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Sherertz v. Brownstein, Rask, Sweeney, Kerr, Grim, Desylvia & Hay, LLP

Court of Appeals of Oregon

November 8, 2017

Kimberly J. Jacobsen SHERERTZ, individually, Plaintiff,
v.
BROWNSTEIN, RASK, SWEENEY, KERR, GRIM, DESYLVIA & HAY, LLP, dba Brownstein Rask, Defendant-Respondent, and Kimberly J. Jacobsen SHERERTZ, as guardian ad litem for William Cole Sherertz, a minor child; Kimberly J. Jacobsen Sherertz, as the Personal Representative of the Estate of William W. Sherertz; Kimberly J. Jacobsen Sherertz, as Trustee of the William W. Sherertz Testamentary Trusts, Plaintiffs-Appellants, and Kirkham E. HAY, individually, Defendant.

          Argued and Submitted October 25, 2016

         Multnomah County Circuit Court 130100793; John A. Wittmayer, Judge.

          Corey Tolliver argued the cause for appellants. With him on the opening brief were Bonnie Richardson and Folawn Alterman & Richardson LLP. With them on the reply brief was Zachariah H. Allen.

          Peter R. Mersereau argued the cause for respondent. With him on the brief were Thomas W. McPherson, Blake H. Fry, and Mersereau Shannon LLP.

         [288 Or.App. 720] Before DeHoog, Presiding Judge, and Hadlock, Chief Judge, and James, Judge. [*]

         Case Summary:

         Plaintiffs appeal from both a general judgment and a supplemental judgment in this action for legal malpractice involving allegations that defendant law frm was negligent in preparing an estate plan. On appeal, plaintiffs assert that the trial court erred in giving defendant's special requested jury instruction, a modification of Uniform Civil Jury Instruction (UCJI) 44.03 (professional perfection not required), because it was reasonably likely to confuse or mislead the jury.

         Held:

         The trial court erred in giving defendant's special requested jury instruction because the instruction carried with it a signifcant risk of confusing the jury about the importance of the "result" promised by defendant in determining duty and breach to establish a claim of negligence. In the context of this case, the risk of prejudice was significant.

         Reversed and remanded.

         [288 Or.App. 721] JAMES, J.

         Plaintiffs appeal from both a general judgment and a supplemental judgment in this action for legal malpractice involving allegations that defendant law firm was negligent in preparing an estate plan. Following a jury trial and verdict, the court entered a general judgment that both dismissed plaintiffs' claims against defendant and awarded monetary damages on defendant's counterclaim. The supplemental judgment awarded defendant costs and disbursements as a prevailing party. On appeal, plaintiffs raise three assignments of error. We reject without discussion plaintiffs' second and third assignments of error and write only to address their first. There, they assert that the trial court erred in giving defendant's special requested jury instruction, which read:

"Attorneys are not negligent merely because they do not achieve the result desired by the client. An attorney does not guarantee a good result by undertaking to perform a service."

         Plaintiffs argue that the trial court erred in giving the instruction because it was reasonably likely to confuse or mislead the jury. We agree, and conclude that in the context of this case, the risk of prejudice was significant. Accordingly, we reverse the general judgment and remand. As a result of that disposition, the supplemental judgment is also reversed and remanded. ORS 20.220(3)(a).

         Plaintiff Kimberly Sherertz brought suit against defendant law firm in her capacity (1) as guardian ad litem for Cole Sherertz (her child with the decedent); (2) as personal representative of the decedent's estate; (3) as trustee of the decedent's testamentary trusts; and (4) on her own behalf. Plaintiffs alleged that defendant was professionally negligent in multiple respects, including " [f ] ailing to prepare an estate plan that fulfilled [the decedent's] intent [ions]" to, among other things, preserve ownership over all of the decedent's Barrett Business Services, Inc. (BBSI) stock and to provide the estate with liquidity to pay the estate taxes.

         The crux of the case was how the decedent had intended to dispose of his stock and how he intended to pay [288 Or.App. 722] the taxes on his estate. According to plaintiffs, defendant law firm had proposed and promised to create an irrevocable life insurance trust (ILIT)[1] to pay the estate taxes. Further, according to plaintiffs, the plan to use the proceeds of the ILIT to pay taxes was essential to realizing the decedent's intentions to pass his entire BBSI stock to his son, Cole, thereby retaining controlling interest in the company within the family. Ultimately, however, the ILIT was unable to pay the estate taxes, which resulted in a sale of significant portions of stock to cover the nearly $10 million owed.

         In response, the defense contended that the law firm drafted estate planning documents in accord with the decedent's wishes. Defendant disputed that the ILIT was intended to cover estate taxes. Rather, according to defendant, the intent of the ILIT was to equally divide the proceeds amongst the decedent's four children. According to defendant, plaintiffs' claims that the ILIT was intended to cover taxes would have deprived the other children of their share, and ran counter to the decedent's wishes.

         For claims of instructional error, we review a trial court's decision to give a particular instruction primarily to determine whether the instruction, when read together with the other instructions given, completely and accurately stated the law applicable to the case and, if not, whether any error in giving the instruction was prejudicial to the party opposing the instruction. Wallach v. ...


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