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Breach of fiduciary duty issue not preserved for review in legal malpractice case

By Bill Watkins, Esq.

In Spence v. Wingate, the South Carolina Court of Appeals granted a grant of partial summary judgment in a legal malpractice claim. At base, the trial court had held that the law firm did not owe a fiduciary duty to the wife concerning her late husband?s life insurance policy. The law firm represented the wife of the late Congressman Floyd W. Spence. The law firm originally undertook representation to negotiate an agreement on wife?s behalf with four sons of her husband regarding a division of the probate estate. During the course of the representation, the wife also consulted with the law firm about her husband?s federal life insurance policy and informed the law firm that Spence had named her as a beneficiary. The facts developed that shortly before his death Spence did attempt to change the beneficiary on his life insurance policy so the wife would be the sole beneficiary. Prior to this attempted change, Spence had named each of his four sons and the wife as equal beneficiaries. The United States House of Representatives determined that the proceeds should be divided equally among the wife and the four sons.

The trial court held that the law firm did not owe a duty or obligation to the wife with respect to the life insurance policy. The wife argued that a general issue of material fact existed about a fiduciary duty in light of the law firm?s earlier representation of her in the probate matter. On appeal, the law firm contended that the wife?s argument was not preserved for review because the trial judge did not explicitly rule on this argument and the wife did not move to alter or amend the appealed order on that ground. The trial judge?s order cited S.C. Code Ann. section 62-1-109 which provides that a lawyer?s representation of a fiduciary in a probate matter does not, without more, impose on the lawyer responsibilities to the other parties with interests in a fiduciary property. This statute, according to the Court of Appeals, does not address whether attorneys representing fiduciaries could be accountable to such claimants for other reasons. The trial judge?s order did not mention that wife, as a former client of the law firm, had a continuing fiduciary relationship with them that would not be affected by Section 62-1-109. Because there was nothing in the appealed order suggesting that the trial judge determined this fiduciary duty issue, the issue was not preserved for review.

Full post as published by South Carolina Appellate Law Blog on April 21, 2008 (boomark / email).