Schlegel v. Barney & Graham, LLC

536 P.3d 231

Taran Michael SCHLEGEL, Appellant (Plaintiff),

v.BARNEY & GRAHAM, LLC, a Wyoming limited liability company and Shelby Noel Hughes, Appellees (Defendants).

S-22-0293

Supreme Court of Wyoming.

October 3, 2023

Representing Appellant: Lucas E. Buckley, Sean M. Larson, Kari Hartman, Hathaway & Kunz LLP, Cheyenne, Wyoming. Argument by Mr. Larson.

Representing Appellees: Scott E. Ortiz, Erica R. Day, Williams, Porter, Day & Neville, P.C., Casper, Wyoming. Argument by Mr. Ortiz and Ms. Day.

Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY, JJ, and ROBINSON, D.J.

ROBINSON, S., District Judge.

[¶1] Michael Lee Schlegel (Michael) and Charlene Ann Schlegel (Charlene) were in the process of divorcing when Michael died of a heart attack without a known will.¹ Under the intestacy statute, Charlene inherited portions of Michael's estate that she would not have, had the divorce been finalized prior to Michael's death. Taran Michael Schlegel (Taran), Michael's only living child, filed a legal malpractice suit against his father's attorney, Shelby Noel Hughes, and her law firm, Barney & Graham, LLC, for failing to timely resolve Michael's divorce. The district court granted Ms. Hughes and Barney & Graham, LLC's motion for summary judgment. It found no evidence was presented that Taran was an intended beneficiary of his father's attorney's services, and thus no duty was owed to Taran. We affirm.

ISSUE

Did the district court err when it found no evidence was presented indicating Taran, a non-client, was an intended beneficiary of legal services provided by Ms. Hughes and Barney & Graham, LLC?

FACTS

[¶2] Michael and Charlene married three times and divorced two times between 1999 and 2017. They separated for the third time in June 2018, after having remarried a year earlier. Michael had two sons, Taran and Kalen, from a different relationship. Kalen predeceased Michael, but had two children, still minors at the time of Michael's death. There was no love lost between Taran and his stepmother, Charlene. Taran encouraged Michael on multiple occasions to divorce Charlene.

[¶3] Michael met with Ms. Hughes, an associate attorney for Barney & Graham, LLC, for divorce representation in the Spring of 2019. Sometime prior to this meeting, Michael had a stroke and thereafter his speech was difficult to understand. Michael's sister, Punky Bradley, attended Michael's first meeting with Ms. Hughes to assist with communication. Ms. Hughes was informed in this meeting that Michael had one living son, and Ms. Bradley, as well as other members of Michael's family, did not like Charlene and believed she had absconded with Michael's money.

[¶4] Michael hired Ms. Hughes to represent him for his third divorce from Charlene. Ms. Hughes filed a complaint for divorce on Michael's behalf on April 2, 2019. Charlene failed to answer, and default was entered against her. A default hearing was scheduled to be held on June 20, 2019. Charlene appeared pro se; the district court continued the hearing to allow Charlene to seek the assistance of counsel.

[¶5] The default hearing was rescheduled for September 19, 2019. On that date, Charlene again appeared without counsel. Ms. Hughes told the district court Michael wanted to complete the divorce but there were unresolved personal property issues – specifically the parties’ vehicles. The district court stated if Ms. Hughes would send a proposed decree of divorce that divided all property except the vehicles, the court would enter a divorce decree, and the vehicles could be addressed in a separate hearing if necessary. The district court further stated to Ms. Hughes, "So get me the decree ... get your client divorced."

[¶6] Following this hearing, Ms. Hughes did not immediately provide a proposed divorce decree to the district court. Instead, Ms. Hughes attempted to have Michael complete his initial disclosures so that all property could be distributed in the divorce decree. Michael did not return the initial disclosures to Ms. Hughes, although he did inform her he was "working on" them. Ms. Hughes made a settlement offer to Charlene, to which she received no response. On January 15, 2020, following the court's judicial assistant inquiring about the matter, Ms. Hughes requested a hearing to resolve the vehicle distribution. A hearing was scheduled for March 26, 2020.

[¶7] On February 23, 2020, Michael died of a heart attack, with no known will.² Despite physical ailments due to Michael's stroke, his death was unexpected.

[¶8] The day after Michael's death, Charlene filed a motion to dismiss the divorce complaint. Ms. Hughes provided a proposed divorce decree to the district court; her firm argued the district court had granted a divorce at the September 19, 2019, hearing and bifurcated the proceedings.³ Ultimately, the district court dismissed the divorce complaint with prejudice.

