NO. A16-1810 July 3, 2017

STATE OF MINNESOTA

IN SUPREME COURT Security Bank & Trust Company, as trustee for the Gordon P. Savoie Revocable Trust and as personal representative for the Estate of Gordon P. Savoie, Respondent, vs. Larkin, Hoffman, Daly & Lindgren, Ltd., Petitioner,

Response and Request for Cross-Review by Security Bank & Trust Company, as trustee for the Gordon P. Savoie Revocable Trust and as personal representative for the Estate of Gordon P. Savoie

SORTLAND LAW OFFICE, PLLC PAUL A. SORTLAND (#103573) 431 South Seventh Street, Suite 2415 Minneapolis, Minnesota 55415 (612) 375-0400

ARTHUR, CHAPMAN, ET AL. STEPHEN M. WARNER (#271275) SALLY J. FERGUSON (#131829) 81 South Ninth St., Suite 500 Minneapolis, Minnesota 55402 (612) 339-3500

Attorney for Respondent

Attorneys for Petitioner

TO:

SUPREME COURT OF THE STATE OF MINNESOTA: Respondent, Security Bank & Trust Company, as trustee for the

Gordon P. Savoie Revocable Trust and as personal representative for the Estate of Gordon P. Savoie (hereinafter Security Bank), opposes the Petition for Further Review brought by Larkin, Hoffman, Daly & Lindgren, Ltd. (Larkin, Hoffman) from the decision of the Minnesota Court of Appeals published May 15, 2017. In the alternative, Respondent conditionally seeks review of the holding of the Minnesota Court of Appeals regarding its interpretation of Minn. Stat. §524.3-703, Subd.(c). This statute, Security Bank contends, would not bar this action, even if the cause of action matured following the death of the decedent. The Petitioner is correct that the Court’s decision gives the personal representative standing to pursue the legal malpractice action after the death of the testator. Any holding to the contrary would promote injustice, which the Court of Appeals rightly attempted to avoid. STATEMENT OF THE LEGAL ISSUES 1.

Does Minn. Stat. §524.3-703, subd. (c) require that a cause of action accrue prior to the death of the decedent in order for a personal representative to pursue a claim for damages?

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2.

Does the trustee of a trust have a claim to pursue damages on behalf of the estate even if the claim does not ripen until or after the death of the decedent? STATEMENT OF THE CASE The facts of the case have been accurately stated by Petitioner.

Respondent and Petitioner disagree, however, on the law applicable to this case and the interpretation of that law. ARGUMENT AND CRITERIA SUPPORTING THIS REQUEST FOR CROSS REVIEW, MINN. R. CIV. APP. P. 117, SUBD. 2(a) and (d)(1), (2), and (3) The Court of Appeals decision in this case contains an error in interpreting Minnesota law. Resolution of this error presents an important question upon which the Supreme Court should rule, namely the time a cause of action for legal malpractice accrues. While the Court ruled in favor of Respondent, Security Bank, Respondent believes that the Court of Appeals did so on an incorrect basis, and that this error should be corrected. As noted in the Court of Appeals decision, the timing as to when such a claim ripens, or matures, has been open to differing interpretations. A decision in this case would help harmonize the law, have statewide impact, and is likely to recur unless resolved by the Supreme Court.

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I.

Minn. Stat. §524.3-703, subd. (c) does not require a cause of action to accrue prior to the death of decedent for a personal representative to pursue a claim for damages. Respondent conditionally petitions this Court to take review of this

case. Respondent’s position is that the Court of Appeals erred in misconstruing Minn. Stat. §524.3-703 as requiring that the legal malpractice claim exist prior to the death of the decedent. Such a construction would be unjust, the exact result if the Court sought to avoid in this case. The Court of Appeals improperly assumed, on Page 6 of its Decision, (Pet. Add. 6) that, “If a client has no claim against an attorney for legal malpractice when the client is living, no cause of action exists to which a personal representative may succeed after the client’s death under Section 524.3-703(c).” This construction of the statute is erroneous. The statute states, in pertinent part: Except as to proceedings which do not survive the death of the decedent, a personal representative of a decedent domiciled in this state at death has the same standing to sue and be sued in the courts of this state and the courts of any other jurisdiction as the decedent had immediately prior to death. There is nothing in this statute that states the legal malpractice action (or any other action) must have accrued to the decedent prior to his death. It simply says that the personal representative has the same standing to sue and be sued as if the decedent was still living. There is no requirement

