Filed: Nov. 14, 2002
Latest Update: Feb. 22, 2020
Summary: jury instructions).Greyrocks. (3) that Biddle escrowed $329, 969.17 with the Gardner, Savings Institution without authority from Murray, and provided for, the account to be equally divided between Murray Keatinge and the, Keatinge Family Trust (of which Kent was a beneficiary);power of attorney;
United States Court of Appeals
For the First Circuit
No. 02-1317
ESTATE OF MURRAY KEATINGE, CECELIA COLE as Executrix,
Plaintiff, Appellee,
v.
ELIZABETH H. BIDDLE, STROUT & PAYSON, P.A.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella and Lynch, Circuit Judges.
James M. Bowie with whom Robert C. Hatch and Thompson &
Bowie, LLP were on brief, for appellants.
Lee H. Bals with whom Marcus, Clegg & Mistretta, P.A. was
on brief, for appellee.
November 1, 2002
LYNCH, Circuit Judge. A federal jury in Maine found
that a lawyer and her law firm had simultaneously represented
Murray Keatinge and another person with interests adverse to Murray
(his son Kent) and then compounded the problem by suing Murray on
behalf of Kent. For this breach of an attorney's duty of loyalty
and care, the jury awarded damages of $660,000. The defense of
attorney Elizabeth Biddle and the firm of Strout & Payson was that
they had never represented Murray Keatinge; rather, they had only
represented Kent: they had represented Kent in the exercise of the
power of attorney granted by Murray, in both the sale of Murray's
house and the management of Murray's business. Defendants
contended that an attorney's representation of the holder of a
power of attorney can never establish an attorney-client
relationship with the grantor of that power.
The Maine Law Court, in an answer to a question certified
after the jury rendered this verdict, disposed of that contention
by holding that the issue of the existence of an attorney-client
relationship is one of fact. There is no rule in Maine that an
attorney in such a position is never in an attorney-client
relationship with the grantor of the power and no rule that such an
attorney is always in an attorney-client relationship. Estate of
Keatinge v. Biddle, 789 A.2d 1271, 1276 (Me. 2002).
On appeal the defendants now argue that the trial court's
earlier jury instruction, given without the benefit of the Law
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Court's later opinion, was potentially misleading to the jury. We
too have concerns about the instruction. But that gives the
defendants no remedy: they failed to preserve the issue as required
by Fed. R. Civ. P. 51, they do not meet the plain error criteria,
and we do not think a corrected jury instruction would have changed
the outcome. Defendants also argue that they were entitled to
certain jury instructions which they did request but which were not
given. The instructions requested would not have been appropriate
on the facts of this case and were quite properly rejected. We
affirm.
I.
We take the facts in the light most favorable to the
verdict, save for a neutral recitation of whether the plaintiff's
evidence warranted the instructions requested. See Gray v. Genlyte
Group, Inc., 289 F.3d 128, 131 (1st Cir. 2002) (evidence offered by
either side may be pertinent to assessing the appropriateness of
jury instructions).
The story of this ill-fated triangle -- father, son, and
lawyer -- reaches back in time. Murray Keatinge and Elisabeth
Keatinge married and had a son, Kent. During the marriage they
acquired a house, Greyrocks, in Camden, Maine in 1985. Two days
before she died in 1990, Elisabeth made a will, naming her husband
executor, and created the Keatinge Revocable Trust with her
husband. On her death, her half interest in Greyrocks poured into
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the Revocable Trust. In turn, in 1996, Murray transferred
Elisabeth's interest in Greyrocks to a Marital Trust of which he
was Trustee. The Marital Trust, of which Murray was the sole
beneficiary, was set up under the Revocable Trust. There was also
another trust under the Revocable Trust: the Family Trust, whose
sole beneficiary was Kent. Under the terms of the Revocable Trust,
Murray, as Trustee, was obligated to fund the Family Trust in the
amount of $600,000 within six months of the death of the first of
the grantors of the Revocable Trust (i.e., Elisabeth). He did not
do so.
It is undisputed that Murray owned at least half of
Greyrocks. In any event, Greyrocks was held by Murray both
individually and as Trustee of the Revocable Trust (Marital Trust).
The jury could have concluded that Murray was the sole owner of
Greyrocks.
