Lost Legatee Beneficiary Claims

The Supreme Court of Pennsylvania, in Guy v. Liederbach, 459 A.2d 744 (Pa. 1982), a plurality decision, first considered whether a lost legatee could assert a malpractice claim against the lawyer who drafted the will. In Guy, the lawyer had drafted a will for a then-Pennsylvania resident, the execution of which was witnessed by the named legatee. Eighteen years later, the testator died in New Jersey. Unfortunately for the legatee, a statute was then in effect in New Jersey, since repealed, that nullified any inheritance to any legatee who had witnessed the execution of a will. Because the will was probated in New Jersey the legatee was effectively disinherited, so she sued the lawyer who had drafted the will.

The lawyer defended on the basis that he had never represented the legatee; therefore, absent the existence of an attorney/client relationship, the legatee and the lawyer did not stand in privity. The legatee argued that the court should adopt the reasoning in Lucas v. Hamm, 56 Cal.21d 583, 264 P.2d 685, 15 Cal.Rptr. 821 (1961), which stated the so-called "California rule" for malpractice suits in negligence to allow a lost legatee to assert a claim in negligence. That rule is not a simple negligence standard but involves the application of a six-part balancing test on a case-by-case basis. The legatee also argued that she should be recognized as an intended third-party beneficiary, under Restatement (Second) of Contracts § 301 (1979), of the contract between the lawyer and the testator, arguing, in effect, that the lawyer, the "promisor," had promised the testator, the "promisee," that he would draft a will that would successfully benefit the intended legatee.

The appeal of these arguments is that the legatee would otherwise have no basis to remedy the real harm that occurred to her unless the court embraced at least one of these arguments. After all, in the instance of a lost legatee, the estate has not been damaged, that is, it has sustained no net loss or gain to its balance sheet; the assets in question would simply be inherited by someone else or by some other entity. Therefore, the estate has no basis to assert a malpractice claim against the lawyer.

The Supreme Court rejected adoption of the California rule, finding it "unworkable, and [that it] has led to ad hoc determinations and inconsistent results as the California courts have attempted to refine the broad Lucas rule." But the court did accept the third-party beneficiary...