Legal Malpractice Law Review : Professional Responsibility Case Summaries & Commentary : Bennett J. Wasserman : LegalMalpractice.com : Lawyer Malpractice & Legal Ethics

Speeney v. Powers, et al., United States Court of Appeals, Third Circuit, March 11, 2010

Facts: Appellants were alleged victims of harassment by a university professor. The university retained a law firm to represent it in connection with the professor's de-tenure hearing and to defend the university in a lawsuit instituted by the professor. Appellants believed they had an attorney-client relationship with the law firm. Eventually, the university settled with the professor, but appellants were not consulted during the settlement negotiations.

Appellants thereafter filed suit against the law firm, the professor, and the university. As against the law firm, appellants alleged that the firm violated the attorney-client relationship and breached its fiduciary duty and ethical obligations. Appellants also moved to disqualify the law firm as counsel to the university based on a conflict of interest between appellants and the firm.

The court held an evidentiary hearing to make a determination on the motion to disqualify. The Court found that there was no attorney-client relationship between appellants and the law firm. The firm then moved for summary judgment with respect to appellants' malpractice claims based on the "law of the case" doctrine.

Issue: Can a factual determination made to determine one issue in a case also decide another claim in the same matter that has not otherwise been fully litigated?

Ruling: No. The "law of the case" doctrine limits relitigation of an issue once it has been decided in an earlier stage of the same litigation in order to promote finality, consistency, and judicial economy. The doctrine, however, is discretionary rather than a restriction on the Court's power. It only precludes relitigation of issues that the parties had a full and fair opportunity to litigate.

Here, the Court had made it clear that the evidentiary hearing was not a trial of the merits of appellants' claims and was limited to the issue of disqualification. Moreover, appellants' lawyer had stated that if he had been trying to prove his malpractice case, he would have pursued more discovery.

Appellants further argued that there is an exception to the "law of the case" doctrine when new evidence is presented. The Court agreed:

Reconsideration of a previously decided issue may, however, be appropriate in certain circumstances, including when the record contains new evidence...This exception to the law of the case doctrine makes sense because when the record contains new evidence, the question has not really been decided earlier and is posed for the first time...But this is only if the new evidence differs materially from the evidence of record when the issue was first decided and if it provides less support for that decision.

Lesson: A factual determination during one phase of a matter will not necessarily be determinative of a professional negligence claim where the claim has not otherwise been fully litigated, or new evidence has since been uncovered to support the claim.

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Black v. California Appellate Project, Court of Appeals of California, Second District, Division Four, June 4, 2010 (Unpublished).

Facts: Plaintiff was convicted of first degree burglary, and based on his prior criminal history, was sentenced to 38 years to life.  Plaintiff appealed and the appellate court affirmed his conviction.  Shortly thereafter, Black filed an action for negligence against the California Appellate Project, the organization that had appointed his defense counsel.  The trial court dismissed Black's negligence action and Black appealed.

Issue: Is a public interest organization liable for the quality of legal services rendered by an attorney that it selects and appoints to handle pro bono matters? 

Ruling: Yes. 

CAP argued that, based upon prior California decisions, Plaintiff first needed to establish a duty on the part of a government entity that could lead to potential tort liability for professional malpractice.  It argued that under the California Tort Claims Act, government tort liability depends on the existence of a statute, and Plaintiff failed to cite any statute guaranteeing that CAP would provide him with legal representation free of attorney neglect or fault. 

The Court, however, looked to CAP's website which provided that its duty included not only the appointment of counsel on behalf of indigent criminal defendants, but also the evaluation of "appointed counsel's performance in order to match attorney skill and experience with the complexity level of each particular case," "review appointed counsel's work," and "provide a quality control function, helping to ensure that panel attorneys have available the resources necessary to provide effective representation..."

The Court further noted that CAP was not a "governmental entity" and, moreover, its work did not involve the type of "policy decisions" that are insulated from liability under the Tort Claims Act. 

Finally, the Court rejected CAP's argument that it was entitled to quasi-judicial immunity: 

[T]he availability of the immunity turns on whether the person is functioning as an advocate or a nonadvocate...[T]he acts performed by [CAP was] not judicial in nature...[The acts] involved selecting defense counsel; they may also have involved substantive review of appointed counsel's appellate representation.  [CAP's] role n no way involved fact-finding or other quasi-judicial functions.

