Ohio Supreme Court: Beneficiaries Cannot Sue Decedent's Attorney For Estate Tax Negligence

The Ohio Supreme Court on Wednesday unanimously held that children could not sue their deceased mother's attorney for negligence in the preparation of a deed during her life that resulted in adverse etsate tax conseqences under § 2036.  Shoemaker v. Gindlesberger, Slip Op. No. 2008-Ohio-2012 (Ohio 5/7/08)

The appellants’ argument rests on two public policy grounds. They advocate for a change in what some refer to as Ohio’s antiquated rule on privity, arguing that Ohio law should grant beneficiaries standing to sue an attorney who allegedly was negligent in providing services to a decedent. In support of their position, they present a survey of several jurisdictions that allow beneficiaries to bring malpractice claims. It is true that Ohio is in the minority of states retaining a strict privity rule, but Ohio was also in the minority of states when Zipperstein was decided over 20 years ago.

Appellants’ second reason for asking for an exception to the privity rule is the need to have attorney accountability in the area of estate planning and wealth transfer. Because any mistakes that an attorney makes in drafting a will or giving advice about an estate plan generally do not arise until after the death of the client, the harm from an attorney’s errors will most likely befall the intended beneficiaries. The appellants argue that an attorney who drafts a will for a client is aware that his or her professional competence affects not only the client but also those whom the client intends to benefit from the will. They argue, consequently, that they should be permitted to maintain a suit against an attorney who negligently drafts or supervises the preparation of a will, to hold the attorney accountable for negligence.

Public policy justifies adherence to the rule, as stated by courts in jurisdictions that apply the strict privity requirement. ... We decline the appellants’ invitation to relax our strict privity rule. ... While recognizing that public policy reasons exist on both sides of the issue, we conclude that the bright-line rule of privity remains beneficial.

Three of the seven Justices filed a separate concurring opinion stating that "in a case with different facts, there would be compelling reasons for adopting the exception we rejected in Zipperstein."

Update:  From Myron Grauer (Capital):

There is an interesting portion of the opinion in which the Ohio Supreme Court leaves open the question of whether the personal representative (executor or administrator) who stands in the shoes of the decedent would have standing to bring a malpractice action for estate tax planning negligence. In fact, one could even read that portion of the opinion as intimating that the personal representative might indeed be the proper person to bring the case. However, in this particular case, the person who brought the malpractice action was both the executor and a beneficiary, but he brought the suit only in his capacity as a benficiary. Maybe this is a case of compounded malpractice :-) because given Ohio's adherence to the privity requirement, it is difficult to understand why the suit wasn't brought by the decedent's personal representative in his capacity as personal representative in the first place.