Attorney's Duty of Care. Sheila Simpson and the other two shareholders in H. P. En-terprises Corp decided to sell the corporation and turned to Ed Oliver, an attorney, for assis-tance. Oliver formed a corporation, Tide Creek, for a group of investors, and Tide Creek then purchased the assets of H. P. Enterprises for 500,000, 100,000 of which was paid at the time of the sale in November 1983. As security for the sellers, Oliver provided a lien on the stock of Tide Creek and personal guaranties of the buyers on the corporation's 400,000 note to the sellers. Oliver was the sole source of legal advice for both parties. About six months after the sale, a fire destroyed Tide Creek's inventory. In October 1984, Oliver left the law firm in which he had been a partner, and one of the other partners, David James, took over the Simpson and Tide Creek accounts. In January 1985, James advised Simpson that Tide Creek was having financial difficulties and suggested that the note be restructured; this was accomplished. When Simpson asked James what he would do if her interests and those of Tide Creek diverged, James replied, We would have to support you. Tide Creek later filed for bankruptcy, as did the individuals who had personally guaranteed the note, and Simpson and the others received nothing. Should the sellers succeed in a lawsuit against James for negligence? Discuss fully.
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