364 P.2d 685 (Cal. 1961)
Plaintiffs, who are some of the beneficiaries under the will of Eugene H. Emmick, deceased, brought this action for damages against defendant L. S. Hamm, an attorney at law who had been engaged by the testator to prepare the will.1 They have appealed from a judgment of dismissal entered after an order sustaining a general demurrer to the second amended complaint without leave to amend.2
The allegations of the first and second causes of action are summarized as follows.3 Defendant agreed with the testator, for a consideration, to prepare a will and codicils thereto for him by which plaintiffs were to be designated as beneficiaries of a trust provided for by paragraph Eighth of the will and were to receive 15 per cent of the residue as specified in that paragraph.4 Defendant prepared testamentary instruments containing phraseology that was invalid by virtue of section 715.2 and former sections 715.1 and 716 of the Civil Code.5 Paragraph Eighth of these instruments transmitted the residual estate in trust and provided that the trust shall cease and terminate at 12 o’clock noon on a day five years after the date upon which the order distributing the trust property to the trustee is made by the Court having jurisdiction over the probation of this will.6 After the death of the testator the instruments were admitted to probate.7 Subsequently defendant advised plaintiffs in writing that the residual trust provision was invalid and that plaintiffs would be deprived of the entire amount unless they made a settlement with the blood relatives of the testator under which plaintiffs would receive a lesser amount.8 As a result, plaintiffs were compelled to enter into a settlement under which they received a share of the estate amounting to $75,000 less than the sum which they would have received pursuant to testamentary instruments drafted in accordance with the directions of the testator.9
The third cause of action alleges that after admission of the will and codicils to probate, Harold Houghton Emmick, Walton Russell Emmick, Delta Inez Spelman, and Retha Newell instituted a will contest.10 The executors, defendant, and the contestants reached a settlement agreement under which $10,000 would be paid to the contestants from the assets of the estate in return for releases.11 Defendant caused to be executed releases which did not preclude the contestants from a subsequent attack upon the validity of the testamentary instruments.12 As a consequence, the contestants joined in a legal attack upon the validity of the residual clause and plaintiffs would have received an additional sum of $15,000 from the estate if the releases had been prepared in accord with good legal practice.13
The trial court sustained a general demurrer to the second amended complaint without leave to amend and entered a judgment of dismissal from which the plaintiffs appealed.14
Whether an attorney who drafts a will is liable in tort to intended beneficiaries not in privity with him for negligence in the drafting?15
The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of factors including the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury, and the policy of preventing future harm.16
Yes. The factors identified in Biakanja v. Irving apply directly to these facts involving the will of Eugene H. Emmick.17 Defendant agreed with the testator for consideration to prepare a will and codicils designating plaintiffs as beneficiaries of a trust under paragraph Eighth and recipients of 15 percent of the residue.18
One of the main purposes of the transaction was to provide for the transfer of property to plaintiffs.19 The damage from invalidity was clearly foreseeable.20 It became certain upon the testator’s death without change that plaintiffs would have received the benefits but for the negligence.21 Allowing recovery prevents future harm by ensuring accountability.22
Recognition of liability does not impose an undue burden on the profession because an attorney’s liability to clients can already be large and unpredictable.23 The innocent beneficiary should not bear the loss instead.24
The lack of privity between plaintiffs and defendant does not preclude plaintiffs from maintaining an action in tort against defendant.25
Whether intended beneficiaries of a will may recover from the drafting attorney as third-party beneficiaries of the contract between the attorney and the testator?26
Section 1559 of the Civil Code, which provides for enforcement by a third person of a contract made expressly for his benefit, does not preclude recovery where the main purpose of the contract for the drafting of a will is to accomplish the future transfer of the estate to the named beneficiaries, and the attorney must necessarily understand this intent.27
Yes. The main purpose of the contract between defendant and the testator was to benefit the persons named in the will, including plaintiffs who were to receive interests under paragraph Eighth, and this intent can be effectuated only by giving the beneficiaries a right of action upon breach.28 The contract unmistakably shows the testator’s intent to benefit the named persons, and the attorney necessarily understood that intent, satisfying the requirements for third-party beneficiary recovery even though performance is not rendered directly to the beneficiaries.29
Intended beneficiaries of a will who lose their testamentary rights because of failure of the attorney who drew the will to properly fulfill his obligations under his contract with the testator may recover as third-party beneficiaries.30
Whether an attorney is liable for negligence or breach of contract in drafting a will provision involving the rule against perpetuities and restraints on alienation?31
No. The complaint alleges that defendant drafted the will so that the trust was invalid under sections 715.2 and former sections 715.1 and 716 of the Civil Code.34 The trust was to terminate five years after the order distributing property to the trustee.35 This provision could cause invalidity only because of the remote possibility of delayed distribution beyond lives in being plus 16 years.36 The subjects of perpetuities and restraints on alienation have long perplexed the courts and bar.37
The possible delay was so remote and unlikely that an attorney of ordinary skill might well have failed to recognize the danger.38 Therefore the error does not show a failure to use the required skill, prudence, and diligence.39
An attorney is not liable either to his client or to a beneficiary under a will for errors of the kind alleged in the first and second causes of action.40
Whether an attorney acting for executors in a will contest settlement was negligent in preparing releases that failed to bar subsequent attacks on the will by the contestants?41
An attorney acting for executors in settling a will contest based on lack of testamentary capacity has no duty to obtain releases waiving all other claims unless the contestants were willing to provide such broader waivers for additional consideration.42 The releases must conform to the settlement agreement.43
No. The third cause of action alleges that after the will contest by Harold Houghton Emmick, Walton Russell Emmick, Delta Inez Spelman, and Retha Newell was settled for $10,000 with releases that did not preclude subsequent attacks on the residual clause.44 The contestants later joined in attacking the clause’s validity under the rule against perpetuities, causing plaintiffs to receive $15,000 less.45 There are no allegations that the contestants were willing to waive rights to other attacks at the time of settlement.46 The $10,000 must be assumed to cover only the contest on testamentary capacity grounds.47
Defendant had at most a duty to request broader releases with no allegation that he failed to do so.48
The third count does not state a cause of action for negligence.49