No. 80-3-802, Appeal from a Judgment of the Superior Court at No. 2942, October Term, 1978, Reversing Final Order Entered November 17, 1978 of the Court of Common Pleas for the County of Bucks, Civil Action, Law, No. 76.0688-06-1, 279 Pa. Super. Ct. 543,
O'Brien, C.j., and Roberts, Nix, Larsen, Flaherty, McDermott and Hutchinson, JJ. O'Brien, Former C.j., did not participate in the decision of this case. Nix, J., joins this opinion and files a concurring opinion. Larsen, J., files a concurring and dissenting opinion. Roberts, C.j., files a dissenting opinion. McDermott, J., files a dissenting opinion.
This case, one of first impression for us, presents the question of whether a named beneficiary of a will who is also named executrix has a cause of action against the attorney who drafted the will and directed her to witness it where the fact that she witnessed the will voided her entire legacy and her appointment as executrix. Common Pleas Court dismissed appellee's suit, relying on Lawall v. Groman, 180 Pa. 532, 37 A. 98 (1897), and two Federal cases*fn1 which found Pennsylvania to be a "strict privity" state requiring an attorney-client relationship to exist before there could be a malpractice action. Superior Court, by a divided vote, reversed the Common Pleas Court, and held that plaintiff-appellee
could proceed under either a negligence or an assumpsit theory. In so holding, Superior Court sought to adopt the California rule for malpractice suits in negligence enunciated in Lucas v. Hamm, 56 Cal.2d 583, 364 P.2d 685, 15 Cal.Rptr. 821 (1961), cert. denied, 368 U.S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525 (1962), and to allow third party beneficiary suits in assumpsit under their interpretation of our holding in Pennsylvania Liquor Control Board v. Rapistan, Inc., 472 Pa. 36, 371 A.2d 178 (1976).
While we agree with appellants that the Lucas standard is too broad, we nevertheless feel that a properly restricted cause of action for third party beneficiaries in accord with the principles of Restatement (Second) of Contracts § 302 (1979) is available to named legatees, such as appellee, who would otherwise have no recourse for failed legacies which result from attorney malpractice.*fn2 We therefore affirm in part and reverse in part the order of Superior Court, 279 Pa. Super. 543, 421 A.2d 333, and hold that while important policies require privity (an attorney-client or analogous professional relationship, or a specific undertaking) to maintain an action in negligence for professional malpractice, a named legatee of a will may bring suit as an intended third party beneficiary of the contract between the attorney and the testator for the drafting of a will which specifically names the legatee as a recipient of all or part of the estate. The policy reasons underlying the retention of privity and the dangers of adopting negligence concepts of duty analyzed in terms of scope of the risk or foreseeability, as set forth in Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931), remain cogent and are underscored by the experience in California after that state's courts abolished the doctrine to allow such suits in negligence. Lucas v. Hamm, supra. However, the grant of standing to a narrow
class of third party beneficiaries seems "appropriate" under Restatement (Second) of Contracts § 302 where the intent to benefit is clear and the promisee (testator) is unable to enforce the contract.
As an appellate court reviewing the sustaining of a demurrer we accept as true all well-pleaded material facts in the complaint as well as all inferences reasonably deducible therefrom. Allstate Insurance Co. v. Fioravanti, 451 Pa. 108, 299 A.2d 585 (1973). On February 24, 1957, Edward J. Kent, then a resident of Pennsylvania, retained Harry J. Liederbach, a Pennsylvania attorney, to draft a one-page "Last Will and Testament," which Liederbach did on the same day (RR-16a). The will provided that Frances E. Guy was to be the beneficiary of the residuary estate, after payment of a specific bequest of $4,500.00 to Kent's sister. Guy was also named executrix of the estate. The will was signed by Kent and, allegedly at Liederbach's direction, was witnessed by Guy and Liederbach.
