Estate of Robert H. Agnew v. Ross, D.

J-S79043-14
2015 PA Super 22ESTATE OF ROBERT H. AGNEW, : IN THE SUPERIOR COURT OF
MARGARET ALZAMORA, INDIVIDUALLY : PENNSYLVANIA
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, :
:
Appellants :
:
v. :
:
DANIEL R. ROSS, ESQUIRE, MEGAN :
MCCREA, ESQUIRE AND ROSS & :
MCCREA, LLP, :
:
Appellees : No. 2195 EDA 2014
Appeal from the Order Entered June 4, 2014,
in the Court of Common Pleas of Chester County,
Civil Division, at No(s): 12-09300
BEFORE: ALLEN, OLSON, and STRASSBURGER, JJ.*
OPINION BY: STRASSBURGER, J.: FILED FEBRUARY 02, 2015
The Estate of Robert H. Agnew, Margaret Alzamora, individually and as
executrix of the Estate of Robert H. Agnew, William and Sheila Hennessy,
Margaret Hennessy, James and Christine Hennessy, and Paul and Eileen
Janke (collectively, Appellants) appeal from the order granting summary
judgment against them and in favor of Daniel H. Ross, Esquire, Megan
McCrea, Esquire, and their firm, Ross & McCrea, LLP (collectively, Appellees).
Upon review, we reverse the order of the trial court and remand for
proceedings consistent with this opinion.
*Retired Senior Judge assigned to the Superior Court.
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The trial court summarized the underlying facts as follows.
[I]n November of 2003, Robert H. Agnew retained Ross to draft
estate planning documents. Ross drafted a Revocable Trust and
Will in order to effectuate Mr. Agnew’s intent. Over the next
several years, Ross prepared various amendments to the Trust
and the Will, as requested by Mr. Agnew.
As of 2010, Mr. Agnew’s estate plan was comprised of
specific gifts of cash and property to selected family members,
friends and five $250,000 scholarship funds to four different
colleges. The beneficiaries of the residue of the trust were
several colleges.
In March of 2010, Mr. Agnew suffered a fall at his
residence and was taken to Paoli Hospital. He underwent a
variety of tests which included a CAT scan, where it was
revealed he was suffering from an inoperable cancerous tumor.
Based upon Mr. Agnew’s age and condition, he was advised that
he was not a viable candidate for chemotherapy and there was
nothing further that could be done. In March of 2010, Mr.
Agnew returned to Devon Senior Living and was admitted into a
hospice program.
In the summer of 2010,…Margaret Alzamora, [Mr. Agnew’s
niece,] contacted Ross to tell him that Mr. Agnew wanted to
make changes to his estate plan. Mr. Agnew retained Ross and
they met at his residence on August 18, 2010. The purpose of
this was to discuss amendments to various documents and to
establish a trust relating to property owned by [Mr. Agnew] in
Florida (hereinafter “Florida Trust”). While Ms. Alzamora
participated in a portion of the meeting, she was not present at
the meeting when Mr. Agnew discussed his estate plan with
Ross.
Ross acknowledged that Mr. Agnew advised that he
wanted to make changes to his estate plan to limit the amounts
going to charity[1] and provide more funds to go to his [nieces
1
The charities involved in the trust were Drexel University, Chestnut Hill
College, Temple University, and Muhlenberg College. The Estate paid a
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and nephews]. Mr. Agnew advised Ross that Ms. Alzamora
would provide further details.
Later in August of 2010, Ms. Alzamora contacted Ross by
email and communicated details of these additional instructions.
The email indicated that the residue should be divided into five
equal shares [among] … William and Sheila Hennessy, James
and Christine Hennessy, Eileen and Paul Janke, Margaret
Hennessy[,] and Margaret Alzamora[, all of whom are Mr.
Agnew’s nieces and nephews].
Ross prepared a draft of an Amendment to the Trust
(hereinafter “2010 Trust Amendment”) which continued to
provide for gifts in the amount of $250,000 to each of the
colleges and universities and a revised Will for Mr. Agnew. Of
note, the drafted 2010 Trust Amendment did provide that the
residue of the assets of the Revocable Trust were to be
distributed equally to [Appellants] in this action.
