Manor Junior College v. Kaller's Inc.

507 A.2d 1245, 352 Pa. Super. 310, 1 U.C.C. Rep. Serv. 2d (West) 648, 1986 Pa. Super. LEXIS 10336
CourtSupreme Court of Pennsylvania
DecidedApril 18, 1986
Docket00521
StatusPublished
Cited by37 cases

This text of 507 A.2d 1245 (Manor Junior College v. Kaller's Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Manor Junior College v. Kaller's Inc., 507 A.2d 1245, 352 Pa. Super. 310, 1 U.C.C. Rep. Serv. 2d (West) 648, 1986 Pa. Super. LEXIS 10336 (Pa. 1986).

Opinion

McEWEN, Judge:

We here consider an appeal from a compulsory non-suit in favor of one of the appellees, John J. Spencer Roofing, Inc. (“Spencer”), in a suit arising from a contract under which Kaller’s, Inc. (“Kaller”) agreed to perform certain renovation work for appellant and then subcontracted the job to Spencer. We affirm.

Manor Junior College entered into a written contract with Kaller under which Kaller was to install a new roof on a college building. Kaller and Spencer then entered into an unwritten agreement that called for Kaller to supply all of the materials and Spencer to provide most of the workmanship necessary to replace the old roof with a new one. When rainstorm water caused interior damage to the building during the construction of the roof and Kaller did not proceed to take satisfactory preventive measures, appellant ordered Kaller “off of the job” and secured another roofer to install the roof.

Appellant thereafter brought suit against both Kaller and Spencer. The trial judge, prior to the trial, ruled that appellant had failed to state a cause of action in negligence against Spencer and at the conclusion of the testimony refused to submit to the jury appellant’s claim against *313 Spencer under the contract. The claim against Kaller, however, was submitted to the jury which determined that Kaller was liable to appellant. Kaller and appellant had stipulated that, in the event of a verdict in favor of appellant and against Kaller, the damages would be set at the sum of $140,000.00.

Appellant raises the following issues in this appeal:

(1) Whether appellant was a third-party beneficiary of the oral contract between Kaller’s and Spencer.
(2) Whether an implied warranty of reasonable workmanship applies to one who renders construction services but who does not sell a product.
(3) Whether the trial court erred in finding that appellant had failed to state a cause of action in negligence against Spencer.

We note, as we commence our seriatim discussion of the assertions of appellant, that the standard for designation of a party as a third party beneficiary was clearly established by our Supreme Court in Spires v. Hanover Insurance Company, 364 Pa. 52, 70 A.2d 828 (1950), when it ruled that a party does not become a third party beneficiary unless both parties to the contract express an intention to benefit the third party in the contract itself.

To be a third party beneficiary entitled to recover on a contract it is not enough that it be intended by one of the parties to the contract and the third person that the later should be a beneficiary, but both parties to the contract must so intend and must indicate that intention in the contract; in other words, a promisor cannot be held liable to an alleged beneficiary of a contract unless the latter was within his contemplation at the time the contract was entered into and such liability was intentionally assumed by him in his undertaking; the obligation to the third party must be created and must affirmatively appear, in the contract itself____

Spires v. Hanover Insurance Co., supra, 364 Pa. at 56-57, 70 A.2d at 830-831 (footnote omitted) (emphasis in original).

*314 It is true that our Supreme Court in Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983), adopted the Restatement (Second) of Contracts Section 302 (1979) 1 as an acceptable method to determine the rights of a person claiming the status of third party beneficiary but, as the court did so, it repronounced the basic principle established in Spires and took pains to make clear that the application of the Restatement was restricted to a quite “narrow class” and is to be seen as a supplement to the Spires standard.

The question posed in Guy v. Liederbach, supra, was whether an individual — who, after being named as a beneficiary as well as an executrix of a will, was directed by the scrivner attorney to witness the will — was a third party beneficiary of the contract between the testator and the attorney since, otherwise, by reason of her role as a witness to the will, the gift to her as beneficiary and the appointment of her as executrix became void. Id., 501 Pa. at 51, 459 A.2d at 746. The eminent Justice William D. Hutchinson quite deftly resolved this perplexing situation when he stated:

While we agree with appellants that the Lucas[ 2 ] standard is too broad, we nevertheless feel that a properly *315 restricted cause of action for third party beneficiaries in accord with the principles of Restatement (Second) of Contracts § 302 (1979) is available to named legatees, such as appellee, who would otherwise have no recourse for failed legacies which result from attorney malpractice ____ [A] named legatee of a will may bring suit as an intended third party beneficiary of the contract between the attorney and the testator for the drafting of a will which specifically names the legatee as a recipient of all or part of the estate____ [T]he grant of standing to a narrow class of third party beneficiaries seems “appropriate” under Restatement (Second) of Contracts § 302 where the intent to benefit is clear and the promisee (testator) is unable to enforce the contract.

Id., 501 Pa. at 51, 459 A.2d at 746-747 (emphasis supplied).

[W]e feel persons who are named beneficiaries under a will and who lose their intended legacy due to the failure of an attorney to properly draft the instrument should not be left without recourse or remedy as they would if appellants’ argument [regarding the standard to be applied] were wholly adopted.

Id., 501 Pa. at 63, 459 A.2d at 752.

We believe that Restatement (Second) of Contracts § 302 (1979) provides an analysis of third party beneficiaries which permits a properly restricted cause of action for beneficiaries such as appellee. In adopting this standard, ... we overrule Spires to the extent that it states the exclusive test for third party beneficiaries.

Id., 501 Pa. at 59, 459 A.2d at 751 (emphasis supplied).

We are not persuaded that this is a case which requires us to apply the Restatement (Second) approach or that Manor Junior College was a third party beneficiary of the unwritten contract between Kaller and Spencer. Rather, we are of the mind that our Supreme Court intended to limit the application of Section 302 of the Restatement (Second) of Contracts to cases involving (1) a legatee resembling the subject of the Guy v. Liederbach

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Bluebook (online)
507 A.2d 1245, 352 Pa. Super. 310, 1 U.C.C. Rep. Serv. 2d (West) 648, 1986 Pa. Super. LEXIS 10336, Counsel Stack Legal Research, https://law.counselstack.com/opinion/manor-junior-college-v-kallers-inc-pa-1986.