Pivnick v. Beck, et al.

SYLLABUS
 

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Pivnick v. Beck, et al. (A-84-99)


(NOTE: This Court wrote no full opinion in this case. Rather, the Court's affirmance of the judgment of the Appellate Division is based substantially on the reasons expressed in Judge Lefelt's opinion below.)

Argued October 24, 2000 -- Decided December 7, 2000

PER CURIAM
 
This case involves the issue of whether or not an enhanced burden of proof is required for legal malpractice actions where the plaintiff claims that the testator's intent differed from the intent expressed on the face of the testamentary instruments. The underlying dispute is best described in two parts.

Part I: Suit for Payment of Audrey's Bequest

Harry Pivnick executed his Last Will and Testament on August 2, 1989, and a Trust Agreement on April 1, 1992. Harry died on July 8, 1992. In his will, Harry made a number of bequests, including a $400,000 bequest to his daughter Audrey. In addition, the Trust Agreement conveyed all the stock from Harry's business, the Acme Holding Co., Inc., to the trust, with a life interest in himself and the remainder upon his death to his son Leonard, co-executor of Harry's estate. Upon Harry's death, Audrey requested payment of her $400,000, which Leonard refused, claiming that the bequest could only be honored by liquidating a portion of the trust, and that, under the Trust Agreement, he could not authorize such a liquidation of assets. Consequently, Audrey sued Harry's estate.

Cross-motions for summary judgments were filed by Leonard and Audrey. Leonard argued for reformation of the Trust Agreement, claiming that the Agreement, as prepared by Harry's attorney, David Beck of Sills Cummis Zuckerman Radin Tischman Epstein & Gross, did not reflect his father's intent. He argued that Harry intended to insulate Acme's assets from Audrey and did not intend for payment of her bequest out of the trust. On September 18, 1997, Judge Clarkson S. Fisher, Jr., sitting in probate, granted Audrey summary judgment, denying reformation of the Trust Agreement and directing payment of Audrey's $400,000 bequest. Judge Fisher concluded that there was clear and convincing evidence that Harry intended that trust assets be used to pay for any bequests under the will. Judge Fisher found the Agreement to be clear in its intent and unequivocally consistent with Harry's will. Judge Fisher entered final judgement on November 13, 1997, and Leonard appealed. The Appellate Division affirmed Judge Fisher's decision on November 19, 1998. The Supreme Court denied certification on May 12, 1999.

Part II: Legal Malpractice Suit

Leonard filed a legal malpractice claim against Beck and his law firm ( defendants ), claiming that Beck drafted a Trust Agreement that was contrary to Harry's intent. According to Leonard, Harry's intent was to disinherit Audrey and leave his entire estate to Leonard. Leonard presented testimony from Angela Roper, an attorney and business associate of Harry's and co-executor of Harry's estate, whom Leonard claimed advised Harry to execute an inter vivos trust as a way of excluding Audrey from any post-death payments out of the estate. Defendants moved to dismiss Leonard's complaint, arguing that Leonard did not have standing to bring the malpractice claim, that Leonard was barred from introducing extrinsic evidence because both Harry's will and Trust Agreement were clear on their face, and that Leonard was collaterally estopped from again raising the intent issue because the issue was decided in the probate proceeding.

On November 20, 1998, Judge Schott dismissed Leonard's complaint, holding that Leonard was collaterally estopped and determining that a clear and convincing burden of proof should apply where a malpractice plaintiff claims that the intent expressed in the testamentary instrument was contrary to the testator's intent. Leonard appealed Judge Schott's decision, arguing that the applicable burden of proof in a legal malpractice action was by a preponderance of the evidence and that collateral estoppel did not attach where the previous action involved a more demanding burden of proof. Defendants countered that a clear and convincing standard applied where the intent of the testator was in dispute and the testamentary instruments were clear and unambiguous. Alternatively, defendants argued that a legal malpractice claim in the context of a testamentary document should only be allowed where an attorney's negligence frustrates the testator's intent as expressed in the testamentary instrument.

