*3 JOHNSON, TAMILIA, аnd JJ. Before POPOVICH POPOVICH, Judge: of from the order the Court appeal
This case involves an Quint (per Judge J. Fayette County Pleas of of Common objec- Salmon, granting preliminary Presiding) Specially Appellees/co- nature of demurrer tions 1 from the lawsuit in their dismissal resulting Defendants Coldren, of DeHaas and of law firm Appellees consist 1. The Jr., Coldren, Jr., Barclay, Ralph K. partners, B. Ira. and Radcliffe Radcliffe, DeHaas, III, Bernard B. Klein M. William P. Ernest "Appellees”). law firm” or (hereinafter as "Coldren referred to properly this Court by Appellаnt before appeal perfected The co-Defendants, from the removed were Appellees, as as the inasmuch objections. Cf. Chiricos v. preliminary grant their suit 491, America, Pa.Super. Council, 571 Boy 391 Scouts Lakes Forest to its causes of (1990). court” as Appellant is "out of A.2d negligence and fraud premised professional action (1991) Burke, A.2d 246 Pa.Super. Appellees. Cf. Consul objections defendants granting preliminary of additional (Order defendants). original appealable by joinder in suit was their instituted Plaintiff/Appellant, Pittsburgh Coal and Coke, Inc. We affirm. 27, 1984,
On November Eureka Energy Company agreed purchase equipment Coke, from Pittsburgh Coal and Inc. agreement date, By even Cuteri Holding Company also purchase contracted to real Pittsburgh estate from Coal and Coke, instance, Inc. In each Fred A. signed Cuteri doc- uments “unconditionally guaranteeing]” that both entities perform provisions under the of the November 27th agreements. this, Failing Cuteri consented to have Pitts- Coke, burgh Coal and Inc. commence suit against him “without having commenced any action or having obtained any judgment against Cuteri.” appeared
When it that non-compliance with the November agreements 27th imminent, was a 45-day extension was granted by Pittsburgh Coke, Coal and Inc. to Cuteri2 on August Cuteri, for the security performance of the August (hereinafter 27th agreement referred to as agreement), “Escrow” placed escrow deeds to three parcels of property situated this Commonwealth. Upon default, Pittsburgh Coke, Coal and Inc. received pur- what ported to be title to Cuteri’s one-half interest to these properties, the remaining share of which belonged to a DiCenzo, Richard his business associate. The deeds were drafted and a “lien search” of the real estate was conducted firm, the Coldren law the latter of which was communi- cated to counsel for Pittsburgh Coke, Coal and Inc. in letter form and read in pertinent part:
This is to confirm that we made a lien check with respect to Cuteri, Fred A. Cuteri, Jr., Fred A. Rinaldo DiCenzo and Richard DiCenzo.
We found mortgages no indexed against any of the partiеs. The liens only which we found were municipal liens entered two properties ... which DiCenzo and Cuteri conveyed Pittsburgh to Coal & Coke. Neither 27, 1985, August Under the agreement, terms of the "Cuteri” includ- 2. Cuteri, Cuteri, Jr., ed Fred A. Fred A. Holding Company, Cuteri and Energy Company. Eureka of these liens has to do with anything property the to be in Pittsburgh held for the benefit of Coal escrow & Coke. Coke, Inc. Pittsburgh When Coal and decided to sell its in the a “title search” properties, by interest was conducted learned prospective buyer3 the who that Cuteri had trans in to рroperty partnership his a com ferred interest by of Cuteri and Richard DiCenzo deed dated June prised II, 1984, by a Coldren law firm. prepared deed Pittsburgh
A complaint by 6-count was filed Coal alia, negli- alleging, inter Coke, professional Inc. fraud and of firm and partners on the the Coldren law its gence part deeds, agreement, con- drafting pursuant the Escrow to be one-half interest veying appeared what Cuteri’s longer good had when it that “Cuteri no property “knew” V, Paragraph Count title to this real estate.” (to nature of a demurrer Preliminary objections (as III, IV, VI) a motion strike to Counts & and Counts V fees) filed on III, attorneys were IV, request for V and A brief was submitted law firm. of the Coldren behalf negli- of allegations professional thereafter and an privity of of because the absence gence were refuted and the Appellant relationship between attorney-client by the Coldren of fraud for the commission Appellees. As not did have firm, “knowing” Cuteri allegedly law on the collateral pledged as property to the good title deliv- Aрpellant “misleading” agreement and Escrow did transferring title which Cuteri purportedly ering deeds title conveying it drafted deed “after” convey not have 6 of page at Coldren’s Cuteri, it asserted from was away that: pre-trial brief fraud, any definition
By
Appellant’s]
[the
be
for a client would
a deed
prepare
upon
called
doing the
before
only
not
a title search
to do
required
because,
utilized
deed was
the time
until
up
deed but
at
Appellant
the reference
interest
3. Of
buyer, a named
proposed
was
Richard DiCenzo
Paragraph 12 that
sought
to be
properties
half owner
and a
associate
Cuteri
sold.
