PA: Judgmental Immunity for Bad Outcome is Not Malpractice

Composition Roofers,etc. v. Katz 398 Pa. Super. 564; 581 A.2d 607 (1990)

PA Underlying Criminal Action

Student Contributor: Natalie Resto

Facts: The Union retained the attorney to advise it on all legal matters. Thirteen of the Union’s former members were indicted for its alleged criminal attempts to benefit the Union and its members. The attorney advised the Union that they could lawfully pay the legal expenses of the 13 members who were under indictment. The 13 members were later convicted of 152 criminal counts, including racketeering and mail fraud. The attorney then advised the Union that it was lawful for it to pay for the appeals of the now convicted former members. The Union later sued the attorney for malpractice claiming that the attorney was negligent in advising it that could lawfully pay the attorneys’ fees to defend its officers who were charged with criminal activity.

Issue: Is an attorney negligent if his informed judgment is later found erroneous?

Ruling: The court held that because at the time the attorney advised the Union there was no clear statement of the law on which he could base his recommendation, his advice that the Union could lawfully pay the attorneys’ fees to defend its officers charged with criminal activity was not negligent.

Lesson: An attorney is negligent in a malpractice case if he fails to use ordinary skill, knowledge and care which would normally be possessed and exercised under the circumstances by members of the legal profession. McPeake v. William T. Cannon, Esquire P.C., 381 Pa. Super. 227, 553 A.2d 439 (1989). [However,] [a]n informed judgment on the part of counsel, even if subsequently proven erroneous, is not negligence. Mazer v. Security Insurance Group, 368 F.Supp. 418 (E.D.Pa. 1973), affirmed 507 F.2d 1338 (3rd Cir. 1975). 

PA: Legal Malpractice Claim Sounds in Tort, Not Contract

Knopick v. Connelly, U.S.D.C., M.D. Pa., January 25, 2010.

Facts: Knopick retained the services of the Defendant attorney in or about March 2007 order to pursue a claim for legal malpractice against his former attorneys in a divorce proceeding.  The Defendant attorney, however, refused to pursue the action and advised that Knopick statute of limitations for the legal malpractice action had expired.

In July, 2009, Knopick sued the Defendant attorney for malpractice, under tort and contract theories of liability, for failing to pursue the malpractice action his former divorce attorney.  The Defendant attorney moved for summary judgment.

Issue: Could Knopick establish a prima facie case against the Defendant attorney under either the tort or contract theory of liability? 

Ruling: No.

The Court first noted that under a tort theory of liability, Plaintiff must show: 

1) The employment of the attorney or other basis for duty;
2) The failure of the attorney to exercise ordinary skill and knowledge; and
3) That such failure was the proximate cause of the damage to the plaintiff.

Here, the Court found that the Defendant attorney's analysis that Knopick was out of time to pursue a malpractice action against his divorce attorney was correct.  Knopick should have brought the malpractice action two years from the date he first became aware of the negligence - by August, 2006.  However, he had no even retained Defendant's services until March, 2007.  Accordingly, there was no failure on Defendant's part to exercise ordinary skill or knowledge.

With regard to Plaintiff's contract theory of liability, the Court noted that "a plaintiff may not couch a tort negligence claim as a contract claim simply to side-step the two-year limitation period."  The Court further provided: 

Plaintiff discusses the standard of care owed by an attorney, not a breach of specific terms of the contingent fee agreement...Merely reciting the language "specific terms of the contract" without citing which terms the parties breached, is insufficient...In addition, the implied duty of care owed by every attorney to their clients is insufficient to support a breach of contract claim...Further evidence that this is a negligence claim couched as a breach of contract claim, is the fact that the language contained in Count Three directly mirrors the language contained in Count Two-Plaintiff's legal malpractice tort claim.

Accordingly, the Court dismissed Plaintiff's complaint.

Lesson: When an attorney is retained after the applicable statute of limitations has expired, he is not negligent in failing to pursue that action.  Moreover, plaintiff cannot pursue a contract theory of liability to avoid the two year statute of limitations applicable in Pennsylvania to legal malpractice actions.  To pursue a contract theory of liability, plaintiff must be able to point to a specific provision of the retainer that was violated other than an attorney "implied duty of care."

PA: No Vicarious Liability if Lawyer Did Not Act in the Scope of His Employment

Atkinson v. Haug, 622 A.2d 983 (Pa. Super. 1993).

PA: Underlying real estate investment

Student Contributor: Laura Binski

Facts: Atkinson entered into a partnership agreement for an apartment complex with Haug, his friend and business associate. Haug was also a lawyer at Acton & Acton, P.C (“Acton”). The business investment failed, and Atkinson brought a legal malpractice action against Haug for misrepresentation and professional negligence. Atkinson also sued Acton under the theory of vicarious liability, claiming that Haug offered faulty business advice within the scope of his employment at Acton. The trial court entered summary judgment in favor of Acton and Atkinson appealed.

Issue: Did a lawyer-client relationship exist between Atkinson and Haug that would defeat the trial court’s entry of summary judgment?

Ruling: No.

“Absent an express contract, an implied lawyer-client relationship will be found if (1) the purported client sought advice or assistance from the lawyer; (2) the advice sought was within the lawyer’s professional competence; (3) the lawyer expressly or impliedly agreed to give the assistance; and (4) it is reasonable for the client to believe the lawyer was representing him”

Sheinkopf v. Stone, 927 F.2d 1259 (1st Cir. 1991). Here, there was no express legal agreement, no fee arrangement or retainer, no discussion of legal consequences of the deal, and no indication that Atkinson asked Haug for legal advice. Therefore, there was no express or implied lawyer-client relationship. A subjective belief that a lawyer-client relationship exists is an insufficient basis to defeat summary judgment. If there was no lawyer-client relationship, it follows that Acton & Acton could not be held vicariously liable.

Lesson: Acton could only be held liable under the theory of vicarious liability if Haug was shown to be acting within the scope of his employment or with apparent authority from Acton. The mere fact that Haug happens to be a lawyer does not necessarily characterize everything he says as “legal advice.” Since there was no evidence that Haug was acting within the scope of his employment at Acton, vicarious liability does not exist.  

PA: Summary Judgment Appropriate When Claims Are Too Speculative

Mariscotti v. Tinari, 335 Pa. Super. 599, 485 A.2d 56 (1984).

PA: Underlying divorce case

Student Contributor: Laura Binski

Facts: The client hired a lawyer to handle her divorce. The lawyer gave the client an incorrect evaluation of the stock owned by her husband. The lawyer told the client that the stock was worthless when in fact it was valuable. The client admits that she knew her husband’s stock holdings were in his name and she did not have title to them. She claims that she would have been in a better bargaining position if she had known the value of the stock. The client claims that the lawyer’s mistake damaged her ability to receive the best possible property settlement after the divorce. The lawyer made a motion for summary judgment. The court granted summary judgment to the lawyer on the ground that the client’s loss, if any, was too speculative to allow recovery.

Issue: Was summary judgment appropriate because the client’s complaint of loss was too speculative?

Ruling: Yes. Summary judgment is appropriate when there is no genuine issue of material fact. A genuine issue of material fact did not arise in this case because the client’s claim was based purely on speculation. No one knows whether she would have achieved a better result if she had known the value of the stock. Exactly how much better the result would have been is even more speculative. Thus, dismissal of her case through summary judgment was appropriate because a jury could not have appropriately decided the issue of whether the client would have obtained a better result.

Lesson: When a client claims that a lawyer has breached his professional obligations, an essential element of the client’s claim is a showing of actual loss. If the client cannot prove actual loss, the claim may be too speculative or remote to survive.

The test of whether damages are remote or speculative has nothing to do with the difficulty in calculating the amount, but deals with the more basic question of whether there are identifiable damages…thus damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.   Pashak v. Barish, 303 Pa. Super. 559, 561-562, 450 A.2d 67, 69

PA: Summary Judgment Appropriate for Speculative Claims

Mariscotti v. Tinari, 335 Pa. Super. 599, 485 A.2d 56 (1984).

PA: Underlying divorce case

Student Contributor: Laura Binski

Facts: The client hired a lawyer to handle her divorce. The lawyer gave the client an incorrect evaluation of the stock owned by her husband. The lawyer told the client that the stock was worthless when in fact it was valuable. The client admits that she knew her husband’s stock holdings were in his name and she did not have title to them. She claims that she would have been in a better bargaining position if she had known the value of the stock. The client claims that the lawyer’s mistake damaged her ability to receive the best possible property settlement after the divorce. The lawyer made a motion for summary judgment. The court granted summary judgment to the lawyer on the ground that the client’s loss, if any, was too speculative to allow recovery.

Issue: Was summary judgment appropriate because the client’s complaint of loss was too speculative?

Ruling: Yes. Summary judgment is appropriate when there is no genuine issue of material fact. A genuine issue of material fact did not arise in this case because the client’s claim was based purely on speculation. No one knows whether she would have achieved a better result if she had known the value of the stock. Exactly how much better the result would have been is even more speculative. Thus, dismissal of her case through summary judgment was appropriate because a jury could not have appropriately decided the issue of whether the client would have obtained a better result.

Lesson: When a client claims that a lawyer has breached his professional obligations, an essential element of the client’s claim is a showing of actual loss. If the client cannot prove actual loss, the claim may be too speculative or remote to survive. “The test of whether damages are remote or speculative has nothing to do with the difficulty in calculating the amount, but deals with the more basic question of whether there are identifiable damages…thus damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.” Pashak v. Barish, 303 Pa. Super. 559, 561-562, 450 A.2d 67, 69 (1982). 

PA: Speculative and Remote Claims Do Not Amount to a Cause of Action for Legal Malpractice

Pashak v. Barish, 303 Pa. Super. 559, 450 A.2d 67 (1982).

PA: Underlying negligence action

Student Contributor: Laura Binski

Facts: Mr. Pashak was injured working as a longshoreman. He sued the ship’s owner for negligence, claiming that the ship was unseaworthy. Mr. Pashak hired some lawyers who recommended that he settle the case out of court for $100,000. Mr. Pashak agreed to settle the case. He was later notified that contrary to his lawyers’ advice, his statutory compensation benefits would be ended because of the settlement. When Mr. Pashak’s wife found out that she also would not be able to collect statutory compensation benefits as a result of the settlement, she sued the lawyers for legal malpractice. The lawyers defended themselves on the basis that Mrs. Pashak’s loss was too speculative and remote to justify her winning her case against the lawyers. The trial court agreed with the lawyers and dismissed Mrs. Pashak’s complaint with prejudice.

Issue: Was Mrs. Pashak’s loss too speculative and remote to justify her winning a legal malpractice case against her husband’s lawyers?

Ruling: Yes. The court reasoned that a mere breach of professional duty, causing only speculative damage or the threat of future damage is not enough to create a feasible cause of action of legal malpractice. In this case, Mrs. Pashak’s right to compensation would not become available until Mr. Pashak died. Thus, Mrs. Pashak’s right to the benefit was dependent upon her surviving him, and the amount of money she would receive was also dependent on whether the couple had children. Since there were so many conditions placed upon her receipt of the benefits, the court held that Mrs. Pashak’s claim was did not rise to the level of harm necessary in a legal malpractice lawsuit.

Lesson: To give rise to a legal malpractice claim, identifiable harm must exist. “The mere possibility or even probability that the plaintiff will sustain an injury at some future time does not alter the speculative nature of the damage claim or support a cause of action for legal malpractice…damages are speculative only if the uncertainty concerns the fact of damages rather than the amount.” R. Mallen & V. Levitt, Legal Malpractice § 302 (2d ed. 1981). 

PA: Possibility of Harm Is Not Enough to Prove Actual Harm

Veneri v. Pappano, 424 Pa. Super. 394, 622 A.2d 977 (1993).

PA: Underlying felony conviction case

Student Contributor: Laura Binski

Facts: The client was convicted of two related robberies and sentenced to twenty-five to fifty years in prison. The lawyer was a public defender assigned to the client’s case. The client claims he informed the lawyer that wanted to file a petition for allowance of appeal to the Supreme Court of Pennsylvania. The lawyer did not file the petition, so the client filed it by himself. The client then filed a complaint against the lawyer for negligence in failing to file the petition. The trial court dismissed the complaint and the client appeals.

Issue: Does the client’s complaint state a cause of action in negligence against the lawyer?

Ruling: No. The three elements for a cause of action for negligence are (1) employment of the lawyer, (2) failure of lawyer to act with ordinary skill and knowledge, and (3) that the lawyer’s negligence was a proximate cause of harm to the client. A client must also show that he likely would have won the underlying dispute. Here, the client did not suffer any real harm. The only harm he might have suffered as a result of the lawyer’s failure to file the petition was his right to habeas corpus relief. Since the client did file the petition, he suffered no real damage as a result of the lawyer’s conduct. As a result, his claim against the lawyer is speculative and does not meet the requirements of an action for negligence. In addition, the client did not make any showing that his claims were likely to be successful. Thus, the client’s case was properly dismissed.

Lesson: Speculative claims of future harm are not enough to rise to a viable cause of action. A client will not succeed in legal malpractice claims when he only asserts a possibility that he might be harmed as a result of the lawyer’s conduct. Also, a client must not forget to assert the likelihood that he would have prevailed in his underlying dispute if not for the lawyer’s malpractice.