Murray also had a business, the Norumbega Bed and
Breakfast (B&B). As of at least early 1998, half of the record
title was held by Murray personally and half was held by the
Revocable Trust (Marital Trust).1 Before late 1997, Kent had been
involved in the management of the B&B.
In August 1997, Biddle brought an action in the Maine
Probate Court seeking to put Murray and his assets into a
1
Biddle later took the position that Kent also had an
ownership interest in the B&B.
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guardianship and conservatorship. Biddle had been retained to do
so by Kent, who said he was concerned about the oversight of his
father's health care and businesses after his father had multiple
by-pass surgery. Kent was appointed temporary guardian and
conservator September 3, 1997. During that proceeding, Biddle
necessarily familiarized herself with Murray's assets. The purpose
of the conservatorship was to protect the estate and assets of the
allegedly incapacitated person, here Murray, as well as to protect
Kent's interest in his mother's estate, administered by Murray.
Me. Rev. Stat. Ann. tit. 18-A, § 5-401 (2001). Murray, represented
by different counsel, opposed Kent's petition for conservatorship
on September 12, 1997. Murray said he opposed appointment of
either a guardian or conservator and that even if there were an
emergency, he had given Cecelia Cole a health care power of
attorney and his businesses were run by competent managers. He
also said that Kent had a conflict of interest which would render
him inappropriate to be guardian or conservator and that Kent's
temporary appointment should be terminated. Indeed, Kent,
represented by Attorney Clark Byam (not at Strout & Payson), had
just threatened to sue to remove Murray as a trustee of a family
trust. In the fall of 1997, Kent had Biddle withdraw the petition
after a resolution was apparently worked out by agreement. On
November 29, 1997, apparently as part of the agreement, Murray
appointed Kent to be a co-trustee of the Revocable Trust. Biddle
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also asked that her firm's fees for the work done on the
conservatorship be paid out of Murray's estate.2
Pursuant to the resolution of the probate matter, Biddle
prepared a power of attorney for Murray to execute, authorizing
Kent to exercise certain powers. This work apparently was also
part of the fee application. Murray executed the durable power of
attorney on November 28, 1997. It gave Kent full power and
authority to conduct Murray's business and affairs. Included among
these was the power to borrow money, which Kent ultimately did
employ. Kent's authority under the power of attorney went beyond
the powers he had previously held while helping to manage the B&B.
There are limits to a durable power of attorney. The holder is not
entitled to use the grantor's money or property for his own benefit
or to make gifts to himself or others unless the power of attorney
so specifies. Id. § 5-508(b). This power of attorney did not give
Kent such authority.
That power of attorney was replaced on March 10, 1998 by
a new durable power of attorney drafted by another lawyer. Though
broadly consistent with the old power of attorney, the new document
provided much more detail regarding the scope of Kent's authority.
It specifically empowered Kent to use his father's income and
principal for Murray's support and to conduct Murray's estate
2
Biddle also asked for a reduction in the fees for counsel
hired by Murray.
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planning (in conformance with his father's wishes). At the same
time, it specifically forbade Kent from making transfers to himself
not necessary for his health, education, support, or maintenance;
receiving compensation for services rendered under the power of
attorney; or disregarding certain provisions of any living will or
related document Murray executed. Murray also executed a simple
will on March 10, 1998.
Kent called Murray's lawyer, James Elliott, who had
drafted the new durable power of attorney and will and asked him to
send both documents to Biddle. On March 17, 1998, Elliott sent
them to Biddle with a cover letter saying that Murray wished only
to have a simple will in effect while he gave thought to a more
extensive estate plan. Elliot also wrote that he assumed Biddle
would handle any further estate planning for Murray and that she
should advise him if that was not the case. Biddle did not reply
other than to acknowledge receipt. She did retain the originals of
the second durable power of attorney and the will in her files.
Using the first power of attorney, Kent retained Biddle
to do work regarding the B&B and Greyrocks. That work was done
from November 1997 to September 1998. In March 1998, Biddle
analyzed the financial situation of the B&B in order to secure a
line of credit for it from the Gardner Savings Institution. The
equity line of credit was to be secured by a third mortgage on both
the B&B and Greyrocks. Biddle worked on this project with James
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Ayers, an accountant whom Kent had hired in his capacity as holder
of the power of attorney, to do work for the B&B. It can be
inferred that from the bank's point of view, Biddle's work on the
B&B was being performed for Murray, and not for Kent in his own
capacity. In early 1998 Biddle also handled two employment
questions and a liquor license issue for the B&B.
