Gregg v. Lindsay

• Decision Date: 22 November 1994
• Citation: 437 Pa.Super. 206,649 A.2d 935
• Parties: James R. GREGG, Appellee v. Carl L. LINDSAY, Jr., Esquire, Appellant.
• Court: Pennsylvania Superior Court

Page 935

649 A.2d 935

437 Pa.Super. 206

James R. GREGG, Appellee v. Carl L. LINDSAY, Jr., Esquire, Appellant.

Superior Court of Pennsylvania.

Argued March 31, 1994.

Filed Sept. 16, 1994.

Reargument Denied Nov. 22, 1994.

Debra Klebanoff, Philadelphia, for appellant.

Martin J. King, New Hope, for appellee.

Before CAVANAUGH, WIEAND and OLSZEWSKI, JJ.

WIEAND, Judge.

This is an action by a would-be legatee against a lawyer who failed to have a will executed by the testator prior to the testator's death. A jury found that the lawyer's failure constituted a breach of a third party beneficiary contract and awarded damages to the would-be beneficiary. The trial court denied post-trial motions, and judgment was entered on the verdict. After careful review, we reverse.

Carl Lindsay, Esquire, is a member of the Pennsylvania Bar and has practiced law in Bucks County for many years. In 1979, he drafted a will for Arthur Blain, in which Phyllis Murphy, a friend, was named as sole beneficiary and executrix. This will was duly executed. In November, 1984, Blain was admitted to the Doylestown Hospital, where he was confined to the Intensive Care Unit following a double femoral bypass. While there, Blain was visited by his longtime friend, James Gregg. According to Gregg's subsequent testimony, he raised with Blain the matter of a will; and after some discussion, Blain directed him to contact Lindsay and have him draft a new will making a substantial bequest to Gregg and also naming Gregg as executor. Also to be included in the will were bequests in favor of the Bucks County SPCA and St. Alban's Episcopal Church of Syracuse, New York.

Thereafter, Gregg called Lindsay and told him that Blain was in the Intensive Care Unit, was in serious condition, and desired a new will which was to be drafted and executed the same day. To emphasize the need for haste, but without any authority from Blain, Gregg told Lindsay that if a new will could not be drafted and executed the same day, he, Gregg, would find another lawyer to do the job.

Later that evening, Lindsay appeared at Blain's bedside with the draft of a new will. Lindsay testified that Blain seemed to be unconcerned about the document but did say that the revised will was acceptable. Because he found the circumstances unusual, Lindsay recommended that the execution of the will be witnessed by two subscribing witnesses. When Lindsay was unable to find persons at the hospital to act as subscribing witnesses, he suggested that he return the following morning. This, he said, would also enable him to correct the name of one of the charitable beneficiaries named in the will. Blain did not voice any objection to this procedure. Lindsay, however, did not return until shortly after noon on the following day. When he arrived at the hospital, he found that Blain had been transferred to a Philadelphia hospital where he died later that afternoon.

Gregg filed a civil action against Lindsay, alleging that he, Gregg, was a third party beneficiary to an agreement between Blain and Lindsay. This contract, he alleged, had been breached by Lindsay's failure to have the new will executed at Blain's bedside on the night before he died.

When considering an appeal from an order denying a motion for judgment n.o.v., our scope of review is narrow. All of the evidence, and all reasonable inferences drawn therefrom, must be considered in the light most favorable to the verdict winner. Robertson v. Atlantic Richfield Petroleum Products Co., 371 Pa.Super. 49, 58, 537 A.2d 814, 819 (1987), appeal denied, 520 Pa. 590, 551 A.2d 216 (1988). Only in clear cases, where no two reasonable persons could fail to agree that the verdict was improper, should judgment n.o.v. be granted. Geyer v. Steinbronn, 351 Pa.Super. 536, 549, 506 A.2d 901, 908 (1986). Where "the law permits no recovery upon the facts which have been alleged ..." an order denying judgment n.o.v. may be reversed. Henze v. Texaco, Inc., 352 Pa.Super. 538, 541, 508 A.2d 1200, 1202 (1986). Lindsay argues that, as a matter of law, no recovery can be allowed under the facts of this case.

In Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983), the Supreme Court specifically retained the "requirement that [a] plaintiff must show an attorney-client relationship or a specific undertaking by the attorney furnishing professional services, ... as a necessary prerequisite for maintaining [an action] in trespass on a theory of negligence." Id. at 58, 459 A.2d at 750. See also: Hatbob v. Brown, 394 Pa.Super. 234, 248, 575 A.2d 607, 614 (1990). ¹ What the Court took away with one hand, however, it gave back, in part, with the other. Thus, it created a right of recovery on the theory of a third party beneficiary contract in a narrow class of cases in which it was clear that an innocent party had been injured by legal malpractice in the execution of an otherwise valid will. As the Superior Court observed in Manor Junior College v. Kaller's Inc., 352 Pa.Super. 310, 507 A.2d 1245 (1986), the Court

adopted the Restatement (Second) of Contracts Section 302 (1979) as an acceptable method to determine the rights of a person claiming the status of third party beneficiary but, as the court did so, it repronounced the basic principle established in Spires [v. Hanover Fire Ins. Co., 364 Pa. 52, 70 A.2d 828 (1950) ] and took pains to make clear that the application of the Restatement was restricted to a quite "narrow class" and is to be seen as a supplement to the Spires standard.

Id., 352 Pa.Super. at 314, 507 A.2d at 1247 (footnote omitted). Under this theory, the fact that the obligor knows that his services will benefit a third person is not alone sufficient to vest in such third person the rights of a third person beneficiary. Marsteller Community Water Authority v. P.J. Lehman Engineers, 413 Pa.Super. 387, 393, 605 A.2d 413, 416 (1992), appeal denied, 533 Pa. 601, 617 A.2d 1275 (1992). There is a two part test, the Court said, in determining whether one is a third party beneficiary.

(1) the recognition of the beneficiary's right must be "appropriate to effectuate the intention of the parties," and (2) the performance must "satisfy an obligation of the promisee to pay money to the beneficiary" or "the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance." The first part of the test sets forth a standing requirement. For any suit to be brought, the right to performance must be "appropriate to effectuate the intentions of the parties." This general condition restricts the application of the second part of the test, which defines the intended beneficiary as either a creditor beneficiary ( § 302(1)(a)) or a donee beneficiary (§ 302(1)(b)), though these terms are not themselves used by Restatement (Second). Section 302(2) defines all beneficiaries who are not intentional beneficiaries as incidental beneficiaries. The standing requirement leaves discretion with the trial court to determine whether recognition of third party beneficiary status would be "appropriate." If the two steps of the test are met, the beneficiary is an intended beneficiary "unless otherwise agreed between promisor and promisee."

Applying these general considerations and Restatement (Second) § 302 to the case of beneficiaries under a will, the following analysis emerges. The underlying contract is that between the testator and the attorney for the drafting of a will. The will, providing for one or more named beneficiaries, clearly manifests the intent of the testator to benefit the legatee. Under Restatement (Second) § 302(1), the recognition of the "right to performance in the beneficiary" would be "appropriate to effectuate the intention of the parties" since the estate either cannot or will not bring suit. Since only named beneficiaries can bring suit, they meet the first step standing requirement of § 302. Being named beneficiaries of the will, the legatees are intended, rather than incidental, beneficiaries who would be § 302(1)(b) beneficiaries for whom "the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance." In the case of a testator-attorney contract, the attorney is the promisor, promising to draft a will which carries out the testator's intention to benefit the legatees. The testator is the promisee, who intends that the named beneficiaries have the benefit of the attorney's promised performance. The circumstances which clearly indicate the testator's intent to benefit a named legatee are his arrangements with the attorney and the text of his will.

Guy v. Liederbach, supra 501 Pa. at 60-61, 459 A.2d at 751-752 (footnote omitted). In order for a would-be beneficiary to recover as a third party beneficiary, he or she must show a breach of contract between the lawyer and the testator. "In the case of a testator-attorney contract the attorney is the promisor who promises to draft a will which carries out the testator's intent to benefit the [beneficiary]." Hatbob v. Brown, supra 394 Pa.Super. at 250-251, 575 A.2d at 615.

The use of this approach is warranted only when the circumstances are analogous to those in Guy v. Liederbach, supra, or are equally compelling. Manor Junior College v. Kaller's Inc., supra 352 Pa.Super. at 315-316, 507 A.2d at 1248. In Guy v. Liederbach, supra, the intent to benefit a third person had been clear from the execution of the written will, and the alleged negligence of the lawyer had been in allowing the person named as executrix and beneficiary to serve also as witness to the will.

The issue before this Court in the instant case is whether Guy v. Liederbach, supra, should be expanded to allow recovery where, as here, (1) the new will was never executed by the testator, and (2) the facts send a mixed signal regarding the person to whom the lawyer owed a primary duty of loyalty.

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