An attorney’s mere drafting of a document containing representation to a non-client third-party must be distinguished from the attorney having made the representation.

A New Jersey appeals court affirmed the trial court’s dismissal of third-party legal malpractice claims while reinstating the non-client plaintiffs’ claim, which alleged common-law fraud against the defendant attorney. The three-judge panel stated: “[w]e do not interpret our Supreme Court’s pronouncements as extending attorneys’ malpractice liability to non-client third parties when the attorneys have done nothing more than draft documents containing representations or warranties, without reason to believe the representations are false.” Although the defendant had drafted the document that contained the representation to the non-client plaintiff, the defendant did not make the representation, held the appeals court. Judge Nugent, who wrote the decision, stated that “[a]lthough plaintiffs tend to blur this distinction, the distinction is important.” Document drafting, then, can be distinguished from opinions expressed by attorneys in public offering statements or when attorneys state that they will file or sign transactional documents but fail to do so, Judge Nugent further wrote. In its decision, the appeals court noted that the trial court “found significant plaintiff’s testimony that he understood defendant was not his attorney . . . and that plaintiff gave the mortgage to an attorney to review before signing it.” The appeals court, however, found “some merit” in the plaintiffs’ contentions that the defendant committed common-law fraud by making misrepresentations about the defendant’s client, which the plaintiffs relied upon to their detriment by delaying legal action against the defendant’s client, and limited to this claim, reversed the judgment of the trial court. Practicing attorneys in New Jersey can breathe a sigh of relief that “no duty aris[es] [with respect to third-parties concerning a client’s representation] when an attorney merely drafts a document containing a client’s representation,” as the appeals court found in Goodman. At the same time, attorneys must always be mindful of the potential impact of statements made to non-client third parties.

_{Case Law Alerts, 1st Quarter, January 2016}

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