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anywhere in this statute, in holding that such a requirement existed and the Court of Appeals erred in its interpretation otherwise. This would result, as the Court of Appeals noted, at Page 12 (Pet. Add. 12), that “certain harms caused by estate-planning malpractice would lack redress.” The Court satisfied itself with stating its reading of Minnesota case law “avoids this harsh result and affords a remedy when a deceased client has incurred damages based upon alleged legal malpractice in estate planning.” Id. In Cook v. Connolly, 366 N.W.2d 287 (Minn. 1985), the Minnesota Supreme Court explained that a plaintiff’s malpractice action “is an independent cause of action, not subsumed in the plaintiff’s personal injury action.” Id. at 291. In Johnson v. Taylor, 435 N.W.2d 127 (Minn. App. 1989) (rev. den., Minn., April 19, 1989), the Minnesota Court of Appeals ruled that the survival statute does not affect a legal malpractice case. It noted that a legal malpractice claim is not an action “arising out of injury to the person” and is not barred by the survival statute. Id. at 128-29. While the Court of Appeals went through the same gyrations that this Court did in Antone v. Mirviss, 20 N.W.2d 331 (Minn. 2006), and Herrmann v. McMenomy & Severson, 590 N.W.2d 641 (Minn. 1999), such exercises are not necessary for the right result. Respondent understands that the Antone case

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may be revisited by this Court soon. A decision in that case should not affect the viability of Security Bank’s claims against Larkin Hoffman. The Court of Appeals noted, at Page 11 (Pet. Add. 11), that different jurisdictions have addressed this issue with varying approaches. Respondent suggests this Court should adopt the position taken by the Texas Supreme Court that no bar exists to prevent the personal representative of an estate from maintaining a legal-malpractice action against the decedent’s estate planning attorneys. Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780 (Tex. 2006). This also seems to be the growing and majority trend. Estate of Schneider v. Finmann, 933 N.E.2d 718 (N.Y. 2010). The Court of Appeals noted its resolution of this issue is consistent with the majority viewpoint that the estate succeeds to the legal malpractice action of the deceased client, citing Mallen, Legal Malpractice, §36:9, at 1295. II.

A trustee of a trust has a claim to pursue damages on behalf of the estate even if the claim does not ripen until or after the death of decedent. Whether or not the personal representative has standing to pursue this

claim, based upon the interpretation of Minn. Stat. §524.3-703(c), the trustee, representing the trust, certainly has standing to pursue this claim regardless of the interpretation of the statute.

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There is no similar statute which could be interpreted to limit the ability of the trustee to sue for damages incurred. The district court acknowledged that a trustee may “prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee’s duties,” citing Minn. Stat. §501C.0816, subd. 23. The court, however, stated that the statute does not explicitly provide trustees with the power to prosecute or defend an action on behalf of trust beneficiaries. That was erroneous, and was ignored by the Court of Appeals. The standing of a trustee to bring a claim for legal malpractice was examined in detail in the case of Witzman v. Gross, 148 F.3d 988 (8th Cir. 1998). In Witzman, the Eighth Circuit Court of Appeals analyzed Minnesota law and held that a trustee (as opposed to an individual trust beneficiary) had standing to sue the estate attorneys for legal malpractice for the negligent administration of an estate. A correct interpretation of the rules would clearly indicate, as the Court found in Carlson v. Houck, P.A., unpublished, 2014 WL 6090685 (Minn. App., November 17, 2014), that the trustee was allowed to pursue a claim for negligent estate planning following the death of the decedent, without comment. While relief was denied to Carlson on other grounds, the Court 6

made no comment on the fact that the lawsuit was brought by the trustee, as opposed to a personal representative. Similarly, there should be no question in this case but that the trustee has authority to pursue its claim for damages. Justice requires the fact that a trustee be allowed to pursue an action on behalf of the trust beneficiaries. This is necessary in this case for proper administration and the pursuit of justice. CONCLUSION The decision of the Minnesota Court of Appeals, while ultimately arriving at the correct decision, in allowing this case to proceed, relies upon an erroneous basis. Minn. Stat. §524.3-703, subd. (c) does not require that a cause of action accrue prior to the death of decedent in order for a personal representative to pursue a claim for damages. In addition, the trustee of a trust has a claim to pursue damages on behalf of the estate even if the claim does not ripen until or after the death of the decedent.

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As the Court of Appeals noted below, it would be unjust to hold that these harms caused by estate-planning malpractice would be without recourse. Nothing is advanced by such an erroneous interpretation of the law. That should be clarified by the Minnesota Supreme Court in this case.

Respectfully Submitted this 3rd day of July, 2017. s/ Paul A. Sortland ______________________________ Paul A. Sortland (#103573) SORTLAND LAW OFFICE, PLLC 431 South Seventh Street, #2415 Minneapolis, Minnesota 55415 (612) 375-0400 [email protected] Attorney for Respondent

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CERTIFICATE OF WORD COUNT The undersigned hereby certifies that said Petition for Review of Decision of Court of Appeals was prepared with Century Schoolbook, size 13point font, proportional typeface and that the total number of words is 1,830. The word count was calculated using “Corel WordPerfect X8" word processing software, which also counts abbreviations as words.

Respectfully Submitted this 3rd day of July, 2017. s/ Paul A. Sortland ______________________________ Paul A. Sortland (#103573) SORTLAND LAW OFFICE, PLLC 431 South Seventh Street, #2415 Minneapolis, Minnesota 55415 (612) 375-0400 [email protected] Attorney for Respondent

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