Simpson v. Calivas

• Decision Date: 21 September 1994
• Docket Number: No. 92-231,92-231
• Citation: 650 A.2d 318,139 N.H. 1
• Parties: Robert H. SIMPSON, Jr., v. Christopher CALIVAS.
• Court: New Hampshire Supreme Court

Page 318

650 A.2d 318

139 N.H. 1

Robert H. SIMPSON, Jr., v. Christopher CALIVAS.

No. 92-231.

Supreme Court of New Hampshire.

Sept. 21, 1994.

Rehearing Denied Nov. 22, 1994.

Wiggin & Nourie, P.A., Manchester (Dennis T. Ducharme on the briefs and orally), for plaintiff.

Nelson, Kinder, Mosseau & Gordon, P.C., Manchester (Richard C. Nelson and Peter G. Beeson on the brief, and Mr. Beeson orally; William C. Saturley on the supplemental brief and orally at rehearing), for defendant.

HORTON, Justice.

The plaintiff, Robert H. Simpson, Jr., appeals from a directed verdict, grant of summary judgment, and dismissal of his claims against the lawyer who drafted his father's will. The plaintiff's action, sounding in both negligence and breach of contract, alleged that the defendant, Christopher Calivas, failed to draft a will which incorporated the actual intent of Robert H. Simpson, Sr. to leave all his land to the plaintiff in fee simple. Sitting with a jury, the Superior Court (Dickson, J.) directed a verdict for the defendant based on the plaintiff's failure to introduce any evidence on damages or breach of duty. The trial court also granted summary judgment on collateral estoppel grounds based on findings of the Strafford County Probate Court and dismissed the action, ruling that under New Hampshire law an attorney who drafts a will owes no duty to intended beneficiaries. We reverse and remand.

In March 1984, Robert H. Simpson, Sr. (Robert Sr.) executed a will that had been drafted by the defendant. The will left all real estate to the plaintiff except for a life estate in "our homestead located at Piscataqua Road, Dover, New Hampshire" (emphasis added), which was left to Robert Sr.'s second wife, Roberta C. Simpson (stepmother). After Robert Sr.'s death in September 1985, the plaintiff and his stepmother filed a joint petition in the Strafford County Probate Court seeking a determination, essentially, of whether the term "homestead" referred to all the decedent's real property on Piscataqua Road (including a house, over one hundred acres of land, and buildings used in the family business), or only to the house (and, perhaps, limited surrounding acreage). The probate court found the term "homestead" ambiguous, and in order to aid construction, admitted some extrinsic evidence of the testator's surrounding circumstances, including evidence showing a close relationship between Robert Sr. and plaintiff's stepmother. The probate court, however, did not admit notes taken by the defendant during consultations with Robert Sr. that read: "House to wife as a life estate remainder to son, Robert H. Simpson, Jr. ... Remaining land ... to son Robert A. [sic ] Simpson, Jr." The probate court construed the will to provide Roberta with a life estate in all the real property. After losing the will construction action--then two years after his father's death--the plaintiff negotiated with his stepmother to buy out her life estate in all the real property for $400,000.

The plaintiff then brought this malpractice action, pleading a contract count, based on third-party beneficiary theory, and a negligence count. At trial, the plaintiff presented evidence, including the defendant's notes and testimony of some of Robert Sr.'s friends and acquaintances, to show that Robert Sr. had intended that his son take the buildings used in the family business and the bulk of the land in fee simple. The trial court, however sustained objections to the plaintiff's three attempts to introduce evidence on damages. First, it refused to allow the plaintiff to testify as to the $400,000 he paid to buy out his stepmother. Second, it refused to allow the plaintiff's expert on damages to testify, ruling that he had not been properly disclosed as an expert during discovery. Finally, it refused to admit appraisal values contained in the probate inventory. With no evidence on damages before the jury at the end of the plaintiff's case, the trial court directed a verdict for the defendant. Further, it directed a verdict on the reasoning that the plaintiff had failed to introduce any evidence of intent that conflicted with the terms of the will as construed.

The plaintiff raises three issues on appeal: (1) whether the trial court erred in ruling that under New Hampshire law a drafting attorney owes no duty to an intended beneficiary; (2) whether the trial court erred in ruling that the findings of the probate court on testator intent collaterally estopped the plaintiff from bringing a malpractice action; and (3) whether the trial court erred in excluding the plaintiff's proffered damages evidence.

In an opinion dated November 23, 1993, we reversed and remanded. The defendant moved for rehearing. See Sup.Ct.R. 22. We granted the motion, withdrew our opinion, and ordered rebriefing and reargument. We reverse and remand.

