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Guerra v. Wallace

TRUSTS & ESTATES LAW
Supreme Court of Alaska (2024)
Rasa Kerelis

In Guerra v. Wallace, the supreme court affirmed summary judgment and held that an attorney did not owe a duty of care to a nonclient (in this case, the beneficiary of an estate), nor did the attorney owe a duty of care to prevent or rectify withdrawals. (Id. at 656). Robert Nesbitt, the attorney for Theresa Hester (the beneficiary of her deceased spouse’s estate), represented the estate while it was in probate. (Id.). The estate funds depleted over time as Nesbitt withdrew funds to pay overdue property taxes, for which Nesbitt sold property and obtained a loan. (Id. at 657). Upon court intervention, Nesbitt retained John Foster Wallace as his attorney to represent him in the estate proceedings. (Id.). Hester then sued both Nesbitt and Wallace for negligence and malpractice on behalf of the estate, and upon her passing her daughter, Courtney Guerra, substituted as personal representative of the estate. (Id. at 658). The superior court granted summary judgment in favor of Wallace, reasoning that due to a lack of privity of contract, beneficiaries of an estate cannot sue the personal representative’s attorney for malpractice. (Id.). The estate appealed, citing material issues of fact precluding summary judgment for the malpractice claim, and argued that because Nesbitt acted in a fiduciary capacity to the estate, Nesbitt had a duty not to “affect adversely the interests of the intended beneficiary.” (Id. at 659). The estate’s opening brief failed to challenge the malpractice claim ruling, so the estate waived the issue. (Id.). In addition, the supreme court concluded that not only was Hester reasonably capable and able to protect her rights, but there was insufficient evidence to show Wallace knew or had reason to know that he was required to act to rectify or prevent a breach of fiduciary duty by Nesbitt. (Id. at 660). Even when all inferences are drawn in the estate’s favor, the evidence did not show Wallace had “reason to know” that Nesbitt was withdrawing funds from the account. (Id. at 662). As such, the supreme court affirmed the superior court’s grant of summary judgment to Wallace. (Id. at 663).

Guerra v. Wallace

TRUSTS & ESTATES LAW
Supreme Court of Alaska (2024)
Rasa Kerelis

In Guerra v. Wallace, the supreme court affirmed summary judgment and held that an attorney did not owe a duty of care to a nonclient (in this case, the beneficiary of an estate), nor did the attorney owe a duty of care to prevent or rectify withdrawals. (Id. at 656). Robert Nesbitt, the attorney for Theresa Hester (the beneficiary of her deceased spouse’s estate), represented the estate while it was in probate. (Id.). The estate funds depleted over time as Nesbitt withdrew funds to pay overdue property taxes, for which Nesbitt sold property and obtained a loan. (Id. at 657). Upon court intervention, Nesbitt retained John Foster Wallace as his attorney to represent him in the estate proceedings. (Id.). Hester then sued both Nesbitt and Wallace for negligence and malpractice on behalf of the estate, and upon her passing her daughter, Courtney Guerra, substituted as personal representative of the estate. (Id. at 658). The superior court granted summary judgment in favor of Wallace, reasoning that due to a lack of privity of contract, beneficiaries of an estate cannot sue the personal representative’s attorney for malpractice. (Id.). The estate appealed, citing material issues of fact precluding summary judgment for the malpractice claim, and argued that because Nesbitt acted in a fiduciary capacity to the estate, Nesbitt had a duty not to “affect adversely the interests of the intended beneficiary.” (Id. at 659). The estate’s opening brief failed to challenge the malpractice claim ruling, so the estate waived the issue. (Id.). In addition, the supreme court concluded that not only was Hester reasonably capable and able to protect her rights, but there was insufficient evidence to show Wallace knew or had reason to know that he was required to act to rectify or prevent a breach of fiduciary duty by Nesbitt. (Id. at 660). Even when all inferences are drawn in the estate’s favor, the evidence did not show Wallace had “reason to know” that Nesbitt was withdrawing funds from the account. (Id. at 662). As such, the supreme court affirmed the superior court’s grant of summary judgment to Wallace. (Id. at 663).