Posts Tagged ‘occurrence rule’

The Superior Court’s Most Recent Legal Malpractice Ruling

Thursday, March 7th, 2013

On February 19, 2013, the Superior Court issued an opinion in O’Kelly v. Dawson, 421 WDA 2012.  Superior Court’s opinion by Judge Wecht upheld a legal malpractice verdict in favor of plaintiff, James O’Kelly who was represented by defendant/appellant, Michele S. Dawson, Esquire, in an underlying divorce.  The primary allegation was the attorney had not finalized an alimony agreement between the spouses, and as a result, a less favorable alimony award was entered by the master in the divorce action.  The appeal argued the spouses never agreed on all of the essential terms of the alimony agreement, and the statute of limitations barred legal malpractice action.

The Superior Court determined that the jury was presented with conflicting evidence with respect to whether the essential terms of alimony had been agreed upon, and found their decision that an agreement had been reached did not “shock the conscience.”  The Superior Court noted it could not put itself “into the jury’s place.”

The statute of limitations argument was not before the jury, but argued in a motion for summary judgment, as well as a post-trial motion.  The appellant had requested the issue of statute of limitations not be sent to the jury, but be decided by the judge.  The trial court found the statute of limitations was tolled by the equitable discovery doctrine until the date of the trial court order adopting the master’s recommendation.  On appeal, it was argued that no two reasonable minds could disagree the statue limitations barred the claim, and in the alternative, that the trial judge erred in not sending the issue to the jury with respect to the exercise of reasonable diligence by the husband in discovering the alleged error.  The court noted appellant argued before the trial court that no two reasonable minds could differ in finding that the plaintiff knew, or should have known, of the potential malpractice as of the date of the master’s recommendation, and therefore the issue should not go before the jury.  The appellant succeeded as to process, “but failed as to substance.”  While recognizing this would usually be an issue for the jury, the Superior Court found appellant could not “now be heard to assert that the trial court erred in granting Appellant’s request that the limitations issue be reserved for the court.”  The Superior Court found the argument that the issue should have been sent to the jury had been waived.  The Superior Court found the trial court “necessarily made a factual finding as to Husband’s reasonable diligence.”  The Superior Court noted that following the master’s recommendation, appellant had advised the husband the trial court would reject the master’s recommendation and order alimony to reflect the parties’ proposed alimony agreement.

Judge Colville filed a dissenting opinion.  The dissenting opinion was not published with the majority opinion.

Professional liability avoidance requires attorneys to be aware of the possibility of equitable tolling of the statute limitations.  While Pennsylvania operates under a strict “occurrence rule” with respect to the statute of limitations, the statute may be tolled if an attorney offers reassurances of a positive result after an alleged act of negligence.


Texas Expands Statute of Limitations at Akin Gump’s Expense

Tuesday, November 20th, 2012

Last year Akin Gump Strauss Hauer & Feld won summary judgment in a legal malpractice action arising out of a failed real estate development.  The real estate developer, Riverwalk Cy Hotel Partners, hired Akin Gump to represent it in the purchase of a tract of land.  Riverwalk then contracted with Lyda Sinerton Builders Inc. to build a hotel.  Akin Gump was subsequently retained to defend Riverwalk in a nuisance, business interference and trespass claim.  The nuisance claim arose out of dust and debris at the construction site.

The legal malpractice action was based on a contention that Akin Gump did not seek indemnification for Riverwalk from Lyda.  Riverwalk also alleged Akin Gump overbilled it during the representation.   Akin Gump filed for summary judgment based upon the expiration of the applicable statute of limitations.  Summary judgment was granted, and Riverwalk appealed.  On appeal, the Fourth District Court of Appeals in San Antonio reversed and remanded, holding the statue limitations was stayed until the expiration of all appeals in the underlying action.  While this is been the law in Texas for some time, Akin Gump had argued it was not applicable in this matter because the underlying action did not stem from the alleged legal malpractice.  The Court of Appeals disagreed, noting the legal malpractice claims “arise out of” the underlying lawsuit.

The law on statutes of limitations in legal malpractice cases is different throughout the country.  In Pennsylvania, legal malpractice cases are subject to an occurrence rule, so that the statue limitations begins to run at the time the alleged legal malpractice occurred, and pendency of appeals does not toll the statute of limitations.  See, Robbins & Seventko Orthopedic Surgeons, Inc. v. Geisenberger, 449 Pa.Super. 367, 674 A.2d 244, 248 (Pa. Super. 1996).  When bringing or defending a legal malpractice action, a careful analysis of the applicable statute of limitations is vitally important.

-Josh J.T. Byrne, Esquire