*5
client,
after
preparing
delivering the deed to the
another deed could be recorded
that
[prior
time]
make
deed prepared by
the
the attorney useless.
taking
After
consideration,
matter under
the court
granted
preliminary
objections of the Coldren law firm.
This resulted
the Coldren law firm being removed from
as a party-defendant.
law suit
appeal
This
followed and
review,
raises three issues for our
the first
two which
can be consolidated into
query:
“Did the court err in
sustaining the
preliminary objections
the nature of a
Appellees?”
demurrer
Since this is an appeal
sustaining
from the
of a
demurrer, we
as
all
accept
true
well-pleaded material facts
set forth in the
well
as
as all inferences reason
ably deducible therefrom. Dercoli v.
Na
Pennsylvania
Co.,
tional Mutual Insurance
471,
520 Pa.
It
that
a
Appellant’s
it has stated
cause of action
professional
for
negligence
Appellees
Supreme
сonsistent with the
Court’s decision
Guy Liederbach,
47,
(1983),
501 Pa.
... must show an a attorney-client relationship specific undertaking by attorney furnishing professional ser- vices as prerequisite ... necessary maintaining [a suit.]
Id.,
at
Pa.
459 A.2d
specifically,
at
More
that,
Appellant contends
despite the absence
aof
formal
attorney-client relationship between itself and the Appel-
lees,
facts,
alleged,
support
clearly
such
imposing
“[t]he
under Guy’s “alternate
duty”
theory
special circum-
specific
stances or a
undertaking may impose that duty.”
Appellant’s Brief at 16.
In
support,
Appellant cites
Groman,
Lawall v.
(1897),
Pa.
Lawall involved from the appeal trial court’s refusal *6 to remove a non-suit for the Plaintiff’s to prove failure an attorney-client between the relationship herself and Defen- dant/attorney. Court the trial Supreme judgment reversed court’s in so, of In the doing
favor the Defendant. course of the that the attorney-client Court observed establishment of an not on relationship solely compensation was based for ser- being paid by party attorney vices the an charging with Nor such remuneration professional negligence. was indis- Rather, pensable representative to the creation of a status. the facts needed to be examined to decide the whether attorney relation client arose from the “mutual of and the of the As stated understanding” parties. Court: case the defendant In the it is undeniable that present Roberts, borrower, the from whom he acting was for alone, the upon and to whom сompensation, received his to look for understanding parties, of all he was manifest the of prevent it. fact does not of itself relation But that defendant, if and plaintiff and client between attorney understanding. There was no evi- the mutual such was court respect, and the below dence of custom that law,—certainly as matter of we might say, not be able But, the outside cannot,—that in fact custom. such was rule, was evidence of there any general of the existence that such inferred was might from have jury which partiсular case. parties of this understanding these for some extent acted to unquestionably The defendant money paid After the was plaintiff. and in of behalf the property was then over, mortgage, kept he doing In so he was record. put he it on and plaintiff, of and, negligently if had he plaintiff, for clearly acting or other subsequent judgment recording until delayed no it, there can be in ahead of slipped incumbrance [sic] the negligent for liable he have been question that But assumed. duty voluntarily of a even performance put than plaintiff more for he did there was evidence that he testified Lawall on record. mortgage [sic] “to the title and the records in told defendant search liens,” would,” he and reference to and that “he said presumption more to the same effect. The that this Roberts, To plaintiff. was done behalf the borrow- er, no of other incumbrances was of priority [sic] concern, loan, regard except bearing to this as plaintiffs willingness money; plain- advance but fact, part tiff it was a material inducement risking We аre of consideration investment. therefore, there