Lucas v. Hamm
15 Cal. Rptr. 821, 56 Cal. 2d 583, 364 P.2d 685 (1961)
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Rule of Law:
An attorney who drafts a will owes a duty of care to the intended beneficiaries of the will. However, the attorney is not liable for errors in judgment on unsettled or complex points of law where reasonable doubt may be entertained by well-informed lawyers.
Facts:
- Eugene H. Emmick hired attorney L. S. Hamm to prepare his last will and testament.
- Emmick instructed Hamm to include a trust provision in the will for the benefit of the plaintiffs.
- Hamm drafted the will with a residual trust clause that was to terminate five years after the order distributing property to the trustee.
- This trust provision contained language that potentially violated the California rule against perpetuities, a highly complex area of law.
- After Emmick died, the will was admitted to probate.
- Due to the potential invalidity of the trust provision, the plaintiffs were forced to enter a settlement agreement with Emmick's blood relatives.
- Under the settlement, the plaintiffs received $75,000 less than they would have received if the trust had been drafted validly according to the testator's instructions.
Procedural Posture:
- Plaintiffs (beneficiaries) filed a lawsuit for damages against defendant L.S. Hamm (attorney) in the trial court.
- The trial court sustained the defendant's general demurrer to the second amended complaint without leave to amend.
- A judgment of dismissal was entered in favor of the defendant.
- The plaintiffs, as appellants, appealed the dismissal to the Supreme Court of California.
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Issue:
Is an attorney who negligently drafts a will that harms an intended beneficiary liable to that beneficiary for the loss, despite the lack of a direct attorney-client relationship (privity)?
Opinions:
Majority - Gibson, C. J.
Yes. An attorney who drafts a will can be held liable to an intended beneficiary who is harmed by the attorney's negligence. The court overrules prior precedent requiring strict privity of contract and holds that a beneficiary may sue for negligence under either a tort theory or as a third-party beneficiary of the contract between the attorney and the testator. In tort, liability is determined by balancing factors such as the extent to which the transaction was intended to affect the plaintiff and the foreseeability of harm. As third-party beneficiaries, the main purpose of the attorney-testator contract is to benefit the persons named in the will. However, in this specific case, the attorney is not liable because the alleged error involved the rule against perpetuities, a notoriously complex and confusing area of law where an attorney of ordinary skill might make a mistake. The attorney's duty is to use the skill of an ordinary lawyer, not to be an insurer of results or to be infallible on unsettled legal questions.
Analysis:
This landmark decision eliminated the long-standing requirement of privity in attorney malpractice cases involving will drafting in California. By allowing intended beneficiaries to sue a negligent attorney, the court created a new cause of action and provided a remedy where none previously existed. However, the decision simultaneously protects attorneys by clarifying that the standard of care does not require perfection, especially in complex and unsettled areas of law like the rule against perpetuities. This balanced approach holds attorneys accountable for clear errors while preventing them from becoming insurers of the validity of every instrument they draft in difficult legal fields.
