Golden v. Cook

• Decision Date: 02 December 2003
• Docket Number: No. CIV.A.02-1300.,CIV.A.02-1300.
• Citation: 293 F.Supp.2d 546
• Parties: Robert GOLDEN, Attorney-in-Fact for Leah Golden and Donald Earwood, Executor of the Estate of Helen Earwood, Plaintiffs, v. Nicholas J. COOK, Esquire and Leskinen & Cook, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

Page 546

293 F.Supp.2d 546

Robert GOLDEN, Attorney-in-Fact for Leah Golden and Donald Earwood, Executor of the Estate of Helen Earwood, Plaintiffs, v. Nicholas J. COOK, Esquire and Leskinen & Cook, Defendants.

No. CIV.A.02-1300.

United States District Court, W.D. Pennsylvania.

December 2, 2003.

Joel W. Todd, Esquire, Dolchin, Slotkin & Todd, Philadelphia, PA, for Plaintiffs.

David L. Haber, Esquire, Weinheimer, Schadel & Haber, Pittsburgh, PA, for Defendants.

OPINION

CERCONE, District Judge.

Plaintiffs commenced this diversity action seeking monetary damages based on their status as third party beneficiaries of a contract between defendants and one of their clients. Under the terms of the contract defendants agreed to provide the client with estate planning documents. Plaintiffs specifically contend that defendants are liable as a result of Nicholas J. Cook, Esquire's ("Attorney Cook") failure to investigate the circumstances under which an addendum to various trust documents initially drafted by Attorney Cook came into existence, which addendum drastically reduced plaintiffs' proportional shares under the initial testamentary scheme reflected in the estate planning documents prepared by Attorney Cook, thus resulting in plaintiffs' claimed damages. Presently before the court is defendants' motion to dismiss. For the reasons set forth below, the motion will be granted.

Plaintiff Leah Golden ("Mrs.Golden"), an elderly individual who is incapable of caring for herself and a resident of New York, is the sister-in-law of plaintiff Helen Earwood and David Golden. Complaint at ¶¶ 1 & 11. She was also the sister-in-law of the late Mrs. Irene I. King, who died on July 26, 2000 ("decedent"). Id. at ¶¶ 13 & 45. Plaintiff Helen Earwood ("Mrs.Earwood"), an elderly individual who is suffering from dementia, incapable of caring for herself and a resident of Georgia, is the sister of David Golden and decedent. Id. at ¶¶ 2 & 10. Decedent was a resident of Fayette County, Pennsylvania, and her brother, David Golden, lived in close proximity to her. Id. at ¶¶ 13 & 8.

On August 20, 1999, decedent, then 95 years of age, called upon the services of Attorney Cook for the purpose of planning her estate. Id. at ¶¶ 15, 19, 20. At that time decedent was in relatively good health and capable of managing her own affairs. Id. at ¶¶ 16-18. David Golden accompanied decedent to Attorney Cook's office. Id. at ¶¶ 19. David Golden and Attorney Cook had been co-parishioners in a local church and David Golden referred decedent to Attorney Cook. Id. at 23.

In accordance with decedent's expressed wishes, Attorney Cook prepared a trust, last will and testament, deed and two powers of attorney ("the trust documents"). Id. at 24. After reviewing the trust documents decedent executed them on September 1, 1999. Id. at ¶¶ 26-30. Decedent transferred all of her property to the trust, in which she designated herself "trustee." Id. at ¶ 32. Under the terms of the trust, upon decedent's death her estate was to be divided in equal one-third shares among Mrs. Golden, Mrs. Earwood and David Golden, provided each legatee was still living. Id. at ¶ 34. Decedent named contingent beneficiaries in the event Mrs. Golden and David Golden did not survive her. Id. at ¶ 35. Specifically, Mrs. Golden's one-third share would pass to her sons and David Golden's one-third share would pass to his wife, or if she too were deceased, to David Golden's son and daughter. Id. at ¶ 36. Decedent's last will and testament provided that upon her death her property would pass under the terms of the trust and David Golden would serve as executor of the estate. Id. at ¶ 37. The trust also provided that in the event of decedent's incompetency/incapacity David Golden would serve as the successor or alternate trustee. Id. at ¶ 33.

Decedent paid Attorney Cook $500.00 for the estate planning documents. Id. at ¶ 25. Attorney Cook was well aware that David Golden was and would be assisting decedent in completing and executing the trust documents and knew that David Golden was quite knowledgeable about trust and estate matters. Id. at ¶ 28, 31, 39 & 42. After preparing the trust documents Attorney Cook forwarded them to decedent and asked her to scrutinize them for consistency with her expressed intentions. Id. at 27. Under the trust documents prepared by Attorney Cook each plaintiff was to receive one-third of decedent's estate upon her death. Id. at ¶ 34. Following the decedent's execution of the trust documents on September 1, 1999, in Attorney Cook's office, Attorney Cook never corresponded with decedent again. Id. at ¶ 43.

