A federal judge in Philadelphia has allowed legal malpractice claims to survive a motion to dismiss, weighing in on an issue over which courts in the Third Circuit have been split.

The Pennsylvania Supreme Court hasn’t declared whether or not its precedent limiting damages in legal malpractice claims that are based on a breach of contract theory to the amount that the client actually paid extends to civil actions.

U.S. District Judge Joel Slomsky of the Eastern District of Pennsylvania held that it does not.

He relied on a Pennsylvania Superior Court ruling from late last year, Coleman v. Duane Morris, to interpret the proper scope of the state Supreme Court’s 1993 opinion in Bailey v. Tucker.

“The Bailey court limited recoverable damages in a criminal context because ‘a criminal defendant, unlike his civil counterparts, may raise the ineffectiveness of his counsel as grounds for reversal,’ and therefore he can remedy attorney malpractice in ways that are not available to a civil client,” Slomsky said, quoting a portion of the Coleman opinion citing Bailey.

“The Coleman court saw no need, therefore, to extend Bailey‘s limitation on damages to civil attorney malpractice cases: damages for breach of contract in a civil context should be governed by the same law whether the claim is being brought against an attorney or the claim arises in a typical commercial dispute,” Slomsky said. “This court predicts that if the Pennsylvania Supreme Court were to address the issue it would hold likewise.”

The suit now in front of the Eastern District of Pennsylvania stems from a dental malpractice claim that Ingrid Lodato retained Joseph Silvestro, of Mutzel & Wesner, to pursue on a contingency fee basis in 2007. In 2010, Silvestro told Lodato that her claim would be time-barred since the firm had failed to file the suit within the two-year statute of limitations, according to the opinion.

In seeking to dismiss the case against him on the grounds that Lodato had failed to plead recoverable damages under Pennsylvania law, Silvestro relied on the Bailey decision.

“The Bailey case involved a claim of attorney malpractice in a criminal case … and the Pennsylvania Supreme Court has never addressed whether the limitation on damages also applies to a claim where the underlying case is a civil action,” Slomsky said. “Federal courts applying Pennsylvania law have held that it does, but not all courts in this circuit have agreed with this position.”

Slomsky agreed with the reasoning of the Pennsylvania Superior Court in Coleman, which held that “damages recoverable in a contract-based civil attorney malpractice action are not limited solely to legal fees paid.”

The judge also disagreed with Silvestro’s second argument that Lodato failed to sufficiently plead contract damages.

The agreement Lodato signed with the law firm, the alleged breach of that agreement when the firm failed to file her suit on time, and the damages Lodato now seeks for present and future dental expenses that would have been awarded to her in the original dental malpractice suit satisfy her burden for pleading the damages element of her breach of contract claim, Slomsky said.

In a footnote, he answered Silvestro’s concern that Lodato couldn’t plead contractual damages since she wasn’t guaranteed to recover anything from her dental malpractice claim.

“Under Pennsylvania law, the burden is on the plaintiff to prove damages with reasonable certainty, ‘which at a minimum embraces “a rough calculation that is not too speculative, vague or contingent upon some unknown factor,”‘” Slomsky said.

Silvestro’s argument would be more appropriate at the summary judgment phase, the judge said.

“We’re pleased the court agreed,” said Julianna Burdo, of Haggerty Goldberg Schleifer & Kupersmith. She represented Lodato and said that she had argued the Coleman angle that the judge focused on.

If the court had ruled the other way, Burdo said, it would have left a segment of plaintiffs without recourse.

This opinion “creates a pathway of justice for all litigants,” she said.

Ralph Luongo of Christie Pabarue Mortensen and Young, who represented Silvestro, couldn’t be reached for comment.

Saranac Hale Spencer can be contacted at 215-557-2449 or sspencer@alm.com. Follow her on Twitter @SSpencerTLI.

(Copies of the 10-page opinion in Lodato v. Silvestro, PICS No. 13-0152, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •