An Ohio appellate court has reversed a summary judgment for an attorney in a legal malpractice case. In Svaldi v. Holmes, a 93 year old client visited an attorney to revise an existing power of attorney. The client was accompanied by two of his neighbors, who also managed the apartment complex where they all resided. At the client’s request, the attorney drafted a new power of attorney naming the neighbors as his agents and granting them authority to manage, sell and transfer his assets.
Under the terms of the power of attorney, within thirty days of their appointment, the neighbors were required to submit to the attorney an inventory of the client’s assets and subsequent yearly accountings of all transactions. The neighbors failed to deliver the initial inventory and never submitted an annual accounting. Other than one letter reminding the neighbors to submit the inventory, the attorney never followed up to determine if accountings were made.
Two years later, a suspicious withdrawal was made from the client’s account, which caused the bank to contact law enforcement. An investigation determined that the neighbors had stolen over $800,000 from the client.
The client then sued the attorney for negligently failing to monitor the neighbors’ activities. The attorney moved for summary judgment, which the trial court granted finding that the attorney did not owe a duty to the client. The client appealed.
The appeals court reversed. The attorney argued that he only had a duty to exercise reasonable care in drafting the documents. The court disagreed, relying on expert testimony, which specified that the language added by the attorney is not typically included in a power of attorney. Therefore, the attorney created an expanded duty to review and monitor the inventory and accountings. The court remanded the case for further proceedings.
Decision: Svaldi v. Holmes