On June 19, 2000, David Golden met with Attorney Cook to advise him of some recent behavior on the part of decedent. Attorney Cook memorialized the conversation as follows:

David said that several weeks ago his sister Irene instructed him to withdraw $15,000 from the bank and to place $5,000 in an envelope for Helen, $5,000 in an envelope for Leah and $5,000 in an envelope for David. David still has those three envelopes in his possession.

Id. at ¶ 64-65. Thereafter decedent instructed David Golden to obtain three $18,000 cashiers checks, each one made payable to a separate legatee. Decedent initially kept the checks in her possession and thereafter told David Golden to deposit Mrs. Golden and Mrs. Earwood's check into decedent's account. Decedent retained possession of the check made payable to David Golden. Id. at ¶ 66. Through these relayed events Attorney Cook became aware that decedent had "allegedly engaged in bizarre behavior that altered drastically the testamentary scheme created by the trust documents." Id. at ¶ 67.

On June 27, 2000, ten months after decedent executed the trust documents, a caregiver of decedent, Darlene Koposko, hand delivered to Attorney Cook's office a hand written, one page document that purported to be an amendment to the trust documents. Id. at ¶¶ 46-47. The addendum was executed on June 14, 2000, and reduced Mrs. Earwood's one-third share of decedent's estate to a $10,000 bequest, Mrs. Golden's one-third share to a $5,000 bequest and increased David Golden's one-third share to the entire residue of the estate. The addendum was silent as to any contingent beneficiary named in the original trust documents. Id. at 53. The one page addendum was purportedly signed by decedent and witnessed by Koposko and Donald Flowers. Id. at ¶ 47 (incorporating Addendum as exhibit "B" to the Complaint).

Upon receipt of the addendum Attorney Cook was provided with a document indicating that his 96 year old client had, with a swipe of the pen, significantly changed the trust documents for which the decedent had paid Attorney Cook $500 to draft, and contrary to the testamentary scheme therein, had virtually disinherited two of the three intended beneficiaries. At the same time, the addendum bestowed upon David Golden almost all of decedent's estate. Despite this significant change of heart, and the simple, holographic instrument virtually undoing the entire trust documents which Attorney Cook had been paid to create, Attorney Cook did not undertake any efforts to contact decedent or investigate the circumstances under which the addendum came into existence and/or its authenticity. Id. at ¶ 54-58. Attorney Cook likewise did not undertake any effort to convert the holographic instrument into an "official" document. Id. at ¶ 59.

Plaintiffs contend that the circumstances confronting Attorney Cook in June of 2000 obligated him to investigate the manner and means by which the addendum came into existence and whether it actually reflected decedent's true testamentary intent. Plaintiffs surmise that had Attorney Cook performed this duty, he would have discovered that as a result of decedent's age and feeble condition, she had become a victim of undue influence. Attorney Cook breached his duty to investigate the matter, however, which in turn permitted the addendum to supplant the duly prepared and properly executed trust documents. Id. at 69. As a consequence of Attorney Cook's breach each plaintiff has been denied her full and intended legacy under the trust documents. Id. at ¶¶ 72-73. At the time of decedent's demise, the estate was worth over $200,000. Id. at ¶ 50.

Defendants move to dismiss on a variety of grounds. They contend this court lacks subject matter jurisdiction because the inheritance tax return filed with the Register of Wills in Fayette County on June 7, 2001, reflects a gross value of the estate of approximately $209,000, and a net value after expenses of $188,000. In light of this official document, Mrs. Earwood's claimed losses would be one-third of the estate minus $10,000, or $53,000; and Mrs. Golden's losses would be one-third of the net minus $5,000, or $58,000; and both amounts are below the amount in controversy threshold for diversity jurisdiction. In addition, plaintiffs assertedly lack standing to pursue a legal malpractice claim under the limited third party beneficiary exception recognized in Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983), and defendants purportedly could not have been the cause of any harm to plaintiffs in any event.

Plaintiffs contend they fall squarely within the limited third party beneficiary exception for disappointed legatees established by Guy, and assert they have otherwise demonstrated that Attorney Cook's failure to investigate the circumstances surrounding the addendum breached his promise to draft documents which would effectuate decedent's true testamentary intent. Had Attorney Cook exercised reasonable care in the execution of his duties, he purportedly would have learned that the addendum was a product of undue influence, and would have been able to thwart the unlawful effort by David Golden to manipulate decedent's estate, resulting in the estate passing through the trust documents and permitting plaintiffs to receive their rightful share of decedent's estate.

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