## Facts

- Ronald D. Liggett, a builder, contracted to construct a residence for Dean A. Young and Elisabeth Young.
- At the time the construction contract was executed, Dean Young was also Liggett’s attorney.
- The parties used a standard form contract, but Young drafted and added a paragraph requiring change orders to be in writing to be enforceable.
- Liggett contended that the parties agreed to multiple oral change orders increasing the project’s scope and cost and that the Youngs did not pay for the additional labor and materials.
- The Youngs asserted they fully paid under the written contract and relied on the written-change-order clause to deny any additional liability.
- A supplier sued Liggett for materials; Liggett filed a third-party complaint against the Youngs seeking payment, and the Youngs counterclaimed for allegedly negligent and untimely work.
- The trial court granted the Youngs partial summary judgment on all of Liggett’s claims and entered final judgment as to those claims; the court of appeals affirmed.

## Issues

1. Whether a contract drafted and entered into by an attorney with his builder/client is presumptively invalid as the product of undue influence under fiduciary-duty doctrine.
2. Whether the presumption shifts the burden to the attorney to prove the transaction’s fairness and the client’s informed, voluntary consent.
3. Whether, applying that framework, the Youngs were entitled to summary judgment enforcing the contract (including the written-change-order clause) against Liggett.

## Decision

- The Indiana Supreme Court reversed the grant of partial summary judgment for the Youngs and remanded.
- The court held that the attorney-client relationship triggered a presumption that the attorney’s business transaction with the client was invalid due to undue influence.
- Because the presumption placed the burden on the Youngs to show fairness and informed consent, and the record presented factual disputes on those points, summary judgment was improper.

## Legal Principles

- Transactions entered into while a fiduciary relationship exists are presumptively invalid as products of undue influence.
- The attorney-client relationship is fiduciary; business transactions between an attorney and client receive heightened scrutiny.
- Once the fiduciary relationship and transaction are shown, the burden shifts to the fiduciary to prove the transaction was fair, in good faith, and accepted by the client with full knowledge and voluntary, informed consent (often including independent advice or its equivalent).
- Summary judgment is inappropriate where the fiduciary presumption applies and the evidence permits differing conclusions about fairness, informed consent, or enforceability of contract terms drafted by the attorney.

## Conclusion

The court required fiduciary-duty analysis for a construction contract drafted by an attorney contracting with his client, holding the contract presumptively tainted by undue influence and sending the case back for fact-finding on whether the attorney rebutted the presumption and whether the contract terms could be enforced.


Liggett v. Young, 877 N.E.2d 178 (Ind. 2007)