Estate of Agnew v. Ross

• Decision Date: 19 January 2017
• Docket Number: No. 76 MAP 2015,76 MAP 2015
• Citation: 152 A.3d 247
• Parties: ESTATE OF Robert H. AGNEW, Margaret Alzamora, Individually and as Executrix of the Estate of Robert H. Agnew, William and Sheila Hennessy, h/w, Margaret Hennessy, James and Christine Hennessy, h/w and Paul and Eileen Janke, h/w v. Daniel R. ROSS, Esquire, Megan McCrea, Esquire and Ross & McCrea, LLP Appeal of: Daniel R. Ross, Esquire and Megan McCrea, Esquire
• Court: Pennsylvania Supreme Court

152 A.3d 247

ESTATE OF Robert H. AGNEW, Margaret Alzamora, Individually and as Executrix of the Estate of Robert H. Agnew, William and Sheila Hennessy, h/w, Margaret Hennessy, James and Christine Hennessy, h/w and Paul and Eileen Janke, h/w
v.
Daniel R. ROSS, Esquire, Megan McCrea, Esquire and Ross & McCrea, LLP

Appeal of: Daniel R. Ross, Esquire and Megan McCrea, Esquire

No. 76 MAP 2015

Supreme Court of Pennsylvania.

ARGUED: May 10, 2016
DECIDED: January 19, 2017

Kathleen M. Carson, Esq., Jeffrey B. McCarron, Esq., Swartz Campbell LLC, Philadelphia, for Daniel Ross, Megan McCrea, appellants.

Paul Fellman, Esq., Kevin William Gibson, Esq., Gibson & Perkins, P.C., Media, for Estate of Robert H. Agnew, appellee.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, JJ.

OPINION

JUSTICE DOUGHERTY

We consider whether individuals who are not named in an executed testamentary document have standing to bring a legal malpractice action against the testator's attorney, as purported third-party beneficiaries to the contract for legal services between the testator and his attorney. For the reasons that follow, we conclude such individuals do not have standing to sue the testator's attorney for a breach of contract. We therefore reverse the Superior Court and remand for reinstatement of the trial court's order granting summary judgment and dismissing the claims.

152 A.3d 249

As the appeal arises from the grant of summary judgment, we set forth the facts as viewed in the light most favorable to the non-moving parties, in this case, plaintiffs-appellees William and Shelia Hennessy, James and Christine Hennessy, Eileen and Paul Janke, Margaret Hennessy and Margaret Alzamora. Toy v. Metro. Life Ins. Co. , 593 Pa. 20, 928 A.2d 186, 195 (2007). In November 2003, the testator Robert Agnew retained defendant-appellant Daniel Ross, Esquire, to draft various estate planning documents.¹ Ross drafted a Will and an amendment to Agnew's Revocable Trust, which was first established in 1994, in order to effectuate Agnew's intended bequests.² Over the next several years, Ross drafted various amendments to both the Revocable Trust and the Will, as directed by Agnew; these documents, including a 2007 Trust Amendment, were executed by Agnew.³ As of 2010, Agnew's Will bequeathed specific gifts of cash and property to selected friends and family members, including appellees, who are relatives of his late wife, and the residue of his estate to the Revocable Trust. The 2007 Trust Amendment more specifically directed that upon Agnew's death the remaining principal and accumulated income of the Revocable Trust should be distributed to pay the balance of any legacies in the Will that the estate is otherwise unable to pay. 2007 Trust Amendment at 2, Exhibit E to Motion for Summary Judgment. If there were assets remaining in the Revocable Trust following satisfaction of the legacies under the Will, the remaining assets were to be distributed to Muhlenberg College, Temple University, Chestnut Hill College and Drexel University in the form of five $250,000 scholarship funds. Id. at 2–3. If there were assets remaining following distribution of the scholarship funds, the residue was to be distributed to Muhlenberg College, Chestnut Hill College and Drexel University. Id. at 3.

In March 2010, Agnew was admitted into a hospice program.⁴ During that summer, appellee Margaret Alzamora, contacted Ross and told him Agnew wanted to make changes to his estate plan. Accordingly, on August 18, 2010, Ross met with Agnew to discuss amendments to various existing testamentary documents and to establish a new trust relating to property Agnew owned in Florida (the Florida Trust). While Alzamora participated in a portion of the meeting between Agnew and Ross, she was not present when the two actually discussed the estate plan. During the meeting, Agnew related to Ross he

152 A.3d 250

wanted to limit the amounts going to charity and provide more funds to appellees. Deposition of Ross, 10/3/2013 at 41, Exhibit J to Motion for Summary Judgment. Agnew told Ross that Alzamora would subsequently provide him with further details. Id. at 45.

