PA: Not Naming A Necessary Party: Not Always Necessary!
Schenkel v. Monheit, 226 Pa. Super. 396 (Pa. Super. Ct. 1979)
Student Contributor: Melissa Goldberg
PA Underlying personal injury action.
Facts: Plaintiff was injured in an automobile accident when his vehicle was struck from behind by a car driven by Charles Salem. Plaintiff thereafter retained Defendant as his attorney to prosecute Plaintiff's civil action against Salem. When Defendant filed this action, he did not join Salem's employer, as Defendants in the underlying action. Plaintiff claims that at the time of the accident, Salem was "on the job" and was within the scope of his employment and that the employer should have been joined as Defendants. Plaintiff’s dissatisfaction with Defendant handling of the personal injury action led appellant to dismiss Defendant before trial and retain other counsel to complete the case. Plaintiff was awarded 10,000 dollars in the personal injury case, which he collected in full. Plaintiffs alleged that the jury would have awarded him a larger verdict in the personal injury action if the corporate employer had been joined as a Defendant.
Issue: Was Defendant’s alleged negligence the proximate cause of damages to Plaintiff?
The Result: The failure to join the corporate employer should not have affected appellant's damages. The tort was the same in this case, whether or not the corporate employer was a party to the action.
1) The actual tortfeasor, was made a Defendant; the corporate employer would only arguably be liable under agency principles, not as an independent tortfeasor.
2) Joinder of the corporate employer would simply have increased the number of parties against whom Plaintiff could enforce any judgment he received.
3) He received the full judgment.
Lesson: Failure to name a necessary party, when full recovery from the main tortfeasor was had, did not proximately cause any injury to the plaintiff. If, on the other hand, the named tortfeasor did not have adequate insurance coverage to pay the judgment and if the unnamed party would have been vicariously liable, the result would have been different since then part of the judgment would remain unsatisfied.
After reading the facts and the issue I didn't expect the court to rule the way it did since the attorney failed to join the corporate employer, and the client claimed that the jury would have awarded him a larger verdict in the personal injury action if the corporate employer had been joined. I see that the court found that the client received full judgment and failed to show that the attorney's negligence in failing to join the corporation was the proximate cause of allegedly inadequate verdict on the issue of damages in the underlying action. But I don't understand how the court came to the conclusion that the attorney's negligence was not the proximate cause. Is it simply because the plaintiff received the full judgment, and the plaintiff would not have received more even if the employer had been joined?
I agree with the holding in this case. While I do not agree with a blanket ban on damages when there is no monetary harm to a plaintiff (For example the original defendant was insolvent). I think in cases where plaintiffs can be jointly liable, and it is apparent that the whole fee can be collected from one of the plaintiff, then it is not necessary to join two plaintiffs anyway. There is less litigation this way, with a similar result.
I don't know if I agree with the holding in this case. It seems to me that if there was another potential defendant liable to plaintiff for damages in the underlying lawsuit, a diligent attorney would make sure to name them in the lawsuit. Since plaintiff recovered the full judgment maybe it would negate this. However, it is the duty of the attorney to protect the client's interests and here it could have been to name the corporation as defendant as well.
I think that the plaintiff should have been able to sue his attorney for legal malpractice. Even though the recovery was complete, it is possible that the plaintiff would have recovered more money if the employer was joined as a defendant. If this was a jury case, then the jury might have been suspicious of the employer and awarded the plaintiff more money. So although the ruling in this case benefited the lawyer, I wonder what would have happened to the award of damages had the employer been included as a defendant. Since it would be hard to provide evidence of a higher damage award, the plaintiff could not sue the lawyer, but I think he should have been able to sue.
It is hard to say that a jury would not have awarded more damages seeing a corporate defendant sitting at the table, but the court does just that. I would be interested to see a current court addressing this issue. Or know whether or not expert testimony was put forth concerning jury verdicts in such actions.
As pointed out in the lesson, I think the result here would have been different if the plaintiff had been unable to collect his full judgment from the actual tortfeasor. It seems to me that the defendant attorney got somewhat lucky in that the plaintiff was indeed able to collect his full judgment. Thus, it could not have been argued that the Plaintiff suffered damages (I agree with the court in that the damages would not have been higher if the corporate employer had been joined; the damages fit the tort, not the defendants), an essential element to a malpractice claim. However, I do believe that it would have been diligent for the attorney to have joined the corporate employer. While it bore no difference on the outcome in hindsight, the attorney did not know that when preparing the complaint. Like I said, this is a situation where an attorney got lucky in terms of a malpractice suit, however, he may have violated ethical rules in his preparation of the case.
I cannot disagree with the court here. If there's no damage resulting from the negligence, there's no legal malpractice.
While I fully understand the court's stance, it is unreasonable to believe that a jury would have rendered the same damages had a corporation been sitting next to the underlying defendant. I think that juries are underestimated by the legal profession. For example, two cars are parked on a street next to each other: one a Bentley and the other a Pugot; if a thief walks down that street looking for a car from which he will break into in an effort to steal the possessions within, the choice is clear. If a jury sees multiple defendants on the caption of their verdict form and throughout the trial, it is not difficult to surmise that they would be more generous in their award of damages. This is especially so when on of the defendants is a company.
Furthermore, the very fact that we do not know whether the Plaintiff would have recovered a greater judgment is reason enough to disagree with the holding. Courts are in the business of finding fact, not making it.
While we know that the Plaintiff recovered fully from the Defendant in the underlying matter, we do not know if the Plaintiff recovered fully from all parties who should have been joined in the case. A mistake of this caliber by an attorney should not result in harm, potential or real, to a client.
It would be interesting had the court engaged in a trial within a trial of the company to see if a jury would award damages in excess of $10,000. My guess: it would.
I agree with the courts ruling in this case. I think the argument that the jury would have awarded the Plaintiff more is entirely speculative and it does not meet the element of proximate cause.
While I partly agree with Mr. Anzalone, I also must disagree. Just because a party is not damaged by an attorney does not mean that the attorney did not commit a wrong. An attorney can commit malpractice without actually injuring a party. In my opinion, the essence of a malpractice action is the wrong committed by the attorney, and an attorney needs to know that there are consequences for their wrongs, regardless of the damages sustained by anyone.