On May 11, the issue of the $600,000 meant to be put into
the Family Trust for Kent's benefit was apparently addressed when
Biddle proposed, by letter to Murray's lawyer, that the Revocable
Trust execute a note and mortgage to the Family Trust for $600,000
secured by a mortgage on Greyrocks and the B&B. The letter said
she was acting for Kent Keatinge and asked that Murray execute the
note, mortgage, and an affidavit that he was represented by
separate counsel. Murray did so and his lawyer returned the
documents on June 1, 1998. Murray's lawyer had earlier expressed
to Biddle his concerns about the facts that Kent had been appointed
co-trustee while the conservatorship for Murray was pending and
that Biddle had unofficially raised doubts about the Marital Trust.
In July 1998 Biddle restructured the B&B to transfer its
ownership into a new subchapter S corporation, E.B. Hammond, which
she had incorporated. Both Murray and Kent appear to have been
shareholders of E.B. Hammond. It also appears that Biddle
structured matters so that Murray owned half of E.B. Hammond in one
of his capacities and Kent, in some capacity, owned the other half.
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One of Murray's theories in the case was that this restructuring
was not necessary for the management of the B&B and was done in
order to take away Murray's ownership interest. It was Biddle's
intent that Murray would transfer his ownership interest in the B&B
to E.B. Hammond and that E.B. Hammond would own the B&B.
Indeed, in an August 13, 1998 memorandum, Biddle
concluded that all of Elisabeth Keatinge's estate should have gone
to the Family Trust and none to the Marital Trust. She also
concluded that the transfer of Elisabeth's half interest to the
Marital Trust was invalid. These conclusions were obviously
contrary to Murray's interests. Based on these conclusions, she
named Murray and the three trusts as the grantors of Greyrocks in
the Warranty Deed. She did not call to Murray's attention the
issue on which there was conflict.
The bulk of plaintiff's complaint dealt with Biddle's
handling of the sale of Greyrocks. Greyrocks and Norumbega were
cross-collateralized through Gardner Savings Institution.3 Biddle
had represented to the Bank that Murray would invest $110,000 of
the proceeds from Greyrocks in the B&B. Biddle also told the Bank
that "Murray and Kent" are entitled to these proceeds from the sale
of Greyrocks in equal shares, but did not copy Murray on the
letter. A jury could find that Murray had not authorized that
3
Biddle did send a letter to the Bank saying she was
appearing only on behalf of Kent Keatinge.
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representation or the transfer of the $110,000 from the Greyrocks
proceeds. Biddle also represented to the Bank that Murray needed
some of the proceeds to pay for his retirement and capital gains
taxes.
There is no dispute that Murray owned at least half of
Greyrocks outright at the time of the sale. Indeed, at the
September 1, 1998 closing, Biddle signed in the space for the
seller's signature as follows: "Elizabeth Biddle, attorney-in-fact
for Murray Keatinge." She communicated with Murray both before and
after the sale. Before the sale she sent him documents for him to
sign and return to her. He did so. After the sale, Biddle spoke
with Murray about the bill -- he questioned her over the telephone
about the closing statement and its legal fees and the accounting
statement. Murray asked for an itemized statement; Biddle never
sent one. This was the only direct contact between Biddle and
Murray.
There was reason for Murray to be concerned about the
bill. Biddle had taken $14,680 from the closing proceeds for her
legal fees. But no more than $6,800 of the legal fees were
attributable to the closing. The discrepancy is not explained by
work done for the B&B; that was billed separately. The bill did
include fees for work directly against Murray's interests: that
is, work for legal research on whether Murray had adequately funded
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a trust established for Kent's benefit, work going back to March
1998.
The conflict of interests between Kent and Murray was
made explicit by Biddle in a September 29, 1998 letter to Murray,
after the closing. The letter said that Biddle had represented
Kent since the guardianship proceedings the prior summer and that
through this work and the sale of Greyrocks Biddle had become
familiar with Murray and Elisabeth's estate planning. Murray,
Biddle wrote, had deprived Kent of the benefits he should have
received and Kent wanted to resolve the outstanding financial
issues between the two of them.
