Calvert v. Scharf

Decision Date30 June 2005
Docket NumberNo. 31790.,No. 31788.,No. 31789.,31788.,31789.,31790.
Citation619 S.E.2d 197
CourtWest Virginia Supreme Court
PartiesJames A. CALVERT, Jr., an Individual and as Representative of the Estate of James A. Calvert, Sr., Deceased; Kim Marie Kizer, an Individual; Robin Calvert Boyias, an Individual; and William Carlyle Calvert, an Individual, Plaintiffs Below, Petitioners in No. 31789, Respondents in Nos. 31788 & 31790, v. William SCHARF, an Individual; And Bowles Rice McDavid Graff & Love, P.L.L.C., a West Virginia Professional Limited Liability Corporation, Defendants Below, Respondents in No. 31789, Petitioners in Nos. 31788 & 31790.

Timothy J. LaFon, Michael J. Del Giudice, Ciccarello, Del Giudice & LaFon, Charleston and Carl S. Kravitz, Blair G. Brown, Zuckerman Spaeder, L.L.P., Washington, DC, for James A. Calvert, Jr., et al.

Charles R. Bailey, Billie Jo Streyle, Bailey and Wyant, P.L.L.C., Charleston, for William H. Scharf.

Michael J. Farrell, Robert L. Hogan, Farrell, Farrell & Farrell, L.C., Huntington, for Bowles Rice McDavid Graff & Love, P.L.L.C.

DAVIS, Justice:

In this action for attorney malpractice in the drafting of a will, the circuit court of Kanawha County certifies nine questions for determination by this Court. The subject will purported to exercise a power to appoint granted to Erma D. Surface, deceased, by her deceased husband's will. This malpractice action was brought by James A. Calvert, Jr., individually and as personal representative of the estate of his father, James A. Calvert, Sr., deceased, and his siblings (also children of James A. Calvert, Sr.), Kim Marie Kizer, Robin Calvert Boyias, and William Carlyle Calvert (hereinafter collectively referred to as "the Calverts"), who are all beneficiaries under Erma D. Surface's will. After carefully considering the nine certified questions, the briefs and oral arguments of the various parties, the record submitted on appeal, and the pertinent authorities, we reformulate the certified questions into one question and conclude that, while beneficiaries of a will have limited standing to assert a malpractice claim alleging negligence on the part of the lawyer who prepared the will, the Calverts may not pursue their cause of action under the particular facts of this case as they have failed to establish that they have suffered damages that were proximately caused by attorney malpractice.


The facts underlying the instant dispute began with the wills of Garrett H. Surface (hereinafter referred to as "Garrett") and Erma D. Surface (hereinafter referred to as "Erma"). Garrett and Erma Surface were husband and wife. There were apparently no children born of the marriage, but Garrett and Erma each had a child from a prior marriage. Garrett's child, a daughter, is Delores Carole Surface (hereinafter referred to as "Delores" or "Garrett's daughter").1 Erma's child, a son, is James A. Calvert, Sr.2

On July 18, 1978, Garrett executed his Last Will and Testament (hereinafter referred to as "Garrett's will"). Garrett's will, which was drafted by attorney John Smallridge, established a marital trust and granted a testamentary general power of appointment over the property in the marital trust to his wife, Erma. This provision, located at "ITEM FIVE," "Paragraph I.B." of Garrett's will, states:

My wife shall have the right and power to appoint, as hereinafter provided, by her Last Will and Testament the entire principal of the MARITAL TRUST, as constituted at the time of her death, to her estate, to her creditors, or to such person or persons as she may designate in her sole, absolute and unrestricted discretion. The aforesaid power of appointment shall be exercisable by my wife in her Will by a separate ITEM in which she specifically refers to this power of appointment and in which ITEM she does not dispose of or attempt to dispose of any other property. This power of appointment in my wife shall be exercisable by her, alone and in all events. If, however, no marital deduction is allowable for federal estate tax purposes at the time of my death, then this paragraph I B shall have no effect, and my wife shall have no power of appointment over the principal of the MARITAL TRUST.