PA: Post Conviction Relief: Too Often Overlooked

Kornicki v. Cherniack, 2006 WL 6049500 (2006).

PA: Underlying criminal defense 

Student Contributor: Laura Binski


Facts: In May of 2000, Kornicki (the client) was found to have violated his probation and sentenced to 7 to 14 years in prison. In 2003, Cherniack (the lawyer) was appointed to represent the client. On behalf of the client, the lawyer filed a Post Conviction Relief Act (PCRA) petition. The court denied the petition. The client sued the lawyer for legal malpractice, claiming that the lawyer was negligent because she failed to raise the issue of credit for time served in the client’s PCRA petition. The trial court sided with the lawyer and dismissed the client’s legal malpractice claim. The client now appeals the court’s decision.

Issue: Was the trial court correct to favor the lawyer’s argument that she did not commit malpractice because she was not allowed to bring up credit for time served in the PCRA petition?

Ruling: Yes. The trial court ruled correctly in favor of the lawyer because under Pennsylvania law, lawyers are not permitted to challenge credit for time served in a PCRA petition because it is not the proper forum to do so. Instead, this type of claim must be raised in the Commonwealth Court against the Bureau of Corrections or in a writ of habeas corpus. Thus, the lawyer was not negligent and acted properly by not bringing up this issue in the wrong forum.

Lesson: In order to establish a legal malpractice claim in a criminal case, a client must show (1) employment of the lawyer, (2) the lawyer’s negligent disregard of the client’s interests, (3) that if not for the lawyer’s conduct, the client would have received an acquittal or dismissal, (4) existence of damages, and (5) that the client has sought post-trial remedies for the lawyer’s mistakes. Since the lawyer in this case could not have appropriately raised the miscalculation of credit issue due to the improper forum, the client failed to meet all of the above requirements.  

PA: Possibility of Harm Is Not Enough to Prove Actual Harm

Veneri v. Pappano, 424 Pa. Super. 394, 622 A.2d 977 (1993).

PA: Underlying felony conviction case

Student Contributor: Laura Binski

Facts: The client was convicted of two related robberies and sentenced to twenty-five to fifty years in prison. The lawyer was a public defender assigned to the client’s case. The client claims he informed the lawyer that wanted to file a petition for allowance of appeal to the Supreme Court of Pennsylvania. The lawyer did not file the petition, so the client filed it by himself. The client then filed a complaint against the lawyer for negligence in failing to file the petition. The trial court dismissed the complaint and the client appeals.

Issue: Does the client’s complaint state a cause of action in negligence against the lawyer?

Ruling:  No. The three elements for a cause of action for negligence are (1) employment of the lawyer, (2) failure of lawyer to act with ordinary skill and knowledge, and (3) that the lawyer’s negligence was a proximate cause of harm to the client. A client must also show that he likely would have won the underlying dispute. Here, the client did not suffer any real harm. The only harm he might have suffered as a result of the lawyer’s failure to file the petition was his right to habeas corpus relief. Since the client did file the petition, he suffered no real damage as a result of the lawyer’s conduct. As a result, his claim against the lawyer is speculative and does not meet the requirements of an action for negligence. In addition, the client did not make any showing that his claims were likely to be successful. Thus, the client’s case was properly dismissed.

Lesson: Speculative claims of future harm are not enough to rise to a viable cause of action. A client will not succeed in legal malpractice claims when he only asserts a possibility that he might be harmed as a result of the lawyer’s conduct. Also, a client must not forget to assert the likelihood that he would have prevailed in his underlying dispute if not for the lawyer’s malpractice. 

PA: Circuit Court Comments on the Need for a Certificate of Merit

Donnelly v. O'Malley & Langan. P.C., U.S. Court of Appeals, Third Circuit (March 16, 2010).

Facts: Donnelly filed an action for legal malpractice against his former attorneys who had represented him in a workers' compensation matter. He raised claims of invasion of privacy under state law, breach of contract, legal malpractice, and violation of his state and federal constitutional rights.


On Defendants' motion, the District Court dismissed Donnelly's breach of contract/legal malpractice claim, holding that he failed to submit a Certificate of Merit, which is required under Rule 1042.3(a) of the Pennsylvania Rules of Civil Procedure, absent a reasonable explanation or legitimate excuse.

Donnelly filed an appeal arguing that he did not need a Certificate of Merit, since his claim sounded in breach of contract.  Further, he argued, the allegation that employment law was beyond the expertise of the Defendants was easy for an ordinary person to understand.

Issues: Did Donnelly need to submit a Certificate of Merit to continue with his legal malpractice action? 


Ruling: Yes.

Regardless of how he chooses to characterize his claim, however, Donnelly's allegations pertain to the quality of the O'Malley defendants' professional representation of him, and thus a [Certificate of Merit] is required.

The Court noted, however, that involuntary dismissal under Pennsylvania's Certificate of Merit Rule is not dismissal with prejudice.


Lesson: Err on the side of obtaining a Certificate of Merit in Pennsylvania for any claim which sounds in legal malpractice, no matter how it is characterized, or risk dismissal.

PA: No Vicarious Liability if Lawyer Did Not Act in the Scope of His Employment

Atkinson v. Haug, 622 A.2d 983 (Pa. Super. 1993).

PA: Underlying real estate investment

Student Contributor: Laura Binski

Facts: Atkinson entered into a partnership agreement for an apartment complex with Haug, his friend and business associate. Haug was also a lawyer at Acton & Acton, P.C (“Acton”). The business investment failed, and Atkinson brought a legal malpractice action against Haug for misrepresentation and professional negligence. Atkinson also sued Acton under the theory of vicarious liability, claiming that Haug offered faulty business advice within the scope of his employment at Acton. The trial court entered summary judgment in favor of Acton and Atkinson appealed.

Issue: Did a lawyer-client relationship exist between Atkinson and Haug that would defeat the trial court’s entry of summary judgment?

Ruling: No. “Absent an express contract, an implied lawyer-client relationship will be found if (1) the purported client sought advice or assistance from the lawyer; (2) the advice sought was within the lawyer’s professional competence; (3) the lawyer expressly or impliedly agreed to give the assistance; and (4) it is reasonable for the client to believe the lawyer was representing him” Sheinkopf v. Stone, 927 F.2d 1259 (1st Cir. 1991). Here, there was no express legal agreement, no fee arrangement or retainer, no discussion of legal consequences of the deal, and no indication that Atkinson asked Haug for legal advice. Therefore, there was no express or implied lawyer-client relationship. A subjective belief that a lawyer-client relationship exists is an insufficient basis to defeat summary judgment. If there was no lawyer-client relationship, it follows that Acton & Acton could not be held vicariously liable.

Lesson: Acton could only be held liable under the theory of vicarious liability if Haug was shown to be acting within the scope of his employment or with apparent authority from Acton. The mere fact that Haug happens to be a lawyer does not necessarily characterize everything he says as “legal advice.” Since there was no evidence that Haug was acting within the scope of his employment at Acton, vicarious liability does not exist.  

PA: When the Statute Tolls You're Out of Luck!

Edwards v. Thorpe, 876 F. Supp. 693 (E.D. Pa. 1995).

PA: Underlying FBI investigation

Student Contributor: Laura Binski

Facts: Mr. Edwards (the client) was taken hostage in a robbery attempt of the bank where he worked as an assistant manager. After the event, Mr. Edwards sought legal counsel from Mr. Thorpe (the lawyer). In March of 1989, the lawyer sent a letter to the client’s boss stating: “I am Causley Edwards’ attorney and I have been informed that the FBI considers him a suspect in a recent robbery attempt…” The client claims that the lawyer had no reason to believe the FBI has listed him as a suspect. As a result of the letter, the client was placed on suspension without pay from his job at the bank until the FBI investigation cleared the client’s name or he was prosecuted and acquitted. The client was not exonerated until five years later, in April of 1994. The client filed a suit against the lawyer in October of 1994 for legal malpractice, breach of contract, and defamation.

Issue: Should the client’s claims be subject to Pennsylvania’s two-year statute of limitations? Does the statute of limitations begin to run at the time the alleged breach of fiduciary duty occurs or, as the client claims, when he is harmed?

Ruling:  The client’s claim will be subject to the two-year statute of limitations. Thus, the claim is barred because the complaint was not filed until five years after the alleged breach of fiduciary duty – when the lawyer sent the letter to the bank. The client cannot claim that he did not discover the letter, or the suspension it caused until after the FBI exonerated his suspected involvement in the robbery attempt.

Lesson: The client tried to make the claim that he could not file his lawsuit against the lawyer until after the FBI exonerated him of any involvement on the basis that if he were found to be guilty, he would have suffered no damages as a result of the lawyer’s misconduct. This claim contradicts the client’s assertion that he was harmed as a result of the suspension from his job and damage to his reputation. This case demonstrates the importance of attention to statutes of limitations. If the client had filed his complaint within two-years from the time that the breach of fiduciary duty occurred, it likely would not have been dismissed.

PA: You Can't Win 'Em All: Negligent Referrals

Bourke v. Kazaras, 746 A.2d 642 (Pa. Super. 2000).

PA: Underlying tort case

By: Laura Binski

Facts: The client was injured as a result of a fall on a cruise ship deck. The client contacted the Lawyer Referral and Information Service (LRIS) of the Philadelphia Bar to get a lawyer recommendation. The recommended lawyer failed to file the client’s claim before the statute of limitations period. The client successfully sued for malpractice against the lawyer, but has been unable to collect any money from the judgment. The client is now suing the LRIS for referring her to that lawyer. The client’s claims were dismissed and she now appeals.

Issue: Is there, or should there be, a cause of action for negligently referring a client to an unskilled or dishonest lawyer?

Ruling: No. Pennsylvania law does not recognize a cause of action for negligent referral, and this court declines to create one. Any court decision that holds that referring lawyers should responsible for the receiving lawyer’s misconduct would be logically and legally unpersuasive, and could disrupt the process of lawyer referrals which is integral to the legal profession. Felker v. O’Connell, 1990 WL 31912, 1 (E.D. Pa. 1990).

Lesson: There is no need to create or recognize a cause of action for negligent referrals. The law already provides protection for clients by imposing liability on the lawyer who does not conduct himself.

PA: Class Action Lawyer Duty to Notify of Settlement

Zimmer Paper Products, Inc. v. Berger & Montague, P.C., 586 F. Supp. 1555 (E.D. Pa. 1984).

PA: Underlying class action antitrust case

By: Laura Binski

Facts: Zimmer Paper Products (the client) was a member of a class action antitrust lawsuit. The lawsuit settled, and the client claims that it never received the letter giving notice of the settlement including the procedures for filing for recovery on the settlement fund. The client then sued the lawyers for the class action suit. The court dismissed the claim and ruled that the client could only win by showing that the lawyers negligently failed to mail the notice to the client.

Issue: Did the client show that the lawyers negligently failed to mail the notice to the clients?

Ruling: No. It is undisputed that the lawyers hired a company (the agents) to print, address, and mail the notices to members of the class. The clients do not argue that the agent was an inappropriate choice, or that the agent failed to mail any notices at all, or even that the agent failed to mail the notice to the client. The client’s only evidence is that they did not get the notice, that the mailing labels weren’t checked against the master list, that the agent didn’t acquire return receipts from the post office, and that none of the agents can recall whether or not the notices were mailed properly. None of the evidence presented by the clients is sufficient to give rise to an inference of negligence.

Lesson: The court reasons “the fact that Zimmer did not receive the notice does not give rise to an inference that the lawyers, or their agents, acted negligently.” The court also noted that having to constantly check and re-check that all the notices were mailed properly would be so time consuming as to defeat the purpose and convenience of a class action lawsuit. 

PA: No Privity, No Certificate of Merit

Sabella v. Estate of Milides, 992 A.2d 180 (Pa. Superior March 25, 2010). 

Facts:  The representatives of the Estate of Milides commenced an action arguing that Sabella participated in a fraudulent transfer of property to avoid satisfaction of a substantial judgment. Sabella filed preliminary objections.  Shortly thereafter, the Estate, through its attorney, filed a praecipe (writ) for satisfaction and termination of the civil suit, indicating it was "settled, discontinued, ended with prejudice and costs paid".  Sabella then filed the instant action for abuse of process against the Estate and its attorney, alleging wrongful use of civil proceedings.  

The Estate's attorney argued that the instant action ought to be dismissed because of Sabella's failure to file a certificate of merit in a "professional liability" matter.  Sabella disagreed since he had no attorney-client relationship with the Estate's attorney, and characterized the matter as an "abuse of process" case, rather than professional malpractice.  Sabella appealed after the lower court dismissed his action for failure to file a certificate of merit against the Estate's attorney.

Issue:  Does Pennsylvania require a Certificate of Merit in a civil action against an attorney for abuse of process by a third-party? 

Ruling:  No. 

The Court noted that two factors determine whether a claim alleges ordinary negligence as opposed to professional negligence: 

  • Whether the claim pertains to an action that has occurred within the course of a professional relationship; and 
  • Whether the claim raises questions of professional judgment beyond the realm of common knowledge and experience.

The Court further provided: 

Our Supreme Court retained privity (an attorney-client or analogous professional relationship, or a specific undertaking) as an element of proof necessary to maintain an action in negligence for professional malpractice. The only exception being a narrow class of third party beneficiaries under Restatement (Second) of Contracts § 302 where the intent to benefit is clear and the promisee (testator) is unable to enforce the contract.

