Oakland Police & Fire Retirement System v. Mayer Brown, LLP

Dist. Ct. did not err in dismissing for failure to state claim, plaintiffs’ legal malpractice action against defendant-law firm under circumstances where defendant was directed by its client (General Motors) to draft release of collateral used to secure 2001 loan, but mistakenly included in said release plaintiffs-lenders’ security interests in 2006 loan they made to General Motors that was unrelated to 2001 loan. Plaintiffs did not bring instant action against its own law firm, which had reviewed instant release, or against bank that had acted as agent for separate groups of lenders in 2001 and 2006 loans, and Dist. Ct. properly found that defendant did not owe duty of care to plaintiffs, who mere non-clients, where plaintiffs were parties who were adverse to defendant’s client in 2006 loan transaction, and who had retained their own law firm to represent their interests. Moreover, plaintiff had failed to establish that they qualified as third-party beneficiaries, and Ct. rejected plaintiffs’ claim that defendant owed them duty of care either because defendant had represented plaintiff’s agent, i.e., instant bank, in different transactions or because defendant had voluntarily undertook to perform instant drafting service, such that plaintiffs could justifiably rely on defendant’s actions.