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A Philadelphia law firm’s individual partners as well as the corporate entity of the firm will be held liable for legal malpractice, a state Superior Court judge has ruled. According to the court, the trial court erred when it entered an order confirming judgment only against the corporate appellees following binding arbitration in May. “The trial court was required to enter judgment against all appellees pursuant to the arbitration award,” wrote Judge Joseph A. Del Sole in the Dec. 20 opinion in Sage v. Mitchell S. Greenspan. Also sitting on the panel for the court were Judge Justin M. Johnson and Senior Judge Phyllis W. Beck. Maryann Sage filed suit against attorneys Mitchell S. Greenspan and J. Andrew H. Gaber as individuals and their law firms — Greenspan & Gaber, Greenspan Berk & Gaber, and Greenspan & Berk — as corporate entities. Greenspan & Gaber is the last corporate name in existence, and the other partnerships are now defunct, according to Mitchell Greenspan, who declined to comment further about the case. Sage claimed the attorneys committed malpractice in their representation of her personal injury lawsuit against PGW, Philadelphia Facilities Management Corp. and the City of Philadelphia for a 1988 gas explosion in her home that left her with lumbar and lumbosacral injuries. According to the complaint in the malpractice suit, Sage retained Greenspan & Gaber approximately one month after the accident in 1988. The firm did not file a civil action complaint on Sage’s behalf until nearly two years later, just four days before the statute of limitations would have expired. Sage alleged the firm failed to conduct pre-trial depositions and did not show up for “at least 12″ other depositions. Sage also claimed Greenspan & Gaber failed to conduct an adequate investigation prior to filing the complaint in her personal injury case. Specifically, she said they lost crucial evidence by failing to “discover and preserve” audiotaped service calls to PGW on the day of the accident or to talk to witnesses on her block who saw what happened. She said this resulted in her having to accept a “nominal” settlement from PGW on the eve of trial. ARBITRATION The parties agreed to discontinue the case while the action was pending and submit to binding arbitration. In July 1999, the arbitrator decided against Greenspan and Gaber as individuals and against their law firm entities. Greenspan and Gaber unsuccessfully requested that the arbitrator reconsider the award against them as individuals. The arbitrator stood by the original decision and issued an amended award clarifying that the award was against both the individual and corporate appellees. In April 2000, Sage filed a petition with the court of common pleas to confirm the arbitration award against all appellees. While the corporate appellees did not oppose the petition, Greenspan and Gaber — as individuals — did. They were successful in convincing the trial court, which refused to confirm the award against the individual appellees. The court also denied Sage’s motion for reconsideration, and she appealed. The two main questions raised on appeal were whether the individual defendants had waived their right to challenge the arbitration award because their appeal was time-barred and whether the trial court erred in refusing to confirm and enter judgment against the individual defendants. DECISION Del Sole began by pointing out there is little leeway in overturning an arbitration award in a common law arbitration. “The award … is binding and may not be vacated or modified unless it is clearly shown that a party was denied a hearing or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award,” he wrote. And since the arbitrator had clarified that the award was against all appellees, it was error for the trial court to change that. The law firm also missed an important deadline to file its appeal in the arbitration, said Del Sole. According to statute, the trial court is required to enter an order confirming an arbitration award within 30 days of the award, Del Sole said. The individual appellees had failed to file a petition with the court of common pleas to vacate or modify the arbitrator’s award within that time. “The individual appellees did not challenge the award of the arbitrator until [Sage] filed her petition to confirm the award … [the appellees] then raised it as ‘New Matter,’” wrote Del Sole. Further, he said, Pennsylvania procedural rules trump any provision in an arbitration agreement, and procedure dictates that a trial court must “enter an order and judgment pursuant to the arbitration award after 30 days when no motion to vacate or modify [an] award has been filed.” The court faced a more difficult issue with Sage’s claim of error at the trial court level. Did the trial court err in refusing to confirm the judgment against all appellees, and not just the corporate entities? The court concluded it did. The appellees argued that the language in the arbitration agreement prevented an award against them as individuals. Sage had, after all, agreed “not to seek satisfaction of any arbitration award against any personal or individual assets of defendants Andrew Gaber, Esquire and/or Mitchell Greenspan, Esquire” if she was successful in the arbitration, they said. Sage also agreed that she would seek satisfaction “only through the assets or income of the law firm defendant” to the extent that insurance coverage was not available to satisfy the arbitration award. Despite that language, Del Sole said the agreement was silent about entering judgment against the appellees. He also made a hair-splitting distinction about the language in the agreement. “Seeking satisfaction of an award against the individual appellees is different than having [a] judgment entered against them,” he wrote. Sage had only agreed not to seek satisfaction of the award through the appellees as individuals. That did not prevent a judgment against them, however, the judge said. Thomas More Marrone of Feldman Shepherd Wohlgelernter & Tanner said he was not aware if Greenspan or Gaber were planning to appeal the Superior Court decision. “It’s been 12 years since the malpractice, and [Sage] hasn’t seen a dime yet,” he said Friday. If the Greenspan & Gaber corporation is dissolved, Sage would become a mere judgment creditor, with little likelihood of collecting on the arbitrator’s $225,000 award. Norman E. Greenspan of Blank Rome Comisky & McCauley, who represents Greenspan & Gaber and is the brother of Mitchell Greenspan, did not return calls for comment. The case is now complicated by a lawsuit between Greenspan and Gaber themselves, Gaber et al v. Greenspan et al. In November, the corporate entity of Greenspan & Gaber was placed in receivership. The two attorneys are forbidden to receive funds or compensation from the professional corporation bearing their names.

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