Previously, this author had written on numerous occasions that the statute of limitations for legal malpractice actions is in flux. Now more than ever that volatility is coming to bear.
In Coleman v. Duane Morris, 58 A.3d 833 (Pa. Super. 2012), the Superior Court precedentially established two causes arising from legal malpractice: negligence; and breach of contract. While there may be ancillary causes (i.e., breach of fiduciary duty, fraud, etc.), the Superior Court held there firmly exists legal malpractice negligence and legal malpractice breach of contract causes effectively emanating from the same attorney misconduct.
In Coleman, the Superior Court held the legal malpractice negligence statute of limitations was two years while the legal malpractice breach of contract statute of limitations was four years. The court reasoned that there existed both by contract and conduct an obligation of attorney’s conformance with the standard of care.
Coleman explicitly held an attorney’s obligation to the standard of care gave rise from the attorney-client representation agreement (oral or written). Coleman suggested the breach of contract attorney’s conformance with the standard of care existed implicitly (as a matter of law) regardless of the form of contract.
As also written by the undersigned, the statute of limitations is largely held to “run” from the discovery of the occurrence of the underlying misconduct. That is, the statute of limitations may begin and end prior to underlying final adjudication. This is generally true regardless of “continuing representation” through appeal, successor unrelated counsel, or otherwise.
As to the “occurrence rule,” the Superior Court just (harshly) held malpractice discovery arises from receipt of the client of the underlying adverse order/opinion—regardless of the circumstances. In Communications Network International v. Mullineaux, 187 A.3d 951 (Pa. Super. 2018), the Superior Court effectively held there was no equitable tolling principles that would delay the expiration of the statute of limitations when a client received notice of the underlying adverse occurrence—even when that notice (there, the trial court’s opinion) was incapable of being understood by the client and indeed liability disavowed by ultimate legal malpractice defendant.
This Coleman implicit contractual duty has been eroding (albeit nonprecedentially).
Toward the above end (i.e., statute of limitations’ mish-mash), Coleman was accepted for allocatur but then settled prior to adjudication. CNI is currently petitioning for allowance of appeal to the Supreme Court.
In any event, despite Coleman’s broad pronouncement, legal malpractice defendants have begun introducing the “gist of the action” doctrine to chip away at that legal malpractice breach of contract cause (and thus, expanded statute of limitations).
At first, particularly in the federal courts, despite Coleman the district courts’ required a legal malpractice plaintiff plausibly pleading that a specific provision of the attorney-client fee agreement was breached (to undertake a legal malpractice breach of contract cause). While a traditional action in breach of contract generally regards express contractual provisions violated, even that generality is abrogated by implicit warranties and covenants (such as, the breach of the covenant of good faith and fair dealing: implicit in every contract). The district courts’ requirements of specifically averred breached contractual provision are inapposite to Coleman.
Notwithstanding, Coleman’s precedent, and public policy seeming to engender Coleman’s implicit covenant of conformance with the standard of care (as opposed to the district courts’ unintentionally promoting perhaps even unethical limitations of liability, nonspecific, or other attorney protective fee agreements), the federal courts are sticking with their breach of contract Coleman abrogations.
Now comes the doctrine.
Admittedly, the doctrine was not argued in Coleman. Thus, the doctrine’s now interposition is appropriate.
In Seidner v. Finkelman (Pa.Super. Aug. 31, 2018), the Superior Court nonprecedentially adjudicated the doctrine.
There appellant-plaintiff, Seidner was found to have married Levy for 19 years upon Seidner’s commencing a divorce action in April 2004. Both were attorneys (always a divorce action’s headache).
Seidner’s then-divorce attorneys engaged in discovery toward an equitable distribution of the marital estate with the trial court ordering that a divorce decree would be entered after all financial matters had been completed.
On Oct. 3, 2008, Seidner engaged Finkelman’s law firm by a written retention agreement for the still-pending divorce action. Seidner recounted to Finkelman a specific list of equitable distribution necessities (including interest as the sole beneficiary of Levy’s life insurance policies).
On Feb. 10, 2009, the divorce court entered a divorce decree. Seidner fired Finkelman immediately thereafter.
Successor counsel appealed the decree—which the Superior Court affirmed.
On Oct. 19, 2012, Seidner commenced a legal malpractice breach of contract action against Finkelman for Levy’s life insurance policy being ordered toward an irrevocable life insurance trust for the beneficiary children (and not Seidner as the beneficiary).
Following a legal malpractice breach of contract mistrial (at the first bench trial), the second bench trial held the lawsuit was time-barred under the doctrine because Seidner’s claim’s gravamen was in negligence and not breach of contract. The trial court also found that Finkelman was not a party to the attorney-client agreement with Seidner.
Citing Bruno v. Erie Insurance, 106 A.3d 48 (Pa. 2014), the Superior Court held that merely the existence of a contract (i.e., attorney-client fee agreement) does not dictate the cause of action when it is truly underlying in negligence. Notably to the Superior Court, Seidner’s own expert’s report and testimony regarded Finkelman’s failure to exercise ordinary skill and knowledge: which conclusion supports a negligence action (not one for breach of contract).
Thus, the doctrine barred the breach of contract claim.
Notably, the Superior Court did not mention Coleman: which stands opposite.
Seidner’s legal malpractice torture goes on:
The Superior Court held—consistent with the trial court—that Finkelman was not a party to the attorney-client fee agreement because he executed it as an agent of his law firm (i.e., not individually) as the fee agreement language itself specifically states.
Seidner is nonprecedential. That said, it is seemingly consistent with the federal courts’ breach of contract abrogation and the Pennsylvania lower courts’ recent application of the doctrine. That is, despite Coleman’s promotion of the legal malpractice breach of contract cause implicit in every attorney-client relationship (as arising from the attorney standard of care), there seems to be an affirmative act of not only abrogation but revision. Said differently, the courts are axing the breach of contract cause.
While Coleman’s allocatur’s ultimate adjudication may have divested a legal malpractice plaintiff of alternatively pleading breach of contract, our Pennsylvania high court has not yet adjudicated that issue secondary to Coleman’s then settlement. These nonprecedential divestitures of the Coleman precedentially granted breach of contract cause without Supreme Court review undermines both public policy and stare decisis.
Matthew B. Weisberg is the managing partner of Weisberg Law. He focuses his practice on consumer and individual rights throughout Pennsylvania and New Jersey. Weisberg Law represents victims of legal malpractice and other professional negligence resulting in financial injury, fraud, civil rights violations, consumer abuse and foreclosure actions.