Lesson: Public interest organizations that engage in something more than the mechanical process of appointing counsel do not appear to be protected from professional negligence actions in California.

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Gere v. Louis, Superior Court of New Jersey, Appellate Division, August 25, 2010 (Unpublished)

Facts:  Plaintiff alleged that her former attorney, Louis, wrote a letter to the adversary, without her authorization, that she was waiving her right to a one-half interest in a marina in the underlying matrimonial proceeding.

Plaintiff retained a new attorney, DeBartolo, to represent her in a post-judgment plenary hearing concerning the issue.  After Plaintiff's cross-motion seeking to maintain equal ownership of the marina was denied, she retained yet another attorney, Soranno.  During the pendency of the post-judgment matrimonial litigation, Soranno negotiated a new settlement with Plaintiff's ex-husband, prior to obtaining a ruling on whether Plaintiff had in fact waived her interest in the marina by way of her former attorney's representations to the adversary.

The new settlement provided that Plaintiff would share equally with her former husband in the net proceeds of the sale of the marina's real estate, and she would be entitled to 40% of all monies arising out of the marina's business operations. 

When questioned about the new settlement in open court, Plaintiff represented that given all the facts and circumstances, she thought the agreement was fair, reasonable, and the "best [she] could do."  She further represented that by signing the agreement, she was waiving her right to later argue that the agreement was unfair.  Plaintiff's attorney did qualify the foregoing representations, however, by indicating that Plaintiff reserved her right to bring malpractice actions against Louis and DeBartolo.

Plaintiff did eventually bring malpractice actions against Louis and DeBartolo.  The trial court held that, under Puder, Plaintiff could not settle and sue.  Plaintiff appealed. 

Issue:  Can Plaintiff pursue malpractice actions against her former attorneys after entering into a purportedly "fair and reasonable" settlement in the underlying litigation? 

Ruling:  No.  If a Plaintiff has a first agreement and is involved in litigation to enforce that first agreement, but decides to enter into a new settlement while the litigation is still pending, Plaintiff is bound by that new settlement, even where she only agrees to enter into the new settlement with a carve-out for a malpractice action.

The Appellate Division based its ruling on the fact that Plaintiff may have been successful in establishing that her former attorney acted without her permission at the plenary hearing, and might even have been able to recoup fees.  As in Puder, however, she chose a different remedy -- to negotiate and settle the matter before the conclusion of the plenary hearing.  The Court distinguished the case from Ziegelheim and Guido: 

[T]he Court in Ziegelheim...recognized that after denial by the Family Court of the plaintiff's application to set aside the challenged settlement agreement, the plaintiff was left with only one remedy -- the legal malpractice action...That is not the case here.

The Court recently decided Guido...and explained that Ziegelheim represented the standard to be applied in legal malpractice cases, while Puder represented a 'limited exception' to Ziegelheim, applying equitable principles...In Guido, unlike here, the plaintiffs did not represent that they were satisfied with the settlement.  Here, Plaintiff made that affirmative representation.

We do not conclude that Plaintiff was required to await the motion judge's decision [in the plenary hearing]; however, we do acknowledge the rule established by Ziegelheim recognizing the sole remedy of a malpractice action as a critical factor in that decision.  That was not the case here.

***

Plaintiff, here, only had to decide whether she would accept a settlement or await the judge's decision on the issue of her waiver.  She was not in a situation where, choosing the latter, she would be left without a claim.  This was not an 'all-or-nothing' decision for Plaintiff; it was a decision with options and she chose to accept the [new] settlement.

***

Litigated cases are settled everyday where plaintiffs and defendants have to weigh the costs and benefits of settling or allowing a judge or jury to decide their fate.

Lesson:  If a plaintiff chooses to negotiate and voluntarily enter into a settlement of her claims before giving the court an opportunity to pass on the former allegedly inadequate settlement negotiated by a purportedly negligent attorney, she will waive her right to bring a malpractice action and will be bound by the terms of the new settlement.

