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STATE OF MINNESOTA IN SUPREME COURT A06-486

Court of Appeals

Meyer, J. Took no part, Page and Dietzen, JJ.

McIntosh County Bank, et al., Respondents, vs. Dorsey & Whitney, LLP, Appellant. Filed: March 6, 2008 Office of Appellate Courts

SYLLABUS 1. The rule of law announced in Marker v. Greenberg, 313 N.W.2d 4 (Minn.

1981), is affirmed. In order for a party to proceed in a legal malpractice action, that party must be a direct and intended beneficiary of the attorney's services. 2. A third party is a direct and intended beneficiary of an attorney-client

relationship if a transaction has as a central purpose an effect on that party, the client intends the effect as a purpose of the transaction, and the lawyer is aware of the client's intent to benefit that party. 3. An implied contract for legal services does not exist between an attorney

and a party if the attorney is unaware of the party's identity, there are no communications

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between the attorney and that party, and there is no notice to the attorney that he or she is expected to represent the party. Reversed. Heard, considered, and decided by the court en banc. OPINION MEYER, Justice. Respondents McIntosh County Bank, et al. (respondents) purchased participation interests in a loan sold to them by Miller & Schroeder (M & S). Appellant law firm Dorsey & Whitney, LLP, (Dorsey) was hired by M & S to assist in structuring, documenting, and securing the loan. After the loan was unpaid, the respondents filed a legal malpractice suit against Dorsey, alleging that the respondents were the third-party beneficiaries of the attorney-client relationship between Dorsey and M & S, because M & S intended Dorsey's services in documenting the loan transaction to benefit the banks that purchased participation interests in the loan. The district court determined that the respondents were neither clients nor third-party beneficiaries, and granted summary judgment to Dorsey. The court of appeals reversed the district court's grant of summary judgment on implied contract and third-party beneficiary theories of standing, holding that the district court failed to apply the appropriate test to determine whether Dorsey owed a duty to the respondents as third-party beneficiaries. We reverse the court of appeals and affirm the district court's grant of summary judgment. The St. Regis Mohawk Tribe (Tribe) and President R.C.-St. Regis Management Company (President) entered into a Fourth Amended and Restated Management 2

Agreement (Management Agreement) dated November 7, 1997.

The Management

Agreement required President to pay all development expenses for a casino to be opened on the Tribe's land and to manage the casino once it was built. The Tribe was required to repay the development expenses to President, as well as fees for the management services. The amounts due to President at any particular time were determined with reference to the casino's revenues. Management contracts and collateral agreements between Indian tribes and casino management companies are subject to approval by the National Indian Gaming Commission (NIGC). 25 U.S.C.

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