In a written opinion, reported at 326 N.J. Super. 474 (1999), the Appellate Division declined to adopt defendant's position that would preclude all malpractice suits by beneficiaries unless those suits involved a lawyer's negligence inhibiting the expressed intent of the testamentary document. The court did, however, agree that an enhanced and more rigorous burden of proof should be applied in such cases: We conclude that a clear and convincing burden of proof for plaintiffs in malpractice actions who seek to contradict solemnly drafted and executed testamentary documents appropriately balances all the competing interests. Our skepticism for oral proofs in such situations is accommodated, yet, truly meritorious cases would not be precluded. (Id., at 485) Having concluded that the same burden of proof applied to both the probate and legal malpractice proceedings , and applying the principle of collateral estoppel as set forth in In Re Dawson, 136, N.J. 1 (1994), the Appellate Division concluded that Leonard was collaterally estopped from raising the intent issue, finding that it was fully litigated in the probate proceeding.

The Court granted Leonard's petition for certification.

HELD: The decision of the Appellate Division below is affirmed substantially for the reasons set forth in Judge Lefelt's opinion. Where a heir's malpractice action claims that the testator's intent differed from what was clearly stated in the testamentary instrument, the heir must meet a clear and convincing burden of proof.

1. The Court adds one additional source of authoritative support, citing the Restatement (Third) of the Law Governing Lawyers 51(3)(a) (1998), Comment F, which states, in pertinent part, that when a lawyer is charged with negligently drafting a document such as a will, the third person must prove the client's intent by evidence that would satisfy the burden of proof applicable to construction or reformation (as the case may be) of the document.
(Pp. 2-3)
 
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA and ZAZZALI join in this opinion.

 

SUPREME COURT OF NEW JERSEY
A- 84 September Term 1999

LEONARD PIVNICK,

Plaintiff-Appellant,

v.

DAVID BECK, ESQ., and SILLS
CUMMIS ZUCKERMAN RADIN TISCHMAN
EPSTEIN & GROSS,

Defendants-Respondents.

Argued October 24, 2000 -- Decided December 7, 2000

On certification to the Superior Court, Appellate Division, whose opinion is reported at 326 N.J. Super. 474 (1999).

Hilton L. Stein argued the cause for appellant (Mr. Stein, attorney; Mr Stein and Diane M. Acciavatti, on the brief).

James M. Hirschhorn argued the cause for respondents (Sills Cummis Radin Tischman Epstein & Gross, attorneys; Mr. Hirschhorn and Thomas J. Demski, of counsel).

PER CURIAM.
We affirm the judgment below substantially for the reasons stated in the opinion of the Appellate Division, reported at 326 N.J. Super. 474 (1999). We add one additional source of authoritative support.
The American Law Institute has taken a position that is consistent with the holding of the Appellate Division. Regarding suits by nonclients, section 51 of the Restatement (Third) of the Law Governing Lawyers provides that a lawyer owes a duty of care to a nonclient when . . . the lawyer knows that a client intends as one of the primary objectives of the representation that the lawyer's services benefit the nonclient. Restatement (Third) of the Law Governing Lawyers 51(3)(a) (1998). Comment f to section 51 explains:
When the claim is that the lawyer failed to exercise care in preparing a document, such as a will, for which the law imposes formal or evidentiary requirements, the third person must prove the client's intent by evidence that would satisfy the burden of proof applicable to construction or reformation (as the case may be) of the document. See Restatement Third, Property (Donative Transfers) 11.2 and 12.1 (Tentative Draft No. 1, 1995) (preponderance of evidence to resolve ambiguity in donative instruments; clear and convincing evidence to reform such instruments).

[Restatement (Third) of the Law Governing Lawyers 51 comment f (1998).]

In an earlier proceeding before the Probate court, plaintiff undertook to have an unambiguous Will and Trust Agreement reformed. In the present case, plaintiff alleges that the lawyer was negligent in drafting the Will and Trust Agreement because it does not reflect the testator-settlor's intent. Thus, the appropriate burden of proof in this case is clear and convincing evidence.
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA and ZAZZALI join in this opinion.

SUPREME COURT OF NEW JERSEY
 

NO. A-84

SEPTEMBER TERM 1999
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court

LEONARD PIVNICK,

Plaintiff-Appellant,

v.

DAVID BECK, ESQ., and SILLS
CUMMIS ZUCKERMAN RADIN TISCHMAN
EPSTEIN & GROSS,

Defendants-Respondents.

DECIDED December 7, 2000 Chief Justice Poritz

PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY DISSENTING OPINION BY
CHECKLIST
AFFIRM CHIEF JUSTICE PORITZ X JUSTICE STEIN X JUSTICE COLEMAN X JUSTICE LONG X JUSTICE VERNIERO X JUSTICE LaVECCHIA X JUSTICE ZAZZALI X TOTALS
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