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Nason v. Fisher, 36 A.D.3d 486; 828 N.Y.S.2d 51 (2007)

NY: Underlying Commercial Transaction

Student Contributor: Colleen Gaedcke

Facts: The plaintiff retained the defendant attorneys based on one of the defendant attorneys representation that he was experienced in handling commercial partnership cases. The plaintiff brought a cause of action against the defendant for false representation in violation of NY Judiciary Law section 487, but the court dismissed the action for the plaintiff’s failure to establish the statutory requirement of “chronic and extreme pattern of legal delinquency.” Additionally, the plaintiff also brought a legal malpractice claim against the defendants. The plaintiff’s claimed that the defendant’s alleged violation of Disciplinary Rules are evidence of malpractice.

Issue: Whether the court properly granted the defendant’s motion for summary judgment, dismissing the legal malpractice claim?

Ruling: Yes.

Lesson: Allegations of violations of Disciplinary Rules may be evidence of malpractice, however such a violation alone will not establish that the attorney’s conduct was the “but for” cause of the plaintiff’s loss.

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Williams v. Bashman, 457 F. Supp. 322 (E.D. Pa. 1978)

 PA: Underlying  tort action.

Student Contributor: Colleen Gaedcke

Facts: The plaintiff retained the defendant, a partner at the defendant law firm, to represent her in her personal injury case against the a homeowner and the city of Philadelphia. A year passed without any communication between the plaintiff and the defendant, until the plaintiff sent the defendant a letter inquiring about the status of her case. The plaintiff received a letter from another attorney at the defendant law firm stating that he was representing her in her case against the City. Plaintiff did have one conversation with the defendant partner where he assured her that the case was in court. Another year passed and the defendant partner left the defendant law firm. The defendant law firm never filed the plaintiff’s case. The plaintiff claimed that the “defendant firm failed to exercise within the scope of their employment reasonable professional care and diligence in their representation of the plaintiff.” As a result of this failure the plaintiff claims that she was unable to recover compensation for her injuries and that her claim was barred by the statute of limitations.

Issue: Whether the plaintiff defendant law firm was liable for legal malpractice?

Ruling:  Yes.

1.) “When a plaintiff alleges that the defendant lawyer negligently provided services to him or her as a plaintiff in the underlying action, he or she must establish by the preponderance of the evidence that he or she would have recovered a judgment in the underlying action in order to be awarded damages in the malpractice action, which are measured by the lost judgment.”

2.) Here, the court found that the defendant law firm was responsible for her case, including conducting discovery to determine the merits of her case and proving the elements if necessary at trial.

3.) The defendant law firm owed the plaintiff a duty to exercise reasonable profession in the prosecution of her claim and they negligently breached that duty which was the proximate cause of the plaintiff’s loss of damages.

Lesson: An attorney who signs a retainer agreement with a client has a duty to exercise reasonable care in representing that client. A breach of this duty may be the proximate cause of the client’s damages and thus the attorney will be liable for legal malpractice.

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Gamer v. Ross, 2008 NY Slip Op. 2107 (App Div. 2d Dept)

NY: Underlying personal injury action; missing discovery causes summary judgment dismissing complain

Student Contributor: Josh Aronson

Facts: In the underlying case, the plaintiff was injured when he tripped and fell over wires and debris while roller skating on a public sidewalk adjacent to a construction site. The plaintiffs retained the defendants to commence a negligence action against the owner of the construction site as well as a contractor who had performed construction work on the site. Both of the plaintiff’s complaints were dismissed on summary judgment and motion to dismiss respectively. The plaintiff then brought action against the defendant to recover damages for legal malpractice, alleging that the defendants were negligent in their handling of the two underlying actions by failing to conduct proper discover that would have enabled them to successfully oppose the summary judgment and motion to dismiss. The defendant claims that the plaintiffs could not have succeeded in the underlying actions because the wires and construction debris over which the plaintiff tripped were open and obvious conditions that were not inherently dangerous. Furthermore, the defendant contends that the plaintiffs could not have succeeded in the underlying actions because they failed to adduce any evidence showing that the landowner of the construction site or its contractor caused or created the alleged dangerous condition.

Issue: Must the defendant in a legal malpractice action establish that their negligence would not have prevented the dismissal of the plaintiffs underlying actions?

Ruling: Yes. The court found that the landowner and its contractor would have had sufficient notice of the dangerous condition and therefore would have been liable for injuries resulting from its failure to correct the danger. As a result, the Court found that the burden was on the defendants in the malpractice action to establish that the missing discovery—which they failed to do, would not have prevented the dismissal of underlying actions.

Lesson: The defendant in a legal malpractice action must establish that “but for” the negligence claimed by the plaintiff, the outcome of the underlying action would not have changed.  

