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Vanguard Production, Inc. v. Martin

United States Court of Appeals for the Tenth Circuit

894 F.2d 375 (1990)

Facts

Vanguard Production, Inc. (Vanguard) (plaintiff) was negotiating for assignment of an oil-and-gas lease. Vanguard and lender Glenfed agreed that Glenfed would select the lawyers for the title and closing work and Vanguard would pay the fees. Glenfed chose the law firm Ames, Ashabranner, Taylor, Lawrence, Laudick and Morgan (Ames) (defendant). Ames partner David Morgan hired Billy Martin (defendants) to assist him. Martin had prepared a title opinion for a third-party warning that Texas Rose Petroleum (TRP) had sued the seller for damages involving the lease. Morgan and Martin advised Vanguard that TRP’s suit would not harm the title because its dismissal would cure any title defect. The TRP lawsuit was dismissed, and Morgan and Martin omitted mention of it in the opinion prepared for Glenfed. After the deal closed, TRP’s suit was refiled, and TRP’s claim to 75 percent of the lease was sustained. Vanguard sued Martin, Morgan, and Ames (the lawyers) for malpractice. The district court granted summary judgment to the lawyers, holding that the lawyers and Vanguard had no attorney-client relationship and therefore the lawyers owed no duty to Vanguard. Vanguard appealed.

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Holding and Reasoning (Tacha, J.)

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