opinion, was sufficient evidence on the existence of the relation of jury submit and client the case. attorney But the nonsuit also erroneous for another reason. was client, Independent relation there *7 evidence, noticed, that defendant undertook already was plaintiff. judge certain duties for the The learned rightly found, or fraud could not on says that collusion be case, evidence in the but this does not exclude liability The in arising negligence. prinсiple Coggs from settled Bernard, Smith, v. Lead.Cas. that one who under- reward, do, takes to is responsible even without misfeasance, nonfeasance, though gener- not for has been If, therefore, defendant, adopted. that ally knowing him, plaintiff professional was his relying capacity, lien, mortgage although to see that her was the first fees, pay perform Roberts was to undertook to that he to do it duty, ordinary was bound with and reasonable profession, skill and care in his and would be liable for negligence respect. 539-40, Thus,
Additionally, concept of third-party beneficiary status being accorded in privity to an individual not with or under contract for the services of an was endorsed Liederbach, Court in Guy supra, v. to allow an intended to sue beneficiary will, scrivener of a which she wit- nessed at his direction and resulted in the loss of her entire legacy as a rеsult thereof. bar,
At we need not inquire whether the Plaintiff should permitted be to bring suit under Guy’s third-party benefi- ciary facts, since theory alleged given every inference fairly therefrom,4 deducible indicate that the Col- dren firm performed law professional services on behalf of Pittsburgh Coke, Coal and letter, Inc. See “no lien” Exhibit “H”, 57; R. note supra. result, As a Lawall, under we only need determine whether a “specific undertaking” took place regard to the Coldren law firm on behalf of the Plaintiff and was articulated with sufficient specificity to survive preliminary objections. See Guy Liederbach, supra.
The first learn of Appellees’ we involvement in the case is with Paragraph of the Plaintiff’s complaint, which avers that the Coldren firm law conducted a “lien search” of the real estate which became one of the prongs of the lawsuit. Once the performed, services were completion of the same and the findings were communicat- Paragraph 10 of the Plaintiffs makes reference to a lien search conducted the Coldren law firm оn the real estate in question. It indicates results the lien search were commu- appearing nicated to Plaintiff s counsel letter form as Exhibit “H” in letter, reproduced supra. light the record and read in a most Plaintiff, Appellees favorable to the reveals that the embarked on the *8 (lien search) performance reporting findings of a task and were their to the Plaintiff. Plaintiff, Because this search was to the benefit of the of which the aware, Appellees could be deemed to be it is reasonable to infer that Appellees the conduct of the was initiated at the behest of the Plaintiff (be Plaintiff). Thus, directly it or via counsel for the we find that approval against engaging Lawall’s of a suit an for in "a specific undertaking" complainant apposite instantly is for the alleged malpractice. permit scrutiny of of the claims stated, why perceive Under the circumstances as we no reason prompted the lien search since it would have been Cuteri would have to the benefit of the Plaintiff to assure itself that thе collateral was not Thus, appear plausible encumbered.' it would that the Plaintiff caused 28, reported August to it in the the lien search to be conducted and Savings by and letter the Coldren law firm. Cf. York Federal Crider, (1976). County Adams L.J. 7 Loan Association v. letter, i.e., mortgages the Plaintiff “no by ed to counsel for for affecting property liens” of the held escrow any or of the Plaintiff were uncovered. the benefit remaining paragraphs complaint, particu- In the through 12 and 21 the Plaintiff contends that the lar malpractice firm committed fraud and Coldren law role, performed by manner in it characterized “duty” Appellees prepare as a owed not to Plaintiff used listing property invalid deeds Cuteri as title owner to agreement. in the as collateral Escrow observation, begin as did the court We below, scope that there is a distinction between the “lien” search a “title” search. Each seeks vis-a-vis example: uncover distinct information. For In sense common a lien is acceptation, its broadest and charge used to сlaim or on legal understood and denote a for the property, personal, security either real or It has also been payment obligation. of some debt or or one has on the person described as a hold claim which for some or property security of another as a debt not in the charge, although property possession is obligation the one to the debt or is due. whom C.J.S., (1987) (Footnotes omitted). Thus, Liens, 2 § check, attempting when one conducts a “lien” he is or piece personal prоperty ascertain whether a real In charged payment with the of a debt. Id. at contradistinction, is more encompassing a “title” search and, occasion, entails of title insurance the issuance loss indemnifying the insured occasioned “a defect of title to real estate the insured has an wherein Am.Jur.2d, purchaser interest either as a or otherwise.” (1982). Insurance, 2§
In attorney-client an context:
An examine attorney employed per- title real sonal must exercise reasonable care and skill in property matter, negligence failure to do so is which he to his client in if damages will be liable his client *9 308
is injured. This principle applicable is whether the exami- nation is for a prospective purchaser, or a prospective lender.
An attorney employed to examine title may be held liable for negligence in the determination of the amount of location of real or in property, the determination of a seller’s or mortgage’s title. He must not overlook encum- brances such as mortgages judgments or liens. Un- less there is an understаnding to the contrary, the title search must be carried forward to the time of closing title.
An examining and reporting on a title is not guarantor. He only undertakes to bring to the dis- charge of his duty a reasonable skill and diligence, and he is not liable for making a mistake with respect to a question doubtful of law. Am.Jur.2d, Law, (Footnotes Attorneys omitted). at §
From the preceding it becomes evident that a title search liens, includes a search for in addition to uncovering the presence or absence of mortgages, judgments and a deter- mination a seller’s or mortgagor’s Therefore, title. although a title search extends itself to encompass a search liens, the converse is not true. A lien search seeks only to discover whether property charged with the payment of a preoccupied debt is not tracing one’s title- ownership to property origination, back to its date of e.g., land-grant up date to the time of closing—euphemistically referred to as “chain of title”. Black’s Dictionary Law (Revised 1986). 4th ed.
Interestingly enough, it at least appears, facially, this recognized plead- distinction is the Plaintiff in its ings. Complaint, See 10 and it is Paragraphs wherein alleged firm conducted a “lien Coldren law search” question, of the real estate in whereas a “title search” conducted disclosed the prospective buyer absence legal title to the same Cuteri.
Therefore,
firm did
find that
the Coldren law
we
do in
appears
required
notifying
it
it was
to
exactly what
“lien” check of
having performed
the Plaintiff of
a
so,
“specific
in a
doing
Appellees engaged
In
property.
professional services” to
undertaking ...
]
[to] furnish[
Lawall,
v. Lieder
Guy
supra.
consistent
See
Plaintiff
with
However,
bach,
57,
at
22. information and C[oal and] alleges that Coldren law knew that C[oke] [the firm] did not good Buildings Cuteri have title to the and the Mount Braddock Propеrty preparing the deeds which conveyed pursuant his interest this to the property Agreement. Escrow Coldren law knowingly [The firm] and committed fraud in maliciously concealing this mate- thereby rial fact and in the injured PCC amount of $360,000.
