Auric v. Continental Cas. Co.

• Decision Date: 29 March 1983
• Docket Number: No. 82-1121,82-1121
• Citation: 111 Wis.2d 507,331 N.W.2d 325
• Parties: Robert AURIC, Plaintiff-Appellant, v. CONTINENTAL CASUALTY COMPANY and Timothy P. Crawford, Defendants-Respondents.
• Court: Wisconsin Supreme Court

Page 325

331 N.W.2d 325

111 Wis.2d 507

Robert AURIC, Plaintiff-Appellant, v. CONTINENTAL CASUALTY COMPANY and Timothy P. Crawford Defendants-Respondents.

No. 82-1121.

Supreme Court of Wisconsin.

Argued March 1, 1983.

Decided March 29, 1983.

Merton N. Rotter (argued), Milwaukee, for plaintiff-appellant; Warshafsky, Rotter, Tarnoff, Gesler & Reinhardt, S.C., Milwaukee, on brief.

C. James Heft (argued), Racine, for defendants-respondents; Heft, Dye, Heft & Paulson, Racine, on brief.

DAY, Justice.

This is an appeal from a judgment of the circuit court for Racine county, James W. Wilbershide, Judge, which dismissed Robert Auric's (Auric) complaint. Auric appealed and filed a petition to bypass the court of appeals pursuant to section 808.05, Stats. 1979-80. This court granted the petition on November 8, 1982.

There are three issues to be considered on appeal. The first issue is: May an attorney who drafted a will be held liable to a beneficiary of the will not in privity with the attorney for the attorney's negligence in failing to properly supervise the execution of the will?

The second issue is: Should the respondent be allowed to challenge a trial court order denying his motion for summary judgment when he has failed to file a notice of cross-appeal pursuant to section 809.10(2)(b), Stats. 1979-80. ¹

The final issue is: When does the statute of limitations in section 893.52, Stats. 1979-80 ² commence to run in an action by a will beneficiary against an attorney for negligently supervising the execution of a will?

We conclude that the beneficiary of a will may maintain an action against an attorney who negligently drafted or supervised the execution of the will even though the beneficiary is not in privity with that attorney. We deny plaintiff-appellant's motion to dismiss the defendant-respondent's cross-appeal because the defendant failed to file a cross-appeal under section 809.10(2)(b), Stats., but raised the issue for the first time in his brief on appeal. We also conclude that the plaintiff, Auric's action was commenced within the period of the statute of limitations.

Accordingly, we reverse the decision of the trial court and direct the trial court to enter judgment in favor of the plaintiff in the amount of $25,000, the amount bequeathed to him in the invalid will. We remand the case to the trial court to determine whether an award of prejudgment interest should be made. ³

This action was tried on stipulated facts as follows.

The testator, Frank P. Goldstein, died on April 13, 1975. Prior to his death, the decedent had attorney Timothy P. Crawford draft a new Will and Revocable Living Trust to replace a previous will dated April 30, 1970. On July 24, 1973, Mr. Crawford had the decedent come to his office to execute the new will and trust. Crawford explained the provisions of the trust to the decedent, had him sign the document, and then both Crawford and his secretary signed the trust document as witnesses. Crawford then explained the provisions of the will to the decedent and had him sign that document. Crawford then signed as a witness. However, because of what was characterized as either "confusion" or a "mistake of the moment," Crawford's secretary failed to sign the will.

The 1973 will contained a specific bequest of $25,000 to Robert Auric, who was Mr. Goldstein's brother. The 1970 will contained no such bequest.

On July 1, 1975, the Racine County Probate Court ordered the 1970 will admitted to probate and denied admission to the 1973 will because it was not executed as required by section 853.03(2), Stats. 1971, ⁴ which required two subscribing witnesses.

Crawford specifically stipulated that his action in failing to obtain the signature of a second witness to the July 24, 1973 will was negligent but "clearly not fraudulent."

On March 12, 1981, Auric filed an action against Crawford. His action contained two claims--one based on a theory of breach of an implied contract and the other based on negligence.

On June 1, 1981, Crawford moved for summary judgment on the grounds that both claims were barred by the statute of limitations. On October 29, 1981, Judge Willbershide issued a written decision granting Crawford's motion on the contract action but denying the motion on the negligence action. Judge Wilbershide reasoned that the breach of contract occurred on the date of the negligent act, July 24, 1973, and thus an action for breach of contract which was commenced on March 12, 1981, was brought well after the six-year statute of limitations for actions on contracts. Judge Wilbershide, however, also concluded that the statute of limitations for the negligence action did not commence to run until the date Goldstein died, April 13, 1975, and thus the negligence action was commenced within the six-year period.