On August 21, 2010, Alzamora contacted Ross by email and advised him the residue of Agnew's Revocable Trust was no longer to be distributed to the three colleges indicated in the 2007 Trust Amendment, but now was to be divided into five equal shares between appellees. Email dated 8/10/2010, Exhibit K to Motion for Summary Judgment. Alzamora also informed Ross that Agnew wished to make bequests to appellees' children. Id. Ross drafted an amendment to the Revocable Trust (the 2010 Trust Amendment), which continued to provide for gifts in the amount of $250,000 to four colleges, but expressly provided that the residue of the assets of the Revocable Trust was to be distributed to appellees. 2010 Trust Amendment at 3–4, Exhibit L to Motion for Summary Judgment. Additionally, Ross drafted a revised Will, which provided various monetary gifts to appellees and their children.⁵ 2010 Will at 1–3, Exhibit L to Motion for Summary Judgment.

On August 27, 2010, Ross emailed the revised Will and the 2010 Trust Amendment to Alzamora. Agnew reviewed the documents with Alzamora and did not communicate any comments or request any changes to the documents. Agnew did not, however, sign the revised Will or the 2010 Trust Amendment at that time. On September 2, 2010, Ross met with Agnew and Agnew did sign the Florida Trust and the 2010 Will, which directed the residue of his estate should be distributed in accord with the Revocable Trust.⁶ Agnew did not, however, sign the 2010 Trust Amendment. Ross did not have a copy of that document with him at that time. Ross retained all of the executed documents and stored them in his firm's will vault.

Agnew died in January 2011. Letters Testamentary were granted to Alzamora and the revised Will executed in September 2010 was admitted to probate as Agnew's last will and testament. On February 10, 2011, Ross informed Alzamora it was his belief the 2010 Trust Amendment had never been executed. Alzamora informed Ross she did not have a signed version of the 2010 Trust Amendment. Alzamora Affidavit dated 2/11/2014, Exhibit K to Memorandum of Law in Opposition to Motion for Summary Judgment.

Appellees and the Estate of Robert Agnew filed suit against Ross, his partner Megan McCrea, Esq., and Ross & McCrea LLP (collectively referred to as appellants), alleging appellants breached the contract to provide legal services to their client Agnew, when Ross failed to have

152 A.3d 251

Agnew execute the 2010 Trust Amendment. Specifically, appellees claimed to be third-party intended beneficiaries of the contract for legal services between Agnew and Ross, and as a result of Ross's breach, appellees were denied sums of money to which they were entitled under the 2010 Trust Amendment. Appellees also asserted a legal malpractice claim sounding in negligence against Ross and McCrea individually, and against Ross & McCrea LLP on a theory of respondeat superior .

Appellants filed preliminary objections and the trial court sustained them in part, holding the Estate of Robert Agnew was an improper party to the suit, and Alzamora's claims in her capacity as executrix should be dismissed. Trial Court Order dated 5/2/2013, Exhibit C to Motion for Summary Judgment. The trial court also dismissed appellees' negligence and respondeat superior claims against Ross, McCrea and the firm, on the basis the individual appellees did not have attorney-client relationships with appellants to support those claims. Id. However, the trial court concluded appellees could potentially establish they were intended third-party beneficiaries of the legal services contract between Ross and Agnew, and allowed that breach of contract claim to proceed against Ross and McCrea individually. Id.

The parties proceeded to discovery, during which Ross testified in a deposition with regard to the 2010 Trust Amendment: "I believe he would have signed the amendment had I prepared it, but because it was not with me, it was not discussed and until I discussed it with him I can't say for certain he would have signed it." Deposition of Ross, 10/3/2013 at 30, Exhibit J to Motion for Summary Judgment; see also Id. at 77–78 ("... [Agnew] had generally indicated that intent but the specifics I had not spoken to him about. So until I spoke to him specifically about that it is only speculation what he would have signed."). Ross attributed his failure to bring the 2010 Trust Amendment to the September meeting to "oversight." Id. at 30. He further stated it was a mistake not to present the 2010 Trust Amendment to Agnew. Id. at 30, 78. During her deposition, Alzamora acknowledged Agnew was aware the 2010 Trust Amendment had been prepared and he had previously reviewed it, but confirmed that it was not among the documents executed at the September 2010 meeting. Deposition of Alzamora, 11/7/13 at 46–50, 88. Exhibit F to Motion for Summary Judgment.

At the close of discovery, appellants moved for summary judgment, which the trial court granted. The trial court recognized that appellees argued they are third-party beneficiaries to the contract for legal services between Ross and...