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.; ProAssurance insured them under a policy with a $100,000 eroding liability limit.
- The Hannons sued Fandray and Bright Future in 2009 through Adoption Related Services; ProAssurance retained Alan Baum to defend Fandray and Bright Future under a reservation of rights.
- Baum entered appearance, filed an Answer and New Matter asserting absolute defenses (immunity, privilege, statute of limitations, truth, corporate veil), participated in discovery, and moved for judgment on the pleadings; Fandray later directed withdrawal of that motion.
- While Baum was defending, ProAssurance, without Fandray’s consent, settled the Hannons’ claim in mid‑June 2011 for $62,000 (within policy limits), thereby potentially avoiding any out‑of‑pocket exposure for insureds.
- Fandray and Bright Future sued Baum for legal malpractice (alleging failure to timely prosecute defenses and personal misconduct) and sued ProAssurance for breach of contract/bad faith for settling without consent.
- The trial court granted summary judgment for both Baum and ProAssurance; the Superior Court affirmed, finding no genuine issue of material fact supporting malpractice or bad‑faith/breach claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Baum committed legal malpractice by failing to timely and effectively litigate defenses causing settlement | Baum failed to promptly prosecute absolute defenses and win dismissal before insurer settled, breaching standard of care and causing damages | Baum timely performed defense tasks (Answer, discovery, motion practice); no evidence of breach or causation — Fandray herself directed withdrawal and acknowledged insurer settled | Summary judgment for Baum. Plaintiffs failed to produce evidence of breach or proximate causation needed for malpractice |
| Whether ProAssurance breached policy or acted in bad faith by settling the Hannons’ claim without insured’s consent | Insurer settled in bad faith and breached duties by settling without insured consent and thereby causing alleged harm | Policy expressly gave insurer the right and duty to investigate and settle claims; settlement was within policy limits and reasonable | Summary judgment for ProAssurance. Insurer had contractual authority to settle and acted in good faith |
Key Cases Cited
- Englert v. Fazio Mechanical Servs., Inc., 932 A.2d 122 (Pa. Super. 2007) (summary judgment standard and review described)
- Epstein v. Saul Ewing LLP, 7 A.3d 303 (Pa. Super. 2010) (elements required to establish legal malpractice)
- Myers v. Robert Lewis Seigle, P.C., 751 A.2d 1182 (Pa. Super. 2000) (legal malpractice elements and causation principles)
- Strausser v. Pramco, III, 944 A.2d 761 (Pa. Super. 2008) (appealability when multiple defendants are removed piecemeal)