***

If a complaint does not set forth a cause of action for legal malpractice, a certificate of merit is not required.

The Court held that Sabella's cause of action did not arise from within the course of a professional relationship with the Estate's attorney, nor was Sabella a third-party beneficiary.  Consequently, the lower court erred in designating Sabella's case as one of professional liability and dismissing it for failure to file a certificate of merit.

Lesson:  In Pennsylvania, a third-party need not file a certificate of merit in an action against an attorney.  By definition, given the lack of privity between the attorney and the third-party plaintiff, the action cannot be one for "professional malpractice."

PA: Scope of the Attorney-Client Privilege Remains Undecided

Nationwide Mutual Ins. Co. v. Fleming et al., 992 A2d 65 (PA 2010). 

Facts:  In the underlying action, Nationwide alleged that a number of its former agents accessed confidential policyholder information from Nationwide's internal computer system and then provided it to competitors.  At trial, defense counsel questioned the president of Nationwide with respect to a memo labeled "Document No. 529."  Nationwide asserted it was protected by the attorney-client privilege, and redacted all information with the exception of the author, recipient list, date and subject line.  The memo had been sent by Nationwide's in-house counsel to 15 Nationwide employees.  

Defendants argued that even if Document No. 529 was privileged, Nationwide had waived the privilege by disclosing two other privileged documents on the subject of agent defection (Document Nos. 314 and 395).  In other words, Nationwide could not use the privilege as a "sword and a shield" by selectively disclosing only those privileged documents favorable to its position. 

Nationwide argued that the other two documents were not protected because they were merely business communications devoid of any confidential communications made by Nationwide for the purpose of obtaining legal advice.

The lower court first examined Documents 314 and 395 to determine whether the production of those documents constituted a disclosure of confidential information by Nationwide.  The Court determined that production of these documents did not amount to a disclosure of privileged information because the information contained in the memos was not confidential or conveyed to an attorney for the purpose of securing legal advice, assistance, or opinion.  Rather, the documents constituted routine business communications.

Consequently, the Court held that Nationwide had not waived the attorney-client privilege by producing Documents 314 and 395.  Nevertheless, the Court ordered disclosure of Document 529 for the following reasons: 

  • Document 529 was a communication from counsel to a group of managers of a corporate client -- The attorney-client privilege protection is available only for confidential communications made by the client to counsel.  Communications from counsel to a client are only protected to the extent they reveal confidential communications previously made by the client to counsel for purposes of obtaining legal advice.
  • Document 529 did not reveal any confidential communications from Nationwide to its in-house counsel for the purpose of obtaining legal advice.  Rather, much like Documents 314 and 395, it was a memo concerning business strategy with regard to agent defections.  
  • The Court further noted that counsel's general opinion as to what is likely achievable via litigation is not protected by the attorney-client privilege in the event it does not reveal the client's confidential communications.

Nationwide appealed.

Issue:  What is the scope of the attorney-client privilege in Pennsylvania? 

Ruling:  The Supreme Court was equally divided and the Order of the lower court was, therefore, affirmed.

Justices Eakin and Baer, in favor of affirmance, noted that Nationwide had waived the attorney-client privilege by previously disclosing other, favorable documents with regard to the same "subject matter": 

[T]he disclosure of Documents 314 and 395 form the basis of subject matter waiver of the attorney-client privilege regarding Document 529, the scope of which extends to Document 529 because it contains the same subject matter. What distinguishes Document 529 from Documents 314 and 395 is counsel's unflattering concessions regarding the litigation's purpose and prospect of succeeding. [A]ppellants seem to have produced only the documents beneficial to their case by disclosing Documents 314 and 395, and withholding Document 529 based on its privileged nature. I believe appellants waived the attorney-client privilege with respect to the subject of agent defections upon disclosing Documents 314 and 395, and cannot claim the privilege applies to a document containing the same subject matter, as well as potentially damaging admissions.

Justices Saylor and Castille, in favor of reversal, noted: 

Document 529 describes, among other things, [discusses] the present litigation in several states involving Appellants, their former agents, and their new companies. Namely, it discusses the nature of these suits, the money damages sought, the purpose behind the litigation, Appellants' likelihood of success, and the other remedies available to Appellants against defecting agents. It also includes counsel's recommendations regarding Appellants' use of specific contract provisions, as well as the possibility of filing complaints with the insurance departments of certain states. 

***

[The document] both reveals information apparently communicated by management and, more generally, reflects in-house counsel's knowledge apparently derived from familiarity with business aspects. The memorandum proceeds to detail strategies that appear to reflect prior decisions made by management upon legal consultation...

Lesson:  The Scope of the attorney-client privilege in Pennsylvania remains undecided.  Arguments for disclosure can be made based on "subject matter" waiver, or the fact that the communication discloses no confidential information related to the attorney for purposes of legal advice.  An argument for protection under the attorney-client privilege can be made based on the principle that an attorney's case-specific advice is necessarily intermixed with and dependent upon information the client shares in confidence.  

PA: Negligence, She Wrote...(but couldn't prove)

Brock v. Owens, 532 A2d 1168 ( PA. 1987).

PA: Underlying employment discrimination case

Student Contributor: Laura Binski

Facts: Brock (client) was a professor at Lincoln University. She believed she was the victim of race and gender discrimination, so she hired a lawyer. She first hired Kalemjian, but he withdrew from the case. Next, the client hired Wusinich. She replaced Wusinich with Owens. The client sued all three of the lawyers for legal malpractice after the court dismissed her case for lack of subject matter jurisdiction. The client represented herself in the lawsuit against the lawyers, and asserted that all three handled her case negligently. At a jury trial, the lawyers filed a motion for non-suit. The motion was granted and the client now appeals.

Issue: Did the trial court properly grant the motion for non-suit in favor of the lawyers?

Ruling: Yes. To avoid non-suit in the case, the client had to show (1) the employment of the lawyers as a basis for their duty to her, (2) the lawyer’s failure to exercise ordinary skill and knowledge in handling the case, and (3) that the lawyer’s failure to handle the case diligently was a cause of the damage to the client. Here, the client presented no evidence to show that the lawyers failed to exercise ordinary skill or knowledge in handling the case, or that she would likely have prevailed in her suit against Lincoln, or that the lawyers handling of her case was a proximate cause of her failure to win the lawsuit against Lincoln. Thus, the client did not meet the requirements to establish her malpractice claim.

Lesson: The client here failed to prove malpractice because she did not show that the lawyers handled her case with less than the requisite ordinary skill and care or that their handling of the case was a proximate cause of her failed claim against Lincoln. She also did not present any evidence to show that it is more likely than not that she would have won her underlying lawsuit if not for the lawyers’ negligence. If the client does not present any evidence that the lawyers failed to exercise ordinary skill and knowledge or evidence that she would likely have won her case against Lincoln University, the client cannot prevail in the legal malpractice claim.
 

PA: Certificate of Merit Required for Malpractice Claim Characterized as "Breach of Contract"

Donnelly v. O'Malley & Langan, P.C., et al., United States Court of Appeals, Third Circuit, March 16, 2010

Facts:  Plaintiff, proceeding pro se, filed suit against his former attorneys who had represented him in his underlying workers compensation claim.  He alleged that his attorney has failed to adequately investigate his claim prior to negotiating a settlement, and tendered his letter of resignation to his employer before settlement.  Plaintiff raised breach of contract and legal malpractice amongst other claims.

The attorneys moved to dismiss based, in part, on Plaintiff's failure to produce a Certificate of Merit.  The District Court granted the attorneys' motion as to both the breach of contract and legal malpractice claims for failure to produce a Certificate of Merit.  It held that Plaintiff provided no reasonable explanation for failing to file the certificate, and his promise to produce a legal expert in the future did not satisfy the requirement.

Plaintiff appealed and argued that no certificate of merit was necessary as to his breach of contract claims, since that claim did "not call for expert testimony to explain the [attorney's] lapses in judgment or failures in performance."

Issue:  Can Plaintiff proceed with a breach of contract claim against his former attorney without an affidavit/certificate of merit?  

Ruling:  No.

Regardless of how [Plaintiff] chooses to characterize his claim...[his] allegations pertain to the quality of [his former attorney's] professional representation of him, and thus a [Certificate of Merit] is required. 

Since Plaintiff could offer no reasonable explanation or legitimate excuse for his failure to furnish the certificate of merit, the Court dismissed Plaintiff's claim without prejudice.  Unlike New Jersey, the Pennsylvania statute does not require dismissal with prejudice for failure to file the required certificate of merit.

Lesson:   A certificate of merit must be filed in Pennsylvania with regard to any claim that requires the analysis of whether or not an attorney breached the applicable standard of care.  Whether the claim is characterized as beach of contract or legal malpractice is of no consequence. 

PA: Collectibility of Damages: Defendant's Burden

Kituskie v. Corbman, 452 Pa.Super. 467, 682 A.2d 378 (Pa. Super. Ct. 1996)

PA Underlying Representation: Personal Injury Lawsuit

Student Contributor: John Anzalone

Facts: Plaintiff sued Defendant Attorney and his law firm for failing to file a personal injury action within the statute of limitations. Plaintiff prevailed below after the judge excluded evidence of the potential collectibility of the underlying judgment.

Issues: 1) May Attorneys raise collectibility as a defense in a legal malpractice case?
2) Whose burden is it to prove that the collectibility of the underlying judgment?

Ruling: In reversing the lower court's ruling, the Superior Court held that it's the Defendant's Burden to raise and prove the collectibility of the underlying judgment, based on the following considerations:
1) Attorneys may invoke "collectibility" as a defense in a legal malpractice case.
2) Here, the jury was not allowed to hear evidence that the underlying judgment would be uncollectible, so its decision must be vacated.
3) This limitation was permitted because the court held that legal malpractice Plaintiffs should only be able to recover against the Attorney for the actual damages they suffered from the Attorney's malpractice.
4) It was the defendant's burden to prove because the plaintiff should not have an additional burden added because the plaintiff was allegedly wronged by the attorney as well as the underlying defendant.

Lesson: In Pennsylvania, the defendant attorney has the burden of raising and proving the defense of the lack of "collectibility" of the underlying judgment.

Editor's Note: The case was affirmed by the PA Supreme Court,  Kitsuskie v. Corbman, 552 Pa. 275 (1998). 


 

PA: Death Bed Wills: Duty of Loyalty to Client or His Alleged "Agent"?

Gregg v. Lindsay, 437 Pa. Super. 206 (Pa. Super. Ct. 1994)

PA: Underlying Wills Transaction

Student Contributor: Melissa Goldberg

Facts: Defendant drafted a will for Blain, which was duly executed. Blain was admitted to the hospital where he was confined to the Intensive Care Unit. While there, Blain was visited by his longtime friend, Plaintiff. According to Plaintiff's subsequent testimony, he raised with Blain the matter of a will; and after some discussion, Blain directed him to contact Defendant and have him draft a new will making a substantial bequest to Plaintiff and also naming Plaintiff as executor. Thereafter, Plaintiff called Defendant and told him that Blain was in the Intensive Care Unit, was in serious condition, and desired a new will, which was to be drafted and executed the same day. To emphasize the need for haste, but without any authority from Blain, Plaintiff told Defendant that if a new will could not be drafted and executed the same day, he, Plaintiff, would find another lawyer to do the job. A new will was unable to be drafted and executed WW before Blain died.

Issue: Should standing be expanded to allow recovery where, as here, (1) the new will was never executed by the testator, and (2) the facts send a mixed signal regarding the person to whom the lawyer owed a primary duty of loyalty?

Result:  The executed will must firmly have evidence of the existence of the third party beneficiary contract intended to benefit the legatee. Here, however, there was no executed will that could clearly establish intent by the testator to benefit a third person.
1) there was no breach of contract between the decedent and his lawyer.
2) It was Plaintiff and not Blain who had called Lindsay and who had directed him regarding the preparation of a will.
3) Lindsay's first direct contact with Blain came later the same day when Lindsay took the will, which he had prepared to Blain's hospital room.

Lesson: To permit a third person to call a lawyer and dictate the terms of a will to be drafted for a hospitalized client of the lawyer and to find therein a contract intended to benefit the third person caller, even though the will was never executed, would severely undermine the duty of loyalty owed by a lawyer to the client and would encourage fraudulent claims.  

PA: Assignment of Legal Malpractice Actions

Ammon v. McClosky 440 Pa.Super. 251, 655 A.2d 549 Pa.Super (1995)

PA: Underlying personal injury action

Student Contributor: Ryan O'Donnell

Facts: Ammon was injured in an automobile accident and sued the driver of the car, Schussler. They settled for $14,000, and executed a release which discharged Schussler of liability. In another action against the owner of the other vehicle in the accident, Schussler was subsequently joined as a defendant. At that trial, Schussler’s attorney did not introduce evidence of the release of liability reached in the previous settlement until after a judgment was reached in favor of Ammon for $220,000. In response to a post-trial motion to introduce the release, the trial court deemed that the release had been negligently waived. Schussler then hired new counsel who negotiated a deal with Ammon to assign Schussler’s malpractice claim in return for a covenant not to enforce the judgment against Schussler. Ammon then commenced a legal malpractice action against Schussler’s former attorney and was awarded the $220,000 in damages that had previously been entered against Schussler. The former attorney appealed on the grounds that the plaintiff-assignee had failed to prove that the assignor had suffered any economic loss as a result of the attorney’s alleged negligence.