I. Duty to Intended Beneficiaries

In order to recover for negligence, a plaintiff must show that "there exists a duty, whose breach by the defendant causes the injury for which the plaintiff seeks to recover." Goodwin v. James, 134 N.H. 579, 583, 595 A.2d 504, 507 (1991). The critical issue, for purposes of this appeal, is whether an attorney who drafts a testator's will owes a duty of reasonable care to intended beneficiaries. We hold that there is such a duty.

As a general principle, "the concept of 'duty' ... arises out of a relation between the parties and the protection against reasonably foreseeable harm." Morvay v. Hanover Insurance Co., 127 N.H. 723, 724, 506 A.2d 333, 334 (1986). The existence of a contract between parties may constitute a relation sufficient to impose a duty to exercise reasonable care, but in general, "the scope of such a duty is limited to those in privity of contract with each other." Robinson v. Colebrook Savings Bank, 109 N.H. 382, 385, 254 A.2d 837, 839 (1969). The privity rule is not ironclad, though, and we have been willing to recognize exceptions particularly where, as here, the risk to persons not in privity is apparent. Id. In Morvay, for example, we held that investigators hired by an insurance company to investigate the cause of a fire owed a duty to the insureds to perform their investigation with due care despite the absence of privity. Accordingly, the insureds stated a cause of action by alleging that the investigators negligently concluded that the fire was set, thereby prompting the insurance company to deny coverage. Morvay, 127 N.H. at 726, 506 A.2d at 335; see also Spherex, Inc. v. Alexander Grant & Co., 122 N.H. 898, 451 A.2d 1308 (1982) (accountants may be liable in negligence to those who reasonably rely on their work despite lack of privity); Robinson, 109 N.H. at 382, 254 A.2d at 837 (bank owes duty to beneficiary of account with survivorship feature set up by depositor).

Because this issue is one of first impression, we look for guidance to other jurisdictions. The overwhelming majority of courts that have considered this issue have found that a duty runs from an attorney to an intended beneficiary of a will. R. Mallen & J. Smith, Legal Malpractice 3d. § 26.4, at 595 (1989 & Supp.1992); see, e.g., Stowe v. Smith, 184 Conn. 194, 441 A.2d 81 (1981); Needham v. Hamilton, 459 A.2d 1060 (D.C.1983); Ogle v. Fuiten, 102 Ill.2d 356, 80 Ill.Dec. 772, 466 N.E.2d 224 (1984); Hale v. Groce, 304 Or. 281, 744 P.2d 1289 (1987). A theme common to these cases, similar to a theme of cases in which we have recognized exceptions to the privity rule, is an emphasis on the foreseeability of injury to the intended beneficiary. As the California Supreme Court explained in reaffirming the duty owed by an attorney to an intended beneficiary:

When an attorney undertakes to fulfil the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client's intended beneficiaries. The attorney's actions and omissions will affect the success of the client's testamentary scheme; and thus the possibility of thwarting the testator's wishes immediately becomes foreseeable. Equally foreseeable is the possibility of injury to an intended beneficiary. In some ways, the beneficiary's interests loom greater than those of the client. After the latter's death, a failure in his testamentary scheme works no practical effect except to deprive his intended beneficiaries of the intended bequests.

Heyer v. Flaig, 70 Cal.2d 223, 74 Cal.Rptr. 225, 228-29, 449 P.2d 161, 164-65 (1969). We agree that although there is no privity between a drafting attorney and an intended beneficiary, the obvious foreseeability of injury to the beneficiary demands an exception to the privity rule.

The defendant in his brief, however, urges that if we are to recognize an exception to the privity rule, we should limit it to those cases where the testator's intent as expressed in the will--not as shown by extrinsic evidence--was frustrated by attorney error. See Kirgan v. Parks, 60 Md.App. 1, 478 A.2d 713, 719 (1984) ("testamentary beneficiary ... has no cause of action against the testator's attorney for alleged negligence in drafting the will when ... the will is valid, the testamentary intent as expressed in the will has been carried out, and there is no concession of error by the attorney"), cert. denied, 301 Md. 639, 484 A.2d 274 (1984); see also Ventura Cty. Humane Soc. for P.C.C. & A., Inc. v. Holloway, 40 Cal.App.3d 897, 115 Cal.Rptr. 464 (1974); Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 586 So.2d 1221, 1223 (Fla.Dist.Ct.App.1991); Schreiner v. Scoville, 410 N.W.2d 679, 683 (Iowa 1987). Under such a limited exception to the privity rule, a beneficiary whose interest violated the rule against perpetuities would have a cause of action against the drafting attorney, but a beneficiary whose interest was omitted by a drafting error would not. Similarly, application of such a rule to the facts of this case would require dismissal even if the...