The revised Will and the 2010 Trust Amendment, which
Ross prepared, were sent by email on August 27, 2010 to Ms.
Alzamora for the purpose of providing them to Mr. Agnew. Ms.
Alzamora did provide Mr. Agnew with copies of the revised Will
and the Trust Amendment. Mr. Agnew reviewed the documents.
However, Mr. Agnew did not execute the revised Will or the 2010
Trust Amendment.
In September of 2010, Ross met again with Mr. Agnew.
Following a discussion between Ross and Mr. Agnew, the revised
Will and an amendment to the Florida Trust were executed.
Importantly, the 2010 Trust Amendment was not executed.
Ross did not speak with Mr. Agnew about the 2010
Revocable Trust Amendment in part because they [did not] have
copies with them. However, it was clear and Ms. Alzamora
acknowledged that Mr. Agnew was aware that the 2010 Trust
Amendment had been prepared. Mr. Agnew had the document
presented and described to him. Ms. Alzamora acknowledged
that Mr. Agnew would have known that the 2010 Trust
portion of each bequest to each charity in order to settle the dispute as to
those entities.
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Amendment was not among the documents executed at the
September 2, 2010 meeting.
After the September 2, 2010 meeting, Mr. Agnew never
mentioned the 2010 Trust Amendment again. Ross retained all
of the documents that had been executed and stored them in the
firm’s will vault. Mr. Agnew died January 15, 2011.
On February 1, 2011, Letters Testamentary were granted
to Margaret Alzamora and the September 2, 2010 Will was
admitted to probate as the Last will of [Mr. Agnew]. Sometime
between the probate of [Mr. Agnew’s] Will and February 10,
2011, Ross realized that the 2010 Trust Amendment was never
executed and advised Ms. Alzamora. Ms. Alzamora noted that
she had never seen a signed copy version of the 2010 Trust
Amendment and there is no evidence it was ever signed.
Trial Court Opinion, 6/4/2014, at 2-4 (footnote added).
On August 31, 2012, Appellants commenced this action against
Appellees by writ of summons. On October 19, 2012, Appellants filed a
complaint. In Count I, Appellants asserted a claim sounding in breach of
contract against Ross and McCrea. In Count II, Appellants asserted a cause
of action in negligence against Ross and McCrea. In Count III, Appellants
asserted a claim called “Respondeat Superior” against the law firm, Ross &
McCrea, LLP. Complaint, 10/19/2012, at 16.
Appellees filed preliminary objections to the complaint, which were
sustained in part and overruled in part on May 23, 2013. Specifically, the
trial court sustained the preliminary objection asserting that the Estate of
Robert Agnew was an improper party to this suit, thereby dismissing the
estate as a party. The trial court also concluded that claims by Margaret
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Alzamora in her capacity as executrix of the estate should be dismissed.
The trial court further concluded that because “the individual [Appellants]
did not have an attorney-client relationship with [Appellees], their claim[s]
for negligence in Count II and respondeat superior in Count III are
dismissed.” Trial Court Order, 5/2/2013, at n.1. Finally, the trial court
concluded that “[i]t is not certain that [Appellants] cannot establish that
they were intended third-party beneficiaries of the contract between [Ross]
and [Mr. Agnew] to amend the Revocable Trust.” Id. Thus, the claim for
breach of contract survived demurrer.
After pleadings were closed and discovery was conducted, Appellees
moved for summary judgment. Following oral argument, summary
judgment was granted in favor of Appellees and against Appellants.
Appellants timely filed a notice of appeal from the order granting summary
judgment.2 On appeal, Appellants set forth four issues for our review.
