Diean Sabin v. Ivan Ackerman

Procedural entryThis page is a short order in Diean Sabin v. Ivan Ackerman. Read the opinion of the Court — 2014 Iowa Sup. LEXIS 31
Supreme Court of Iowa·Decided March 28, 2014·No. 12–0627·Published

Opinion

IN THE SUPREME COURT OF IOWA No. 12–0627

Filed March 28, 2014

DIEAN SABIN,

Appellant,

vs.

IVAN ACKERMAN,

Appellee.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Bremer County,

Rustin Thomas Davenport, Judge.

Plaintiff appeals the district court’s decision granting defendant’s

motion for summary judgment. DECISION OF COURT OF APPEALS

VACATED; DISTRICT COURT JUDGMENT AFFIRMED.

David J. Hanson of Hofmeyer & Hanson, P.C., Fayette, and

John W. Hofmeyer III of Hofmeyer & Hanson, P.C., Oelwein, for

appellant.

Robert M. Hogg and Patrick M. Roby of Elderkin & Pirnie, P.L.C.,

Cedar Rapids, for appellee. 2

CADY, Chief Justice.

In this appeal, the claims raised by the parties require us to

examine the duty of care owed by an attorney hired by an executor of an

estate to render legal services in the administration of the estate. The

executor brought a legal malpractice lawsuit against the attorney for

failing to adequately protect her personal interests during the

administration of the estate and in the distribution of property of the

estate. The district court granted summary judgment to the attorney

based on its determination that the attorney did not have a duty to

protect the personal interests of the executor. We transferred the case to

the court of appeals, and it reversed the decision of the district court.

On further review, we vacate the decision of the court of appeals and

affirm the decision of the district court.

I. Background Facts and Prior Proceedings.

Elmer and Alberta Gaede owned a 120-acre farm near Tripoli,

Iowa, in Bremer County. In early 2001, they entered into a contract to

lease the farm to James and Marlys Gaede. James and Marlys were

husband and wife, and James was a son of Elmer and Alberta.

The term of the lease was sixteen years, and the annual rent was

$12,500. The contract gave James and Marlys the exclusive option to

buy the property for $200,000 at any time during the lease. If the option

to buy was exercised, the purchase price would be reduced by the total

amount of the rent that had been paid. Ivan Ackerman, an attorney in

Waverly, Iowa, prepared the lease and notarized the signatures of the

parties to the contract.

Elmer died testate on February 27, 2005. He was eighty-six years

old. Alberta had predeceased him. Under his will, Elmer left his estate

in equal shares to three of his four children. The three children were 3

James; another son, Steven Gaede; and his daughter, Diean Sabin.

Another daughter was not included as a beneficiary under the will. The

largest asset of the estate was the farmland, which James was farming

pursuant to the lease.

Diean was named executor under the will. She designated

Ackerman as the attorney in the probate report filed with the court in the

probate proceedings. There was no other written documentation of an

attorney–client relationship between Diean and Ackerman. The farm was

valued at $200,000 in the probate inventory.

During the pendency of the probate proceedings, James and

Marlys exercised the option under the lease agreement to purchase the

farm. In response, the three beneficiaries of the will and their spouses

conveyed the farm by warranty deed to James and Marlys pursuant to

the terms of the option. Ackerman prepared the documents to convey

title and notarize the signatures on the documents. The deed was placed

in escrow pursuant to a written agreement. Ackerman did not advise

Diean that the validity of the option might be subject to a legal challenge

and did not advise her to seek independent counsel to obtain legal advice

on her personal interests in the transaction. Likewise, Diean never

expressed to Ackerman any information to question the legality of the

option. The estate was subsequently closed.

Diean and Steven later initiated a lawsuit against James, claiming

the option under the lease was invalid. They claimed the market value of

the farm was much more than the purchase price. Several specific

grounds to invalidate the option were asserted, including

unconscionability, unreasonable restraint on alienation, and undue

influence. The parties later settled the action for a relatively small sum

of money. 4

A short time later, Diean brought this legal malpractice lawsuit

against Ackerman. She alleged Ackerman failed to advise her about the

potential legal challenges to the enforcement of the option in the farm

lease at the time it was exercised by James and Marlys during the

administration of the estate. She also alleged Ackerman failed to advise

her to seek independent counsel to protect her personal interests.

Ackerman moved for summary judgment. He claimed he had no

duty of care to protect Diean’s personal interests relating to the

enforceability of the option because he only represented her in her

capacity as the executor of the estate. 1 In response, Diean argued an

estate attorney represents an executor both in the capacity of an

executor and with respect to the personal interests of the executor,

unless the representation is specifically limited by the attorney.

Consequently, she claimed Ackerman had a duty to examine and explain

the validity of the option and advise her of the need for independent

counsel. In her affidavit and resistance to the motion for summary

judgment, she also claimed she viewed Ackerman as representing her

personal interests.

The district court granted summary judgment for Ackerman. 2 It found he did not have a duty of care to Diean as a matter of law to advise

her about her potential challenges to invalidate the option. The district

court found the duties identified by Diean fell outside the duties of an

1Ackerman also claimed summary judgment was proper based on the settlement of Diean’s lawsuit with James and Marlys. He further claimed the release signed by Diean and James in that lawsuit absolved Ackerman of any malpractice. The district court denied summary judgment on these grounds, and Ackerman did not pursue them on appeal. 2Attorney Ivan Ackerman died in 2011 while his motion for summary judgment was pending before the court. The parties agreed to continue the lawsuit in his name and not substitute the executor of his estate. See Iowa Code § 633.410(3) (2011). 5

estate attorney because they did not pertain to matters that would have

frustrated the testamentary intent of the testator.

On appeal, Diean makes two core arguments to support her claim

that the district court erred in granting summary judgment. First, she

argues an estate attorney represents the individual interests of the

executor unless the attorney specifically limits the scope of the

representation to those duties pertaining to the administration of the

estate. Second, she alternatively asserts a factual dispute existed

whether Ackerman should have known that she believed he was

representing her personal interests. If established, Diean asserts

Ackerman had a duty to disclose the scope of his representation to her

and advise her to seek independent counsel based on potential

challenges to the lease and the conflict of interest presented by her

potential challenge.

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