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Must A Lawyer Explain The Terms of A Marital Settlement Agreement To His Client?

The Nebraska Supreme Court has reversed a grant of summary judgment in favor of a lawyer in a legal malpractice claim. The plaintiff was a former client of a divorce attorney. She alleged that he breached the standard of care by failing to explain to her that she had signed an agreement that unambiguously waived any interest in her ex-husband’s life insurance policy.

The underlying case was a typical divorce case resolved by an equally typical Marital Settlement Agreement. The Court quotes from three of its provisions:

In the agreement, Brenda and Dale divided the marital estate and waived whatever interest they had in certain property owned by the other spouse. Paragraph VI provided:

STOCKS, BANK ACCOUNTS, LIFE INSURANCE POLICICES [sic], PENSION PLANS AND RETIREMENT PLANS

[Brenda] shall be awarded all interest in all pension plans, stocks, retirement accounts, 401(k), IRA, life insurance policy and checking or savings account in [Brenda’s] name, free from any claim of [Dale]. [Dale] shall be awarded all interest in any pension plans, stocks, retirement accounts, 401(k), IRA, life insurance policy and checking or savings account in [Dale’s] name, free from any claim of [Brenda].

Paragraph IX provided:

PROPERTY PROVISIONS AND SETTLEMENT OF PROPERTY RIGHTS OF PARTIES

It is expressly understood by and between the parties hereto that the provisions of this agreement relating to the property and liabilities of each, set aside and allocate to each party his or her respective portions of the properties belonging to the parties and of the liabilities of the parties at the date hereto; and each party acknowledges that the properties set aside to him or her, less the liabilities so allocated to him or her, will be in full, complete and final settlement, release and discharge, as between themselves, of all rights, claims, interests and obligations of each party in and to the said properties and the same in their entirety constitute a full, fair and equitable division and the partition of their respective rights, claims and interests in and to the said properties of every kind and nature.

And, in relevant part, paragraph X provided:

WAIVER AND RELEASE OF MARITAL RIGHTS

. . . .

(b) In consideration of the provisions of this agreement, [Brenda] waives and relinquishes any and all interest or rights of any kind, character, or nature whatsoever, including but not limited to all rights to elective share, homestead allowance, exempt property, and family allowance in the property of [Dale], and renounces all benefits which would otherwise pass to [Brenda] from [Dale] by intestate succession or by virtue of the provisions of any Will executed before this Settlement Agreement which she, as wife, or as widow, or otherwise, has had, now has, or might hereafter have against [Dale], or, in the event of his death, as an heir at law, surviving spouse, or otherwise. [Brenda] also waives and relinquishes any and all interest, present and future, in any and all property, real, personal, or otherwise, now owned by [Dale] or hereafter acquired, and including all property set aside for him in this agreement, it being the intention of the parties that this agreement shall be a full, final, and complete settlement of all matters in dispute between the parties hereto.

The lawyer moved for summary judgment on the ground that the agreement was unambiguous and that no lawyer should be held to a duty to advise a client on the effect of an unambiguous agreement. The trial court agreed but the Nebraska Supreme Court disagreed and reversed. It based its decision on the lawyer’s failure to offer any expert testimony that his work met the duty of care.  The court’s opinion contains a lengthy explanation of the decision:

[10,11] So Poppe owed Brenda a duty to reasonably advise her about the property settlement agreement’s effect on her interests. And, as the summary judgment movant, he had the burden to produce evidence that he did not breach that duty. The general standard of an attorney’s conduct is established by law, but whether an attorney’s conduct fell below the standard in a particular case is a question of fact. Expert testimony is generally required to show whether an attorney’s performance conformed to the standard of conduct. An attorney moving for summary judgment must generally make a prima facie case by producing expert testimony that his or her conduct did not fall below the standard of care.

[12] Poppe did not offer any expert testimony. We note that Poppe could have offered his own affidavit stating that he met the standard of care. His failure to do so means that he did not make a prima facie case unless the common-knowledge exception applies. Under the common-knowledge exception, expert testimony is not needed if the alleged negligence is within the comprehension of laypersons. But we do not believe that whether a lawyer ought to discuss the effect of a property settlement agreement on life insurance beneficiary designations is so obvious that it is within the comprehension of laypersons. Poppe therefore did not produce evidence which, if uncontroverted at trial, would show that he did not neglect a reasonable duty.

[13] Because Poppe has failed to make a prima facie as to neglect of a reasonable duty, we turn to whether the court could find as a matter of law that Poppe’s alleged negligence was not the proximate cause of Brenda’s loss. A client cannot recover in a legal malpractice case if the client’s own conduct caused his or her injury. In cases revolving around documents which the client read or could have read, courts have discussed the client’s failure to discover the error both in terms of causation and contributory negligence. We have noted that a client’s negligence in a legal malpractice case is often more relevant to negating the proximate cause element of the claim than to showing that the client’s negligence was a contributing cause of the client’s injury.

My opinion: The discussion appearing above is confused and is not logical or well-reasoned. The opinion makes no mention as to whether Plaintiff had an expert and does not mention whether or not plaintiff’s expert opined that the defendant breached the standard of care. Without such testimony, I cannot see how plaintiff defeated a summary judgment motion.

Even if plaintiff had an expert and plaintiff’s expert testified that there was a duty and the duty of care was breached, the dismissal should have been affirmed. There is no proof that the lawyer’s error, if any, caused any damage to the client. No matter what the lawyer allegedly said about the agreement, the result would be the same – husband retained the right to change the beneficiary of his life insurance.

In sum, this case should have failed the proximate cause test. The court became confused and appears to shift the burden to the lawyer to produce an expert to negate whatever plaintiff alleged. Lawyers in Nebraska should seek rehearing of this decision, which does not make any sense.

Edward X. Clinton, Jr.

Source: Rice v. Poppe, Neb: Supreme Court 2016 – Google Scholar