Kohut v. Vlahos

• Decision Date: 29 November 2022
• Docket Number: 355 WDA 2022,J-A25033-22
• Parties: JENNIFER KOHUT, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF JOHN HAUSER, JACQUELINE DAVISSON, JOSEPH HAUSER AND, CHRISTOPHER HAUSER Appellants v. DARLENE VLAHOS, ESQ., AND VLAHOS LAW FIRM, P.C.
• Court: Pennsylvania Superior Court

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JENNIFER KOHUT, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF JOHN HAUSER, JACQUELINE DAVISSON, JOSEPH HAUSER AND, CHRISTOPHER HAUSER Appellants v. DARLENE VLAHOS, ESQ., AND VLAHOS LAW FIRM, P.C.

No. 355 WDA 2022

No. J-A25033-22

Superior Court of Pennsylvania

November 29, 2022

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

Appeal from the Order Entered March 14, 2022 In the Court of Common Pleas of Erie County Civil Division at No(s): No. 11774-21

BEFORE: KUNSELMAN, J., NICHOLS, J., and McCAFFERY, J.

MEMORANDUM

McCAFFERY, J.

Jennifer Kohut, individually and as executrix of the Estate of John Hauser (Estate), Jacqueline Davisson, Joseph Hauser, and Christopher Hauser (collectively Heirs) appeal from the order entered in the Erie County Court of Common Pleas, sustaining the preliminary objections filed by Darlene Vlahos, Esquire (Attorney Vlahos) and Vlahos Law Firm, P.C. (collectively Law Firm) and dismissing Heirs' legal malpractice action because Heirs had no standing to sue Law Firm as third-party beneficiaries of Attorney Vlahos's legal services contract with John Hauser (Decedent). On appeal, Heirs contend that the trial court erred as a matter of law in sustaining the demurrer to their complaint because (1) as named legatees in Decedent's probated will, they had standing to sue Law Firm as third-party beneficiaries (2) the decision in Estate of Agnew v. Ross, 152 A.3d 247 (Pa. 2017), is distinguishable; and (3) their amended complaint sufficiently pled a cause of action asserting Law Firm's negligence. For the reasons below, we affirm.

The relevant facts underlying this appeal, as set forth in Heirs' amended complaint, are as follows. In April of 2014, Decedent executed a will (2014 Will), which was prepared by Attorney Vlahos. See Heirs' Amended Complaint, 11/8/21, at ¶¶ 10-12. Because Decedent's wife passed away a month earlier, the 2014 Will "provided for equal distributions of the residue of his estate to each of his four children as well as an unfunded trust for his grandchildren, Christopher and Breanna Hauser." Id. at ¶ 12. Heirs are three of his adult children and his grandson, Christopher.^[1]

In July of 2018, Decedent and his then-fiancée, Rebecca Kistle (Becky), met with Attorney Vlahos to discuss revisions to his will, as well as the drafting of a will for Becky, due to their upcoming nuptials in October of 2018. Heirs' Amended Complaint at ¶¶ 15-16. Heirs allege that Decedent and Becky agreed to the following:

[I]n the event of their deaths [they would] bequeath only the marital home, household goods and equipment to one another and [would] bequeath the residue of their estates to their adult children from their first marriages. [They] also agree that a fund or special needs trust would be set up and funded from [D]ecedent's assets for the benefit of [his] grandson[, Christopher,] who is autistic and disabled.

Id. at ¶ 1. Attorney Vlahos agreed to represent both Decedent and Becky. Id. at ¶ 20.

Attorney Vlahos "memorialized" the proposed provisions of the respective wills in a "File Note" dated July 17, 2018. Heirs' Amended Complaint at ¶ 22; see also Vlahos File Note. Pursuant to the couple's agreement, Decedent's revised will was to "contain a provision that [he] is married to [Becky], and . . . made provisions for his wife Becky outside the will and has not made any provisions for the residue of the estate to Becky." Heirs' Amended Complaint at ¶ 24; Vlahos File Note at 1-2. Heirs allege that Attorney Vlahos failed to advise Decedent that this proposed language was inadequate to ensure that the entire residue of his estate would pass to Heirs, and that, to effectuate his wishes, he and Becky would have had to execute a separate pre- or postnuptial agreement.^[2] Id. at ¶¶ 25-26.

Decedent and Becky were married on October 13, 2018. Heirs' Amended Complaint at ¶ 36. Heirs assert that "[o]n multiple occasions both prior to and after the wedding, [D]ecedent placed phone calls to [Attorney] Vlahos offering to come to her office to sign his revised will or requesting that she send the will to him for execution." Id. at ¶ 38. Heirs attached to their amended complaint a November 30, 2018, email exchange between Attorney Vlahos and a coworker in her office. The coworker informed Attorney Vlahos that Decedent and Becky were married in October and "they want to sign their Wills." See Heirs' Amended Complaint at Exhibit D, Email Exchange, 11/30/18. Attorney Vlahos responded by asking her coworker to call Decedent and "let him know that we will send out the drafts for them to review." Id.