[¶9] Had the divorce been completed prior to Michael's death, Taran would have inherited fifty percent (50%) of Michael's estate under the intestacy statute, Wyo. Stat. Ann. § 2-4-101 (LexisNexis 2023).⁴ Because the divorce was not completed prior to Michael's death, Charlene inherited fifty percent (50%) of Michael's estate, Taran inherited twenty-five percent (25%), and Kalen's two children inherited the remaining twenty-five percent (25%) in equal shares⁵ . Taran argues this difference resulted in Charlene receiving approximately $500,000.00; had the divorce been finalized prior to Michael's death she would have only been entitled to make a claim against the estate for a vehicle worth a few thousand dollars.

[¶10] Taran filed a complaint against Ms. Hughes and Barney & Graham, LLC for legal malpractice. The complaint alleged Ms. Hughes’ negligent delay in presenting a divorce decree to the district court following the September 19, 2019, default hearing led to a diminishment of his inheritance. Ms. Hughes and Barney & Graham, LLC filed a motion for summary judgment, arguing they did not owe Taran, a non-client, a duty of care. The district court granted the motion and concluded:

In certain circumstances, an attorney owes a duty to a non-client. The threshold inquiry is whether [Taran] is an intended beneficiary of the attorney's services. The Court cannot identify any facts on the record indicating that [Michael] sought his divorce with the intention of enlarging his son's inheritance. Therefore, [Taran] lacks standing to pursue legal malpractice claims against his father's attorneys as a matter of law.

[¶11] Taran appeals.

STANDARD OF REVIEW

[¶12] Rule 56 of the Wyoming Rules of Civil Procedure provides standards for summary judgment motions. A motion should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion." W.R.C.P. 56(a).

A genuine issue of material fact exists when a disputed fact, if proved, would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties. The party moving for summary judgment bears the initial burden of establishing a prima facie case for a summary judgment. If the movant carries this burden, the party opposing the summary judgment must come forward with specific facts to demonstrate that a genuine issue of material fact does exist.

Bidache, Inc. v. Martin , 899 P.2d 872, 874 (Wyo. 1995) (quoting Thunder Hawk By and Through Jensen v. Union Pac. R.R. Co. , 844 P.2d 1045, 1047 (Wyo. 1992) ).

[¶13] Our standard of review for summary judgment is firmly established. "We accord no deference to the district court's decisions on issues of law." Kahrs v. Bd. of Trs. for Platte Cnty. Sch. Dist. No. 1 , 901 P.2d 404, 406 (Wyo. 1995) (citing Halpern v. Wheeldon , 890 P.2d 562, 564 (Wyo. 1995) ). In reviewing a district court's decision on summary judgment, we review the motion as if it had been presented to us originally. Creel v. L&L, Inc. , 2012 WY 124, ¶ 3, 287 P.3d 729, 730 (Wyo. 2012) (citing Bangs v. Schroth , 2009 WY 20, ¶ 20, 201 P.3d 442, 452 (Wyo. 2009) ). We review the record and materials received by the district court and give the party opposing the motion all favorable inferences and benefits that may be fairly drawn from the materials. Id.

[¶14] In negligence cases, summary judgment is not favored, and the standard of review requires further scrutiny. Cook v. Shoshone First Bank , 2006 WY 13, ¶ 12, 126 P.3d 886, 889 (Wyo. 2006). "This rule is particularly true in malpractice actions. The mixed questions of law and fact usually involved in a negligence action concerning the existence of a duty, the standard of care and proximate cause are ordinarily not susceptible to summary adjudication." Rino v. Mead , 2002 WY 144, ¶ 13, 55 P.3d 13, 18 (Wyo. 2002) (internal quotation marks and citations omitted). Determining whether a duty has been violated is generally a question of fact for the fact finder. Id. However, whether a duty exists is "a question of law, ‘making an absence of duty the surest route to summary judgment in negligence actions.’ " Id. (quoting Schuler v. Cmty. First Nat'l Bank, 999 P.2d 1303, 1306 (Wyo. 2000) ) (other citations omitted). Issues of a party's intent are typically a question for the fact finder, making summary judgment improper. In re Estate of Drwenski , 2004 WY 5, ¶ 14, 83 P.3d 457, 461 (Wyo. 2004). If "reasonable minds could not differ" as to the party's intent, however, summary judgment may be appropriate. Id.

DISCUSSION

[¶15] Whether Ms. Hughes and Barney & Graham, LLC owed a duty to Taran, a nonclient, is a mixed question of fact and law. Almost two decades ago, in Drwenski , we analyzed whether an attorney owes a non-client a duty when the death of a divorce litigant occurred prior to the completion of the divorce.

[¶16] Both parties find Drwenski to be germane in this matter; we find it to be controlling. Vernon Drwenski died while his divorce...