2
In response to the trial court’s direction to file a concise statement of
errors complained of on appeal pursuant to Pa.R.A.P. 1925, Appellants filed
a statement consisting of “seven pages with four errors delineated as
headings; however, each error ha[d] several subparagraphs, totaling 46 in
all. In addition to the errors complained of on appeal, Appellant[s] attached
in excess of 50 pages of exhibits.” Trial Court Opinion, 8/18/2014, at 1. We
agree with the trial court’s assessment that “Appellant[s’] Concise Statement
was anything but[;]” and runs perilously close to permitting us to conclude
Appellants have waived all issues. See Kanter v. Epstein, 866 A.2d 394(Pa. Super. 2004) (holding no issues preserved for review where appellant’s
“concise” statement spanned 15 pages and 49 issues). However, because
Appellants have raised the same issues on appeal that the trial court
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A. Whether the [t]rial [c]ourt erred in holding that a signed
testamentary document is a prerequisite to standing in every
legal malpractice action based on third-party beneficiary status.
B. Whether the [t]rial [c]ourt abused its discretion in failing to
recognize Appellants’ status as third-party beneficiaries of the
contract for legal services between [Mr. Agnew] and Appellees?
C. Whether the [t]rial [c]ourt erred as a matter of law in relying
on Gregg v. Lindsay[, 649 A.2d 935 (Pa. Super. 1994)]?
D. Whether the [t]rial [c]ourt failed to view the evidence in the
light most favorable to Appellants?
Appellants’ Brief at 4 (footnotes omitted).
Because Appellants’ issues are interrelated, we consider them
together.
Our standard of review of a trial court’s order granting
summary judgment is well-established: We view the record in
the light most favorable to the nonmoving party, and all doubts
as to the existence of a genuine issue of material fact must be
resolved against the moving party. Only where there is no
genuine issue as to any material fact and it is clear that the
moving party is entitled to a judgment as a matter of law will
summary judgment be entered. Our scope of review of the trial
court’s order granting or denying summary judgment is plenary,
and our standard of review is clear: the trial court’s order will be
reversed only where it is established that the court committed
an error of law or abused its discretion. [A]n abuse of discretion
occurs when the court has overridden or misapplied the law,
when its judgment is manifestly unreasonable, or when there is
insufficient evidence of record to support the court’s findings.
addressed in its June 4, 2014 opinion granting summary judgment, we will
proceed to the merits of this case.
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Young v. Prizm Asset Mgmt. Co., 100 A.3d 594, 596 (Pa. Super. 2014)
(internal citations and quotations omitted).
Instantly, the only claim considered on summary judgment was
Appellants’ contention that Ross had breached his contract with Mr. Agnew.3
Because Mr. Agnew was deceased and could not sue Ross, Appellants
contended they had standing to pursue this suit under the theory that they
were third-party beneficiaries of the contract between Ross and Mr. Agnew.
In Guy v. Liederbach, 459 A.2d 744 (Pa. 1983) (plurality),4 our
Supreme Court adopted the Restatement (Second) of Contracts § 302 with
respect to third-party beneficiaries in situations analogous to the one at
issue here.5
3
This Court has explained:
[A]n assumpsit claim based on breach of an attorney-client
agreement is a contract claim, and the attorney’s liability must
be assessed under the terms of the contract. Thus, if the
attorney agrees to provide his or her best efforts and fails to do
so, an action in assumpsit will accrue. [A]n 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.
Fiorentino v. Rapoport, 693 A.2d 208, 212-13 (Pa. Super. 1997)
(quotations and citations omitted).
4
The majority of justices joined the opinion on the aspects of Guy pertinent
to this case.
5
In Guy, supra, the executrix of the estate, who was also a named
beneficiary in the will, brought a breach of contract and legal malpractice
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We believe that Restatement (Second) of Contracts § 302
(1979) provides an analysis of third party beneficiaries which
permits a properly restricted cause of action for beneficiaries
such as appellee.…
Restatement (Second) of Contracts § 302 (1979)
states:
§ 302. Intended and Incidental Beneficiaries
(1) Unless otherwise agreed between promisor and
promisee, a beneficiary of a promise is an intended
beneficiary if recognition of a right to performance in
the beneficiary is appropriate to effectuate the
intention of the parties and either
(a) the performance of the promise will
satisfy an obligation of the promisee to
pay money to the beneficiary; or
(b) the circumstances indicate that the
promisee intends to give the beneficiary
the benefit of the promised performance.
(2) An incidental beneficiary is a beneficiary who is
not an intended beneficiary.