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Moores v. Greenberg 834 F.2d 1105, (1st Cir. 1987)

Fed'l Underlying Longshoreman's Act personal injury

Student Contributor: Ryan O'Donnell

Facts: Longshoreman was injured during the course of his employment and was able to collect compensation benefits through his employer. He then retained an attorney to bring a  liability claim against the ship owners. The ship owners allegedly made two settlement offers of $70,000 and $90,000, which the attorney did not communicate to the client. The third party liability claim was subsequently lost, and the client brought this malpractice claim against the attorney claiming that he would have accepted the settlement offer had he been informed of it. The attorney was found to be liable for $12,000, and he appealed the verdict claiming that the settlement offers were too meager to be relayed.

Issue: Is a lawyer required to communicate all reasonable settlement offers?

Ruling: Yes. A lawyer has a duty to use a degree of skill, diligence, and judgment necessary to the practice of his profession and which others who are similarly situated ordinarily possess. “As part and parcel of this duty, a lawyer must keep his client seasonably appraised of relevant developments, including opportunities for settlement.” The court implies that an attorney might not have a duty to communicate offers only when they are “so divorced from a realistic appraisal of the merits,” and unresponsive to the upside and downside of the litigation.

Lesson: A lawyer has a duty to keep his client informed of relevant developments, including opportunities for settlement. Lawyers are obliged to promptly communicate to the client settlement offers and all matters that may be relevant to the client’s appreciation and understanding of the matter.

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Teamsters Chauffeurs, Warehousemen and Helpers, Local 764 v. Greenawalt, 919 F. Supp. 774 (M.D. Pa. 1996)

PA Underlying labor dispute.

Student Contributor: Colleen Gaedcke

Facts: The plaintiff, a union, sued the defendant, former union counsel, for legal malpractice for allegedly improperly advising the former union president and co-defendant to collect a severance pay. According to union by-laws, union officers are not supposed to get severance, however the plaintiffs argue that the defendant got a severance pay in the form of a car. The defendant used the car during his assignment as union president, but when he left the defendants allegedly made an arrangement that transferred the car to the defendant in exchange for the car’s fair market fault payable to the union.

Issue: Whether the plaintiff’s suit was timely filed?  

Ruling: No. The plaintiff’s cause of action accrued more than two years prior to them filing the action therefore their action is time-barred.
1.) Pennsylvania’s statute of limitations for a legal malpractice claim is two years.

2.) “A cause of action accrues under Pennsylvania law and the limitations period begins to run when ‘the plaintiff knows, or reasonably should know, 1) that he has been injured, and 2) that his injury has been caused by another party’s conduct.’”

3.) Here, the plaintiffs were aware of some potential wrong doing as early as September of 1991 however they failed this action in December of 1993. Thus, the “plaintiff unreasonably and unjustifiably waited too long to file this action.”

Lesson: In Pennsylvania, an attorney cannot be sued for legal malpractice where the alleged malpractice occurred more than two years prior to the date the action was filed.

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Chimento v. Parsons, Powell & Lane, LLC, Superior Court of New Jersey, Appellate Division, January 5, 2010

Facts:  Plaintiff brought suit against a casino after his chair collapsed and, allegedly, caused him to sustain back and shoulder injuries.  Although Plaintiff's attorney in the underlying matter sued the casino for negligent maintenance, he failed to assert a claim against the manufacturer of the chair.  After the statute of limitations expired, Plaintiff's attorney learned of the identity of the manufacturer. 

Eventually, Plaintiff retained another attorney in the underlying matter who successfully filed an amended complaint naming the manufacturer and obtained default judgment for approximately $300,000.  Upon learning of the judgment, Plaintiff's former attorney asserted his right to compensation.  Plaintiff, however, elected to bring the instant action in light of his former attorney's failure to name the chair manufacturer in the initial complaint. 

Plaintiff's former attorney moved to dismiss arguing that the chair manufacturer had ceased to exist as a legal entity before Plaintiff's accident.

Issue:  Can a former client successfully pursue a legal malpractice action based on his attorney's failure to pursue claims against a defunct entity? 

Ruling: No. 

The Court noted that the chair manufacturer and its successor in interest had ceased to exist as financially viable entities before Plaintiff's accident.  The assets of both entities had been sold by a court appointed receiver for the benefit of the manufacturers' creditors. 