Biddle, representing Kent, sued Murray in October 1998
in Superior Court in Maine on claims that Murray had failed as
trustee to adequately fund a trust established for Kent's benefit.
Biddle used information against Murray which she had obtained in
the course of the prior representation.
That lawsuit was settled. As part of the settlement,
Murray gave up his ownership in E.B. Hammond, which owned the B&B;
some of Murray's other property was transferred to Kent; Murray
assumed any tax liability from the sale of Greyrocks; and Murray
and Kent executed a mutual release. The lawsuit was apparently,
for Murray, the last straw which led to the federal litigation.
The costs of that settlement and the attorneys fees paid to defend
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himself became a major component of Murray's damages claim in the
federal litigation.
II.
Murray brought the federal litigation on October 19,
1999, under the court's diversity jurisdiction. Discovery was
completed, including Murray's deposition, when Murray died on
August 1, 2000. His estate subsequently became the plaintiff.
The complaint based its legal malpractice claim on
allegations that Biddle did not disclose to Murray her conflict of
interest; diverted for nefarious reasons proceeds from the
Greyrocks closing; and failed adequately to represent Murray's
interests.4 Ultimately, the jury would be instructed that if an
4
Specifically, plaintiff made the following allegations: (1)
that Biddle failed to disclose to Murray that she should not
represent his interests during the sale of Greyrocks since she was
simultaneously advising Kent as to claims he might have against
Murray for Murray's performance of his duties as a trustee under
the Revocable Trust; (2) that without Murray's consent Biddle
prepared a proposed deed and real estate tax transfer declaration
which included as grantors entities which had no ownership interest
in Greyrocks; (3) that Biddle escrowed $329,969.17 with the Gardner
Savings Institution without authority from Murray, and provided for
the account to be equally divided between Murray Keatinge and the
Keatinge Family Trust (of which Kent was a beneficiary); (4) that
Biddle permitted some of the escrow amounts to be paid to people
other than Murray; (5) that this diversion of the proceeds from
Greyrock was done for nefarious reasons -- diverting monies to
Kent, depriving Murray of sums he would need to defend himself
against the lawsuit that Kent was about to bring, and increasing
their own legal fees in that litigation; (6) that Biddle
misdirected some $10,000 of the closing proceeds to pay for work
done by accountants that was unrelated to the Greyrocks sale and
that was for Kent's benefit, adverse to Murray's interests; (7)
that Murray had never agreed to invest $110,000 from Greyrocks in
the B&B and he could not recover that sum; and (8) that Biddle
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attorney-client relationship existed between Murray and Biddle,
then there was a breach of Biddle's duties to Murray. There is no
question that there was a breach of the duty of loyalty and
due care if an attorney-client relationship existed between
Murray and Biddle. There is also no claim about damages in
this appeal.
The trial took four days. After deliberations, the jury
returned a verdict finding that the defendants were in breach of
their duties to Murray and that the breach had caused Murray
$660,000 in total damages. The jury also found that Murray had not
negligently caused his damages.
After the verdict, on a motion by defendants, the federal
district court certified questions to the Maine Law Court.5 The
failed to adequately represent Murray against Kent's contrary
interests.
5
The judge certified the following three questions to the
Maine Law Court:
A. When the holder of a power of attorney hires a
lawyer concerning matters within the scope of the power,
can the engagement ever result in an attorney-client
relationship between the hired lawyer and the grantor of
the power?
B. If yes, is there any change in the proof
necessary to demonstrate the existence of such an
attorney-client relationship? Specifically, in Board of
Overseers of the Bar v. Mangan, 763 A.2d 1189 (Me. 2001),
the Law Court adopted the formulation
that an attorney-client relationship is created when
(1) a person seeks advice or assistance from an
attorney, (2) the advice or assistance sought
pertains to matters within the attorney's
professional competence, and (3) the attorney
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Law Court replied:
In ordinary circumstances, when the holder of a power of
attorney retains counsel to assist him in fulfilling his
duties, the lawyer has an attorney-client relationship
with the holder only. In order to effectively exercise
the powers granted to him, the holder of a power of
attorney may often need to retain counsel. For example,
the holder of a power of attorney is not authorized to
appear pro se on behalf of the grantor.
