Cantey Hanger, LLP v. Byrd
No. 13-0861
Case Summary written by Allison Grayson, Online Edition Editor.
JUSTICE LEHRMANN delivered the opinion of the Court, in which JUSTICE GUZMAN, JUSTICE BOYD, JUSTICE DEVINE, and JUSTICE BROWN joined.
In 2006, Philip Byrd and Nancy Simenstad filed for divorce. Simenstad was represented in the divorce proceedings by Cantey Hanger. The divorcing couple ultimately settled in 2008 and the trial court entered an agreed divorce decree. “The decree awarded Simenstad three aircraft as her separate property, including a Piper Seminole that had been owned by Lucy Leasing Co., LLC, a company the decree awarded to Byrd.” In addition, the decree “made Simenstad responsible for all ad valorem taxes, liens, and assessments on the aircraft.” The decree also required the parties to execute any documents necessary for transfer of ownership within ten days.
Byrd, Lucy Leasing, and PGB Air, Inc. (the Respondents) sued Simenstad and Cantey Hanger, alleging that Simenstad and Hanger falsified a bill of sale, which transferred the Piper Seminole to a third party. The Respondents argued that Cantey Hanger “falsified the bill of sale in order to shift tax liability for the Piper Seminole from Simenstad to Byrd in contravention of the decree.”
In response, Cantey Hanger “moved for summary judgment on attorney-immunity grounds, arguing that it owed no duty to Byrd or the other plaintiffs and that as a matter of law it was not liable to the plaintiffs for actions taken in the course and scope of its representation of Simenstad in the divorce proceeding.” The Respondents argued that Cantey Hanger failed to discharge its duties, and therefore, was not protected on attorney-immunity grounds.
The trial court granted the motion for summary judgment and dismissed all claims against Cantey Hanger with prejudice. “The court of appeals reversed as to the fraud, aiding-and-abetting, and conspiracy claims relating to the sale of the plane.” The court of appeals explained its decision stating that the sale of the plane had nothing to do with the divorce decree, and therefore, was outside the scope of Cantey Hanger’s representation of its client.
Issue: Whether “Cantey Hanger [conclusively proved] that its alleged conduct with respect to the sale of the plane was part of the discharge of its duties in representing Simenstad in the divorce proceedings or, instead, was independent of the divorce and foreign to the duties of an attorney.”
In its explanation of the attorney-immunity defense, the Court argued that a general fraud exception to the defense would significantly undercut its purpose. Further it stated that “merely labeling an attorney’s conduct ‘fraudulent’ does not and should not remove it from the scope of client representation or render it ‘foreign to the duties of an attorney.’”
Additionally, the Court explained that an attorney pleading the attorney-immunity defense has the burden to prove the conduct in question fell under the scope of discharging its duties to its client. The defense does not depend on whether or not the wrongful conduct was fraudulent. Here, the Court determined that the alleged conduct fell under the scope of Cantey Hanger’s legal representation of Siminestad. Therefore, the Court reversed the portion of the court of appeals’ judgment relating to the fraud claims and reinstated the trial court’s judgment.
JUSTICE GREEN joined by CHIEF JUSTICE HECHT, JUSTICE JOHNSON, and JUSTICE WILLETT, dissenting.
Justice Green dissented to explain his position that the attorney-immunity defense must be used to except conduct occurring during litigation. Justice Green argued that the Court’s interpretation of the doctrine resulted in “a much broader, more expansive liability protection.” Justice Green therefore stated that he would affirm the court of appeals’ judgment because Cantey Hanger failed to “establish that its alleged conduct occurred in litigation.”