(Emphasis added). There is thus a two part test for determining
whether one is an intended 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
action against the attorney who prepared the will. That attorney had
permitted the executrix to be a witness to the will which, under a now
repealed New Jersey statute providing that a will signed by an interested
witness is invalid, voided her entire legacy and her appointment as
executrix. Our Supreme Court concluded that the executrix could not bring
an action for legal malpractice as there was no strict privity between the
executrix and the attorney. As discussed, infra, the Supreme Court
concluded that the executrix could maintain a breach of contract action with
standing as a third-party beneficiary to the contract between the attorney
and the decedent.
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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 [sic] 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
§ 302.8
8
There are, of course, beneficiaries under a
will who are not named, and who may be either
intended or unintended beneficiaries. The standing
requirement may or may not be met by non-named
beneficiaries: the trial court must determine whether
it would be “appropriate” and whether circumstances
indicate an intent to benefit non-named
beneficiaries. It follows that unintended third party
beneficiaries could not bring suit under § 302 against
the drafting attorney. In making that determination
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the trial court should be certain that the intent is
clear.
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, 459 A.2d at 751-52.
Thus, in footnote 8 of Guy, the Supreme Court left open the possibility
that beneficiaries not named in a will could have standing to pursue a breach
of contract action against an attorney. Subsequently, in Gregg v. Lindsay,
649 A.2d 935, 938 (Pa. Super. 1994),6 this Court considered whether Guy
“should be expanded to allow recovery where…(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.”
6
Gregg, supra, was a three-judge panel decision of this Court with one
judge writing for the majority and two judges concurring in the result.
“Unless an issue in a panel decision commands a majority both as to result
and as to rationale, the principle embodied in the issue is not
precedential.” Commonwealth v. Perez, 760 A.2d 873, 880 (Pa. Super.
2000) (emphasis added). As such, the rationale in Gregg is non-
precedential because it did not garner a majority vote on the panel.
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In Gregg, the would-be legatee, Gregg, contacted an attorney,
Lindsay, to prepare a will on behalf of his long-time friend, Blain, who was in
intensive care at a hospital. The will named Gregg executor and provided a
substantial bequest to him. Lindsay went to the hospital with a draft of the
will, which Blain approved; however, Lindsay was unable to find two persons
to witness the will. Lindsay returned at noon the following day so Blain
could execute the will; however, Blain had been transferred to another
hospital and died later that afternoon.
Gregg filed a breach of contract action against Lindsay asserting
standing on the basis that Gregg was a third-party beneficiary to the
contract between Blain and Lindsay. A jury returned a verdict in favor of
Gregg, and Lindsay appealed. This Court reversed the verdict and held that
“there was no breach of contract between [Blain] and [Lindsay].” Id. at 939-
40. This Court reasoned as follows.
In Guy v. Liederbach, supra, the Supreme Court found
that the executed will had firmly evidenced the existence of the
third party beneficiary contract intended to benefit the legatee.
Here, however, there was no executed will which, under such an
analysis, could clearly establish an intent by the testator to
benefit the third person. Where one seeks to prove the
existence of an oral contract for the making of a will, he assumes
an exacting evidentiary burden which requires clear, direct and
precise evidence of each of the elements to a valid contract. …
[T]here is no competent evidence of that which transpired
between Lindsay and Blain at the hospital sufficient to permit a
finding that they had entered a contract to make a will at that
time.
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To hold otherwise, under the circumstances of this case,
would open the doors to mischief of the worst type. To permit a
third person to call a lawyer and dictate the terms of a will to be
drafted for a hospitalized client to benefit the third person caller,
even though the will was never executed, would severely
undermine the duty of loyalty owed by a lawyer to the client and
would encourage fraudulent claims.
Id. at 940.
In the instant case, the trial court applied the aforementioned law and
concluded the following.
A review of the probated 2010 Will does not list any of the
[Appellants] as beneficiaries…. The issue is whether there is any
executed document which indicates that [Appellants] were
intended as beneficiaries.
In reviewing Guy and its progeny, it is clear that in order
to maintain the action under the theory of a third-party
beneficiary, [Appellants] would need to show that there is an
“otherwise valid” document naming them as recipients of all or
part of the estate. In other words, the beneficiary’s right must
be shown and established by the showing of some otherwise
valid document that effectuates the intention of the parties.
