Attorneys – Legal Malpractice – Trust Revocability – Advice To Client

In this decision from Fairfax Circuit Court, a claim of lawyer malpractice is dismissed as to a client’s intent to make a trust revocable or irrevocable, based on collateral estoppel, but the client may pursue a claim of negligence in advising on the tax consequences of the trust.

Plaintiff’s second wife, Lorraine, died July 22, 1998. A dispute arose between Lorraine’s son and plaintiff Charles Durosko about a trust created by Lorraine. Durosko alleged the trusts drafted by defendant lawyer in this action was revocable until Lorraine’s death and thereafter would remain revocable. The son contended the trust was to remain revocable until Lorraine’s death and at her death it would be come irrevocable.

At the first trial, the District of Columbia trial court granted summary judgment in favor of Durosko, finding that the trust was revocable on the death of Lorraine. Her son appealed. The D.C. Court of Appeals reversed, finding that the trust language was ambiguous on its face. The Court of Appeals remanded the case to the trial court for the taking of further evidence.

On remand, the trial court found that Durosko intended for the trust to become irrevocable upon Lorraine’s death. Defendants assert the doctrine of collateral estoppel should bar this current action from going forward as the issues already have been decided by a court of competent jurisdiction. The parties in this action are different than the parties in the original cause, requiring this court to ask if defendant lawyer had been a party to the action in the District of Columbia courts would she have been bound as to the issue of revocability, but not as to the advisement of tax consequences.

The issue in “Ziegler v. Durosko” in the D.C. courts was the revocability or irrevocability of the trust. Indeed, the parties stipulated prior to the first trial that the sole issue requiring the trial in Tr. No. 12-99 RP is whether the CTD trust was intended to become irrevocable upon Lorraine Ziegler Durosko’s death on July 22, 1998, or whether it was intended to remain revocable following her death.

The trial judge noted in his findings that Durosko testified that the lawyer did not explain to him certain possible gift tax consequences of having the CTD trust become irrevocable on Lorraine’s death, and that Durosko submitted a post-trial brief describing those consequences. The trial judge also noted that the lawyer testified that she did discuss income and estate tax consequences with the Duroskos, and at best, Durosko’s testimony meant only that he might not have been fully informed as to all possible tax consequences.

The trial court found that “it did not mean Durosko lacked the intent or capacity to create an irrevocable trust.” The emphasized language from the trial court findings further supports a conclusion that the sole issue before the trial court was the revocability or irrevocability of the trust. The possible negligence in drafting the tax provisions of the trust was not before the D.C. court.

The plea in bar is sustained as to the issue of Charles Durosko’s intent to make the trust revocable or irrevocable. The plea in bar is denied as to the issue of negligence in advising or not advising Charles Durosko as to the tax consequences of the trust.

Durosko v. Lawrence (Smith, J.) No. 2008-11089, Dec. 8, 2008; Fairfax Cir.Ct.; Timothy J. Battle, Matthew A. Ranck for the parties. VLW 009-8-003, 3 pp.