Thus, the mere retention of counsel by the holder does
not by itself create an attorney-client relationship
between the attorney and the grantor. There must be some
other agreement or arrangement to create the separate
attorney-client relationship between the attorney and the
grantor. To hold otherwise would leave the attorney
hired to represent the holder of a power of attorney in
the untenable position of being subject to ill-defined
professional responsibilities and create the reality of
conflicting loyalties.
Estate of Keatinge, 789 A.2d at 1275 (internal citations omitted).
The district court then rejected the motion for a new
trial and for judgment as a matter of law, holding:
expressly or impliedly agrees to give or actually
gives the desired advice or assistance.
Id. at 1192-93 (citations and quotation marks omitted).
When the holder of the power engages the lawyer, is it
appropriate to modify the first of the three requirements
so as not to require the grantor personally to seek the
advice or assistance, but rather to require that the
lawyer be asked for advice or assistance "on behalf of
the grantor"?
C. With respect to the third requirement taken from
Mangan, is the Law Court disposed to adopt the
Restatement (Third) of the Law Governing Lawyers
§ 14(1)(b) (1998) alternative formulation that it is
sufficient on that element if the lawyers failed to
manifest lack of consent to provide legal services when
they knew or reasonably should have known that the
grantor reasonably relied on them to provide the
services.
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I instructed the jury that they could find an attorney-
client relationship only if they found, among other
things, that the lawyer(s) "knew or should have known
that Murray Keatinge was relying upon them for legal
counsel." On the evidence, the jury did not have to
reach that conclusion, but it certainly could. Among
other things, Murray Keatinge had talked directly to
Attorney Biddle about the size of her bill, and Attorney
Biddle had direct correspondence with him in connection
with a real estate closing.
Keatinge v. Biddle, 188 F. Supp. 2d 3, 4 (D. Me. 2002) (order).
III.
Because this appeal focuses on the jury instructions
given, we initially describe them and the colloquy and objections
made. The court instructed:
On the question whether Murray Keatinge had an
attorney/client relationship with the lawyers, the
plaintiff Cecelia Cole bears the burden of proof. To
proceed, she must show each of the following three things
by a preponderance of the evidence:
(a) That the lawyers were asked for advice or
assistance on behalf of Murray Keatinge;
(b) That the advice or assistance related to
legal matters;
(c) That the lawyers expressly or impliedly
agreed to give the desired advice or assistance
on behalf of Murray Keatinge, or failed to
demonstrate that they did not agree when they
knew or reasonably should have known that Murray
Keatinge reasonably relied on them to provide the
services. That is, Cecelia Cole must show that
Elizabeth Biddle and/or Strout & Payson knew or
should have known that Murray Keatinge was
relying upon them for legal counsel.
You should consider all the facts and circumstances. An
attorney/client relationship may be created expressly, or
it may be implied from the conduct of the parties.
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This was a reworking of the standard set by Board of Overseers of
the Bar v. Mangan, 763 A.2d 1189 (Me. 2001).
Though neither party contested the relevance of the
Mangan standard, both parties objected to the court's jury
instructions. The plaintiff objected that the court should have
delivered proposed jury instructions providing, first, that an
attorney retained by a guardian or conservator owes a fiduciary
duty to the ward as well as to the guardian and, second, that
counsel to the holder of a power of attorney represents and owes a
duty of care to the grantor of the power of attorney (as well as to
the holder). The defendants objected that the court had
effectively instructed the jury that the holder's counsel always
has a relationship with the grantor -- when, in fact, it should
have instructed the jury that holder's counsel never has an
attorney-client relationship with the grantor.
A. The "On Behalf Of" Instruction
The defendants argue that the jury instruction as given:
(1) permitted the jury to find that an attorney asked to provide
representation to a holder of a power of attorney would, by that
fact, create an attorney-client relationship, because by definition
the holder is usually acting for the benefit of the grantor of the
power of attorney; and (2) did not tell the jury that mere
retention of counsel by the holder does not by itself create an
attorney-client relationship with the grantor. This, they say,
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contravenes the Law Court's holding that the mere retention of
counsel by the holder does not by itself create an attorney-client
relationship. Estate of Keatinge, 789 A.2d at 1275-76. We agree
that the instruction given had some potential to be misleading on
certain facts.
