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Pelham v. Griesheimer

OPINION FILED FEBRUARY 27, 1981.

THOMAS PELHAM, A/K/A THOMAS RAY, ET AL., PLAINTIFFS-APPELLANTS,

v.

RONALD E. GRIESHEIMER, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Lake County; the Hon. BRUCE R. FAWELL, Judge, presiding.

MR. JUSTICE REINHARD DELIVERED THE OPINION OF THE COURT:

This is an appeal by plaintiffs from a trial court order dismissing their amended complaint for attorney malpractice for failure to state a cause of action on the basis that there was no attorney-client relationship between the plaintiffs and defendant. We affirm.

Plaintiffs' amended complaint contains the following factual allegations: that the defendant was retained as attorney for Loretta Ray to obtain a divorce from George Ray; that plaintiffs herein were minor children of the parties at the time of the divorce; that the decree of divorce, entered on June 22, 1971, contained a provision requiring plaintiffs' father, George Ray, to "maintain all four of his children as the prime beneficiaries in his life insurance policies"; that plaintiffs' father, George Ray, was employed by Anchor Coupling Company of Liberty-ville, Illinois, prior to and after the divorce and was provided by his employer with a $10,000 life insurance policy; that subsequent to his divorce, plaintiffs' father, George Ray, married Mae Black Underwood and named her as the beneficiary of the life insurance policy issued through his employer in contravention of the terms of the divorce decree; that plaintiffs' father, George Ray, died on December 17, 1976, and that subsequent to his death Mae Black Underwood received the proceeds of said life insurance policy.

The amended complaint further alleges that defendant owed plaintiffs a duty to exercise a reasonable degree of professional care and that defendant breached that duty by failing to notify Anchor Coupling Company that the divorce decree required plaintiffs to be named as the prime beneficiaries on their father's life insurance policy, by failing to notify the life insurance company that plaintiffs were to be named as prime beneficiaries, by failing to advise plaintiffs that they had not been named as beneficiaries and by failing to advise plaintiffs' mother, Loretta Ray, to notify Anchor Coupling Company and the insurance carrier of the requirements of the divorce decree. Finally, plaintiffs' amended complaint states that as a direct and proximate result of defendant's alleged negligence, plaintiffs have suffered monetary damage in the amount of $10,000.

• 1, 2 Loretta Ray is not a party to this lwsuit. The sole issue before us is whether the amended complaint alleges facts sufficient to state a cause of action in either contract or tort. While plaintiffs' amended complaint appears to be grounded in tort, we shall address briefly plaintiffs' contention on appeal that they qualify as third-party beneficiaries and are thereby entitled to recover for damages under a contractual theory. A motion to dismiss for failure to state a cause of action is not properly granted if a good cause of action is stated, although not the one intended by plaintiffs. (Browning v. Heritage Insurance Co. (1975), 33 Ill. App.3d 943, 947, 338 N.E.2d 912, 915.) However, the amended complaint herein clearly fails to state a cause of action in contract as there are no allegations that a contract was entered into between defendant and Loretta Ray for the direct benefit of plaintiffs, which is an indispensable element of a third-party beneficiary theory of recovery. (People ex rel. Resnik v. Curtis & Davis (1980), 78 Ill.2d 381, 400 N.E.2d 918.) Therefore, if plaintiffs' amended complaint states a cause of action at all, it is in tort rather than contract.

