No. 8 8 - 4 9 4
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
MARION LORASH ,
Plaintiff and Appellant,
-vs-
LARRY D. EPSTEIN, and JAMES C. NELSON,
d/b/a WERNER, NELSON & EPSTEIN,
Defendants and Respondents.
APPEAL FROM: District Court of the Ninth Judicial District,
In and for the County of Glacier,
The Honorable R.D. McPhillips, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Sweeney & Healow; Kevin T. Sweeney, Billings, Montana
For Respondent :
Floyd D. Corder; Alexander & Raucus, Great Falls,
2 Montana
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a c .-,I Submitted on Briefs: Dec. 16, 1 9 8 8
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Decided: January 27, 1 9 8 9
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Filed: 7
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Clerk
Mr. Justice L . C. Gulbrandson delivered the Opinion of the
Court.
Appellant appeals the order of the Ninth Judicial
District Court, Glacier County, Montana, granting the
defendant's motion for summary judgment upon finding
plaintiff presented no material facts proving that the
defendants committed legal malpractice. We affirm.
Appellant, Marion Lorash, the owner of a glass business
in Cut Bank, Montana, entered into a partnership with one
Chad Standish to operate an auto repair business in Browning,
Montana. The partners contacted Wilbur Werner, a law partner
in the firm of Werner, Nelson and Epstein, for the purpose o+
drafting a partnership agreement. The partnership agreement
was prepared and executed in March of 1982. The partners
constructed a building, in which they intended to operate the
auto repair business, on land owned by Standish. The
partnership began using the building for the auto repair
business in August, 1982. B y December, 1982, the partners
were aware that the business was not going to succeed. They
discussed ways in which the appellant could protect his
interest in the partnership. They decided that the best way
would be for the appellant to file a lien against the
building and the land on which the building stood. In
December of 1982 or January of 1983, appellant contacted
defendant Epstein for the purpose of securing his interest in
the labor and materials contributed to the building.
Defendant Epstein agreed to prepare a mechanic's lien which
would secure plaintiff's interest. Mr. Lorash provided a
schedule of the labor and materials he supplied for the
building and a property description. After appellant
supplied the necessary data, defendant Epstein drafted the
mechanic's lien which was then filed on March 18, 1983.
Nothing further happened regarding the mechanic's lien until
December, 1984, when the appellant was contacted regarding an
incorrect legal description on the mechanic's lien which
affected another person's property. Appellant contacted the
defendant Epstein, who determined from an examination of the
mechanic's lien statute and conversations with the title
company manager that there was no problem regarding the
validity of the lien. This information was communicated to
the appellant.
In March or April of 1985, appellant was notified that
Mr. Standish had filed bankruptcy. Concerned with the effect
of the bankruptcy on the mechanic's lien, appellant then
contacted defendant Epstein. After consultation with his
partner Mr. Nelson, defendant Epstein informed the appellant
that due to a conflict of interest he was unable to represent
him in foreclosing the lien. The conflict arose due to
defendant Nelson's position as the county attorney and Mr.
Epstein's position as deputy county attorney, and the fact
the county attorney's office was conductinq an investigation
in which the appellant was involved.
The appellant then contacted another attorney in Cut
Rank to attempt to foreclose the mechanic's lien and protect
his claim in Mr. Standish's bankruptcy. That attorney was
unsuccessful in establishing a priority claim based upon the
mechanic's lien, due to the running of the statute of
lirnj-tations under Montana law. As a result, appellant was
only able to establish an unsecured claim in the bankruptc~i.
action and received nothing when the hankruptcy court
discharged his claim.
Appellant then brought this legal malpractice action
seeking the value of the lien, approximately $24,000, lost
due to the alleged: (1) negligent withdrawal of counsel from
representation, and (2) defendants' negligent failure to
Foreclose the mechanic's lien.
Defendants filed a motion for summary judgment citing
five independent and separate grounds for d i smissing the
action. The District Court, having reviewed the entire file
and heard oral arguments, held there were no relevant factual
matters in dispute and that defendants were entitled to
judgment as a matter of law on both counts.
Rule 56 (c), M. R.Civ.P. , provides that summary judgment
is appropriate when "[tlhe pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Generally negligence issues
will not he susceptible to summary judgment because of the
factual issues involved in such cases. See Brohman v. State
of Montana (Mont. 1988), 749 P.2d 67, 69, 45 St.Rep. 139,
141, and cases cited therein. In a summary judgment
proceeding, plaintiffs are entitled to all reasonable
inferences which may be drawn from the offered proof and
which indicate any issue of fact which would thereby defeat
the summary judgment motion. Brown v. Merrill, Lynch,
Pierce, Fenner and Smith, Inc. (1982), 197 Mont. 1, 640 P.2d
453. Rowever, an issue of negligence cannot be inferred
merely from the fact that a loss has occurred. Carlson v.
Morton (Mont. 1987), 745 P.2d 1133, 44 St.Rep. 1929. To
establish a professional negligence action "the plaintiff
must prove that the professional owed him a duty, [and] that
the professional failed to live up to that duty, thus causing
damages to the plaintiff." Carlson, 745 P.2d at 1136.
In pursuing a negligence or breach of contract action
against an attorney, the plaintiff must initially establish
the existence of an attorney-client relationship. The
plaintiff must then establish that the acts constituting the
negligence or breach of contract occurred, proximately
causing damages to the plaintiff. The final requirement for
the plaintiff is the need to establish "[tlhat 'but for' such
negligence or breach of contract the client would have been
successful in the prosecution or defense of the action."
Christy v. Saliterman (Minn. 1970), 179 N.W.2d 288, 293-294.
A. Duty to Foreclose the Mechanic's Lien
The plaintiff in the case at bar has simply failed to
establish an attorney-client re!.ationship which would require
the defendants to foreclose the mechanic's lien. Montana has
not recognized the doctrine of continuous representation,
which may have required the defendants to continue to
represent plaintiff regarding the mechanic's lien. Schneider
v. Leaphart (Mont. 1987), 743 P.2d 613, 617, 44 St.Rep. 1699,
1703. To establish a duty owed to continue to represent the
plaintiff, the plaintiff would need to show the existence of
a retainer agreement or a specific agreement between the
parties that the defendants would foreclose the mechanic's
lien. We note that neither party cites any specific
authority on the question of whether or not an attorney who
drafts a mechanic's lien has a duty to foreclose that lien.
Appellant claims he had used defendants' law firm for
various dealings over a period of several years, both before
and after the mechanic's lien was drawn. However, the
appellant's deposition states he was not sure he "had call"
to have an attorney prior to the drafting of the partnership
agreement. Further, the first time he met defendant Epstein
on a professional basis was when he contacted him regarding
the drafting of the mechanic's lien. The appellant stated in
his deposition he had no further contact with Mr. Epstein
from the time he signed the lien, until he contacted him
regarding the error in the property description, in early
1985.
Also, appellant's deposition shows a retainer agreement
did not exist between himself and the law firm.
Q. The law firm of Werner, Nelson &
Epstein were not on retainer to you or
anything; it was just simply when you
needed work done you called and asked if
they could do it for you?
A. Yes. That's correct.
Even under the continuous representation doctrine, such an on
and off history of representation would not establish a duty
on the part of an attorney to monitor the activities of their
clients. See, Shapero v. Fliegel (1987), 236 Cal.Rptr. 696,
699. This is particularly so where the attorney had acted as
a scrivener in preparing documents which a client inferred
they did not intend to use.
Q. When you filed this Mechanic's Lien
did you intend to foreclose on the lien?
A. As a last resort, yes, I did.
Q. Why did you wait until March of 1985
to begin any action on the foreclosure of
the lien?
A. Because I didn't want to use--- I
didn't want that to keep him from being
able to borrow the money to pay me off.
Based upon the foregoing deposition testimony which the
District Court had before it, we find the order granting
summary judgment was proper. Appellant failed to establish
the existence of a duty owing by the defendamts to the
appellant to foreclose the mechanic's lien.
B. Negligent Withdrawal of Counsel
Appellant contends that the defendants negligently
withdrew from their representation of appellant. This
contention is fatally flawed, however, in light of the fact
that no representation existed. Appellant asserts that this
case involved a collection action and that the defendants
were obligated to pursue the collection action to a
conclusion once they accepted representation. 7 Arn.Jur.Zd,
Attorneys at Law, S 211. This contention ignores the fact
that the appellant himself forestalled the foreclosure of the
mechanic's lien. Mr. Lorash acknowl-edges he did not intend
to foreclose the 1.j-enexcept as a last resort. Further, he
did not communicate a desire to foreclose the lien until he
was notified that Mr. Standish was in bankruptcy. As Mr.
Lorash had been informed of the two year statute of
limitations which applied to the mechanic's lien, and was the
party who forestalled its foreclosure, we find the defendants
did not have a duty to foreclose the mechanic's lien.
Further, representation had been terminated as to the
mechanic's lien, pending further action on Mr. Lorash's part,
and there could not be a negligent withdrawal.
Having found that no duty existed for the defendants to
foreclose the mechanic's lien, the parties' arguments whether
or not the mechanic's lien involved in this case was valid
and enforceable become moot.
The decision of the District Court is affifmed.
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We concur: '
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