Cawdrey v. HANSON BAKER LUDLOW DRUMHELLER

120 P.3d 605
CourtCourt of Appeals of Washington
DecidedOctober 3, 2005
Docket55370-4-I
StatusPublished
Cited by1 cases

This text of 120 P.3d 605 (Cawdrey v. HANSON BAKER LUDLOW DRUMHELLER) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cawdrey v. HANSON BAKER LUDLOW DRUMHELLER, 120 P.3d 605 (Wash. Ct. App. 2005).

Opinion

120 P.3d 605 (2005)

James L. CAWDREY, personal representative of the Estate of Elizabeth C. Cawdrey, Appellant,
v.
HANSON BAKER LUDLOW DRUMHELLER, P.S., a Washington professional services corporation; Andrée R. Chicha, a shareholder, and John Doe Chicha and the marital community composed thereof; and All Other Shareholders and All their Spouses and their respective marital communities, Respondents.

No. 55370-4-I.

Court of Appeals of Washington, Division 1.

August 29, 2005.
Publication Ordered October 3, 2005.

*606 Marc Silverman, Bellevue, WA, Philip Talmadge, Tukwila, WA, for Appellant.

Kirsten Schulz, Seattle, WA, for Respondents.

AGID, J.

¶ 1 Elizabeth Cawdrey, her son Dan Cawdrey, and Dan's wife Lillian were partners in L & M Partners, a general partnership.[1] Andrée Chicha, an attorney who had previously represented both L & M and Elizabeth in a variety of legal matters, assisted with two business transactions between Elizabeth and L & M. When one of Elizabeth's other children discovered these transactions and learned they had caused a significant decrease in Elizabeth's assets, Elizabeth sued Chicha for legal malpractice. The trial court dismissed the case on summary judgment, and James Cawdrey, as personal representative of his mother's estate, appeals. Because neither the discovery rule nor the continuous representation rule tolled the statute of limitations, Elizabeth's case is time-barred and we affirm.

FACTS

¶ 2 Elizabeth and James Cawdrey, Sr., divorced in 1990, when Elizabeth was 73 years old. Elizabeth received approximately $1.2 million in cash and property from the dissolution. In 1994, James died, and left each of the six Cawdrey children vastly different inheritances.[2]

¶ 3 L & M Partners is a general partnership that develops real estate. As of 1992, Elizabeth and Lillian, Dan's wife, were the sole partners of L & M, although Dan was very active in L & M's business affairs. Attorney Andrée Chicha did legal work for L & M and worked primarily with Dan. In 1993, at Dan's request, Chicha assisted Elizabeth in collecting on a loan that she had made to her daughter, Mary Lynn. And in 1994, again at Dan's request, Chicha began assisting Elizabeth with her estate planning.

¶ 4 Also in 1994, Dan asked Chicha to revise L & M's partnership agreement so Elizabeth and Lillian could add Dan as a partner. Because Chicha was representing L & M, she referred Elizabeth to a different attorney. Chicha drafted the new partnership agreement to provide that Elizabeth would be paid $300,000, her total estimated capital contribution, if she chose to leave the partnership. Elizabeth's independent counsel thought the proposed arrangement was not in Elizabeth's best interest, so she requested that the agreement provide that Elizabeth would be paid the amount equal to her actual, rather than estimated, capital contributions if she left the partnership. Chicha incorporated those terms into the agreement which Elizabeth, Dan, and Lillian signed in August 1994.

¶ 5 After the 1994 agreement was executed, Elizabeth no longer wanted to pay her independent attorney's fees and instead wanted Chicha to represent her. Chicha, who considered herself to be L & M's attorney, recognized the potential conflict involved in representing both L & M and Elizabeth, but nevertheless agreed to represent both parties. She never obtained a conflict waiver from either client, nor did she ever insist that either client obtain independent counsel.

*607 ¶ 6 In July 1995, L & M obtained a $225,000 loan from Viking Bank. As collateral, Elizabeth, Dan, and Lillian pledged three condominium units, two of which Elizabeth owned outright. In 1997, Elizabeth withdrew as a partner of L & M, and Chicha drafted the documents to facilitate the buyout. The memorandum of sale stated that Elizabeth's total capital contribution to the partnership was $300,000 and that Dan and Lillian would purchase Elizabeth's interest for that amount. The accompanying promissory note provided that Dan and Lillian would make monthly interest payments to Elizabeth until the note was paid in full and that they would begin making principal payments on the first anniversary of Elizabeth's death. This arrangement differed from the one established in the 1994 partnership agreement.[3] Also, as part of this transaction, Dan and Lillian promised to "indemnify, defend and hold Elizabeth C. Cawdrey harmless from any and all claims, demands, losses, costs, damages or liabilities which arise out of the business activities of L & M Partners."

¶ 7 In January 1999, Elizabeth signed a quitclaim deed conveying her two condominium units to L & M, and in exchange, Dan and Lillian agreed to release Elizabeth's liability on the Viking Bank loan. Again, Chicha drafted the documents memorializing the transaction. Shortly thereafter, Dan and Lillian refinanced the Viking Bank loan to remove Elizabeth's name. Chicha last provided legal assistance to Elizabeth in May 2000, when she prepared a codicil to her will.

¶ 8 In 2000, Elizabeth left Seattle, where she was living in the same condominium building as Dan and Lillian, and moved in with her daughter Mary Lynn in Arlington. Mary Lynn asked an attorney to investigate the state of Elizabeth's financial and legal affairs. The attorney attempted to obtain information about Elizabeth's assets, estate planning, and business transactions from Chicha, but Chicha refused to comply, asserting that the signature on Elizabeth's release form was forged. Mary Lynn then retained a trial attorney to commence litigation, and in late 2000, they received the requested information.

¶ 9 In December 2000, Elizabeth filed a lawsuit against Dan, Lillian, and L & M for fraud, misrepresentation, breach of fiduciary duty, breach of contract, conversion, undue influence, theft, and breach of implied duty of good faith and fair dealing. The claims arose out of various financial transactions, including the 1997 and 1999 transactions described above. Dan and Lillian eventually settled with Elizabeth for $700,000.[4]

¶ 10 In May 2003, Elizabeth brought this suit against Chicha and her law firm for legal malpractice, breach of contract, and breach of fiduciary duties, alleging that Chicha breached her duty of care as Elizabeth's attorney by facilitating business transactions that were detrimental to Elizabeth. Specifically, Elizabeth alleged that Chicha structured the partnership buyout so that Elizabeth would receive $300,000, even though Elizabeth had contributed $370,000 to her capital account. She also alleged that because L & M had indemnified her after the buyout, she was not required to quitclaim her condominium units to L & M in order to be released from its Viking Bank loan.

¶ 11 Elizabeth died two months after filing this case, and James Cawdrey, Jr., the personal representative of Elizabeth's estate and Elizabeth's eldest son, was substituted as plaintiff. Chicha filed a motion for summary judgment, and Cawdrey responded with a motion for partial summary judgment on liability and proximate cause. The trial court granted Chicha's summary judgment motion, dismissing all of Cawdrey's claims. The court also denied Cawdrey's motion for reconsideration. Cawdrey appeals the dismissal of the malpractice claim.

DISCUSSION

¶ 12 In reviewing a trial court's decision to grant summary judgment, we review *608

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Bluebook (online)
120 P.3d 605, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cawdrey-v-hanson-baker-ludlow-drumheller-washctapp-2005.