The case was then submitted to the trial court on the stipulated facts. The trial court issued a written decision on April 30, 1982, in which it ruled that Crawford was not liable to Auric for his negligent act because no privity existed between the two. The court therefore dismissed Auric's complaint in an order dated May 17, 1982.

Auric appealed and this court granted his petition to bypass the court of appeals.

The first issue is whether an attorney may be held liable to a beneficiary of a will not in privity with the attorney for the attorney's negligence in drafting or supervising the execution of the will.

While it has long been the general rule that an attorney is not liable to third parties for acts committed in the exercise of his duties as an attorney, this rule is not without exceptions. Where fraud has been involved, attorneys have been held liable to third parties. Scandrett v. Greenhouse, 244 Wis. 108, 11 N.W.2d 510 (1943). This exception was reaffirmed in Goerke v. Vojvodich, 67 Wis.2d 102, 108, 226 N.W.2d 211 (1975), a case in which the court affirmed a trial court's dismissal of a third-party complaint against an attorney because the complaint failed to state a cause of action in fraud or wrongful conduct.

The question is should an exception be recognized to the general rule of attorney nonliability to third parties to allow a beneficiary of a will to sue an attorney for his negligence in drafting or supervising the execution of a will. This court has frequently stated that it is a question of public policy--and, thus, one appropriate for a determination by this court--as to whether liability should not be imposed even though damage is caused by the negligent act of another. Kornitz v. Earling & Hiller, Inc., 49 Wis.2d 97, 102-103, 181 N.W.2d 403 (1970); Coffey v. City of Milwaukee, 74 Wis.2d 526, 541, 247 N.W.2d 132 (1976); Ollerman v. O'Rourke Co. Inc., 94 Wis.2d 17, 51, 288 N.W.2d 95 (1980). The question of whether to impose liability upon the attorney here is one that involves a consideration of public policy.

Jurisdictions which have considered this question are divided on the issue. See Annot., Attorneys-Liability to Third Parties, 45 A.L.R.3d 1181. Where courts have shied away from allowing the imposition of liability, concern has been expressed that such liability may conflict with the duty an attorney owes to his client. Clagett v. Dacy, 47 Md.App. 23, 420 A.2d 1285, 1289-1290 (1980). Courts that have allowed the imposition of liability seem to recognize that it will make attorneys more careful in the execution of their responsibilities to their clients. Lucas v. Hamm, 56 Cal.2d 583, 15 Cal.Rptr. 821, 824, 364 P.2d 685, 688 (1961), cert. denied 368 U.S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525 (1962); Licata v. Spector, 26 Conn.Sup. 378, 381, 225 A.2d 28 (1966). This is especially true where the beneficiaries of wills have been the injured third parties because, as the court in Licata wrote, "public policy would seem to favor the court's extending its equitable arm to assist innocent parties seeking just damages resulting from an error committed by another and affecting their rights, which error those innocent parties were never themselves able to correct." 26 Conn.Sup. at 382, 225 A.2d 28.

In this state, there is a constitutional right to make a will and to have it carried out according to the testator's intentions. Cowie v. Strohmeyer, 150 Wis. 401, 136 N.W. 956 (1912); Estate of Ogg, 262 Wis. 181, 186, 187, 54 N.W.2d 175 (1952); Will of Wright, 12 Wis.2d 375, 380, 107 N.W.2d 146 (1961). This right reflects a strong concern that people should be as free as possible to dispose of their property upon their death. Allowing a will beneficiary to maintain a suit against an attorney who negligently drafts or supervises the execution of a will is one way to make an attorney accountable for his negligence.

Accountability should result in increasing the care with which attorneys draft wills and see to their execution. It is consistent with and promotes this state's longstanding public policy supporting the right of a testator to make a will and have its provisions carried out. Public policy supports the imposition of liability on an attorney who acts negligently in drafting or supervising the execution of a will resulting in a loss to a beneficiary named therein. Therefore the lack of privity should not be a bar to this action.

Such a determination is consistent with decisions of other jurisdictions which have abandoned a strict privity test in will beneficiary suits against attorneys. Many of those courts have relied upon a balancing of the factors set out in Lucas. ⁵ Those factors are: "the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury, and the policy of preventing future harm." 15 Cal.Rptr. at 823, 364 P.2d at 687.

Examining these factors in light of the stipulated facts in this case, it is clear that this will was intended to bring direct...