff Isabella Bank & Trust, as trustee of the Jacob S. Stanke Trust (plaintiff) sued the Varnum firm (Varnum) for malpractice arising from personal injury litigation. After the trial court granted summary disposition to Varnum, plaintiff appealed.
Five-year old Jacob Stanke (Jacob) was injured at a "Mini Grand Prix" event. Jacob's mother (Linda) engaged Varnum to pursue a personal injury claim on Jacob's behalf. The case eventually settled. Varnum then moved the circuit court to approve the settlement with the proceeds to be placed in trust for Jacob. Varnum attached a copy of the trust document to the motion, signed by Linda and Jacob's father (Jeffrey). Linda was named in the trust document as the trustee. The circuit court approved the settlement and authorized establishment of the trust.
Varnum then moved in the probate court, with Jeffrey's approval, to have Linda appointed as Jacob's conservator and to have the settlement funds transferred into the trust. The probate court granted the motion, appointed Linda as Jacob's conservator, approved use of the trust as a receptacle for the settlement proceeds, authorized the deposit of the proceeds into the trust, and ordered that an Acceptance of Trust be filed in lieu of a bond.
Subsequently, plaintiff filed this case on Jacob's behalf against Varnum and Linda alleging that Linda had depleted the trust's assets and that Varnum had committed malpractice in the manner in which it drafted the trust and handled matters before the probate court. Specifically, plaintiff alleged that Varnum had committed malpractice by: (1) constructing the trust in a manner that allowed Stanke to misappropriate funds; (2) asking the circuit and probate courts to approve the trust as drafted; (3) allowing Linda to appointed as trustee; and (4) not causing the probate court to pass on the sufficiency of a bond, a bond to be filed, or hearings to be held regarding the approval of the trust in the probate court.
Varnum moved for summary disposition on several different grounds, including that plaintiff's claims were barred by the attorney-judgment rule. The trial court granted Varnum's motion.
On appeal, the court of appeals affirmed because the attorney-judgment barred plaintiff's claims. First, the court of appeals explained the attorney judgment rule: "our Supreme Court explained that an attorney has an implied duty to exercise reasonable, skill, care, discretion and judgment in representing a client. Further, an attorney is obligated to act as an attorney of ordinary learning, judgment or skill would act under the same or similar circumstances. However, an attorney is not a guarantor of the most favorable possible outcome, nor must an attorney exercise extraordinary diligence or act beyond the knowledge, skill, and ability ordinarily possessed by members of the legal profession. Thus, an attorney is not liable for what, in hindsight, were errors of judgment where the attorney made those judgments in good faith and in the honest belief that the decisions were well founded in the law and made in the best interests of the client. Accordingly, while a gross error in judgment may be actionable, a mere error in judgment made in good faith is not. Therefore, where a plaintiff's allegations cannot support a breach of duty because they are based on mere errors of professional judgment and breaches of reasonable care, summary disposition is appropriate." [Individual citations omitted. Generally citing Simko v Blake, 446 Mich 648, 655-659; 532 NW2d 842 (1995) and Estate of Mitchell v Doughtery, 249 Mich App 668, 677-679; 664 NW2d 391 (2002).
The court then explained that each of plaintiff's allegations of malpractice fell within the attorney-judgment rule. First, Varnum's recommendation to use a trust to manage Jacob's assets in lieu of a bonded conservatorship was a matter of judgment -- a conscious choice made by Varnum in the course of tort litigation. Plaintiff presented no evidence that Varnum's judgment in this regard was motivated by anything other than good faith, with the honest belief that its decisions were well-founded in applicable law and made in the best interest of Varnum's client. Second, plaintiff had not and could not show that Linda was not an appropriate choice for trustee. Indeed, "it is almost routine to appoint parents to manage the interests of their minor children." In re Estate of Powell, 160 Mich App 704, 711; 408 NW2d 525 (1987). Finally, the decision to file the Acceptance of Trust instead of a bond was a pleading judgment and therefore, it too, came within the attorney-judgment rule.
In sum, since plaintiff had not presented any evidence that Varnum's errors, if any, were anything more than mere errors in judgment, there was no genuine issue of material fact regarding defendant's alleged negligence.
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