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How Ignorant Is Blamelessly Ignorant?: Delaware Law Still Frowns on People Who Do Not Read What They Sign

December 1, 2009

Delaware - Discovery Rule

 

Key Points:

  • Signers of documents with legal or contractual implications cannot avoid obligations under the contract, nor maintain legal malpractice claim against attorney who drafted legal document if person of ordinary intelligence could understand the document.
  • Person bound by details of document he signed even if he failed to inform himself of details.
  • Receipt of allegedly false information requires one to use senses and cannot recover for injuries if falsity of misrepresentation would be obvious to him had he used his opportunity to make cursory examination or investigation.
  • Plaintiff cannot justifiably rely on false representation if falsity of representation would have been obvious upon investigation.


 

In Delaware, signers of documents with legal or contractual implications cannot avoid their obligations under the contract, nor maintain a legal malpractice claim against an attorney who drafted the legal document, if a person of ordinary intelligence could understand the document. In a March 2009 decision, Sammons v. Andersen, No. 323, 2008, 2009 Del. LEXIS 115 (Del. Mar. 9, 2009), the Supreme Court of Delaware made clear that signatories of documents have an independent duty to read and understand what they sign. Such signers of a legal document cannot claim blameless ignorance of contract provisions that laypeople of ordinary intelligence can understand. In turn, this inability to claim blameless ignorance not only precludes the application of the so-called Discovery Rule which extends the time to file a lawsuit, but it also precludes the malpractice/negligence claim itself against the attorney who drafted the plain-language document.

The analysis before the Sammons Court dealt with this Discovery Rule exception to the statute of limitations, which applies if/when a plaintiff is "blamelessly ignorant" of an injury and the injury was inherently unknowable. For instance, the Delaware statute of limitations for legal malpractice/negligence is three years, starting when the malpractice/negligence occurred. Where the Discovery Rule applies, the statute of limitations period does not start - or is "tolled" - until the plaintiff discovers either facts constituting the basis of the claim or the existence of facts or observable factors that would indicate a problem. However, instead of a simple Discovery Rule analysis, the Sammons Court laid the groundwork for preclusion of claims, notably malpractice and negligence, that conflict with the signatory's assent to contract terms understandable by laypeople of ordinary intelligence.

In Sammons, a plaintiff sued his former attorney, claiming that the Discovery Rule tolled the statute of limitations period for a malpractice/negligence claim against the attorney. The plaintiff maintained that he did not understand the effect of a four-paragraph document his attorney drafted, which revoked his then-existing pre-nuptial agreement, when he signed the revocation document more than three years prior to filing suit against the attorney. He claimed he was unable to understand the document and such words as "revocation" and "rescission" because he only had a high school education. He further asserted that his alleged inability to understand the document rendered him unable to realize that he had a malpractice/negligence claim against his lawyer. Significantly, he claimed that his attorney did not explain the revocation to him and, instead, actually misrepresented the contents of the document to him.

Upon motion, the trial court granted summary judgment to the defendant attorney, concluding that the applicable statute of limitations barred the plaintiff's claims. The plaintiff appealed. The Delaware Supreme Court affirmed the trial court's summary judgment.

The Sammons Court was confronted with the question of whether the lawyer's duty to keep his client informed, and to explain documents to a client who is signing them, relieved the client of his independent duty to read and understand the documents. The answer to this question is of particular importance in a state where the law requires an attorney to explain mortgage documents - and at a time when foreclosure proceedings are being filed with some frequency.

The Sammons Court emphasized and re-affirmed a signatory's duty to read a document himself and confirmed that a person is bound by the details of a document he signed even if he failed to inform himself of the details. The Court pointed out that it is reasonable to assume that a layman of ordinary intelligence would understand, at a minimum, that "revocation" means "the act of recalling or taking back," even if he would not understand the legal implications of the term. Therefore, the plaintiff's knowledge that the pre-nuptial agreement was being recalled or taken back should have put the plaintiff on notice that there was a problem with the document he was signing - if the plaintiff did not want to revoke the previous pre-nuptial, as he claimed in his lawsuit.

The further logical extension of this requirement to understand plain language is that a signatory's knowledge of, and assent to, the plain language terms of a contract operate to bar any claim against the drafting attorney for including provisions that the signatory supposedly did not want, or failing, on the other hand, to include contract provisions that the signatory might later claim he requested.

With regard to the attorney's alleged misrepresentation, the Court reasoned that a recipient of false information is required to use his senses and cannot recover for his injuries if the falsity of a misrepresentation would be obvious to him had he but used his opportunity to make a cursory examination or investigation of the document. Thus, if the plaintiff had read the revocation document, he would have had the knowledge to determine whether his attorney was misrepresenting its contents. Furthermore, in order to claim misrepresentation, the court pointed out that the plaintiff would have to show justifiable reliance on the attorney's misrepresentations. On the facts in Sammons, if the attorney had lied to the plaintiff, the plaintiff could not have justifiably relied on the attorney's alleged oral misrepresentations, which would have been in obvious conflict with the written provisions of the revocation document.

A more recent decision by the Delaware Court of Chancery, Sokol Holdings, Inc. v. Dorsey & Whitney, LLP, No. 3874-VCS, 2009 Del. Ch. LEXIS 142 (Del. Ch. Aug. 5, 2009), echoed the theme of client responsibility in line with the Sammons decision. In Sokol, a client sued its law firm for professional negligence and breach of fiduciary duty. In an analysis of jurisdiction, the Chancery Court, Delaware's court of equity, found that it did not have jurisdiction over the action because the attorney did not act in a fiduciary capacity. The Sokol Court reasoned that an attorney is not a fiduciary of a party unless the attorney goes beyond providing legal services and has actual control of a party's property - such control being the hallmark of a fiduciary relationship. Again, the case law continues to affirm a client's responsibilities to be an aware and discerning participant in an attorney-client relationship.

*Art and Scott are associates in our Wilmington, Delaware, office and can be reached at (302) 552-4300 or acaranilla@mdwcg.com and jsshannon@mdwcg.com, respectively.

Defense Digest, Vol. 15, No. 4, December 2009

Affiliated Attorney

Art C. Aranilla
Special Counsel
(302) 552-4354
acaranilla@mdwcg.com

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