Attorney Vlahos failed to "timely prepare and forward[ the] documents" prior to Decedent's death five weeks later, on January 4, 2019. Id. at ¶ 54.

Consequently, Decedent's 2014 Will was probated, as it was the only will finalized before his death. See Heirs' Amended Complaint at ¶ 48. Because it was drafted prior to his engagement and marriage to Becky,

[the] will was probated pursuant to 20 Pa.C.S. [§] 2102 which provided Becky was to receive 50% of the residue of the estate while the three surviving children and one surviving grandchild each received 12.5% of the residue of the estate.^[3] Christopher Hauser did not receive any distributive share because the 2014 Will did not fund the trust that was intended for him.

Id. Heirs aver that, as a result of Attorney Vlahos's negligence, their "distributive shares" were reduced by nearly $700,000. Id. at ¶ 59.

On August 16, 2021, Heirs filed a civil complaint against Law Firm, asserting causes of action for negligence-based and contract-based legal malpractice. Law Firm filed preliminary objections on November 29, 2021. Law Firm argued: (1) Heirs cannot establish a negligence action because "[t]he individual beneficiaries had no attorney-client relationship" with Law Firm; and (2) as "purported beneficiaries of an unexecuted estate planning document[, Heirs had] no standing" to assert a breach of contract claim as third-party beneficiaries under Agnew.^[4] Law Firm's Preliminary Objections to Amended Complaint, 11/29/21, at 2-3. Heirs filed an answer to Law Firm's preliminary objections on December 23, 2021, and Law Firm subsequently filed a reply brief in support of their preliminary objections.

The trial court conducted oral argument on March 3, 2022. Thereafter, on March 14th, the court entered an order sustaining Law Firm's preliminary objections and dismissing Heirs' complaint with prejudice "consistent with" Agnew. Order, 3/14/22. This timely appeal followed.^[5]

Heirs present the following issues for our review:

1. Did the trial court err as a matter of law in sustaining a demurrer to this legal malpractice case where [Heirs], who are named legatees in the probated Will, state a cause of action as third[-]party beneficiaries of the contract for legal services under the Restatement (Second) of Contract § 302, adopted by Guy v. Liederbach, 459 A.2d 744 (Pa. 1983)?

2. Did the trial court err as a matter of law in dismissing this case at the preliminary objection stage for lack of standing and failing to distinguish the facts of this case from [Agnew]?

3. Did the trial court err as a matter of law in dismissing the negligence count for failure to state a cause of action where the facts averred in the Amended Complaint plead a specific undertaking by the lawyer to perform services for the benefit of [H]eirs?

Heirs' Brief at 5-6.

When reviewing an order sustaining preliminary objections, we are guided by the following:

Our standard of review of an order . . . is to determine whether the trial court committed an error of law. When considering the appropriateness of a ruling on preliminary objections, the appellate court must apply the same standard as the trial court.

Preliminary objections in the nature of a demurrer test the legal sufficiency of the complaint. When considering preliminary objections, all material facts set forth in the challenged pleadings are admitted as true, as well as all inferences reasonably deducible therefrom. Preliminary objections which seek the dismissal of a cause of action should be sustained only in cases in which it is clear and free from doubt that the pleader will be unable to prove facts legally sufficient to establish the right to relief. If any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the preliminary objections.

Fiedler v. Spencer, 231 A.3d 831, 835-36 (Pa. Super. 2020) (citation omitted), appeal denied, 241 A.3d 335 (Pa. 2020).

In the present case, Heirs assert a claim for legal malpractice. "[A]n action for legal malpractice may be brought in ether contract or tort." Wachovia Bank, N.A. v. Ferretti, 935 A.2d 565, 570 (Pa. Super. 2007) (citation omitted).

The elements of a legal malpractice action, sounding in negligence, include: (1) employment of the attorney or other basis for a duty; (2) failure of the attorney to exercise ordinary skill and knowledge; and (3) that such failure was the proximate cause of the harm to the plaintiff. With regard to a breach of contract claim, an attorney who agrees for a fee to represent a client is by implication agreeing to provide that client with professional services consistent with those expected of the profession at large.

Id. at 570-71 (citations & quotation marks omitted).

Where as here, the plaintiffs did not employ the allegedly negligent attorney, their legal malpractice claim is limited. Both the parties and the trial court agree the Pennsylvania Supreme Court decisions in Guy v. Liederbach, supra, and Estate of Agnew v. Ross, supra, provide the framework for malpractice claims brought against the drafter of the will by a beneficiary of the will based upon a failed legacy. Accordingly, a...