[E]ven assuming that [the former attorney] deviated from the standard of professional competence expected of attorneys in this State by failing to name [the manufacturer] as a defendant in Plaintiff's underlying cause of action, such a deviation was legally inconsequential because [the manufacturer] was not a legally or commercially viable entity at the time of Plaintiff's accident.

Lesson: Plaintiff cannot pursue a malpractice action for his attorney's failure to name a defendant, unless he can first prove that he had a possibility of collecting on a recovery against that defendant.  Otherwise, as a matter of law, the attorney's alleged negligence is not a proximate cause of any damages sustained by his client.

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Hubert v. Bartels, United States District Court, District of New Jersey, February 4, 2010

Facts:  This legal malpractice action arose from an underlying products liability action by the Huberts for defective breast implants.  At the mediation of the underlying matter, Plaintiffs agreed to settle.  During further negotiations, however, Plaintiffs became dissatisfied with the final form of the agreement and filed a motion to be released from the settlement.  The court held that the settlement was enforceable and the parties had agreed to a form of release.  Plaintiffs assented to the terms of the settlement as modified by the court.

Plaintiffs subsequently brought this action for malpractice alleging that they did not receive an adequate settlement for their claims in the underlying action.

Issue:  Can a Plaintiff bring a malpractice suit against his attorney after entering into a settlement in the underlying matter? 

Ruling:  Yes. 

Decision:  In making its decision, the Court analyzed the New Jersey Supreme Court's two seemingly contradictory opinions on the issue:  Ziegelheim and Puder: 

[In Puder], the original attorney had obtained a divorce settlement to which the client originally agreed...The client then consulted another attorney who expressed the opinion that the settlement was "ridiculously inadequate."...The client fired the original attorney and filed a malpractice lawsuit against the original attorney which was stayed pending the outcome of a hearing on the enforceability of the settlement worked out by the original attorney...After six days of testimony in the hearing to enforce the settlement, but prior to any ruling on the enforceability of the settlement, the parties informed the motion judge that a new settlement had been reached...The new settlement was substantially similar to the disputed settlement, and the new settlement was found by the motion judge to be entered into knowingly and voluntarily.

The client in Puder then sought to litigate the stayed malpractice action against the original attorney...Holding that the public policy of New Jersey encouraging settlements was the determinative factor, the Supreme Court of New Jersey held that the second settlement barred the client's claim against her original attorney.

In doing so, the New Jersey Supreme Court distinguished an earlier case concerning matrimonial legal malpractice...In Ziegelheim, a client entered into a settlement agreement in a divorce action allocating about fourteen percent of the marital assets to the client after the client's lawyer advised her that she could expect no more than ten to twenty percent of the marital property after a trial...One year later, the client sought to set aside the property settlement and recover from her original attorney in a malpractice case...After the property settlement was found to be enforceable, the malpractice case went forward...The Supreme Court of New Jersey held that the malpractice action against the attorney should have been allowed to go to trial, because there was a genuine dispute concerning the competence of the original attorney, including the attorney's advice on the likelihood of the client receiving no more than twenty percent of the marital assets after trial.

The Court found that the facts of this case were more in line with Ziegelheim, since Plaintiffs did not enter into a second settlement after obtaining advice from new counsel.  Rather, "a settlement was reached and was found enforceable after the Plaintiffs sought release from the deal they had struck...Having received information about the enforceability hearing in 2000 that there may have been a defect in the professional advice they received from Defendants...they filed the instant suit."  Recognizing the possibility that Plaintiffs may have received a more favorable settlement with different legal representation, the Court allowed Plaintiffs to pursue their malpractice action, despite the settlement in the products liability matter.

Lesson:  The fact that a party entered into a settlement in the underlying matter, does not mean that the party had competent representation.  Accordingly, an underlying settlement will not always bar a subsequent malpractice action.

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730 J&J, LLC v. Polizzotto & Polizzotto, Esqs., Supreme Court of New York, Appellate Division, Second Department, January 12, 2010

Facts:  Plaintiff commenced a legal malpractice action to recover damages for the defendant attorneys' alleged failure to secure a deficiency judgment.  Defendants argued the action was time barred under New York's three year statute of limitations.  Plaintiff argued that the statute of limitations was tolled during the time Defendants continued to represent them in the underlying matter.

