Attorneys – Duty To Non- Client – Real Estate Closing

Listen to this article

Where a plaintiff purchaser of a mixed-use residential and commercial building filed suit alleging that the defendant attorney for the bank which financed the purchase negligently failed to discover that the sale did not include six deeded parking spaces, a summary judgment for the attorney should be affirmed on the ground that no duty was owed to the plaintiff, a non-client.

“The buyer plainly understood that the bank’s attorney represented the bank and did not represent her; she knew in advance of the closing that she was free to retain counsel to represent her interests in the transaction. While not asserting the existence of an attorney-client relationship between herself and the bank’s attorney, she maintains that the attorney is nonetheless liable to her as a nonclient, particularly given the arguable congruity of the bank’s and buyer’s interests with respect to the inclusion of the six parking spaces in the conveyance.

“The case is governed in all material respects by Page v. Frazier, 388 Mass. 55 (1983). Here, as there, the buyer made the ‘conscious decision, after disclosure, to elect the riskier path’ of not obtaining her own counsel to represent her interests. … Notwithstanding some putative overlap in the bank’s and buyer’s interests in the parking spots that were not conveyed, the bank’s attorney at all times had an ‘independent and potentially conflicting duty’ to his client, the lending bank. … ‘Where, as here, a nonclient takes the chance that the client’s interests are in harmony with [her] own, and does so in the face of an express warning that the interests may differ, [her] claim of foreseeable reliance cannot be rescued simply because, in retrospect, the interests are shown not to have differed.’ …”

The full text of this decision can be found on Lawyers Weekly’s website, malwdev.wpengine.com.

Fistel v. Favaloro, et al. (Lawyers Weekly No. 11-097-05) (4 pages) (Lenk, J.) (Appeals Court) Case heard by Gershengorn, J., on a motion for summary judgment; entry of separate and final judgment was ordered by Hinkle, J., in Superior Court. Valeriano Diviacchi for the plaintiff; Ralph G. Picardi for the defendants (Docket No. 04-P-883) (June 2, 2005).