Issue: Is a claim for damages based on legal malpractice assignable?

Ruling: Yes. The Court follows the precedent set by Hedlund Mfg. Co., Inc v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357 (1988), that a claim for damages based on legal malpractice is assignable. The elements of the malpractice action still need to be proven however and defendant’s claim that there were no actual damages proven was rejected by the court. They reasoned that the judgment against Schussler constituted the actual damages necessary to maintain a malpractice action, and no further proof of damages was necessary. The court considers the right to assign a malpractice claim akin to a transferrable property right

Lesson: A judgment against a client-assignor constitutes actual damages. No further proof than the entry of judgment against a client-assignor is necessary to prove actual harm when an assignee prosecutes an assigned malpractice claim. When prosecuting an assigned malpractice claim, the assignee stands in the shoes of the assignor, so it is only necessary to prove that the assignor suffered actual damages 

PA: Proximate Cause = Case Within a Case

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.

PA: Statute of Limitations 2 years.

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.

 

PA: Lawyer Liability for Judicial Error. A Glimpse back in time...

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?

PA: Multiple doctors, multiple lawyers....

Rudd v. Timm, 1995 WL 298950 (E.D. Pa. 1995).

Pa. underlying medical and legal malpractice

Student contributor: Cheryl Neuman

Facts: Plaintiff fell in a motel bathtub and sustained injuries. She visited various doctors over the next number of years and eventually developed a pseudomeningocele on her back. Doctor 1 stated that the medical condition was caused by Doctor 2’s injection. After hearing this information, plaintiff retained Law firm 1 to bring a medical malpractice claim against Doctor 2. Law firm 1 failed to identify any expert witnesses and Doctor 1 refused to testify as to the appropriate standard of care that Doctor 2 should have complied with. Law firm 1 eventually did get an expert report which stated that the medical condition was not necessarily caused by the injection and was therefore not negligence, but rather it was negligence for Doctor 3, plaintiff’s treating physician, not to have diagnosed the medical condition. The expert opinion further stated that it could have been caused by other surgeries as well. The lawsuit against Doctor 2 was therefore dismissed. Plaintiff then hired lawyer 2 to file a malpractice case against law firm 1. Lawyer 2, however, failed to answer the pleadings properly and then plaintiff filed a legal malpractice action against lawyer 2.

Issue: Should the claim against lawyer 2 be viable?

Ruling: Yes. The lawsuit is viable. In order for the plaintiff to recover against lawyer 2, she must establish  she would have prevailed in the underlying suit against law firm 1, assuming that law firm 1 conducted proper research and sued the proper parties.

Lesson: The plaintiff wasn't barred by the statute of limitations in this case because the underlying medical malpractice case was brought against the wrong doctor as a result of law firm 1’s negligence. Therefore, if the plaintiff could show that she would have prevailed against the appropriate doctor, then the malpractice case against the first lawyer and second lawyer is still available to the plaintiff. 

PA: Privity Prevails

Mentzer & Rhey, Inc. v. Ferrari, 367 Pa. Super. 123 (Pa. Super. Ct. 1987)

PA. Underlying Real Estate Transaction

Student Contributor: Melissa Goldberg

Facts: Bruno Ferrari, the original Defendant, sold a parcel of land located in Westmoreland County to Mentzer and Rhey, Inc., the Plaintiff. A portion of the land located on Mentzer & Rhey's used car lot collapsed, creating a dangerous hole. Mentzer & Rhey filed an action for damages alleging the cause of the collapse to be a defective culvert constructed by Ferrari and fraudulently concealed by him during the sales transaction. Ferrari filed a complaint to join Fisher, Long and Rigone, the law firm representing Mentzer & Rhey in the property sale. The complaint alleged that Mentzer & Rhey's lack of knowledge of the existence of the culvert was due to the attorneys' negligence in performing the title search and that therefore the proposed third-party attorneys should be solely liable to Mentzer & Rhey for damages or in the alternative should be jointly liable with original Defendant.

Issue: Were the attorneys who performed a title search for buyers of property properly joined as third-party Defendants under Pa.R.C.P. 2252(a) where the buyers sue the seller for damages resulting from an allegedly fraudulently concealed and defective culvert and the attorneys failed to discover the existence of the culvert in their title search?

Result: A party must show an attorney-client relationship or a specific undertaking by the attorney furnishing professional services as a necessary prerequisite for maintaining a suit.
• Ferrari is not in privity with Plaintiff's attorneys, he has no cause of action against them and thus may not, under Pa.R.C.P. 2252(a), join the attorneys as third-party Defendants

Lesson: The general rule in Pennsylvania is that an attorney will be held liable for negligence only to his client. In the absence of special circumstances, he will not be held liable to anyone else.

PA: Standard of Care

McHugh v. Litvin, Blumberg, Matusow & Young, 525 Pa. 1, 574 A.2d 1040 (Pa. 1990)

PA Underlying Representation: Personal Injury

Student Contributor: John Anzalone

Facts: Plaintiffs retained Attorney 1 to sue Plaintiff Husband's employer for injuries suffered while working. Attorney 1 later referred Plaintiffs' case to Defendant Attorneys. Defendant Attorneys also were retained by Plaintiff Wife in her action for loss of consortium. The suits were dismissed for improper service. Plaintiffs brought a malpractice suit.

Issue: Was the Plaintiffs' malpractice suit for the loss of the wife's consortium action prohibited because the cause of action only applied to the loss of a wife's consortium when Plaintiff Husband was injured?

Ruling: In reversing the lower court's dismissal of the lost consortium claim, the court held that the wife's consortium claim was valid, based on the following considerations:
1) In Pennsylvania, court decisions changing the law are to be applied retroactively unless the court holds that it's not to be applied retroactively.
2) Since the Plaintiffs had already filed an action when the law was changed, Plaintiffs were entitled to rely on the change of the law.
3) Since the Plaintiffs' claims were pending when the change of law happened, they could rely on the new law.
4) Defendants additionally filed for the loss of consortium claim for the Plaintiffs after the change in the law. The court inferred from this that Defendants believed that the change was applicable to the Plaintiffs. The court held that after filing the claim, the Defendants can not claim that they had no duty to not file it negligently.

Lesson: Attorneys  are responsible for complying with changes in the law that effect the standards of care that occur while cases they are representing clients in are pending. Attorneys especially can not claim that they did not believe that the change in law applied to a case they were representing a client when they made a claim based on that change of law.

PA: The Need for Legal Malpractice Expert--the First Word

Storm v. Golden, 371 Pa. Super. 368, 538 A.2d 61 (1988)

Student Contributor: Christopher Henn

PA Underlying real estate transaction

Facts: Storm (the Client) retained Golden (attorney) in connection with the sale of her residence after an agreement was reached with a buyer. From the record, it appears that the client had “irrational trust in [a third party that] was founded in Christian faith and fueled by his representation of faith and Biblical interest” and “she couldn’t think for herself.” At the closing, a check for the proceeds was made to the order of the client and that third party. Thereupon the client endorsed the check to the third party and delivered it to him. He has not been seen or heard from since receiving the nearly $25,000 check. After suing the attorney for alleged malpractice, the trial court dismissed the suit at the end of client’s case for a failure to present expert testimony.

Issue: A question of first impression at the time, the court considered whether expert testimony was required to establish an attorney’s breach of his duty of care.

Ruling: The Superior Court held that;
“As a general rule, our Supreme Court has held that “expert testimony is necessary to establish negligent practice in any profession.” Id. at 375 citing Powell v. Risser, 375 Pa. 60, 65, 99 A.2d 454, 456 (1953);
And that “[b]y its very nature, the specific standard of care attributed to legal practioners necessitates an expert witness' explanation where a jury sits as the fact finder.” Id. at 375-76.
Finally, “[w]hether an attorney failed to exercise a reasonable degree of care and skill related to common professional practice in handling a real estate transaction is a question of fact outside the normal range of the ordinary experience of laypersons.” Id. at 377.

Lesson: This case is the beginning in a long line of decisions in Pennsylvania that recognizes the importance of expert testimony in legal malpractice cases. While the court noted there would be many times in which layperson jurors can decide for themselves, at least in a real-estate transaction such is not the case.

The State Supreme Court denied an appeal. 524 Pa. 630, 574 A.2d 71 (Pa. Nov 03, 1989).

PA: Delay Damages

Wagner v. Orie & Zivic, 431 Pa. Super. 337 (Pa. Super. Ct. 1994)

PA Underlying Tort action

Student Contributor: Melissa Goldberg

Facts: Plaintiff suffered physical injuries resulting from a work-related accident. Plaintiff retained Defendant for the purpose of representing him in a personal injury action against the manufacturer, distributor, and/or shipper of the product alleged to cause the injury. Defendant never filed the complaint and the statute of limitations expired. A jury found for the Plaintiff in the legal malpractice suit. The Plaintiff requested that the trial court mold the verdict to award damages for delay pursuant to Rule 238 of the Pennsylvania Rules of Civil Procedure.

Issue: Whether Rule 238 of the Pennsylvania Rules of Civil Procedure provide for delay damages to be awarded in a legal malpractice action where the underlying claim resulted from improper handling of a personal injury claim.

Result: Rule 238 provides for an award of damages "in an action seeking monetary relief for bodily injury, death or property damage . . . ."
1) While the underlying cases which precipitated the instant action were both personal injury cases, the instant case was an action for legal malpractice.
2) The rule is explicitly limited by its own language, and it is not applicable to a legal malpractice action. "

Lesson: Rule 238 of the Pennsylvania Rules of Civil Procedure, in determining whether delay damages are available, will only look at the case at bar, and not the underlying action. Thus, it does not extend to Legal Malpractice cases. 

PA: No Expert for the Obvious

Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (Pa. 1989)

PA Underlying Personal Injury and Medical Malpractice

Student Contributor: John Anzalone

Facts: Plaintiff retained Defendant Attorney to represent him in a personal injury case against Philadelphia and in a related medical malpractice case. Settlement offers were made by Philadelphia and were not conveyed to Plaintiff before Defendant rejected them. Later, at defendant's suggestion, Plaintiff settled the personal injury case, believing the medical malpractice case was viable since Defendant claimed that it was. A fee dispute then took place between Defendant and Plaintiff's prior attorney, in which the attorneys' claims for 50,000 dollars in an escrow account were rejected by the court which ordered that the funds be returned to Plaintiff. However, Defendant was later able procure them from Plaintiff as a "gift." The medical malpractice case was subsequently dismissed on summary judgment. Plaintiff then sued for legal malpractice alleging negligence and a breach of the attorney's fiduciary duty. The lower court held for Plaintiff.

Issue: Was an expert witness's testimony regarding the breach of the standard of care required?

Ruling: In affirming the lower courts ruling, the Pennsylvania Supreme Court held an expert witness's testimony regarding the breach of the standard of care was not required, based on the following considerations:
1) Attorneys commit malpractice if they fail to use "ordinary skill and knowledge" in settlement negotiations and that failure damages their client.
2) Defendant had a duty to investigate the settlement offers made and to convey them to his client. His failure to do so breached his duty to the client. This breach was accompanied by harm, so malpractice occurred.
3) The court held that this breach of duty does not require an expert witness's testimony. The average person would know that failing to investigate a settlement offer is a breach of the attorney's duties.
4) Expert testimony was also not needed about the breach of fiduciary duty because the Code of Professional Responsibility establishes these duties and prohibits an attorney from suggesting that the client make a gift to the lawyer. (Code of Professional Responsibility EC 5-5).

Lesson: Expert testimony is not required in Pennsylvania when the breach would be obvious to an average person or when the rules governing professional conduct in the state have been violated. 

 

PA: Lawyer's Fraud as Basis for Malpractice

O’Callaghan v. Weitzman, 436 A.2d 212 (Pa. Super. Ct., 1981)

PA Underlying Tort Action.

Student Contributor: Colleen Gaedcke

Facts: The plaintiffs, husband, wife and daughter, brought a fraud and legal malpractice action against the defendant resulting from the defendant’s representation of in a vehicular negligence accident. The defendant hired a colleague to handle the plaintiff’s case who in turn hired another attorney to institute the suit on the plaintiff’s behalf. By the time the attorney attempted to commence the action, the statute of limitations had run as for the two adult plaintiffs. The attorney alerted the defendant and his malpractice insurer as to his error. Without any authority to do so, the defendant negotiated with the attorney’s insurer and obtained a $9,000 settlement offer for the plaintiffs. The plaintiffs accepted the offer under the impression that the settlement was for the original automobile accident. The defendant deducted 40% contingent fee from the $9,000 and gave the plaintiffs a personal check for the remainder of the balance. When the plaintiffs learned the truth behind the settlement they brought this action against the defendant for fraud and legal malpractice.

Issue: Whether the lower court erred in granting the plaintiffs motion for a new trial on the issue of fraud?

Ruling: No. The plaintiff’s evidence was sufficient to warrant submission of the issues of fraud and damages to the jury.
1. “Fraud is composed of a misrepresentation fraudulently uttered with the intent to induce the action undertaken in reliance upon it to the damage of its victim..[and] the evidence must be sufficient to ‘enable the jury to come to a clear conviction, without hesitating, of the truth of the precise facts in issue’.”
2. The jury could come to a clear conclusion that the defendant defrauded the plaintiffs because the defendant failed to truthfully inform the plaintiff about the nature of the settlement in an effort to avoid being sued for malpractice.
3. Furthermore, as a result of the defendant’s actions the plaintiff was denied the opportunity to have a disinterested advocate pursue a malpractice claim against the attorney for missing the statute of limitations.