Issue:  Is the statute of limitations for legal malpractice matters tolled during the time the allegedly negligent attorney continues his representation? 

Ruling:  Yes.  A cause of action for legal malpractice accrues on the date the malpractice was committed.  Nevertheless, under the doctrine of "continuous representation," the statute of limitations is tolled while the attorney continues to represent the client in the same matter in which the malpractice allegedly occurred: 

The parties have a mutual understanding that further representation is needed with respect to the matter underlying the malpractice claim.

Lesson:  In New York, the three year statute of limitations in legal malpractice actions will be tolled where the purportedly negligent attorney continued his representation in the underlying matter after the malpractice was committed.

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Szaferman, Lakind, Blumstein, Blader & Lehman v. Parise, Superior Court of New Jersey, Appellate Division, February 24, 2010

Facts:  Defendants retained Plaintiff attorneys in an underlying residential construction matter.  Upon the submission of summary judgment motions in the underlying matter, defendants instructed their attorneys to cease all legal work.  The attorneys advised of the need to prepare for upcoming court events and trial. 

Prior to trial, however, the underlying litigation was dismissed upon entry of a mutual release, which included the parties' agreement to satisfy their respective counsel fees and costs.  Despite this agreement, defendants paid only half of the outstanding legal fees and costs.  In response to Plaintiff's efforts to collect the remainder of their fees, Defendants filed an action for malpractice.  Specifically, Defendants disputed the reasonableness of certain time entries, cited to alleged billing irregularities, and asserted that the fees charged were excessive for the work performed. 

The lower court dismissed the malpractice claim for failure to obtain an expert report.  Defendants appealed.

Issue:  Is the reasonableness of attorney's fees an issue of  "common knowledge," or is an expert opinion necessary? 

Ruling:  An expert opinion is necessary: 

Expert testimony is required in cases of professional malpractice where the matter to be addressed is so esoteric that the average juror could not form a valid judgment as to whether the conduct of the professional was reasonable.  This is because the duties a lawyer owes to his client are not known by the average juror.

The Court concluded that Defendants' alleged dissatisfaction with the amount of legal fees charged, supported only by their personal experience in paying other attorneys was not a sufficient factual basis for their malpractice claim.  The Court also rejected Defendants' argument that the jury ought to disallow all contested charges, unless Plaintiff provides sufficient justification.

Lesson:  An expert opinion is necessary to successfully dispute the reasonableness of attorney's fees.

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Flaherty-Wiebel v. Morris, Downing & Sherred, Court of Appeals, Third Circuit, June 10, 2010

Facts:  At the request of their client, Wiebel (Plaintiff's former husband), the Defendant attorneys drafted a pre-nuptial agreement.  Plaintiff was advised that Defendant attorneys had drafted the agreement on behalf of Wiebel.  Plaintiff was represented by separate counsel during the negotiation of the agreement.

The agreement provided that Plaintiff owned 49% of a certain entity ("Entity") and Wiebel owned 51%.  In actuality, Wiebel owned 99% and his son owned the remaining 1%.  Upon the execution of the pre-nuptial agreement, Plaintiff married Wiebel. 

Approximately four years later, Wiebel filed for divorce.  Plaintiff subsequently brought this litigation, alleging (1) that the Defendant attorneys' misrepresentations in the pre-nuptial agreement concerning her ownership interest in the Entity disadvantaged her in the negotiation of her property settlement agreement, and (2) that the attorneys' allegedly breached certain Rules of Professional Conduct.

Issue:  Does a violation of the Rules of Professional Conduct constitute legal malpractice?  What is the extent of an attorney's duty to a non-client? 

Ruling:  The Court affirmed the New Jersey Supreme Court's holding in Baxt v. Liloia, 714 A.2d 271 (1998), and held that a violation of the Rules of Professional Conduct cannot sustain a cause of action for legal malpractice: 

New Jersey does not recognize an independent cause of action for the violation of the Rules of Professional Conduct, but violations of these rules may be used to support a claim of legal malpractice.  New Jersey courts have defined legal malpractice as negligence relating to an attorney's representation of a client.

Accordingly, the Court held that it was necessary for Plaintiff to establish that she was the Defendant attorneys' client.  Plaintiff could not do so and argued that Defendants owed her a limited duty under Petrillo v. Bachenberg, 655 A.2d 1354 (N.J. 1995). 

