Hotz v. Minyard

[chrisrs]

Hotz v. Minyard
403 S.E.2d 634 (S.C. 1991)

Facts: Judy Minyard Hotz (P) and Tommy Minyard (Dl) are brother and sister. Dl has been in charge of their father's Greenville car dealership since 1977; P worked at their father's Anderson dealership since 1983 and was also vice-president and minority shareholder. In 1985, their father signed a contract with General Motors designating P successor of the Anderson dealership. In October of 1984, their father had Dobson (D2), a lawyer and nonpracticing CPA, draft a will, which their father executed one morning in the presence of his wife, his secretary, and Dl. Dl was left the Greenville dealership; other family members were left bequests totaling $250,000 and the remainder of the estate was divided between Dl and a trust for P after the wife's death. Later the same afternoon, their father signed a second will with all of the same provisions except it gave the real estate on which the Greenville dealership was located to Dl outright. He told D2 not to disclose the existence of the second will and specifically said P should not be told about it. Three months later, P asked to see the will and with her father's permission, D2 showed her the first will and discussed it with her in detail. P claims D2 gave her the impression she would receive the Anderson dealership and said she would share equally with Dl in their father's estate. D2 claims he explained that their father intended to provide for P as he had for Dl when and if she became capable of handling a dealership. D2 noted this on the will and P claimed she thought these notes were part of the will. About 16 months later, the father had a stroke and he is now mentally incompetent. P and Dl agreed that while their father was ill, P would care for him and Dl would temporarily run the Anderson dealership. Under Dl's direction, the Anderson dealership bought another dealership, which was operating at a loss; Dl also formed a holding company, which assumed ownership of the father's real estate leased to the Anderson dealership children as beneficiaries under his will and advised P of this by letter. Later, at a meeting with their mother, Dl, and D2, P was told she would be restored under the will and could work at the Greenville dealership if she dropped her plans for a lawsuit. P discharged her lawyers and moved to Greenville. Eventually, Dl terminated her. P sued Dl, D2, D2's law firm, and an accounting firm of which D2 is a shareholder and director but from which he receives no remuneration as an employee. The causes of action against Dl for tortious interference with contract, a shareholder derivative suit for wrongful diversion of corporate profits, and fraud survived summary judgment and are not at issue here. P appeals various causes of action that did not survive summary judgment, but the only issue addressed here is the trial judge's order granting summary judgment on the cause of action against D2 for breach of fiduciary duty.

Issue: Do material issues of fact, precluding summary judgment, exist as to whether D2 owed a fiduciary duty toward P, who consulted him regarding the terms of her father's will? .

Holding: Yes. Judgment reversed in part, affirmed in part.

Analysis

1. 2's law firm had prepared P's tax returns for approximately 20 years until 1985 and had prepared a will for her which she had signed only one week before she inquired about the effect of her father's will. P testified she had consulted D2 in 1984 or 1985 about a suspected misappropriation of funds at one of the dealerships and as late as 1986 about her problems with Dl. A fiduciary relationship exists when one has a special confidence in another so that the latter, in equity and good conscience, is bound to act in good faith.

2. An attorney-client relationship is a fiduciary one. D2 did not owe P a duty to disclose the existence of the second will, but he did owe her a duty to deal with her in good faith and not actively misrepresent the first will.

3.Since D2 was acting as an attorney when he met with P, there is evidence to present a jury issue whether D2's law firm should be held vicariously liable for D2's conduct.