Lesson: A deliberate nondisclosure by a lawyer of a material will amount to fraud and legal malpractice for which the client can sue the lawyer.

Settle and Sue: Pennsylvania Style (Divorce action)

Martos v. Concilio, 642 A.2d 1096 (Pa. Super. Ct., 1993)

Underlying PA Divorce Action.

Student Contributor: Colleen Gaedcke

Facts: Plaintiff retained the defendant to represent him in renegotiating a property settlement agreement with his former wife. The new agreement was made part of a stipulation that settled personal property and child custody issues. The stipulation became a court order and a court appointed master decided the remaining issues. Both the plaintiff and his ex wife filed exceptions to modify the master’s recommendations, resulting in the plaintiff owing $250,000.00 to his ex-wife. The plaintiff then filed a legal malpractice and breach of contract action against the defendant claiming that the defendant was not competent in advising him that the plaintiff’s initial settlement agreement with his ex-wife should be opened by stipulation that allowed for the renegotiation of items that were already settled.

Issue: Whether an action for legal malpractice covers claims made by the client against their attorney for fraud in the inducement?

Ruling: No.

Citing the Pennsylvania Supreme Court in Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 587 A.2d 1346 (Pa., 1991), the court stated, “…in light of our longstanding public policy which encourages settlements…we will not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which that plaintiff agreed, unless that plaintiff can show he was fraudulently induced to settle the original action. An action should not lie against an attorney for malpractice cased on negligence and/or contract principles when that client has agreed to a settlement. Rather, only cases of fraud should be actionable.”

Lesson: Where a client is unhappy with the outcome of a settlement agreement their only redress against their attorney is fraud by inducement, not legal malpractice. An attorney should make sure that his or her client explicitly agrees to any modifications to a stipulation in order to protect him or herself from a legal malpractice claim where their client was dissatisfied with the outcome

Prohibited Transactions between Attorney-Client

Meara v. Hewitt, 455 Pa. 132; 314 A.2d 263 (1974)

PA Underlying Mortgage Transaction

Student Contributor: Natalie Resto

Facts: The client had executed a mortgage on a real estate he owned to a corporation, which was wholly owned by his attorney. The mortgage was given in exchange for stock representing 25 percent interest in the corporation. The client then died and the attorney was appointed executor of his estate pursuant to the client’s will. That year the corporation through the attorney assigned the mortgage to the Hewitts for a consideration of $100. A couple of years later the mortgagee corporation became insolvent. The estate brought an action against the attorney arguing that the attorney took advantage of the attorney-client relationship when he allowed him to enter into a mortgage in favor of a corporation of which the attorney was the sole owner. The lower court found that the attorney and the client did have a confidential relationship but that there was no abuse of that relationship. The estate appealed.

Issue: Who has the burden of showing whether the attorney-client relationship has been abused?

Ruling: The attorney has the burden to prove that he did not abuse the relationship, that he fully disclosed the facts of the transaction to his client, and that the transaction is fair and conscionable. The court remanded to see whether the attorney met his burden.

Lesson: The standard of conduct that must prevail between an attorney and client when it involves business transactions is that:

“[N]o shadow of anything like deception or unfair dealing upon the  part of any attorney can be countenanced…Owing to confidence bestowed upon him, the attorney is presumed to be able to strongly influence his client; hence the law often declares transactions between them void which between other persons would be objectionable.”

Id. at 135 (quoted Kribbs v. Jackson, 387 Pa. 611, 129 A.2d 490 (1957)).

 


 

PA: The Predictable Result of Policy Language Ambiguity: Coverage!

Westport Ins. Corp. v. Bayer, 284 F.3d 489 (2002)

PA :Underlying Negligent Misrepresentation Action

Student Contributor: Natalie Resto

Facts: Lakens filed suit against Bayer, an attorney, to recover money in a Ponzi-type scheme. Bayer filed for bankruptcy before the Lakens’ action against him reached trial. The Lakens eventually obtained an order lifting the stay when they agreed to limit any damages they might receive to those available under Bayer’s professional liability insurance policy with Westport. The insurance company then brought this declaratory judgment action against the attorney. They argued that the attorney’s professional liability policy provided no coverage for the investors’ claims against the insured, the attorney. The lower court found that even though the Lakens never retained Bayer to act as their attorney, he created the impression that he was “looking out for” their interests, and he had also claimed to have performed a due diligence investigation, which provided a basis for Bayer’s liability.

Issue: Does a professional liability insurance cover only those claims that arise out from acts or omissions unique to the practice of law?

Ruling: No, not when the policy does not define what it means for an injury to “arise out of the conduct of the insured’s profession as a lawyer.”
The insuring agreement stated that the policy covers claims “arising out of services rendered or which should have been rendered by any insured…and arising out of the conduct of the insured’s profession as a Lawyer.” Id. at 496.
Here the court broadly construed the coverage afforded by the insuring agreement of Bayer’s policy, and held that the policy’s insuring agreement provides coverage to Bayer for the Lakens’ negligent misrepresentation claims against him.

Lesson: When a policy provision is ambiguous, the court construes the provision in favor of the insured in a manner consistent with the reasonable expectations the insured had when obtaining coverage. Id. at 497; Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (Pa. 1983).

Repudiating a Settlement

Piluso v. Cohen, 2000 P.A. Super. 335, (2000).

PA underlying medical malpractice action.

Student Contributor: Colleen Gaedcke

Facts: Appellant sued two doctors and the hospital for medical malpractice. Attorney for the appellant, the appellee, entered into a settlement agreement for $100,000 with doctor A and the hospital. Appellant was not present for the settlement negotiations. Appellant argues on appeal that the appellee settled the case without her consent or knowledge. Appellant stated that she did first learned of the settlement at trial when asked the appellee why the other defendants were not present at the trial. However, the appellant did not repudiate the settlement, but rather proceeded to trial against doctor B. The jury entered a 1.5 million dollar verdict in favor of the appellant, holding the hospital and doctor A liable. After the verdict was entered, the appellant tried to repudiate her attorney’s authority to enter into the settlement for the first time. Appellant brought a malpractice claim against the appellee. The lower court grated summary judgment in favor of the attorney and the woman appealed.

Issue: Whether a client can repudiate a settlement that was entered into by his or her attorney without his or her expressed authority?

Ruling: In affirming the lower courts grant of summary judgment in favor of the appellees, the Superior Court held:
1) “A client ratifies his attorney’s act if he does not repudiate it promptly upon receiving knowledge that the attorney has exceeded his authority.”
2) As a matter policy, settlements are favored by the law and must be sustained in the absence of fraud and mistake.

“We foreclose the ability of dissatisfied litigants to agree to a settlement and then file suit against their attorneys in the hope that they will recover additional monies…[because] to permit otherwise…places an unnecessarily arduous burden on an overly taxed court system.”

Lesson: If an attorney makes a decision to settle their client’s case without their clients authority or knowledge and the client does not attempt to immediately repudiate the authority of his counsel to enter into a settlement, but rather accepts the benefits flowing from the settlement, the client has ratified the act of the attorney and will be prevented to bring a malpractice claim against his or her attorney.

Disqualification for Conflicts of Interest

Maritrans GP, Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241 (Pa. 1992)

Student Contributor: Melissa Goldberg

Underlying: Motion to disqualify for  Conflict of Interest 

Facts: Defendant represented Plaintiff in broad range of labor matters for well over a decade. During the course of their labor representation of Plaintiff, Defendant became familiar with Plaintiff’s operations and "gained detailed financial and business information. The Court of Common Pleas of Philadelphia County entered an order preliminarily enjoining Pepper and Messina from continuing to act as labor counsel for seven of Plaintiff’s New York-based competitors. The trial court ruled that preliminary injunctive relief was necessary given the existence of a substantial relationship between Defendant’s current representation of the New York companies, whose interests were adverse to the interests of Plaintiff, and their former longstanding representation of Plaintiff.

Issue: Is the conduct of Defendant Attorney’s is actionable independent of any violation of the Code of Professional Responsibility?

Result: Violations of the Code do not per se give rise to legal actions that may be brought by clients or other private parties; however, the record supports a finding that Defendant’s conduct here constituted a breach of common law fiduciary duty owed to Plaintiffs.
1) there is a well-entrenched body of substantive law prohibiting fiduciaries from engaging in conflicts of interest, and that there is no law excepting attorneys from that prohibition.
2) the trial court improperly relied upon the Rules of Professional Conduct without any independent finding that Pepper and Messina's conduct was "actionable." Just as there would be an independent cause of action available to a client whose attorney has misappropriated his funds, so too there is an independent cause of action available to a client whose attorney engaged in impermissible conflicts of interest vis a vis that client.

Lesson: The public's trust in the legal profession undoubtedly would be undermined if the Court did not recognize the common law foundation for the principle that an attorney's representation of a subsequent client whose interests are materially adverse to a former client in a matter substantially related to matters in which he represented the former client constitutes an impermissible conflict of interest actionable at law.

PA: Breach of Fiduciary Duty: Where Attorneys Serve as Executors

In re Estate of Westin, 874 A.2d 139, 2005 PA Super 158 (Pa. Super. Ct. 2005)

PA Underlying Will Probate

Student Contributor: John Anzalone

Facts: Creditors of an estate bring suit to remove  Attorney as the executor of the estate because of the embezzlement of the estate's funds by an employee of the law firm. The lower court held that the request to remove Executor Attorney was moot since he voluntarily agreed to withdraw.

Issue: Did the Orphan's Court err in refusing the creditor's request to remove the Executor Attorney as executor of the estate?

Ruling: In reversing the lower court, the Superior Court held that the lower court should have dismissed the Executor Attorney and appointed a new executor, based on the following considerations:
1) The court  can remove an executor of an estate when that executor's personal interests conflict with the estates and "cannot be served simultaneously."
2) Here, the estate has an action against the executor for the embezzlement from the account maintained by the executor for the estate. There is a conflict of interest here because the Executor Attorney would have to sue himself and his law firm on behalf of the estate to protect the estate's interests.

Lesson: Even where an attorney-executor recognizes his conflict of interest and resigns, the court can still officially remove him and appoint another in his place.  Here is another example of the sometimes troubling issues raised when an attorney who prepares a will, names himself as Executor and serves in that role. 

The Damage of "Justice Delayed" is not "Actual Damage"

Boerger v. Levin, 812 F. Supp. 564 (E.D.Pa 1993)

PA: Underlying mortgage foreclosure

Student Contributor: Joshua D. Aronson

Facts: The plaintiff hired the defendant to represent him in a mortgage foreclosure action. The plaintiff is suing the defendant for malpractice for his handling of the matter. He claims that the defendant failed to bring the foreclosure action to trial before the defendant in the foreclosure action filed for bankruptcy, thereby staying the foreclosure proceedings. Although the foreclosure action is still pending in the courts, the plaintiff claims this negligence thereby delayed, reduced, and possibly eliminated the plaintiff’s mortgage recovery. The plaintiff is also claiming that he must bring this malpractice action now because of the statute of limitations on the malpractice claim.

Issues: 

1) Can a client bring a malpractice action against his attorney for anticipated loses when an actual injury to the client has yet to be established?

2) When does the statute of limitations start on a malpractice claim when the underlying action is still pending in the courts?

Ruling:

1) As to Issue #1 the court held that the plaintiff can point to no actual loss which can constitute an injury at the hands of the defendant. The court further held that since the underlying suit in which the defendant represented the plaintiff had not yet concluded, the plaintiff cannot show that the defendant’s performance proximately caused his injury or even that he was slightly injured at all.
*This holding hinged on Pennsylvania case law which established that legal malpractice plaintiffs must prove actual loss resulting from the defendants conduct.

2) As to Issue #2 the court held that the statute of limitations on a malpractice claim such as this one will not start running until the plaintiff suffers actual damage. In this case since the claim has not yet been settled, the limitations period cannot yet begin.

Lesson:

1)Under Pennsylvania law, a client cannot bring a malpractice claim against his attorney until he suffers an injury as a consequence of his attorney’s negligence.

2) The statute of limitations on a malpractice claim does not start running until the plaintiff suffers actual damage.

 

PA: The Fair Report Privilege

Doe v. Kohn Nast & Graf, P.C., 866 F.Supp. 190 (1994)

Student Contributor: Justin Lieberman

Underlying Employment Matter

Facts: Plaintiff attorney who was infected with Human Immunodeficiency Virus brought an action against his former law firm for, amongst other claims, defamation. Plaintiff alleged that his employment was terminated because he was HIV positive, and that the firm had made certain defamatory statements to the press with respect to plaintiff’s dismissal sometime after he filed his complaint against the firm. The allegedly defamatory comments were made before defendants submitted their answer to plaintiff’s complaint, however, the firm argued they had been made in response to plaintiff’s complaint and, therefore, were conditionally privileged against a defamation suit.

Issue: Are out-of-court statements made to the press during the pendency of the litigation covered under the “fair report privilege”?

