Katherine Allen and Katherine Allen, P.C. v. Jack Steele and Danette Steele

Summary

The Colorado Supreme Court held that an initial consultation concerning a potential civil lawsuit does not satisfy the negligent-misrepresentation requirement that information be provided for guidance in a business transaction. The court also held that Restatement (Third) of the Law Governing Lawyers § 15(1)(c), concerning duties to prospective clients, cannot serve as the basis for a negligent-misrepresentation claim. The court reversed the court of appeals and remanded for further proceedings.

Holdings

1. An initial consultation to discuss a potential civil lawsuit is not sufficient as a matter of law to satisfy the requirement that the misrepresentation be supplied for the guidance of others in their business transactions. The Steeles therefore failed to plead sufficient facts to state a negligent-misrepresentation claim.
2. A claim of negligent misrepresentation may not be founded on Restatement (Third) of the Law Governing Lawyers § 15(1)(c)'s requirement that attorneys exercise reasonable care when providing legal services to prospective clients.
3. The court would not decide whether the Steeles could state a legal-malpractice claim because they appealed only dismissal of the negligent-misrepresentation claim.

Questions Presented

1. Whether a non-client may state a claim for negligent misrepresentation against an attorney based on allegedly incorrect information provided during an initial consultation concerning a potential civil lawsuit.
2. Whether an initial consultation about a potential civil lawsuit satisfies the negligent-misrepresentation element requiring information to be supplied for the guidance of others in their business transactions.
3. Whether section 15(1)(c) of the Restatement (Third) of the Law Governing Lawyers may provide the basis for a negligent-misrepresentation claim by imposing a duty of reasonable care to prospective clients.

Disposition

reversed_and_remanded