The Colorado Supreme Court issued its opinion in Allen v. Steele on May 9, 2011.
Negligent Misrepresentation—Prospective Client—Existence of Attorney–Client Relationship.
The Supreme Court held as a matter of law that an initial consultation with an attorney to discuss a potential civil lawsuit is not sufficient to meet the element of “guidance of others in their business transactions.” Because plaintiffs did not plead sufficient facts to demonstrate that an attorney provided them with false information as guidance in a business transaction, plaintiffs failed to state a claim of negligent misrepresentation for which relief can be granted.
The Court also held that a claim of negligent misrepresentation may not be founded on the requirement in Restatement (Third) of The Law Governing Lawyers, § 15(1)(c) that attorneys owe a duty of reasonable care to prospective clients. Accordingly, the Court reversed the court of appeals’ decision that plaintiffs stated a claim of negligent misrepresentation for which relief can be granted.
Summary and full case available here.