Garrett's will also established a charitable remainder unitrust to pay five percent of its net fair market value annually to his daughter Delores, commencing upon Garrett's death (hereinafter referred to as the "Residuary Trust"). Upon the death of Garrett's daughter, the principal of the Residuary Trust was to be split equally between the Union Mission Settlement, Inc., and World Vision, Inc. (hereinafter referred to as "the Default Charities"). In the event that Erma failed to exercise the power of appointment granted to her in Garrett's will, the principal of the marital trust was to be combined with the Residuary Trust created for the benefit of Delores and the Default Charities:

If my wife should fail, in whole or in part, to exercise by her Last Will and Testament the power of appointment given to her in respect to the principal of the MARITAL TRUST, the Trustee shall add the principal remaining in the MARITAL TRUST, not validly appointed as aforesaid, to the principal of the RESIDUARY TRUST; and thereafter the combined principals of the MARITAL TRUST and the RESIDUARY TRUST shall be administered and distributed as hereinafter provided.

Garrett's will, "ITEM FIVE," "Paragraph I.C."

Garrett died in May, 1979. Shortly thereafter, attorney Smallridge prepared a will for Erma, which, the parties agree, contained a valid and effective exercise of the general testamentary power of appointment granted to Erma in Garrett's will. However, in 1984 Erma retained the law firm now known as Bowles Rice McDavid Graff & Love, P.L.L.C. (hereinafter referred to as "Bowles Rice") to perform estate planning services on her behalf. Pursuant to this engagement, William Scharf, then a partner at Bowles Rice, drafted a new will for Erma (hereinafter referred to as "Erma's will"), along with several trust documents including a revocable trust (hereinafter referred to as "the Living Trust"). With respect to exercising Erma's power of appointment as granted in Garrett's will, Erma's will stated:

SECOND: All the rest, residue and remainder of my property and estate, of whatever nature and wherever situate, including all property over which I have a power of appointment under Item Five I B of the will of my husband, GARRETT H. SURFACE, who died May 2, 1979, which said will is dated July 18, 1978, and is of record in the office of the Clerk of the County Commission of Kanawha County, West Virginia, in Will Book 321, at page 160, which power of appointment I hereby specifically exercise, after payment of any debts, expenses of administration and taxes, I give, devise and bequeath to the Trustee under the existing Trust Agreement executed by me as Grantor and by the Bank of West Virginia as Trustee, on June 1, 1984, at 9:30 A.M., and establishing a revocable trust [(the Living Trust)] for my benefit, to be added to the principal of the trust assets held thereunder as if said rest, residue and remainder of my estate had originally formed a part thereof, and to be held, administered and distributed in accordance with the provisions of said Trust Agreement.

Thus, Erma sought to appoint the Living Trust as beneficiary of the property over which she had been granted the power of appointment by Garrett's will. In turn, the beneficiaries of the Living Trust were the Calverts (plaintiffs in this malpractice action). Subsequently, the Living Trust was amended on four separate occasions. The final two amendments were prepared by the law firm of Jackson Kelly, L.L.P. In its final version, the Living Trust established five charitable unitrusts (one for each of the Calverts) as additional beneficiaries. Under the amended terms, each Calvert was to receive annual distributions from a corresponding unitrust. Five charities (hereinafter referred to as the "Appointed Charities"), one corresponding to each unitrust, were appointed to receive the principal remaining in its designated unitrust upon the death of the corresponding Calvert.

Erma died in 1999. Subsequent to her death, One Valley Bank, successor-in-interest to the Bank of West Virginia, as executor of Erma's estate and as trustee of Erma's Living Trust, Garrett's Marital Trust, and Garrett's Residuary Trust, filed a declaratory judgment action in the Circuit Court of Kanawha County, West Virginia.3 One Valley Bank sought an affirmative declaration that it should distribute the assets of Garrett's Marital Trust into the Living Trust. In addition to One Valley Bank, the parties to the declaratory judgment action were the Calverts, the Calverts' minor children, the Appointed Charities, Garrett's daughter Delores, and the Default Charities.

The issue in the declaratory judgment action was whether Erma's will complied with the requirements established in Garrett's will for the exercise of her power of appointment, as Garrett's will had required the appointment be by "a separate ITEM in which ... she does not dispose of or attempt to dispose of any other property." Erma's will exercised the power of appointment in a residuary clause that disposed of all of Erma's property. If Erma's will did not validly exercise the power of appointment, the Marital Trust would not fund the Living Trust of which the Calverts and the Appointed Charities are the beneficiaries. Instead, under the terms of Garrett's will, the Marital Trust would fund the Residuary Trust, of which Garrett's daughter Delores and the Default Charities are the beneficiaries.

Shortly before a scheduled hearing on cross-motions for summary judgment in the declaratory judgment action, the parties notified Judge Charles E. King, Jr., that a settlement had been reached. Following a hearing held on March 1, 2002, Judge King entered an...

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