Pederson v. Barnes

Summary

The Supreme Court of Alaska addresses whether a guardian's attorney owes a duty to the ward and holds that liability may arise when the attorney had reason to know that action was necessary to prevent or rectify the guardian's crime or fraud. The court also holds that Alaska's pure several-liability regime applies in duty-to-protect cases, requiring damages to be apportioned according to fault. It vacates the judgment imposing full compensatory liability on the attorney and remands for entry of judgment based on the attorney's allocated share; the court also concludes that the evidence did not support submitting punitive damages to the jury.

Holdings

1. Under section 51(4) of the Restatement (Third) of the Law Governing Lawyers, a lawyer representing a guardian owes a duty to the ward when the lawyer knows, including by having reason to know, that action is necessary to prevent or rectify the guardian's crime or fraud, the ward cannot reasonably protect the ward's rights, and imposing the duty would not significantly impair the lawyer's obligations to the guardian.
2. Summary judgment was properly denied because a genuine issue of material fact existed regarding whether Pederson had reason to know that Aiken was defrauding Barnes, even though the superior court articulated the standard as whether Pederson knew or should have known.
3. Alaska's pure several-liability regime under AS 09.17.080 and AS 09.17.900 applies to duty-to-protect cases, including cases involving an intentional tortfeasor.
4. The superior court abused its discretion by denying Pederson's motion for a directed verdict on punitive damages because the evidence did not provide clear and convincing proof that Pederson acted with reckless indifference to Barnes's interests or with the requisite outrageousness.
5. Prejudgment interest began to accrue when Pederson received Barnes's demand letter notifying him that she would pursue a claim, rather than when he learned that Aiken's wrongdoing had caused Barnes's loss.

Questions Presented

1. Whether a lawyer representing a guardian owes a duty of care to the ward when the lawyer has reason to know that the guardian is committing or facilitating a crime or fraud.
2. Whether the evidence created a genuine issue of material fact regarding whether Pederson had reason to know of Aiken's fraud, supporting denial of summary judgment.
3. Whether Alaska's pure several-liability regime applies in a duty-to-protect case involving negligent conduct and an intentional tortfeasor.
4. Whether the evidence was sufficient to submit punitive damages to the jury under Alaska Statute 09.17.020(b).
5. When prejudgment interest began to accrue under Alaska Statute 09.30.070(b).

Disposition

reversed_and_remanded