Bowen v. Smith

BROWN, Justice (Retired),

concurring with whom CARDINE, Justice, joins.

I agree with the majority that this case be affirmed; however, I do not agree with the packaging of the majority opinion for publication. It seems that the issue before the court is simple; however, the majority obscures its holding with phantom sub-issues and a profusion of unnecessary commentary.

The adjudicative facts of this case are uncomplicated. Squaw Mountain Cattle Company (Squaw) is the majority shareholder in Two Bar-Muleshoe Water Company (Two Bar) and appellants are the minority shareholders. Both Squaw and Two Bar employed appellees to represent them in an action against Wheatland Irrigation District (WID).

In the litigation against WID, all the costs and attorney fees were paid by Squaw. None of appellants paid any of the costs or attorney fees, nor were they asked to. A favorable settlement offer was proposed by WID. At a Two Bar shareholders meeting on September 9, 1988, Squaw approved the settlement and appellants, minority shareholders, rejected the settlement offer. Appellants and their attorney were present at the September 9 shareholders meeting.1 Appellants did not disagree with the amount of the settlement, but rather the proposed division of $1,250,000 between majority stockholder Squaw and minority stockholders (appellants). The dispute between the majority stockholder and the minority stockholders with respect to allocation of WID settlement resulted in a lawsuit filed by appellants. In the division lawsuit, the minority stockholders were successful and recovered substantially the amount of their principal claim. However, they were not awarded attorney fees or punitive damages.

After the division suit, appellants here (minority stockholders in Two Bar) ran out of entities to sue, so they sued the attorneys who represented Squaw and Two Bar. In this latest lawsuit against Squaw’s attorneys, appellants here contend that they were clients of appellees and apparently contend that appellees should have required a division more favorable to them. In their lawsuit, appellants specified five causes of action: breach of fiduciary duty, conspiracy, breach of contract, fraud, and legal malpractice. They also demanded judgment for costs, attorney fees, and other damages they sustained in the division lawsuit. The trial court determined that appellee attorneys never represented the minority stockholders (appellants) and summary judgment was entered accordingly.

Resolving a single issue is dispositive of this appeal. Did an attomey/client relationship exist between minority stockholders in Two Bar and the attorneys who represented the corporations, Two Bar and Squaw?

An attorney who represents a corporation does not, because of that corporate representation, also represent the individual stockholders. Skarbrevik v. Cohen, England & Whitfield, 231 Cal.App.3d 692, 282 Cal.Rptr. 627, 634 (1991). Some additional circumstance other than representing the corporation must come to pass before the corporate attorney also becomes the attorney for a stockholder. Whether an attorney/client relationship exists is a question of law. Meehan v. Hopps, 144 Cal.App.2d 284, 301 P.2d 10, 11 (1956). The facts necessary to make that determination are not in dispute. There is no indication in *198the record that any of appellants (minority stockholders) ever contacted appellees (attorneys) in regard to the Wheatland Irrigation District litigation or for any other purpose. Furthermore, appellants did not pay any attorney fees or costs; nor were they billed or expected to pay any of the expenses.

In their affidavits opposing summary judgment, appellants merely state that in their “opinion,” “belief,” “understanding,” “feeling,” and “intention,” appellees represented the shareholders. Opinion or belief by appellants is insufficient to rebut a pri-ma facie showing that an attorney/client relationship did not exist.

It has not been shown that an attorney/client relationship existed between appellants and appellees. In fact, the record shows that there was no such relationship. An attorney/client relationship is the essential element for the maintenance of a malpractice lawsuit. Brooks v. Zebre, 792 P.2d 196, 201 (Wyo.1990). Whether a legal duty exists is a question of law, and absent a duty, there is no liability. Allmaras v. Mudge, 820 P.2d 533, 536 (Wyo.1991). Summary judgment was, therefore, justified as a matter of law, the trial court having determined that appellants were never represented by appellees during the WID litigation. See Davenport v. Epperly, 744 P.2d 1110 (Wyo.1987); Cordova v. Gosar, 719 P.2d 625 (Wyo.1986).

Each of appellants’ five causes of action was premised on an attorney/client relationship between the minority stockholders and the attorneys. Failure to show that relationship was fatal to all causes of action.

. One appellant had been represented by his own counsel since 1984. Another appellant was represented by counsel since August 1988.