Fandray, N. v. Baum, A.
199 WDA 2016
| Pa. Super. Ct. | Nov 17, 2016Background
- Nita Fandray, an attorney, owned adoption agency A Bright Future Adoptions, Inc.; both were insured by ProAssurance.
- The Hannons sued (underlying Hannon suit) seeking damages related to adoptions; Fandray and Bright Future were added as defendants.
- ProAssurance reserved rights and assigned Attorney Alan Baum to defend under a policy with an "eroding liability" limit and an express right/duty to settle.
- Baum entered appearance, filed an Answer raising absolute defenses (immunity, privilege, statute of limitations, truth, corporate veil), litigated discovery, and drafted a motion for judgment on the pleadings that he later withdrew at Fandray’s request.
- ProAssurance, without Fandray’s consent, settled the Hannon suit for $62,000 within policy limits in mid-June 2011.
- Fandray and Bright Future sued Baum for legal malpractice and ProAssurance for breach of contract/bad faith; trial court granted summary judgment for both defendants and the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legal malpractice: did Baum breach duty by failing to timely obtain dismissal before settlement? | Baum failed to timely prosecute absolute defenses and thus negligently allowed settlement to occur, causing damages. | Baum timely raised defenses, engaged in discovery and motions; withdrawal of motion to dismiss was at Fandray's direction; no proof of breach or causation. | Summary judgment for Baum — Plaintiffs produced no evidence of breach or proximate causation. |
| ProAssurance bad faith/breach: did insurer act improperly by settling without insured's consent? | Insurer acted in bad faith by settling within policy limits without Fandray's consent, harming her. | Policy expressly granted insurer the right and duty to investigate and settle claims; settlement was within limits and reasonable. | Summary judgment for ProAssurance — insurer had authority to settle and acted in good faith. |
| Causation for malpractice: did Plaintiffs show Baum’s conduct proximately caused their harm? | Settlement left Plaintiffs exposed financially and professionally because defenses were not timely pressed. | No evidence that different attorney conduct would have produced dismissal before insurer’s settlement decision. | Held: Plaintiffs failed to produce facts essential to causation; summary judgment proper. |
| Standard for summary judgment: did genuine issues of material fact remain? | Plaintiffs argued disputed facts about timing, Baum’s motives, and settlement impact. | Defendants argued record showed no material factual dispute on breach, causation, or insurer authority. | Held: No genuine issue of material fact; defendants entitled to judgment as a matter of law. |
Key Cases Cited
- Englert v. Fazio Mechanical Services, Inc., 932 A.2d 122 (Pa. Super. 2007) (standard of review and summary judgment criteria)
- Epstein v. Saul Ewing LLP, 7 A.3d 303 (Pa. Super. 2010) (elements of legal malpractice action)
- Myers v. Robert Lewis Seigle, P.C., 751 A.2d 1182 (Pa. Super. 2000) (legal malpractice elements)
- Strausser v. Pramco, III, 944 A.2d 761 (Pa. Super. 2008) (appealability of multiple separate orders)