Baker v. Wood, Ris & Hames, Professional Corp.

Summary

The Colorado Supreme Court affirmed dismissal of claims brought by beneficiaries against the attorneys who prepared their father's estate plan. The court reaffirmed Colorado's strict privity rule, under which an attorney's liability to nonclients is generally limited to fraud, malicious or tortious conduct, including negligent misrepresentation. The court declined to adopt the California Test or the Florida-Iowa Rule and also upheld dismissal of the beneficiaries' fraudulent concealment claims.

Holdings

1. Colorado retains the strict-privity rule: an attorney's liability to a nonclient is generally limited to fraud, malicious conduct, or a tortious act, including negligent misrepresentation. Intended beneficiaries of a testator's estate may not sue the testator's attorney for professional negligence or breach of contract merely because they allege that the attorney's estate plan failed to achieve an extrinsic understanding of the testator's intent.
2. A fraudulent-concealment claim must be pleaded with particularity under C.R.C.P. 9(b), just as other claims sounding in fraud must be.
3. Petitioners failed to state a fraudulent-concealment claim because they did not adequately allege a duty to disclose, intent that they rely on the alleged concealment, or detrimental action and resulting damages.

Questions Presented

1. Whether intended beneficiaries who were not clients of a testator's estate-planning attorneys may bring legal-malpractice or contract claims against those attorneys under the California balancing test or the Florida-Iowa third-party-beneficiary rule.
2. Whether Colorado should abandon or modify its strict-privity rule limiting an attorney's liability to nonclients.
3. Whether fraudulent-concealment claims must be pleaded with particularity under C.R.C.P. 9(b).
4. Whether petitioners adequately pleaded fraudulent concealment under the governing elements of that claim.

Disposition

affirmed