In a recent legal-malpractice case, the Supreme Court of New Jersey adopted the standard set forth in § 51 of the Restatement of the Law Third, the Law Governing Lawyers, as the appropriate test for determining when an attorney owes a duty of care to a nonclient such that the nonclient can bring an action against the attorney for legal malpractice.
Christakos v. Boyadjis, 348 A.3d 966 (N.J. 2026), involved a dispute that arose after the death of two brothers who had hired an attorney to review and update their mirror-image wills. The testators’ sister-in-law and niece brought legal-malpractice and other claims against the attorney, alleging that the sister-in-law and niece were intended beneficiaries of the wills, and that the attorney breached his duty of care to them by misadvising the testators about the testators’ existing wills and negligently preparing the testators’ updated wills, causing the sister-in-law to receive less of the estates than she should have and the niece to be omitted as a beneficiary entirely. The trial court denied the attorney’s motion for summary judgment, finding that the attorney owed the sister-in-law and niece a duty of care because they were known potential beneficiaries of the estates, and that there were questions of fact as to whether the attorney breached that duty. On interlocutory appeal, the court of appeals reversed in part, holding that, while the attorney owed the sister-in-law a duty to correctly draft the wills because the wills named the sister-in-law as a beneficiary and were therefore intended to benefit her, the record was bereft of evidence that the niece was an intended beneficiary of the wills.
The Supreme Court of New Jersey adopted the test set forth in Restatement of the Law Third, the Law Governing Lawyers § 51 for determining when an attorney owed a duty of care to a nonclient such that the nonclient could bring an action for malpractice against the attorney, and affirmed based on that test, holding that the attorney did not owe a duty of care to the niece under either § 51(2) or (3). The court reasoned that the attorney did not owe the niece a duty under § 51(2), because it was undisputed that the niece did not rely on the attorney’s legal opinion, nor did he owe her a duty under § 51(3), because the testators’ intent to benefit her did not appear on the face of the wills, and no reasonable jury could find clear and convincing evidence that the attorney knew that the testators intended for their wills to benefit her.
In a property dispute on the other side of the country, the Supreme Court of Idaho adopted § 3.4 of the Restatement of the Law Third, Property (Servitudes), as the standard for determining the reasonableness of a restraint on alienation.
Smallwood v. Little, 583 P.3d 149 (Idaho 2026), dealt with a dispute between the owners of three adjacent parcels of property that originally shared a common owner. The original owner divided the single parcel into three parcels, which she transferred to her three children pursuant to grant deeds that contained nearly identical restrictions on alienation. The restrictions provided that the grantees could only convey the properties to or encumber them in favor of their siblings, nephews, and nieces who were alive at the time of the grant, and prohibited the grantees from conveying the properties to or encumbering them in favor of anyone else, including their own spouses and lineal descendants.
The owners of two of the properties sued, among others, the owners of the third property, seeking to quiet title to the properties and to obtain a declaratory judgment that the restrictions in the grant deeds were unreasonable restraints on alienation that were void as against public policy. The trial court granted summary judgment for the defendants, holding that the language in the grant deeds was unambiguous, and that the common-law rule against unreasonable restraints on alienation had recently been abrogated by the passage of a state statute that replaced the rule against perpetuities and provided a durational limitation for how long the alienation of property could be limited or conditioned.
The Supreme Court of Idaho vacated, holding that the statute did not abrogate the common-law rule against unreasonable restraints on alienation, which was therefore still in effect in Idaho, and that, as a matter of law, the restrictions on the grant deeds at issue were unreasonable restraints on alienation. In making its decision, the court adopted the modern formulation of the common-law rule against unreasonable restraints on alienation found in Restatement Third of Property (Servitudes) § 3.4, which provided that “[r]easonableness is determined by weighing the utility of the restraint against the injurious consequences of enforcing the restraint.” This approach, the court noted, reflected the historic practice in Idaho as well as longstanding common-law principles.
Applying the Restatement’s standard, the court concluded that the restrictions on the parties’ grant deeds were unreasonable; among other things, any utility in the apparent purpose of the restrictions—namely, keeping the properties in the family—was not fully effectuated by the language of the restrictions, and the restrictions, as written, were counterproductive in that they unreasonably prevented the grantees from realizing the full enjoyment and economic benefit of their properties, contrary to Idaho’s public policy favoring the full use of lands.