Nonetheless, Biddle's attorney failed to preserve his
objection to the trial judge's jury instructions. "The governing
rule provides that a party cannot assign as error the giving of or
failure to give an instruction 'unless that party objects thereto
before the jury retires to consider its verdict, stating distinctly
the matter objected to and the grounds of the objection.' Fed. R.
Civ. P. 51." Genlyte, 289 F.3d at 133-34. The objection "must be
sufficiently specific to bring into focus the precise nature of the
alleged error." Cyr v. B. Offen & Co.,
501 F.2d 1145, 1155 (1st
Cir. 1974) (quoting Palmer v. Hoffman,
318 U.S. 109, 119 (1942)).
The purpose of this requirement is to help trial courts correct
errors in jury instructions, Broderick v. Harvey,
252 F.2d 274, 276
(1st Cir. 1958), -- and thus to avoid unnecessary appeals.
To maximize the likelihood that errors can be corrected
at the trial court level, parties objecting to a trial judge's
instruction must not only identify the error but also "proffer a
correct instruction or [otherwise] explain how the alleged error in
the charge could be corrected." Scarfo v. Cabletron Sys., Inc., 54
F.3d 931, 944 (1st Cir. 1995); see
id. at 946 ("In general,
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objections to a trial judge's charge to the jury must be clear
enough and explicit enough to tell the trial judge what the party
wishes the trial judge to say in order to correct the alleged
error."); Linn v. Andover Newton Theological Sch., Inc., 874 F.2d
1, 5 (1st Cir. 1989) ("If there is a problem with the instructions,
the judge must be told precisely what the problem is, and as
importantly, what the attorney would consider a satisfactory
cure."). The proposed correction must not substantially overstate
the law in favor of the objecting party. Parker v. City of Nashua,
76 F.3d 9, 12 (1st Cir. 1996). It is this latter part of the
distinctness requirement (the proffering of a satisfactory cure)
which defendants do not meet.
After the judge finished instructing the jury, Biddle's
attorney objected to the formulation of the first prong of the
standard for determining whether an attorney-client relationship
exists. "By leaving that prong as phrased, the court has
effectively held and instructed the jury that representation [by an
attorney] of a representative [i.e., the holder of the power of
attorney] is representation of the protected party [i.e., the
grantor]. Because necessarily, the representative [or holder] is
acting on behalf of the protected party [or grantor]." But Biddle
did not ask that the court instruct that there was no rule that an
attorney retained by the holder of a power of attorney was
automatically in an attorney-client relationship with the grantor
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of a power of attorney. Rather, Biddle's position throughout was
that an attorney-client relationship can never arise under these
circumstances. Biddle's argument was that under Mangan, Murray had
to directly ask Biddle for the service. And that argument is quite
wrong; further, it did not distinctly notify the court of the
argument Biddle now makes. She then compounded the problem by
insisting that an instruction be given that when a representative
retains a lawyer, the client is the representative, and not the
party for whom the representative is working.
Our view that defendants did not distinctly state the
view they now advance is reinforced by the trial judge's reaction.
The trial judge rejected defendants' objection, observing:
[T]he defendant takes the . . . extreme . . . position
that the client holder of the power is automatically the
client only, and it cannot be the grantor. I think
that's also an incorrect statement of the law. And so
I'm rejecting those particular objections.
. . . .
. . . Essentially, what the plaintiff has
maintained here is that the grantor of a power of
attorney is automatically the client of anybody the
holder of the power consults at least in matters covered
by the power.
And the defendant essentially contends that the
grantor is never the client in such circumstances.
Clearly my charge has rejected both of these
alternatives.
The Maine Law Court's response to certified question one,
see Estate of Keatinge, 789 A.2d at 1275-76, confirms that the
district court judge correctly rejected this extreme position.
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Defendants proposed a "cure" which was substantively wrong and in
doing so did not give the trial judge fair notice of the real
problem.
In the absence of a properly preserved objection, this
court reviews the trial judge's jury instructions under the plain
error standard. Genlyte, 289 F.3d at 134. The party claiming
plain error is required to demonstrate "(1) that there was error,
(2) that it was plain, (3) that it likely altered the outcome, and
(4) that it was sufficiently fundamental to threaten the fairness
or integrity or public reputation of the judicial proceedings."
Id. (citing United States v. Olano,
507 U.S. 725, 735-36 (1993)).
We agree that, as phrased, the portion of the instruction
given had the potential to mislead the jury into thinking that an
"always" per se rule existed. Still, the error was not plain and
there are several reasons to think that the jury was not misled.
Particular formulations in jury instructions are viewed in context,
not in isolation. Here, the jury was instructed that it had to
"consider all the facts and circumstances," an instruction
consistent with the fact-based approach to the existence of the
attorney-client relationship and inconsistent with a per se
approach. Further, there were numerous facts, apart from the
existence of the power of attorney, that support the jury's
conclusion that an attorney-client relationship existed. It is
highly unlikely that the error in the district court judge's
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instruction changed the outcome of the case. Under the
circumstances, the plain error test is not met.
B. The Trial Court's Rejection of Defendants' Proposed Jury
Instructions
Biddle also argues that the court erred by declining to
give appellant's proposed jury instructions. Those instructions
would have further defined an attorney-client relationship in light
of Sheinkopf v. Stone, 927 F.2d 1259 (1st Cir. 1991).
Specifically, the defendants requested that the court
advise the jury that the representation must have been sought
directly by Murray (Jury Instruction No. 2); that there are a
number of factors that are important to determining whether an
attorney/client relationship exists (No. 3); that the client's
subjective unspoken belief that an attorney was representing him is
insufficient to create an attorney-client relationship (No. 4);
that a client's belief must be objectively reasonable (No. 5); that
the attorney must be aware that the putative client was in fact
relying on the attorneys for legal counsel (No. 6); and that if a
person such as Murray were regularly obtaining legal assistance
from others, then it is a reasonable assumption on the part of the
defendants that Murray was receiving legal assistance about his
business activities from other counsel and not from the defendants
(No. 7).
A refusal to give a particular instruction constitutes
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reversible error only if the requested instruction was (1) correct
as a matter of substantive law, (2) not substantially incorporated
into the charge as rendered, and (3) integral to an important point
in the case. Elliott v. S.D. Warren Co., 134 F.3d 1, 6 (1st Cir.
1998). The district court should refuse a request for an
instruction that states a legal holding which is not applicable to
the facts, even if it is otherwise correct. See 9A C.A. Wright &
A.R. Miller, Federal Practice and Procedure § 2552 (2d ed. 2002).
We find no error. The substance of many of the requests was in
fact given and some had the potential to mislead. For example, the
substance of Requests Nos. 2 and 5 was given, Request No. 2 was
misleading, and Request No. 3 was given in the sense that the jury
was told to decide the issue on all of the facts. Request No. 4
was misleading in that an attorney-client relationship may be
implied, and Request No. 6 was misleading in that it eliminated the
"should have known" portion of the test. Request No. 7 is closer,
but it was within the discretion of the trial judge to decide that
under Maine law one factor should not be emphasized over others.
As the district court noted, Sheinkopf's fact pattern is
dissimilar from the one at issue in this case. In Sheinkopf, the
plaintiff sued an attorney's law firm after the joint venture in
which both men had invested turned sour. 927 F.2d at 1260-61,
1264-65. The case did not involve a power of attorney.6 Biddle
6
Nor did it involve any of the situations that the district
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sought an instruction that more is required than an individual's
subjective belief that the person with whom he was dealing was his
lawyer; the belief, Biddle contended, must be objectively
reasonable (No. 5). This request derives from the portion of
Sheinkopf where the court explains that no reasonable person could
have objectively believed, on the facts of that case, that an
attorney-client relationship was created. The district court was
well within its discretion in finding that the facts of the present
case did not warrant that specific instruction, where it had
already instructed that the jury should consider all the facts and
circumstances and that the lawyers must have expressly or impliedly
agreed to the representation. Sheinkopf did not create a set of
one-size-fits-all jury instructions.
The verdict is affirmed. Costs are awarded against
defendants.
court in the present case described as giving rise to useful
analogies and parallels: a guardian-ward relationship; an agent-
principle relationship; an employee-corporation relationship; or an
executor- or trustee-beneficiary relationship. These are imperfect
analogies to be sure, but involve situations in which a client
hires a lawyer to help the client meet his legal responsibility to
a third person.
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