Duggan v. Keto, 86-352.

• Decision Date: 28 February 1989
• Docket Number: No. 86-1274.,No. 86-352.,No. 86-727.,86-352.,86-727.,86-1274.
• Citation: 554 A.2d 1126
• Parties: Helena Lemp DUGGAN, et al., Appellants, v. George J. KETO, Personal Representative of the Estate of Mary Eileen Lemp, Appellee. Helena Lemp DUGGAN, et al., Appellants, v. Arthur PETER, Jr., et al., Appellees.
• Court: D.C. Court of Appeals

Page 1126

554 A.2d 1126

Helena Lemp DUGGAN, et al., Appellants, v. George J. KETO, Personal Representative of the Estate of Mary Eileen Lemp, Appellee.

Helena Lemp DUGGAN, et al., Appellants, v. Arthur PETER, Jr., et al., Appellees.

No. 86-352.

No. 86-727.

No. 86-1274.

District of Columbia Court of Appeals.

Argued October 13, 1987.

Decided February 28, 1989.

As Amended March 28, 1989.

COPYRIGHT MATERIAL OMITTED

Edward Greensfelder, Jr., with whom Gerald P. Greiman, Washington, D.C., was on the brief, for appellants.

Thomas B. Carr, Washington, D.C., for appellee Keto.

Harlan L. Weiss, with whom Sidney S. Sachs, Washington, D.C., was on the brief, for appellees Peter, et al.

Before ROGERS, Chief Judge,^* TERRY, Associate Judge, and PRYOR, Senior Judge.^**

TERRY, Associate Judge:

Mary Lemp died on October 2, 1981, leaving the bulk of an estate worth over $1.¹ million to her brother, William Stroman, rather than to her stepchildren, James Lemp, Helena Lemp, and John Lemp, Jr. The stepchildren had expected to be the primary beneficiaries under Mary Lemp's will and so brought suit against her estate, alleging that Mary I had breached a reciprocal wills agreement which she had made with their late father. The estate filed a counterclaim against James Lemp when it learned that he had removed several bonds from Mary's safe deposit box shortly after her death. The trial court granted summary judgment in favor of the estate on both the original claim and the counterclaim.

In a related action, the stepchildren sued Arthur Peter, Jr., and the partners in his law firm, Hamel & Park, for malpractice and breach of fiduciary duty. Mr. Peter had drafted wills for Mary Lemp and her husband, Colonel John Lemp. The trial court granted summary judgment for the defendants on these claims as well. The stepchildren now appeal from all the awards of summary judgment and from an order authorizing the estate to pay $222,261 in attorney's fees.

I. FACTUAL BACKGROUND

A. The Claim against the Estate

Appellants are the children of Colonel John Lemp and Helena Lemp. John divorced Helena in 1957 and married Mary Lemp. Mary never bore any children.

In May 1973, John and Mary Lemp consulted Arthur Peter, Jr., a member of the law firm of Hamel & Park, about drafting a will for each of them. After discussing their assets and testamentary goals, Mr. Peter wrote separate wills for the Lemps; the terms of the wills, however, were largely reciprocal. Colonel Lemp bequeathed his residuary estate to Mary if she survived him for thirty days. If she did not survive him, his estate would go to his three children (appellants), except for certain property in Texas, which would be left to Mary's brother and sister, William Stroman and Gusta Mae Brewton. Similarly, Mary bequeathed her residuary estate to John should he survive her by thirty days, and, if not, then to appellants except for the property in Texas left to her brother and sister.

Despite their overall similarity, neither will referred to the other, and some provisions in the two wills differed. Mr. Peter testified² that he had no knowledge of any agreement between the Lemps to make the wills irrevocable. James Lemp testified, however, that his father had told him that his property would eventually descend to his three children.

Colonel Lemp died on October 25, 1974. Three days before his death, he executed a new will which left his entire estate to his wife Mary, except for some small bequests to his children of personal items, stock which had only a nominal value, and a few thousand dollars in life insurance proceeds. Mary, however, elected not to receive anything under the will. See D.C.Code § 19-113(a) (1973).³ With the exception of a bank account containing $211.71, Colonel Lemp and his wife had owned all their property jointly, so that she became the sole owner of everything after his death. Mary therefore had the colonel's estate administered as a small estate⁴ and received the money in the bank account as her statutory allowance under D.C.Code § 19-101(a) (1973).

After her husband's death, Mary Lemp executed three new wills on November 22, 1974, October 25, 1978, and November 7, 1979. Although the 1974 will has never been produced, the 1978 and 1979 wills were substantially different from Mary's original 1973 will, leaving the bulk of her estate to her own relatives rather than to her stepchildren.

Mary Lemp died on October 2, 1981, leaving an estate valued at $1,126,673.11. Although her will (the 1979 will) bequeathed some property, worth about $208,000, to her three stepchildren, the lion's share of her estate, valued at almost $920,000, went to her own relatives, primarily to her brother William Stroman, the residuary legatee. Appellants thereafter filed suit against George Keto, as personal representative of Mary's estate, alleging that John and Mary Lemp had entered into an agreement not to revoke their 1973 wills and that Mary had breached that agreement. They sought damages for that alleged breach or, alternatively, specific performance of it. As a third alternative, appellants claimed that John and Mary had formed a trust for their benefit.

During discovery, appellants moved to compel Hamel & Park to disclose certain communications made by John and Mary Lemp with the firm. Hamel & Park opposed the motion, asserting Mary's attorney-client privilege. Judge Pratt ruled that the privilege did not apply to those communications made by the Lemps when they sought joint counsel. However, he upheld the claim of privilege as to those communications which Mary made both in her capacity as personal representative of her husband's estate and with regard to her own affairs.

Judge Pratt initially denied the estate's motion for summary judgment on appellants' claims, but without prejudice. After further filings, the estate moved again for summary judgment, which was granted by Judge Barnes.

B. The Estate's Counterclaim

A few hours after Mary's death on October 2, 1981, James Lemp went to a branch of the First American Bank on Wisconsin Avenue, N.W., and removed eleven bearer bonds from a safe deposit box which he held jointly with Mary. These bonds had a face value of $55,000. James did not tell the bank officials about his stepmother's death, nor did he tell anyone about his taking the bonds until December 1983. The estate first learned about the removal of the bonds during discovery proceedings in August 1984, and shortly thereafter it filed a counterclaim against James for conversion.

James claimed as a defense that he and his wife Susan had received the bonds as a gift from Mary before her death or, alternatively, that they were the subject of an informal inter vivos trust under which title to the bonds had vested in James and his wife upon Mary's death. In support of this claim, James produced a letter from Mary dated February 25, 1976, which he offered as proof of her donative intent. The letter stated in part:

Enclosed is the form, Jim, to sign where the "X" is in both places. Although this form states that both of us will be responsible for the rent, etc., I'm writing a letter to accompany it saying that I alone am responsible. Today I put a rubber band around those papers with a small tan envelope on top, and this is what you are [to] remove, if and when it looks as if my time here is ending, for safe keeping for you and Susan.

The form mentioned in the letter was a lease for safe deposit box No. 692 in the main office of the First American Bank on 15th Street, N.W., in downtown Washington. In July 1979 Mary moved the contents of this box to another one located in the Wisconsin Avenue branch of the First American Bank. Mary and James were joint lessees of both boxes.

James testified that Mary gave him a key to the new box in 1979. Additionally, James said that on August 13, 1979, Mary took him to the Wisconsin Avenue branch, where together they opened the box and Mary pointed to the packet of papers to which she had referred in her letter. Although he did not unwrap the packet, James could see that it contained municipal bonds.

The trial court noted in its opinion that only four of the eleven bonds in the packet were purchased before the date of the letter, February 25, 1976, implying that Mary could not have referred to the remaining seven in her letter. The court also observed that all matured coupons except the most recent one on each bond had been removed and redeemed before James took the bonds from the safe deposit box, and that James had stated he never used the box as his own. The court then granted the estate's motion for summary judgment on the counterclaim.

The parties were in further disagreement about the proper calculation of damages. Generally adopting the formula proposed by the estate, the court awarded damages for the present market value of the six bonds still in James' possession, the coupon interest that he had received, the proceeds from the sale of the other five bonds, and pre-judgment interest at eight percent per annum on the sale proceeds and coupon interest. Appellants contend on appeal that both the award of summary judgment and the measurement of damages were erroneous.

The trial court also authorized Mr. Keto, the personal representative, to pay $222,261.00 from the estate's assets for attorney's fees and other costs resulting from the litigation of appellants' claims against the estate. In making this award, the court noted that it constituted only a partial payment (Mr. Keto had petitioned for over $360,000). Appellants now challenge the award as excessive and premature.

C. The Malpractice and Breach of Fiduciary Duty Claims

By 1978 John Lemp, Jr., noticed that his stepmother's attitude toward her stepchildren had begun to change, and he suspected that she might have done something with the property she had inherited from her late husband. John decided to investigate. On July 3, 1979, he went to the Superior Court to review...