Trial Court Opinion, 6/4/2014, at 8.
Thus, the trial court’s reading of non-precedential Gregg essentially
obliterates footnote 8 of Guy by requiring that being named in an “otherwise
valid” document is a prerequisite to obtaining standing as a third-party
beneficiary to a contract. In support of its conclusion, the trial court relied
on language in Gregg, which provided the following analysis of Guy.
In [Guy], the Supreme Court specifically retained the
“requirement that [a] plaintiff must show an attorney-client
relationship or a specific undertaking by the attorney furnishing
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professional services, … as a necessary prerequisite for
maintaining [an action] in trespass on a theory of negligence.”
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 to a 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.
Gregg, 649 A.2d at 937 (emphasis added; citations omitted).
Appellants contend the circumstances of this case differ from those in
Gregg; and, footnote 8 of Guy still leaves open the possibility that a
beneficiary who is not named may still have standing to bring suit.7
Specifically, footnote 8 of Guy provides that where non-named beneficiaries
bring suit, “the trial court must determine whether it would be ‘appropriate’
and whether circumstances indicate an intent to benefit non-named
beneficiaries.” 459 A.2d at n.8. Essentially, Appellants suggest that while
the naming of a beneficiary in a will or contract provides a clear
manifestation of intent, and would preclude summary judgment, the failure
to name the beneficiary does not automatically require the entry of
summary judgment if the beneficiary can satisfy the test set forth in section
302.
We agree with Appellants that footnote 8 of Guy is still good law, and
conclude the trial court erred in its reading of Gregg to eliminate footnote 8
7
These individuals were all named beneficiaries in the will executed by Mr.
Agnew, but they were not named in the trust prior to the unsigned 2010
Trust Amendment at issue here.
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of Guy. Having concluded that the trial court erred as a matter of law, we
continue our analysis to determine whether the trial court erred in granting
summary judgment. Instantly, the trial court concluded that “[t]here is no
competent evidence of that which transpired at the September meeting
between Mr. Agnew and Ross.” Trial Court Opinion, 6/4/2014, at 9. We
disagree, and examine the facts of this case in the light most favorable to
Appellants.
There is no question that Ross was Mr. Agnew’s attorney for the seven
years prior to the 2010 Trust Amendment.8 Moreover, Ross’ testimony
reveals that he believes he made a mistake by not presenting the 2010 Trust
Amendment for Mr. Agnew’s signature at the September 2, 2010 meeting.
See Deposition of Ross, 10/3/2013, at 25 (“I had met with Mr. Agnew in
August of 2010, at which time he indicated that he wanted to make changes
to his estate plan, to have more go to his wife’s family. He was unclear at
that point how he wanted to accomplish that. And he said he would get
back to me through Ms. Alzamora.”). Ross further testified that when he
drafted the 2010 Trust Amendment with the names of Appellants, he
believed that it was consistent with Mr. Agnew’s wishes. Id. at 27. Ross
8
This is quite distinguishable from Gregg, where Lindsay had never before
met either Blain or Gregg prior to the drafting of the will. Moreover, Gregg
called Lindsay and requested the change of will to benefit himself while Blain
was on his deathbed. These are circumstances which would alert any
reasonable person to suspect that fraud could be invovled.
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also stated that Mr. Agnew “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.” Id. at
30. Moreover, Ross conceded that his failure to bring the 2010 Trust
Amendment to that meeting was an “[o]versight.” Id.
Thus, the trial court erred in concluding that the “recognition of a right
to performance in the beneficiary is appropriate to effectuate the intention of
the parties” did not exist in order to satisfy the standing requirement of the
Restatement (Second) of Contracts § 302. Examining the facts in the light
most favorable to Appellants, the record supports an inference that Ross
intended to give Appellants the benefit of his contract with Mr. Agnew. As
such, Appellants have satisfied the standing requirement. Therefore, we
reverse the order of the trial court granting summary judgment in favor of
Appellees.
Order reversed. Case remanded for proceedings consistent with this
opinion. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/2/2015
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