Holding: Under Pennsylvania Law, in the course of a judicial proceeding, statements made by the parties or attorneys are granted an “absolute privilege” against a suit for defamation. That protection, however, is not afforded to statements made outside of the courtroom in a press release or news conference that does not further the purpose of the litigation. However, individuals may still invoke a qualified, conditional privilege when they make out of court statements, if those statements fairly and accurately report statements made or pleadings filed in a judicial proceeding.

Here, the Court went one step further and held that Pennsylvania’s “fair report privilege” would apply even to those statements that the party intends to make during the course of judicial proceedings. If it were otherwise, the plaintiff would be permitted to report his own allegations to the press because he had filed his pleadings, while the defendants would be subject to a defamation suit if they attempted to respond simply because they had not yet had the opportunity to file a formal response with the Court.

Lesson: Parties do not have to wait until a formal pleading is filed with the court to make a fair comment to the press concerning the legal proceeding, so long as they believe, in good faith, that the comments accurately set forth the representations to be made in the party’s forthcoming pleading.

PA: Settlement Not Always a Bar to Malpractice Action

McMahon v. Shea, 547 Pa. 124 (1997)

Student Contributor: Justin Lieberman

Underlying Divorce Matter

Facts: The husband in an underlying divorce action brought a professional malpractice suit against his attorneys, claiming that they had failed to properly advise him in his divorce settlement. More specifically, the husband claimed that his attorneys had failed to advise him as to the length of his duty to pay alimony and to generally read and review the alimony agreement in its entirety.

The wife remarried two months after the divorce was finalized, and husband moved to terminate his alimony payments. The court denied the termination of alimony payments, holding that the alimony agreement survived the divorce since it was not merged with the divorce decree. The court ordered continued payment of alimony until the parties’ youngest child turned twenty-one. Consequently, husband further alleged that his attorneys had been negligent in advising him to stipulate that the alimony agreement be incorporated but not merged with the divorce decree.

The attorneys argued that husband’s action had to be dismissed, since a dissatisfied plaintiff may not file a malpractice suit following a settlement to which he agreed, unless he could show he was fraudulently induced into settling the action.

Issue: Can an attorney be held liable for advice rendered to a client in a settlement to which the client subsequently agreed?

Holding: The Court rejected the attorneys’ argument and held that an attorney’s use of ordinary skill and knowledge extends to the conduct of settlement negotiations:

The fact that the legal document at issue had the effect of settling a case should not exempt his attorneys from liability…An attorney may not shield himself from liability in failing to exercise the requisite degree of professional skill in settling the case by asserting that he was merely following a certain strategy or exercising professional judgment.

Lesson: Negligence in failing to advise a client as to the controlling law applicable to a contract is actionable as malpractice, even if the contract serves to settle the underlying dispute.

PA: Partial Protection under the Attorney-Client Privilege

Coregis Insurance Co. v. Law Offices of Carole F. Kafrissen, 186 F. Supp.2d 567 (3d Cir. 2002)

Underlying Legal Malpractice Action

Student Contributor:  Justin Lieberman

Facts: An attorney was sued for professional malpractice and his carrier agreed to settle the claim with his consent. The attorney then filed a compliant against his carrier for bad faith in settling with his former client, as well as denial of benefits under the policy. The attorney, while in the discovery stage of the bad faith litigation, requested amongst other things, six documents from the carrier's claims file that the carrier alleged were attorney-client privileged.

The District Court found that four of the documents were not protected by the privilege, and while the remaining two could have appeared to be protected, Pennsylvania law offered limited protection for communications from lawyers to their clients. The insurer had to submit redacted versions of the four documents to the attorney, and provide the remaining two documents to the Court for in camera review.

The carrier appealed to the Third Circuit. The attorney moved the Court to declare the appeal frivolous, require immediate production and proceed to trial, or in the alternative, stay the proceeding until the Third Circuit made a ruling on the appeal. The insurer opposed the motion, arguing that the Court’s decision was incorrect, and no in camera review of the documents was necessary since all of the communications contained in them were privileged.

Issue: Whether, under Pennsylvania law, the attorney-client privilege protects communications from the client to the lawyer only, or whether it extends also to communications from the lawyer to the client, even though this disclosure will not reveal the client's communications to the lawyer?

Ruling: Pennsylvania law cloaks with privilege communications from the client to the attorney, but does not extend an equal and full protection to those communications flowing from the lawyer to the client. Rather, it enjoins the attorney only from subsequent unauthorized disclosures of communications made to him in confidence by the client, and does not shield other information imparted by the attorney to the client, i.e. counsel’s advice to the client. Accordingly, in camera production of the carrier’s claims file was required in order to ascertain which certain documents would be protected from production.

Lesson: Under Pennsylvania law, all communications from an attorney are not automatically afforded attorney-client privilege. Rather, the communication flowing from an attorney to his client is only protected to the extent the disclosure would infringe upon client confidences.

Settle and Sue: Pennsylvania Style

Martos v. Concilio, 427 Pa. Super. 612; 629 A.2d 1037 (1993)

Student Contributor: Christopher Henn

PA Underlying divorce- property settlement agreements

Facts: The plaintiff retained defendant to represent him in his divorce. Plaintiff and his former spouse agreed to a property settlement. The parties then executed a new property settlement agreement that modified the first. The second settlement resolved property distribution and custody of their children. Alimony, debt repayment and other obligations were submitted for judicial determination. The trial court appointed a master to make recommendations after the property settlement agreement was incorporated by court order. Following the master’s recommendations, plaintiffs financial burden exceeded $250,000. Dissatisfied, the Plaintiff brought a malpractice suit against defendant attorney alleging inadequate representation. The Plaintiff was especially displeased that the terms reached by the first settlement agreement had been renegotiated in the second settlement agreement.

Issue: Whether the plaintiff was required to allege fraud in the inducement of the property settlement agreement.

Ruling: The court distinguished its prior holding in Collas v. Garnick, 425 Pa. Super. 8 (1993) by noting that there were two separate and distinct actions in that case; “[t]he prior action in which they signed the release had been completely settled; the action which they planned to bring against the seatbelt manufacturer was a separate and distinct action.” Id. at 615.

After recognizing the judicial preference for settlement, the court recited its holding in Miller v. Berschler, 423 Pa. Super. 405 (1993) as dispositive of the issue;

a party dissatisfied with the settlement agreement can only seek redress if it can establish that it was fraudulently induced into agreeing to settle, and it is incumbent on the client to plead with specificity fraud in the inducement.

The Lesson: Once a client expressly agrees to settle a dispute he will not be permitted to recover against his attorney on a malpractice claim absent fraudulent conduct by the attorney. However, if the settlement of one dispute serves to prevent subsequent actions against third parties, without the client’s knowledge, the client may be permitted to recover on a malpractice theory.

Ineffective Assistance of Counsel: No Duty to Advise Criminal Defendants of Collateral Consequencesof a Plea.

Rogers v Williams,  420 Pa. Super. 396; 616 A.2d 1031 (Super 1992)

PA Underlying criminal defense

Student Contributor: Candice L. Deaner

Facts: Plaintiff attorneys brought suit against Defendant to collect balance of attorneys fees owed to them, and Defendant filed a counterclaim. Defendant was represented by Plaintiff attorneys, where client plead guilty to mail fraud. Defendant alleges she is innocent, that she pleaded guilty only because counsel advised her to. She asserts that she was never advised by counsel that she might be deported if she pleaded guilty. Summary judgment was granted dismissing her complaint, for failure to establish the necessary elements for a professional negligence cause of action. 

Issue: Whether an attorney is required to advise a criminal defendant of the collateral consequences of a guilty plea.

Ruling: The Court held that in criminal matters, ordinary skill and professional competence do not require an attorney to advise a client of the collateral consequences of a guilty plea, including the possibility of deportation. 

1) The three elements of a cause of action for legal malpractice are: (1) the employment of the attorney or other basis for his duty to act as an attorney; (2) the failure of the attorney to exercise ordinary skill and knowledge; and (3) that such negligence was the proximate cause of damage to the plaintiff

Counsel’s failure to advise the defendant of the collateral consequences of a guilty plea cannot rise to the level of constitutionally ineffective assistance.

The court held that a defendant's incomplete awareness of collateral consequences of a guilty plea does not render that plea involuntary.

Lesson: In PA, An attorney does not have a duty to advise a criminal defendant of collateral consequences of a guilty plea, even if those consequences are as harsh as deportation. There are many collateral consequences of a guilty plea, such as loss of the right to vote, loss of employment etc. and it would not be practical to require an attorney to disclose all the possible effects of the guilty plea. An attorney is only required to advise their client of the direct consequences of their guilty plea.

Mr. Nice Guy Wins in the End.

Schenck v. K.E David, Ltd.  446 Pa.Super. 94, 666 A.2d 327 (1995)

PA Underlying Settlement paid by lawyer on behalf of client

Student Contributor: Maninder (Meena) Saini 

Facts: Plaintiff/attorney, Schenk claimed that defendant/client, K.E. David, Ltd. was unjustly enriched when he refused to reimburse the plaintiff with $32,000 that the defendant owed to satisfy a settlement agreement between the defendant and the Commonwealth. Plaintiff represented defendant and negotiated a settlement amounting to $82,000. In the agreement, the Commonwealth was to collect $32,000 from another settling defendant, who owed the defendant that amount. Unfortunately, the settling defendant died before paying the debt. So, the law firm advanced the outstanding amount to the Commonwealth on behalf of the client. The client/defendant then refused to reimburse the law firm. So, the law firm sued for reimbursement. The defendant counterclaimed for legal malpractice because the plaintiff failed to explain that the defendant would have to pay the $32,000 if the other defendant was unable to pay. The jury found that plaintiff did not commit malpractice and held the client/defendant had been unjustly enriched. The defendant then appealed.

Issue: Was the lawyer entitled to get back what he paid on behalf of the client in view of the clients not understanding the ramifications of the settlement agreement?

Ruling: The appellate court found that it was unjust for the defendant to retain the benefits of the law firm’s payment to the Commonwealth, especially after the plaintiff/lawyer obtained successful results for the defendant. 

The law will find that a quasi-contract exists when unjust enrichment is found. The beneficiary will be required to pay the plaintiff the value of the benefit conferred.
The elements of unjust enrichment are:
• Benefits conferred on defendant;
• Appreciation of such benefits by defendant; and
• Acceptance and retention of such benefits under circumstances that make it inequitable for defendant to retain the benefit without payment of value.

Lesson: The lawyer’s work was successful for the client. What if the underlying matters were not successful because the lawyer was negligent? Would the lawyer be entitled to reimbursement of the monies he advanced? In applying the “unjust enrichment” doctrine, one must focus on whether the enrichment of the defendant is unjust and not on the intention of the parties. Accordingly, an attorney should consider using the theory of “unjust enrichments” to seek full compensation for work performed. 

Establishing Damages with Reasonable Certainty: An Element of Proximate Cause

Boyer v. Walker, 714 A.2d 458 (Pa. Super. Ct. 1998)

PA Underlying Commercial Action

Student Contributor: John Anzalone

Facts: Plaintiffs became junior lien holders when they issued a mortgage to property owners who had outstanding prior mortgages, including two held by a bank. Upon default by the property owners, the bank foreclosed on its mortgages. Plaintiffs were aware of the foreclosure. Notice of judgment for the bank, and of the attendant sheriff's sale of the property, was sent to the defendant attorney who represented the plaintiffs when they issued the mortgage. Plaintiffs discovered this after the sale occurred, and subsequently sued the attorney for professional negligence as a result of his failure to forward the notice of the sheriff's sale. More specifically, plaintiffs alleged that had they received notice of the foreclosure sale, they would have appeared at the sale and would have attempted to purchase the property, inasmuch as they believed that the property was worth far in excess of the bank’s liens.

Issue: Was the attorney liable for plaintiffs’ damages as a result of his failure to forward the notice of the sheriff's sale?

Ruling: The Court ruled that the attorney was not liable based on the following considerations:
1) Attorneys can only be held liable for professional malpractice where (1) an attorney-client relationship is established between the plaintiffs and the defendant attorney; (2) the attorney failed to exercise ordinary knowledge and skill; and (3) that failure proximately caused the plaintiffs’ damages.
2) As junior lien holders, plaintiffs lost all interest in the property when it was sold at the sheriff's sale, but plaintiffs failed to show that this harm would have been prevented if the attorney had forwarded them notice of the sale, since they failed to present evidence concerning the purchase price at the sheriff's sale, the bids made at the sheriff's sale, the amount of money they were prepared to bid at the sheriff's sale, and whether other bidders were ready and able to bid.
3) Thus, plaintiffs failed to establish that they suffered damages proximately caused by the attorney’s alleged negligence.

Lesson: Proximate cause requires establishing the identity of the damages suffered with reasonable certainty.

Intended Beneficiaries as Exceptions to the Rule of Privity

Guy v. Liederbach, 501 Pa. 47 (Pa. 1983)

PA. Underlying Will Action

Student Contributor: Melissa Goldberg

Facts: Kent, then a resident of Pennsylvania, retained Defendant to draft a one-page "Last Will and Testament," which Defendant did on the same day. The will provided that Plaintiff was to be the beneficiary of the residuary estate. Guy was also named executrix of the estate. The will was signed by Kent and, allegedly at Defendant's  direction, was witnessed by Plaintiff and Defendant. Kent died. After offering the will for probate, the court invalidated the gift to Plaintiff because Plaintiff was a subscribing witness to will. Plaintiff argued Defendant was negligent in advising the Plaintiff to become an attesting witness to the will. Also, Plaintiff argued the action and conduct of the Defendant in directing and advising the Plaintiff to become an attesting witness to the will amounted to a breach of the contract between Kent and Defendant to which contract the Plaintiff was a third party beneficiary.