In Petrillo, the Court held that an attorney representing the seller of property had a duty not to provide misleading information regarding the property to potential buyers who the attorney knew, or should have known, would rely on the information.  In order to determine whether the duty applied here, the Court first ascertained the purpose of the document.  The Court concluded that the attorneys had drafted the pre-nuptial agreement to memorialize the parties' agreement, not to induce either party to enter into the agreement.  Accordingly, the Court held that Petrillo did not apply:

[A]n attorney who puts into writing an agreement between two parties does not vouch for the representations either party has made to the other. The attorney only puts into writing the representations that the parties intend to make to each other. The act of drafting does not make the attorney responsible for the accuracy of the statements placed on paper.

Lesson:  A violation of the Rules of Professional Conduct, in and of itself, cannot serve as a basis for a malpractice action.  An attorney, by undertaking the task of setting forth the understanding of two individuals in a writing, does not owe non-clients the duty to verify the accuracy of a party's representations therein.

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Chatterjee v. Due, 511 F. Supp. 183, 1982 A.M.C. 2970 (E.D. Pa. 1981)

Admiralty Law: Wrongful Death Settlement

Student Contributor: John Anzalone

Facts: Decedent was killed in a maritime ship collision in Pennsylvanian waters. Plaintiff, mother of the deceased, sues Defendant Law Firm that negotiated on behalf of one ship owner with her son-in-law in his suit to collect damages for her son's death. Plaintiff claims no settlement regarding son's death occurred because her son-in-law was not authorized to represent her interest as her son's sole heir. Defendant entered into the settlement without her consent and her son-in-law received the proceeds of the settlement based on his forgeries.

Issue: Did Defendant-Lawyers owe the non-client Plaintiff any legal duty? 

Ruling: The court granted Defendant's motion to dismiss, holding that Defendant owed the plaintiff no legal duty of representation, based on the following considerations:
1) The theory allowing beneficiaries to sue a testator's attorneys despite a lack of privity is not applicable here because the protection of a beneficiary's interest and the testator's intent only occurs if a will is validly drawn. Further, in a will, an attorney is on notice that the testator's intent depends on their services. Will beneficiaries are allowed to sue because they are intended successors to a continuing attorney-client relationship between the attorney and the testator
2) Here, there is no will involved that would become defective through the acts of Defendant
3) Additionally, a reasonable attorney would have no reason to question his opponent's authority to enter into a settlement.
4) Furthermore, Plaintiff's claim fails because she cannot show that she was damaged by Defendant's negligence unless she was foreclosed from some right or property because the settlement was valid and not effected by fraud. Her allegations against her son-in-law undermine this because if they were true, the settlement would be invalid and not binding upon her.
5) Even if there was a valid settlement binding upon her, there is no duty running between Defendant and Plaintiff.

Lesson: A plaintiff has to be actually damaged before they can sue a lawyer for malpractice. Additionally, attorneys can agree to make payments from their client to their adversary if a reasonable lawyer would conclude that there was no reason to doubt their adversary's authority to agree to the settlement. 

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Stephens v. Downey, 53 Pa. 424 (1866)

PA: Underlying  Estate Action.

Student Contributor: Colleen Gaedcke

Facts: The court clerk entered a judgment on February 18, 1854 in an estate action that became a lien when the final judgment was entered on the February 28, 1854. The defendant’s attorney, filed a challenge to the final judgment however the writ was not entered into the docket on time.

Issue: Whether an attorney can be held liable for the negligence of a prothonotary (court clerk) for failing to timely enter a lien in the docket?

Ruling: No.

1) It is the prothonotary’s statutory duty to entering a lien on the docket.
2) A client cannot hold her attorney liable for “…the error of an officer of the tribunal in which the judgment was obtained, and whose positive duty it was to have entered it on the judgment docket."

Where it is the duty of the prothonotary to enter the final judgment in a suit on the judgment docket and he neglects to do so, the attorney who has charge of the claim is not liable for damages resulting from the loss of the lien.

Lesson: An attorney will not be liable for the negligence of court officers.

Editor's Note: But what if the attorney played any role in the court officer's error? For example, would the attorney's lack of diligence, which is a departure from the standard of care, be considered a "substantial factor" in the untimely entry of the judgment, which may have caused actual damage to the client?

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