Caba v. Barker, CC 0107-07280.

Decision Date19 October 2006
Docket NumberCA A118089.,SC S51769.,CC 0107-07280.
PartiesSandra CABA and Floy Jones, Respondents on Review, v. Anthony J. BARKER, Petitioner on Review.
CourtOregon Supreme Court

Brian R. Talcott, Dunn Carney Allen Higgins & Tongue LLP, Portland, argued the cause for petitioner on review. With him on the briefs were Thomas H. Tongue and Madeleine S. Campbell.

Thomas W. Sondag, Lane Powell PC, Portland, argued the cause and filed the brief for respondents on review.

Before CARSON,** Chief Justice, and GILLETTE, DURHAM, RIGGS,*** DE MUNIZ, BALMER, and KISTLER, Justices.††

GILLETTE, J.

In this case, two residual legatees1 of a will brought an action against the lawyer who drafted it. Plaintiffs assert that, in addition to their status as residual legatees, they are the intended third-party beneficiaries of what they characterize as an "implied" promise that they allege that defendant made to testator in connection with that will. Plaintiffs further allege that defendant failed to carry out the terms of his implied promise to testator, that they suffered damages as a result of that failure, and that they have either a viable breach of contract claim or a viable negligence claim (or both) against defendant as a result. The trial court dismissed plaintiffs' complaint for failing to state claims for either breach of contract or negligence. The Court of Appeals reversed, holding that, under Hale v. Groce, 304 Or. 281, 744 P.2d 1289 (1987), plaintiffs sufficiently had alleged that they were intended third-party beneficiaries of promises associated with the drafting of testator's will and that they had alleged legally sufficient claims for losses suffered as a result of defendant's failure to perform in conformance with his implied promise. Caba v. Barker, 193 Or.App. 768, 93 P.3d 74 (2004). We allowed review and, for the reasons that follow, reverse the decision of the Court of Appeals.

Because this is an appeal from a trial court order dismissing a complaint under ORCP 21 A(8),2 we assume that all well-pleaded facts are true and give plaintiffs the benefit of all favorable inferences that reasonably may be drawn from those factual allegations. See, e.g., Babick v. Oregon Arena Corp., 333 Or. 401, 407, 40 P.3d 1059 (2002) (stating standard of review). Plaintiffs' third amended complaint alleges that, in October 1999, Laura Carnese (testator) was suffering from the effects of a stroke. Charles Carnese (Carnese), testator's relative by marriage and a friend and former colleague of defendant, arranged for defendant to prepare testator's will. The resulting will designated Carnese as executor of the estate and named him as both a beneficiary of a cash gift and as a residual legatee along with plaintiffs and three others. Testator executed that will on October 22, 1999; she died the following month. Shortly after the court admitted the will to probate, a will contest was filed. The estate subsequently settled that will contest. The settlement diminished each residual legatee's share of the estate by $103,569.50.

Plaintiffs then filed the present breach of contract and professional negligence action against defendant. In addition to the facts recited above, plaintiffs alleged the following facts in support of their breach of contract claim:

"[D]efendant promised to prepare a will for [testator]. * * * Defendant knew that [testator's] estate plan included residuary bequests to plaintiff[s.]

"Defendant's promise to prepare [testator's] will included an implied promise to make the will invulnerable to a will contest so as to achieve [testator's] plan to maximize gifts to residuary beneficiaries, including [plaintiffs]. [Plaintiffs] were intended, donee beneficiaries of defendant's promises, including his promise to prepare a will which would not be attacked by a will contest.

"* * *

"The will contest would not have been filed if [testator's] will had been prepared by an independent lawyer. * * * In preparing [testator's] will, defendant, under the circumstances, breached his implied promise to make the will invulnerable to a will contest, resulting in damages to plaintiffs, who bring this breach of contract claim as intended donee beneficiaries of defendant's implied promise to [testator]."

(Emphasis added.)

Plaintiffs incorporated the above-mentioned allegations in their negligence claim, in which they also alleged that defendant had been negligent in several particulars related to exposing testator's estate plan to a will contest and "failing to otherwise minimize the chances of a will contest being filed or the success of a will contest."

Defendant moved to dismiss both plaintiffs' claims, arguing that plaintiffs did not allege that defendant had made a specific contractual promise to render the will invulnerable to a contest. Defendant argued that an implied promise to do so is legally insufficient to support either of plaintiffs' claims or to establish that plaintiffs were intended third-party beneficiaries of defendant's contract with testator. The trial court agreed, concluding that an implied promise to make a will impervious to attack alleges only a professional duty that a lawyer owes to a client and not a duty that runs to nonclients.