Issue: Does a named beneficiary of a will who is also named executrix have a cause of action against the attorney who drafted the will and directed her to witness it where the fact that she witnessed the will voided her entire legacy and her appointment as executrix?

Result: In a wills action, a properly restricted cause of action for third party beneficiaries in accord with the principles of Restatement (Second) of Contracts § 302 is available to named legatees, who would otherwise have no recourse for failed legacies, which result from attorney malpractice.

1) The will, providing for one or more named beneficiaries, clearly manifests the intent of the testator to benefit the legatee
2) The grant of standing to a narrow class of third party beneficiaries is "appropriate" under Restatement (Second) of Contracts § 302 where the intent to benefit is clear and the promisee (testator) is unable to enforce the contract.

Lesson: Important policy concerns require privity to maintain an action in negligence for professional malpractice. However, a named legatee of a will may sue 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 because named beneficiary has no other discourse.

Legal Malpractice in Underlying Criminal Defense Cases

Bailey v. Tucker, 533 Pa. 237 (1993)

PA Underlying Action-Criminal Defense

Student Contributor: Candice L. Deaner

Facts: Plaintiff was convicted of first degree murder and sentenced to life imprisonment. He was represented at trial by defendant attorney. Subsequent to the guilty verdict, plaintiff alleged that his criminal defense lawyer had been ineffective in failing to investigate and adequately pursue an intoxication defense on his behalf. Finding some merit to this claim, the court revisited his case and ultimately found him guilty of a much lesser offense. Having already served 9 years on the previous conviction, plaintiff was released. His subsequent suit against defendant attorney alleged both negligence and breach of contract.

Issue: What are the elements of a legal malpractice case arising from an allegedly botched defense in an underlying criminal prosecution?

Ruling: The court decided to recognize criminal malpractice actions subject to the following :1) The employment of the attorney; 2) Reckless or wanton disregard of the defendant’s interest by the attorney; 3) The plaintiff’s innocence in the underlying case if not for the attorney’s malpractice; 4) Damages suffered by the criminal defendant/plaintiff; and, 5) Plaintiff’s full pursuit of available post-trial remedies. The standard was set because criminal defendants are afforded several opportunities to insure that injustice has not been committed during their prosecution. The Court noted:
1) Defense counsel should not use a criminal defendant’s access to the appellate courts as a shield to liability. Even though criminal defendants may appeal a conviction in the ordinary course of a prosecution, such a remedy does not address the “time and suffering spent under the burden of an unwarranted conviction.” Therefore some cases may award damages.
2) Imposing the same burden of proof on criminal plaintiffs as that required of civil plaintiffs may have a chilling effect on defendant representation. The court worried that availability of actions by defendants against their former attorneys would provide a powerful disincentive among practitioners to take on such cases. 

Lesson: Criminal defendants face greater burdens in proving malpractice because courts have identified concerns regarding the extension of this cause of action to convicted criminals. The court felt that too broad an application would effectively chill the criminal defense bar and award money to wrongdoers. Rather than eliminate the right to sue one's allegedly negligent criminal defense lawyer altogether, Pennsylvania courts will instead impose greater burdens on criminal plaintiffs to protect the interests of both attorneys and potential clients.

PA: Settlement Offers: Investigate, Communicate, Negotiate; so you Won't Have to Compensate...

Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (Penn. 1989)

PA Underlying med mal and personal injury cases

Student Contributor: Evan Michael Hess 

Facts: The clients retained the  attorney in a case arising from a medical malpractice  against a physician and hospital and a personal injury suit against the city of Philadelphia. The attorney did not seek to have the two suits joined, and reassured the clients that the medical malpractice case was still viable. The jury in the personal injury lawsuit returned a verdict for the clients.  The medical malpractice case was dismissed soon thereafter based upon a lack of evidence and that the personal injury suit had fully compensated the clients for the injuries sustained. The clients initiated the legal malpractice action alleging the attorney negligently settled the personal injury case, breached his fiduciary duties, and improperly accounted for costs and expenses. A bench trial was conducted, and the clients were awarded damages.

Issue: Was the trial court correct in finding in favor of the client that the attorney breached his professional duties, and were the damages awarded reasonable?

Ruling: The Supreme Court of Pennsylvania held that:

1) An attorney's must communicate all settlement offers to clients;

2) Failure to investigate offers that were proposed constituted malpractice;

3) Aggrieved clients are entitled to recover as damages the difference between actual recovery and the amount they would have recovered if the attorney was not negligent; and

“The necessity of an attorney’s use of ordinary skill and knowledge extends to the conduct of settlement negotiations.”

Lesson: The attorney must fully communicate to his client all proposed settlement offers in addition to completing due diligence in investigations on the client’s behalf. If an attorney fails to perform her/his duties in accordance with the standard of professional care, they must make the client whole by paying the difference between what the client did receive and should have received in a settlement. 

PA: Duty to Communicate Settlement Offers

Builders Square, inc. v. Saraco,  868 F. Supp. 748 (E.D. Pa. 1994).

PA. underlying products liability suit

Student contributor: Cheryl Neuman

Facts: Plaintiff was a defendant in an underlying products liability lawsuit. Plaintiff was a retailer of the allegedly defective product. The distributor of the product was also named as a defendant. The distributor had $1 million of liability insurance coverage. Plaintiff retained defendant lawyer in the product liability suit. The plaintiffs in the underlying products liability offered to settle for $1 million, which was the limit of the insurance policy. Defendant lawyer, however, rejected the offer to settle and did not inform his client (plaintiff) about the settlement offer. After plaintiff found out about the settlement offer defendant attorney withdrew from representation. At trial, the parties agreed to settle for $4.25 million, of which the plaintiff was responsible for $3.25 million. Plaintiff therefore alleges that defendant’s failure to pursue the earlier settlement agreement placed plaintiff in a much weaker position to defend or settle the case.

Issue: Does a lawyer have the duty to explore and timely communicate to his client all settlement offers?

Ruling: Yes. An attorney had the duty to tell his client about all settlement offers as well as other important information relating to the representation.

Lesson:  The plaintiff in this case was dissatisfied  at having to settle a case on terms that were more disadvantageous than the terms of  the initial settlement negotiations.  Allowing this type of lawsuit to go forward heightens awareness and provides incentives to lawyers to fully communicate all settlement offers to their clients. It is, after all, the client's right to settle the case. 

Editor's Note: See RPC 1.4 re the lawyer's duty to communicate to the client. 

PA: Multiple Defendants, Single Certificate of Merit

Salamoni v. Karoly, 2005 WL 3823056, 74 Pa. D. & C.4th 378 (Pa.Com.Pl. 2005)

PA Underlying personal injury claim

Student Contributor: Christopher S. Henn

Facts: Plaintiff suffered personal injuries after being struck by a car. Plaintiff engaged the Defendant attorney, Karoly, to seek recovery for his injuries in the accident. Defendants filed for issuance of a summons one day before the expiration of the applicable two-year statute of limitations. It was issued the same day but expired a month later because it was never delivered to the sheriff for service.

After the summons was reinstated, however, Plaintiff's case was dismissed on summary judgment because of the expiration of the statute of limitations. Subsequently, Plaintiff filed suit against Defendant Karoly and his associate for legal malpractice. Despite naming two Defendants, Plaintiff submitted a single certificate of merit as to both defendants. The Clerk of the Court, therefore, dismissed the malpractice action for failure to prosecute.

Issue: Is a single certificate of merit sufficient where there are multiple defendants?

Ruling: The Court held:

It was not the clerk's function to evaluate the sufficiency of this certificate. The clerk was without authority to enter a judgment of non pros under these circumstances…Where several defendants acting together are responsible for the same negligent act or omission, a single certificate of merit naming both or all defendants [is sufficient].

Lesson: The purpose of filing a certificate of merit is to ensure that the Plaintiff has not asserted a frivolous claim against the Defendant for professional negligence. Although the Plaintiff here did not comply with the technical requirements of Pennsylvania’s Certificate of Merit rule for each separate Defendant, the Court found that the purpose of the requirement had been fulfilled “[w]here both parties [were] jointly responsible for the same negligent act or omission”.

PA: Unintended Consequences of Relying on Your Lawyer's Advice

Collas v. Garnick, 425 Pa. Super. 8; 624 A.2d 117 (1993)

Underlying PA Tort Action

Student Contributor: Colleen Gaedcke

Facts: The plaintiff employed the defendant to represent her in an automobile tort action. The defendant reached a settlement with the plaintiff for $245,000. The plaintiffs were asked to sign a general release, which discharged the driver and all other parties who might be liable for the damages. The plaintiff asked the defendant whether the release would have any effect on her desire to sue the manufacturer of the vehicle. The defendant responded that it would not. In reliance on his advice she signed the release. She subsequently filed an action against the manufacturer, which the court dismissed stating that the action was barred by the release. The plaintiff then filed this action against the defendant for legal malpractice.

Issue: “If a lawyer negligently advises a client regarding the effect of a release and the client, in reliance on the lawyer’s advice, signs a release which unintentionally has the effect of barring an action contemplated by the client, is the lawyer immune from liability because the release was executed as part of the settlement of a prior, separate action?”

Ruling: No.

1) A lawyer has a duty to know how a proposed settlement will affect his client…conducting  legal research sufficient to allow the client to make an informed decision.

2) Here,

the fact that the written agreement was prepared as part of the settlement of their prior action was incidental; it did not relieve counsel of an obligation to exercise care in determining the effect of the agreement which his clients were being asked to sign…counsel was required to exercise the same degree of care as he or she would have exercised in advising a client about a complex agreement not a part of the settlement of a legal action. 

Lesson: An attorney is not expected to be perfect.  But, where the attorney gives erroneous advice that falls below standards that the client has a right to expect form their lawyer they will be held liable for malpractice.

PA: No Duty to Non-Clients

Cost v. Cost, 450 Pa. Super. 685 (1996)

PA Underlying Commercial Action

Student Contributor:  Rachel Morris

Facts: In connection with the “buyout” of ownership interests in several family businesses, the Plaintiff signed various agreements including “spousal joinder” forms. The spousal joinder forms created an indemnification obligation and release on the part of the Plaintiff in favor of the party selling the ownership interests and another third-party. Plaintiff subsequently filed an action against the attorney for the seller alleging breach of his professional duty to explain the legal ramifications of the buyout, and more specifically, the consequences of the various forms signed by the Plaintiff to complete the transaction.

Issue: Is a lawyer liable for malpractice because he failed to explain to a non-client the legal ramifications of entering into a particular transaction or signing certain documents?

Ruling: No, absent any written or oral retainer agreement between the lawyer and the complainant. Here, the court found that there was (1) no express contract for legal representation between the lawyer and the Plaintiff, (2) the Plaintiff never sought advice or assistance from the lawyer, and (3) the lawyer never expressly or impliedly agreed to represent the Plaintiff. Therefore, the court ruled that the Plaintiff could have had no reasonable expectation that the lawyer was looking out for her interests, much less that he had any duty to explain the legal significance of the documents she signed.

Lesson: A plaintiff’s subjective belief that an attorney is representing her interests is insufficient, absent other indicia of an express or implied attorney-client relationship, to successfully assert a cause of action in legal malpractice.

PA: Injunctive Relief Available for Breach of the Rules of Professional Conduct

Maritrans GP, Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241; 602 A.2d 1277 (Pa., 1992)

PA Underlying Legal Ethics Matter

Student Contributor: Lisa Larato

Facts: This legal malpractice action was commenced by the Plaintiff, Maritrans GP, Inc., former clients of the Defendant law firm, due to the law firm’s representation of the Plaintiffs’ competitors, entities whose interests were found to be adverse to the interests of Plaintiffs, in matters substantially related to matters in which they had represented Plaintiffs. The Court of Common Pleas granted the Plaintiffs injunctive relief and enjoined the Defendants from representing the Plaintiffs’ competitors. The Superior Court reversed the injunction order, given that it was based on nothing more than the Defendants’ alleged violation of Pennsylvania’s Rules of Professional Conduct (1.7, 1.9) which, in and of itself, cannot be the basis for a cause of action in legal malpractice. Plaintiffs’ appealed the Superior Court’s reversal.

Issue: Did the Defendants’ conduct give rise to a claim for legal malpractice?

Ruling:

1) [Defendant] attorneys’ representation of subsequent clients whose interests were materially adverse to former client in matter substantially related to matters in which [they] represented the former client was an impermissible conflict of interest actionable at law, independent of any violation of the code of professional responsibility; (2) injunctive relief would lie to prevent [the] attorneys from breaching fiduciary duties toward [their] former client by representing its competitors; and (3) grant of preliminary injunction was not an abuse of discretion, given law firm's extensive involvement in its former client's affairs and its extensive knowledge of sensitive client information.

Lesson: The Court will intervene to prevent imminent harm to a former client by an attorney’s breach of his or her fiduciary duty, irrespective of the fact that the breach may constitute a violation of nothing more than state professional ethics guidelines. 

PA: Duty to Communicate Settlement Offers to Client

Moores v. Greenberg 834 F.2d 1105, 9 Fed.R.Serv.3d 1314 (1987)

PA: Underlying 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 third party 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. 