On October 12, 1972, Kent died, apparently a resident of New Jersey.*fn3 The will was submitted to probate, and on July 11, 1973, Mrs. Guy qualified as executrix in the office of the Surrogate in Camden, New Jersey. However, on March 29, 1974, the Probate Division of Camden County Court, relying on a New Jersey statute, since repealed, invalidated the legacy to Mrs. Guy because she was a subscribing witness to the will.*fn4 (Mrs. Guy had previously resigned her
appointment as executrix because of the legal challenge to her right to inherit under the will). In all, Mrs. Guy was barred from taking the bulk of Kent's estate, her share totaling some $45,000 worth of property, including a parcel of real estate in Avalon, New Jersey.
On January 23, 1976, Mrs. Guy filed this action in Bucks County Common Pleas Court. The complaint, which consisted of one count in both trespass and assumpsit, alleged in pertinent part:
19. The actions and conduct of the defendant Liederbach in directing and advising the plaintiff to become an attesting witness to the Will of Edward J. Kent, Jr., was negligent as contrary to the ordinary and reasonable standards for duly licensed attorneys practicing within the Commonwealth of Pennsylvania.
20. The action and conduct of the defendant Liederbach in directing and advising the plaintiff to become an attesting witness to the will of Edward J. Kent, Jr. amounted to a breach of the contract between Edward J. Kent, Jr. and defendant Liederbach to which contract the plaintiff, Frances E. Guy, was a third party beneficiary.
(RR-6a). Along with the facts presented above, she alleged that when the will was drafted Liederbach knew or should have known that Kent possessed personalty and realty in Avalon, New Jersey, and that Kent's express choice was that
Mrs. Guy should be the beneficiary of all his estate, save for the bequest to his sister.
Liederbach filed preliminary objections in the nature of a demurrer, alleging that the absence of any attorney-client relationship between Guy and Liederbach barred any malpractice action, that the complaint failed to state facts sufficient to establish negligence on the part of Liederbach, and that the New Jersey statutes and the Camden County Probate Court's decision based on them barred Guy's suit.
Common Pleas, relying on the requirement of strict privity set out in Lawall v. Groman, supra, dismissed Mrs. Guy's action. 33 Bucks Co.L.Rep. 300 (1979). On appeal to the Superior Court, the case was heard by a three judge panel which voted 2-1 to reverse the order of the trial court. Guy v. Liederbach, 279 Pa. Super.Ct. 543, 421 A.2d 333 (1980). The Superior Court held that a beneficiary has a cause of action against the attorney who drafted the will based either on a negligence theory as articulated in Lucas v. Hamm, supra, which Superior Court called "the better view," or under a third party beneficiary theory, relying on their interpretation of our holding in Pennsylvania Liquor Control Board v. Rapistan, Inc., supra. Superior Court's holdings entail a change in the law of Pennsylvania in the areas of both attorney malpractice and third party beneficiaries, and we granted review of this case to give full consideration to these issues.*fn5
Under present Pennsylvania law, an individual who has an attorney-client relationship may sue his attorney for malpractice under either a trespass or assumpsit theory. See 1 Standard Pennsylvania Practice 2d § 4:66 and cases cited therein. In dicta, Lawall v. Groman, supra, relying on the principle that one who undertakes to perform a service for another, even without reward, is bound to exercise reasonable care and can be held responsible for misfeasance, though not for nonfeasance, stated that a third party could bring suit against an attorney in a negligence action if the attorney knew that the third party "was relying on him in his professional capacity." 180 Pa. at 540, 37 A. 98. Despite this language, Federal courts interpreting Pennsylvania law have held that the mere negligence of an attorney toward someone other than a client is not actionable. Sachs v. Levy, supra; Connelly v. Wolf, Block, Schorr & Solis-Cohen, supra. Thus we have in the past adhered to the rule followed by the overwhelming majority of states requiring the privity of an attorney-client relationship in order to maintain a cause of action. See Annot., 45 A.L.R.3d 1181. At the very least, Lawall would require a specific undertaking on the attorney's part to perform a specific service for a third party, coupled with the reliance of the third party and the attorney's knowledge of that reliance in order for the third party to bring suit.
Our analysis begins with the recognition that Lawall v. Groman, albeit in dicta, allows for the bringing of suits by persons other than clients. In Lawall, a mortgagee sued an attorney for his failure to properly search records to ...