• 3 It is elementary that a motion to dismiss a complaint for failure to state a cause of action admits, for purposes of ruling thereon, all facts well pleaded. (Booker v. Board of Education (1979), 75 Ill. App.3d 381, 384, 394 N.E.2d 452.) Therefore, in reviewing the trial court's decision to dismiss plaintiffs' amended complaint for failure to state a cause of action, we consider as true all well pleaded facts, but for the sole purpose of determining whether, as a matter of law, those facts set forth a claim upon which relief may be granted. (Kenworthy v. Young (1979), 70 Ill. App.3d 144, 145, 388 N.E.2d 217.) To be legally sufficient, plaintiffs' complaint, like any other for negligence, must set out the following elements: (1) the existence of a duty owed by defendant to the plaintiffs; (2) breach of that duty, and (3) an injury proximately resulting from that breach. (Cunis v. Brennan (1974), 56 Ill.2d 372, 374; Mieher v. Brown (1973), 54 Ill.2d 539, 541; Public Taxi Service, Inc. v. Barrett (1976), 44 Ill. App.3d 452, 357 N.E.2d 1232.) Here plaintiffs seek to establish the existence of a legal duty owed to them by defendant and offer as support for their contention that by agreeing to represent plaintiffs' mother in her divorce proceeding, defendant assumed responsibility for protecting plaintiffs' legal rights relative to their care, custody, support and general welfare.

This issue of whether an attorney may be liable to a non-client for damages allegedly incurred as a result of the attorney's negligent performance of his professional duties toward a client, while not one of first impression, has received scant attention in Illinois. The issue was addressed in a different context in Bloomer Amusement Co. v. Eskenazi (1979), 75 Ill. App.3d 117, 394 N.E.2d 16. In Eskenazi the contract seller of certain realty brought an action against the attorney for the contract purchaser alleging negligence in the attorney's failure to record the real estate contract. In affirming the trial court's grant of summary judgment for the attorney, the court referred to the United States Supreme Court decision in National Savings Bank v. Ward (1880), 100 U.S. 195, 25 L.Ed. 621, stating:

"According to the Supreme Court:

`[T]he general rule is that the obligation of the attorney is to his client and not to a third party, and unless there is something in the circumstances of this case to take it out of that general rule, it seems clear that the proposition of the defendant must be sustained.' (National Savings Bank v. Ward (1880), 100 U.S. 195, 200, 25 L.Ed. 621, 623.)

According to the court, such circumstances that would make a case an exception to this general rule are `[c]ases where fraud and collusion are alleged * * *.' (National Savings Bank v. Ward (1880), 100 U.S. 195, 203, 25 L.Ed. 621, 624.) No such allegations were made by the plaintiff in the instant case, nor would they have been supported by any of the record." 75 Ill. App.3d 117, 119, 394 N.E.2d 16, 18.

Most recently, in Byron Chamber of Commerce, Inc. v. Long (1981), 92 Ill. App.3d 864, this court commented on the plaintiffs' action against a law partnership where there was no attorney-client relationship between them:

"Moreover, the apparent theory of the suit — that is, a class action suit based on breach of a contract for legal services for the benefit of third parties, raises, under the circumstances here, a serious question as to the alleged third parties' standing to sue. It is the general rule and the rule followed in Illinois that a contract for professional services between a lawyer and a client does not create a professional obligation between the lawyer and an unknown third party. Bloomer Amusement Co. v. Eskenazi (1979), 75 Ill. App.3d 117 and the numerous cases cited from other jurisdictions in Annot., 45 A.L.R. 3d 1187 (1972)." 92 Ill. App.3d 864, 868.

Plaintiffs, on the other hand, have failed to cite any Illinois cases which have extended an attorney's duty of care to nonclients, nor are we able to find any. While courts> in several other states have held that attorneys may be liable for professional negligence to persons other than their clients, the cases so holding are distinguishable factually from the case at bar and typically have involved will-drafting situations where intended beneficiaries are damaged by an attorney's failure to fulfill the testamentary directions of his client. See Annot., 45 A.L.R. 3d 1181 (1972).

In Biakanja v. Irving (1958), 49 Cal.2d 647, 320 P.2d 16, a forerunner to subsequent attorney negligence cases, the California Supreme Court held that a notary public who had failed to have a will properly attested owed a duty of due care to an intended beneficiary of the testator and was liable to that intended beneficiary for damages caused by ...


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