Plaintiffs appealed, and the Court of Appeals reversed the trial court's decision. Caba, 193 Or.App. at 783, 93 P.3d 74. That court concluded that, under Hale, plaintiffs were classic "intended" third-party beneficiaries of defendant's promises, including the implied promise to act in a professionally competent manner. Id. at 779, 93 P.3d 74. Accordingly, the court concluded that plaintiffs properly had pleaded their breach of contract and negligence claims by alleging that defendant had breached "a promise to prepare a will that is `invulnerable' to challenge." Id. at 782, 93 P.3d 74. We allowed defendant's petition for review.

Defendant argues to this court, as he did before the Court of Appeals, that plaintiffs must allege a specific and express promise before they may proceed against a lawyer in a third-party, nonclient action for either breach of contract or negligence. With respect to plaintiffs' breach of contract claim, however, defendant also argues that a promise to render the will invulnerable to a will contest alleges only a general standard of care that cannot support a contract action. Finally, defendant argues that plaintiffs have failed to state any basis for relief.

Plaintiffs' case — and, as noted, the Court of Appeals opinion — relied heavily on this court's decision in Hale, 304 Or. 281, 744 P.2d 1289. We therefore turn first to that case as an essential step in analyzing plaintiffs' claims in the present action.

In Hale, the defendant lawyer had promised the testator that he would include in the testator's will a specific bequest to the plaintiff. The lawyer then unaccountably failed to carry out that promise. The plaintiff, after unsuccessfully attempting to reform the will, brought an action against the lawyer for breach of contract and negligence. This court held that the plaintiff's complaint stated claims both for breach of contract and for negligence but, as we shall show, our analysis in that regard demonstrates why the same may not be said for plaintiffs' complaint here.

The court in Hale began by observing,

"The two claims are related, but they differ in important respects. Standing alone, without a duty to plaintiff derived from defendant's contractual undertaking, plaintiff's tort claim would confront the rule that one ordinarily is not liable for negligently causing a stranger's purely economic loss without injuring his person or property. * * * It does not suffice that the harm is a foreseeable consequence of negligent conduct that may make one liable to someone else, for instance to a client. Some source of a duty outside the common law of negligence is required. * * * A contract claim, on the other hand, does not necessarily depend on showing negligence."

304 Or. at 283-84, 744 P.2d 1289 (citations omitted). The court then turned to the question whether the allegations in the plaintiff's complaint were sufficient to permit him to assert "third-party beneficiary" status. The court stated:

"We agree that the beneficiary in these cases is not only a plausible but a classic `intended' third-party beneficiary of the lawyer's promise to his client within the rule of [the] Restatement [ (Second) of Contracts] section 302(1)(b) and may enforce the duty so created[.]"

Id. at 286, 744 P.2d 1289. The court went on to hold that,

"[b]ecause under third-party analysis the contract creates a `duty' not only to the promisee, the client, but also to the intended beneficiary, negligent nonperformance may give rise to a negligence action as well."

Id.

The court in Hale considered a will beneficiary to be a classic "intended" third-party beneficiary when the facts satisfy the standards in the Restatement (Second) of Contracts,...

To continue reading

Request your trial
16 cases
  • PAUL v. PROVIDENCE HEALTH SYSTEM-Or.
    • United States
    • Oregon Court of Appeals
    • October 6, 2010
    ...and give the party opposing the motion the benefit of all reasonable inferences that can be drawn from those facts. Caba v. Barker, 341 Or. 534, 536, 145 P.3d 174 (2006). Accordingly, we take the facts from plaintiffs' third amended complaint. The facts alleged in this case are few: An empl......
  • Piazza ex rel. Piazza v. Kellim
    • United States
    • Oregon Supreme Court
    • July 21, 2016
    ...the benefit of all favorable inferences that reasonably may be drawn from those factual allegations. See, e.g. , Caba v. Barker , 341 Or. 534, 536, 145 P.3d 174 (2006) (stating standard of review). Plaintiff alleged that Delgado, age 17, was staying with a host family in White Salmon, Washi......
  • Lowe v. Philip Morris Usa, Inc.
    • United States
    • Oregon Supreme Court
    • May 1, 2008
    ...gives the party opposing the motion the benefit of all reasonable inferences that may be drawn from those facts. See Caba v. Barker, 341 Or. 534, 536, 145 P.3d 174 (2006) (stating standard of 2. Although the complaint does not define the term "pack year," one court has explained that "pack ......
  • Frakes v. Nay
    • United States
    • Oregon Court of Appeals
    • December 19, 2012
    ...between Nay and Velma—to recover for purely economic losses arising out of Nay's negligent performance as an attorney. See Caba v. Barker, 341 Or. 534, 541 n. 3, 145 P.3d 174 (2006) (residual legatees “would not be able to sustain their claims under the more general, professional negligence......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT