Fraud Claim Against Attorney By Nonclient – ASLA – Exclusive Remedy Provision

Roberson v. Balch & Bingham, LLP, [Ms. 1200002, Jan. 21, 2022] __ So. 3d __ (Ala. 2022). On rehearing, in a per curiam opinion, the Court (Stewart, J., and Lyons, Main, and Welch, Special Justices, concur; Parker, C.J., and Mendheim, J., and Baschab, Special Justice, dissent; Bolin, Shaw, Wise, Bryan, Sellers, and Mitchell, JJ., recuse) withdraws its per curiam opinion issued July 23, 2021 which had affirmed the dismissal of David Roberson’s (“Roberson”) claims against Balch & Bingham, LLP (“Balch”). Roberson, a former employee of Drummond Company, Inc. (“Drummond”), was convicted of bribery arising from payments of thousands of dollars to a charitable foundation controlled by Oliver Robinson, a member of the Alabama House of Representatives, in exchange for “advocacy” and “community outreach” aimed at undermining the Environmental Protection Agency’s (“EPA”) efforts to clean up a Superfund site at which Drummond was a potential responsible party. Balch was Drummond’s outside legal counsel. Roberson alleged that prior to authorizing payments to the Foundation, he had asked Joel Gilbert, a registered lobbyist employed by Balch, “if Gilbert had inquired with the ethics lawyers at Balch & Bingham whether the Plan [to pay the Foundation] was legal and ethical. Gilbert represented to [Roberson] that Balch’s in-house ethics attorneys had reviewed the Plan and determined that it was legal.” Ms. *5.

Balch filed, and the circuit court granted, a motion to dismiss all the claims against Balch based on the limitations provisions in the Alabama Legal Service Liability Act. Ms. *17. On original deliverance, although the Court held that the limitations provisions in the ASLA did not support dismissal, the Court affirmed on the basis that Roberson’s claims failed because Balch owed no duty to Roberson under the ASLA.

On rehearing, the Court reverses the dismissal of Roberson’s fraud claims. The Court first notes that “[c]ommon sense dictates that a lawyer serves the lawyer’s client, not the parties with whom the lawyer may come in contact while serving the client.” Ms. *26. In support of its conclusion that a nonclient may sue a lawyer for fraud, notwithstanding the exclusive remedy provision of the ASLA, the Court writes

In Kinney v. Williams, 886 So. 2d 753 (Ala. 2003), an attorney “assured” two couples (one clients and one nonclients) that a road to property they were purchasing was “private.” Id. at 754. After they purchased the property and found otherwise, both couples sued the attorney. The trial court entered a summary judgment in favor of the attorney as to the claims of both the clients and the nonclients. On appeal, this Court affirmed the summary judgment on the clients’ claims based on the applicability of the statute of limitations set forth in the ALSLA. However, this Court reversed the summary judgment on the nonclients’ claims, allowing their fraud claims against the attorney to proceed.

Ms. *29. The Court concludes that in the absence of an attorney-client relationship between the plaintiff and the attorney, “the ALSLA simply does not apply” and cited prior case law “recogniz[ing] the availability of a fraud claim by a nonclient against an attorney for activities stemming from the attorney’s activities while representing a client.” Ms. *36.

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