COUNT V ... 24. Upon belief, information and PCC alleges that Cu- teri, Eureka, and H[olding] C[ompany] knowingly C[uteri] and maliciously agreed Coldren law [the firm] defraud PCC by preparing invalid deeds for Buildings and the Mount Braddock and Property by concealing from PCC fact Cuteri no longer held good title to this real estate. PCC suffered injury the amount of $360,000 as a result of this unlawful conspiracy. No one contests the fact that the June 1984, deed, transferring Cuteri’s one-half interest the properties in question the partnership of Richard DiCenzo Fred A. *11 Cuteri, had been filed of record with Recorder of Deeds Office at public large to take note and examine. R. light fact, See 58. In of such a we would be pressed hard to find the Appellees engaged “con- a cealment aof material fact” which proved detrimental the Plaintiff. we deem it Accordingly, proper affirm the action of the court in granting the Appellees’ preliminary objections in the of a nature demurrer.5
Order affirmed. JOHNSON, J., files dissenting opinion. a JOHNSON, Judge, dissenting.
I agree
that the averments
my colleagues
with
contained
Coke,
complaint
Pittsburgh
filed
Coal &
Inc.
by
(P.C.C.)
Coldren,
part-
DeHaas
Raclifee and
&
(the
firm)
ners
fails to set forth
cause of action
Coldren
1017(b)(4).
relief
Pa.R.C.P.
upon
granted.
can be
423,
(1972). I
Rowland,
v.
447 Pa.
It been the law has 1028(c),1033. Otto v. pleadings. their Pa.R.C.P. to amend 202, Co., 482 Pa. 393 A.2d American Mutual Insurance 221, Inc., (1978); Pa.Super. Mediq v. MacGregor (1990). the decision of whether to Although 576 A.2d matter of judicial amend a is a grant pleading leave to stage discretion, any should be allowed at such amendments merits, unless to secure a decision on the proceedings rights unfairly prejudice the law or they violate other Id. party. negli- trespass theory a suit in on a Pennsylvania,
In
either an
against attorneys where
gence may be maintained
undertaking
specific
or a
relationship
client
attorney
Guy
services is shown.
v.
furnishing professional
(1983);
Liederbach, 501 Pa.
At the very believe complaint to amend its have afforded the opportunity been its claim in order to set forth sufficient facts to establish upon might granted. which relief be emphasis
I expressly disagree my colleagues’ must on the distinction a “lien” search and a “title” between objections, search. We here review not an preliminary granting denying summary judgment. order Without affording plaintiff opportunity at least one to amend its speculating we should refrain from as to whether pleading, did, not, firm or did do it “exactly appears Coldren what having it was to do in the Plaintiff required notifying performed property.” a ‘lien’ check conclude, I not as quick my colleagues would be footnote, way of that no amount of alteration would over- preliminary come the objections given allegations made. Opinion, page rоle, review, 796 n. 5. It not our which, fashion averments if pleading, included Nevertheless, pleading render that sufficient. it would take averments, little additional in my judgment, to demonstrate either an attorney-client specific or a relationship undertak- I ing. Moreover, believe the concedes as much. it majority irresponsible Liederbach, would not be to revisit Guy supra, given “rapidly eroding Id., doctrine of privity.” McDermott, J., dissenting. firm prepared knowing Coldren the no-lien letter its
intended use. The firm had previously prepared a deed which, recorded, operated when to convert the deeds escrow into worthless documents. The firm voluntarily assumed a relationship with P.C.C. when it issued its no-lien letter. P.C.C. should be afforded the opportunity plead whatever additional facts possession surrounding are these transactions. (a)
I would: affirm so much of the of July order (entered 13, 1990) July as sustained Preliminary Objections firm, I and II (b) of the Coldren portion reverse that order firm, which dismissed all claims the Coldren (c) remand for further consideration of Preliminary III Objections VI, through without prejudice P.C.C.’s right to seek and secure amendment of fol- *14 lowing any subsequent order of the trial court. Hence this dissent.
Appeal LANDIS, of Annette Jane Natural Mother.
Superior Pennsylvania. Court of
Argued March 1991. May
Filed