Comment: Judical Misconduct and Immunity from Civil Suit

Student Comment by Candice Deaner, 3L

PA: Judicial Corruption and Immunity

Recently, Luzerne County, Pennsylvania, learned a tough lesson in what can happen when judges become corrupt. Former Luzerne County Senior Judge Michael Conahan along with Justice Ciavarella, a juvenile court judge, corruptly and fraudulently "created the potential for an increased number of juvenile offenders to be sent to juvenile detention facilities," federal court documents alleged. Children would be placed in private detention centers, under contract with the court, to increase the head count. In exchange, the two judges would receive kickbacks. The two secretly received more than $2.6 million. In order to accomplish their goals, harsh punishments were given for minor crimes.

Minors charged with nonviolent crimes were often given harsher sentences than what probation officers recommended, court documents say. Hundreds of these children appeared without attorneys. All of this done in order to ensure the judge could send the child to one of the private facilities lining the judges’ pockets.

The judges have been disbarred and have resigned from their elected positions and agreed via plea bargain to serve 87 months in prison. What proves to be more interesting than the criminal portion of the matter, is that fact that they have been held to be IMMUNE from civil suit.

The plaintiffs, led by the Philadelphia Juvenile Law Center, and brought a class action, arguing that neither judge should be granted immunity because their acts were so far outside the norm. The Plaintiffs’ alleged the actions were “so egregious that he was not acting as a judge while he was adjudicating juveniles delinquent and sentencing them.”

In rejecting the Plaintiffs’ allegations, U.S. District Judge A. Richard Caputo has ruled, in Wallace, et al. v. Powell, et al., that the Judges  are protected by immunity from facing legal action for their courtroom acts. Judge Caputo used both historical principles, as well as public policy in defending his ruling, which he noted would likely be against popular will.

The doctrine of judicial immunity, he wrote, is grounded in the notion that all judgments are final, judicial independence must be protected, sincere judges should be protected from continual legal action and the justice system is to be protected from falling into disrepute. Caputo founded his decision on long held principals of immunity, from the days of Lord Coke, the former chief justice of England, from 400 years ago.

In further rejecting the Plaintiff’s arguments that the degree of corrupt behavior should weigh in the decision to allow a civil suit, Justice Caputo wrote, "the degree of corrupt behavior is not the touchstone of the immunity doctrine's application." Judges with good intentions, as well as bad intentions are immune from civil suit, and Judge Caputo refused to make a distinct with regard to intent. The test, Caputo said, is an OBJECTIVE not SUBJECTIVE standard, which is whether the alleged action is one that traditionally a judge would perform or that the parties expected would come from the judge in an official capacity.

As for the public policy argument, Judge Caputo said that "Subjecting judges to a determination of the existence of good faith on a case by case basis is not desirable," "It would create chaos and undermine judicial independence. It would eliminate the finality of judgments and destroy public confidence in the judiciary. Every decision by every judge would be subject to attack on the basis that it was not an honest mistake."

Judge Caputo noted that the judges wouldn’t be free from liability entirely. They would be held liable for non judicial actions, such as coercing probation officers. He reiterated his knowledge that the behavior of the judges was egregious in nature, however he stressed his commitment to upholding the law. "It is about the rule of law in the face of popular opinion which would seek a finding directly contrary to the result the rule of law dictates."

Editors Note: Comments, Please.  


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. 

PA: Conflicts and Malpractice in Commercial Transactions

Fiorentino v. Rapoport,   693 A.2d 208 (Pa. Super. 1997).

PA underlying sale of business interest : conflict of interest

Student contributor: Cheryl Neuman

Facts: Plaintiff and his business partner had established a restaurant servicing business. Ten years later, plaintiff and his partner decided to end their business relationship. They hired defendant lawyer to draft the terms of their mutual agreement. The defendant, however, failed to discuss the possibility of a default by one of the partners, conflict of interest, or the possibility of hiring independent counsel by each of the business partners. Subsequent to signing the termination agreement, one business partner could not pay plaintiff the money that he owed the other under the agreement. Furthermore, the business partner transferred the business’s assets to other companies—owned by his family, that competed in the restaurant servicing business. The defaulting partner filed for bankruptcy. Plaintiff then sued defendant for 1) breach of contract, 2) legal malpractice, and 3) breach of fiduciary duty.

Issue: Was it the inadequate quality of defendant’s legal services that allowed the defaulting partner to strip the business of all assets, rendering it judgment proof, so that he could not pay what was owed to plaintiff?

Ruling: Yes, it was the negligence of defendant’s legal services that allowed the defaulting partner to liquidate his business so that he could declare bankruptcy and subsequently fail to pay the money owed to plaintiff. Plaintiff’s expert (the Editor here) testified that it is a universal practice for lawyers to consult form books when drafting agreements for the sale of a business. Common protection used in these agreements include clauses that require corporate stock to be transferred through third-party escrow accounts, prohibit the transfer of corporate assets to other entities for less than the full market value, and prevent the buyer from setting up businesses that compete with the business providing the payment source for the seller, which is what happened in this case. None of those common safety clauses were used in the termination agreement and that benefitted one partner over the other. The conflict of interest should have been obvious to the defendant lawyer.

Lesson: The crux of the matter is that the default could have been avoided if the agreement had been properly drafted to prevent the transfer of assets away from the servicing business into other businesses that actively competed with the original business. That happened becuase, the defendant lawyer had a conflict of interest, since he could not concurrently represent both the separating partners whose interests were adverse to one another. It was therefore inevitable that one side of the transaction was going to benefit at the cost of the other. The Court relied heavily on the plaintiff's expert and permitted the suit to proceed under both tort and contract theories. 

PA: Fraud Claim will Not be Barred by Failure to Produce Affidavit of Merit

Jackson v. Gary L. Sweitzer Enterprises, Inc., 67 Pa. D. & C.4th 239 (York County 2004)

Student contributor: Justin Lieberman

PA: Underlying Real Estate Matter

Facts: Plaintiffs filed a complaint against multiple Defendants, including Attorney Sedor, in December 2003 for professional negligence, fraud, and violation of Pennsylvania’s Consumer Protection Law. The complaint alleged that their attorney was aware, or should have been aware, that appraisals of Plaintiffs’ properties were inflated. Plaintiffs were allegedly damaged as a result of this negligence in that they were unable to obtain mortgages due to these inaccurate appraisals.

Counsel for the Plaintiffs failed to file a certificate of merit against the defendnant attorney, within 60 days of filing the complaint, as required under Pennsylvania Law (Pa.R.C.P. 1042.3) in cases alleging a professional liability claim. Defendant Sedor, therefore, moved for judgment non pros. The trial court entered judgment  in favor of Defendant Sedor.

Issue: Will the failure to file a certificate of merit bar all causes of action against an attorney?

Ruling: The Court denied Plaintiffs’ petition with respect to their claim of professional negligence against the attorney, but granted it on the remaining fraud and consumer protection law violation claims. The Court reasoned that the certificate of merit requirement was created to prevent frivolous professional negligence claims, not to bar all other causes of action a plaintiff may have against his attorney.

Lesson: The failure to file the required certificate of merit in a professional negligence claim will not preclude plaintiff’s other causes of action which are not based on professional negligence, against the defendant-attorney:

When a plaintiff fails to file a certificate of merit in an action alleging professional negligence, only those claims based on professional negligence should be dismissed.

PA: No Need for Expert Witness where the Lawyer's Malpractice is Obvious

Antonis v. Liberati 821 A.2d 666 (Pa. Cmwlth. 2003)

Student Contributor: Evan Kusnitz

PA Underlying Mortgage Transaction

Facts: Plaintiff hired Attorney to prepare a mortgage and note as a security on a loan to Borrower. Attorney delivered the documents to the Recorder of Deeds. Plaintiff called Attorney several times to ask if the mortgage was recorded correctly, and Attorney repeatedly assured him that it was. However, due to a clerical error, the mortgage was in fact not recorded correctly. As a result, Borrower was able to sell the land subject to the mortgage without disclosing the existence of the mortgage, and without paying anything to Plaintiff. Plaintiff successfully sued Attorney. On appeal, Attorney argued that the trial court erred by not requiring expert testimony to show that he had a duty to Plaintiff to ensure that the mortgage was recorded correctly. Attorney also argued that Borrower’s fraud was an intervening cause of Attorney’s harm.

Issue:

  1. Is expert testimony required to show that an attorney has a duty to a client to ensure that a mortgage is recorded correctly?
  2. Is a borrower’s fraud––selling mortgaged land without disclosing the incorrectly recorded mortgage––an intervening cause of any harm caused by an attorney’s failure to ensure the mortgage was correctly recorded?

Ruling: In affirming the decision of the trial court, the appellate court ruled:

1. Expert evidence . . . is not required when the issue of negligence is clear enough to be concluded as a matter of law.

Since it is the responsibility of the mortgagee to ensure that the mortgage has been properly recorded, that duty undoubtedly falls upon his attorney, who represents him in the matter.

2. A borrower’s fraud is not an intervening cause of the harm caused by an attorney who failed to ensure that a mortgage was correctly recorded. If the attorney did not breach his duty to his client, the fraud could have never happened.

Lesson:

1. A mortgagee’s attorney has a duty to ensure that the mortgage is recorded correctly.

2. When an attorney’s negligence is obvious, expert evidence may not be required.

PA: Settle & Sue? No Way! (Take 1)

Muhammed v. Strassburger, McKenna, Messer, Shilobod and Gutnik
526 Pa. 541, 587 A.2d 1346 (Pa. 1991)

PA Underlying Medical Malpractice Litigation

Student Contributor: Justin B. Lieberman

Facts: Former client sued attorney for legal malpractice after the client was unhappy with the settlement received in the underlying medial malpractice action. In the underlying action clients accepted a settlement offer at a pre-trial conference, and then recanted the acceptance after their lawyer informed the opposing side of acceptance. The opposing side sought enforcement of the settlement and the trial court, at an evidentiary hearing, upheld the settlement, as did the Superior Court on appeal. The clients filed suit against the attorneys. The law firm defended on the following grounds: that the action should be dismissed as the claims were too speculative and settling clients were seeking to relitigate the settlement. The case was brought to the Supreme Court of Pennsylvania.

Issue: Can a settling defendant sue his/her lawyer for malpractice although they agreed to settle the underlying claim?

Ruling: A client cannot bring a malpractice claim against a former attorney because of their later dissatisfaction of a settlement to which they agreed,  unless they can show some fraudulent conduct by the attorney  in advising the client on accepting the settlement. Here, the clients, were dissatisfied not able to renegotiate their settlement after they had already voluntrarily accepted an offer. They were thus, not fraudulently induced to settle by their attorney.

We foreclose the ability of dissatisfied litigants to agree to settlement and then file suit against their attorneys in the hope that they will recover additional monies.

Lesson: An attorney may not be held liable when a client later decides they are unsatisfied with a settlement they willingly agreed to at a prior time, unless the attorney fraudulently induced or intentionally misadvised the client to accept the settlement.

Editor's note: This was the law in PA for many years. The stringent rule in this case, of barring a malpractice suit against the lawyer who represented the settling party-- has  since  been substantially limited  and liberalized.

See, e.g., McMahon v. Shea, 441 Pa. Super. 304, 657 A.2d 938 (1995).

The holding in Muhammad has been rejected in New Jersey (Ziegelheim v. Apollo, 128 N.J.250, 607 A.2d 1298 (1992) and Connecticut (Grayson v. Wofsey, Rose, Kweskin & Kuriansky, 231 Conn. 168, 646 A.2d 1994).

Assigning Your Legal Malpractice Claims: "Hidden Treasure" in Tough Times ?

Hedlund Mfg. Co., Inc. v. Weiser, Stapler & Spivak, et ano.
517 Pa. 522, 539 A.2d 357 (1988)


Facts:
Martin hired attorney Spivak to apply for a patent for a machine that Martin had invented and manufactured. Spivak prepared the application but he did not timely file it. Hedlund Manufacturing purchased Martin's business, including the rights to all pending patents. When Hedlund learned that Spivak had filed the patent application late, they had Martin assign to them all rights and causes of actions arising out of the lawyer's malpractice. Hedlund then sued Martin's lawyer for legal malpractice alleging negligence and breach of contract.

Issue: Can Hedlund (the assingee) sue the assignor's lawyer based on the assignment of the legal malpractice claim, even though there is no attorney-client relationship between the assignor and the lawyer?

Ruling: The PennsylvaniaSupreme Court said yes, reversing the lower court that had held that lack of privity barred the malpractice suit. The Court held legal malpractice claims can effectively be assigned and that "privity is not an issue involving an assigned claim because the assignee stands in the shoes of the assignor and does not pursue the cause of action in the assignee's own right." Thus, the assignment of a cause of action for legal malpractice is valid and can be used by the assignor to circumvent the privity defense. It might also be viewed as a "hidden" asset in the sale of a business.

New York: Assignment of legal malpractice claims are permitted. See, Tawil v. Finkelstein, et al 646 NYS2d 691 (App Div. 1st Dept, 1996). But they probably have to be explicit and unambiguous CALPERS v. Shearman & Steling, 95 N.Y. 2d 427 (2000).

New Jersey: Assignment of legal malpractice are not permitted for public policy reasons. Alcman Services Corp. v. Bullock 925 F. Supp. 252 (DNJ 1996).