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 Fandray and Bright Future (and others) in 2009; ProAssurance appointed Alan Baum to defend under a reservation of rights and with an eroding liability policy limit.
- Baum filed an Answer asserting absolute defenses (immunity, privilege, statute of limitations, truth, corporate veil), took discovery, and filed (then at Fandray’s request withdrew) a motion for judgment on the pleadings.
- ProAssurance settled the underlying Hannon suit in mid‑June 2011 for $62,000 (within policy limits) without Fandray’s consent; Fandray claims she learned of the settlement only after it occurred.
- Fandray and Bright Future sued Baum for legal malpractice (alleging failure to timely and effectively prosecute defenses and improper personal motivations) and sued ProAssurance for breach of contract and bad faith for settling without consent.
- The trial court granted summary judgment for Baum and for ProAssurance; the Superior Court affirmed, concluding plaintiffs failed to show breach or causation against Baum and that ProAssurance had the contractual right to settle and acted in good faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Baum committed legal malpractice by failing to timely obtain dismissal before the insurer settled | Baum failed to timely prosecute absolute defenses and therefore breached standard of care causing damages | Baum performed competent work (pleadings, discovery, motion practice) and withdrawal of motion was at Fandray’s direction; no evidence of breach or causation | Summary judgment for Baum — plaintiffs did not produce evidence of breach or proximate causation |
| Whether allegations of Baum’s improper personal motives support malpractice liability | Baum’s alleged personal, inappropriate desires distracted him and caused deficient representation | Baum denied any improper conduct; record shows active representation and no causal link to the settlement | Summary judgment for Baum — insufficient proof of misconduct or causation |
| Whether ProAssurance breached the insurance contract by settling without insured’s consent | Insurer settled without insured’s approval and acted in bad faith, depriving insured of defense and recovery options | 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 |
| Whether ProAssurance acted in bad faith in settling the Hannon suit | Settlement was unnecessary/bad faith because better defenses existed that counsel failed to pursue | Settlement resolved claim within policy limits, avoiding insured liability; insurer reserved rights but legally could settle | Summary judgment for ProAssurance — no reasonable juror could find bad faith |
Key Cases Cited
- Englert v. Fazio Mechanical Servs., Inc., 932 A.2d 122 (Pa. Super. 2007) (standard and scope of appellate review for summary judgment)
- Epstein v. Saul Ewing LLP, 7 A.3d 303 (Pa. Super. 2010) (elements required to prove legal malpractice)
- Myers v. Robert Lewis Seigle, P.C., 751 A.2d 1182 (Pa. Super. 2000) (attorney malpractice elements and causation principles)
- Strausser v. Pramco, III, 944 A.2d 761 (Pa. Super. 2008) (appealability of piecemeal orders when final defendant resolves case)