Kapuscinski, E. v. Cavalier, R.
1098 EDA 2015
| Pa. Super. Ct. | Jul 14, 2016Background
- Kapuscinski (claiming sole share ownership of TG Cooper & Co., Inc.) and Cooper owned property leased to Graeber with an option to purchase at fair market value; disputes over price produced multiple consolidated lawsuits.
- Attorneys Cavalier/Lucas and later Dranoff represented Appellants in parts of the underlying litigation and negotiations.
- The consolidated matters were reported settled before trial; Graeber moved to enforce the settlement and later filed a contempt petition, which was ultimately dismissed as moot after a hearing where Kapuscinski told the court he agreed to the sale.
- Appellants sued the Attorneys for legal malpractice, alleging the attorneys failed to consult them and obtain their consent to the settlement and did not disclose settlement terms.
- The Attorneys filed preliminary objections (demurrer), arguing malpractice based on a post-settlement grievance is actionable only if fraud induced the settlement.
- The trial court sustained the preliminary objections, dismissed the second amended complaint with prejudice for failing to plead fraud with particularity; the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a legal-malpractice claim based on an agreed settlement can proceed without alleging fraud | Kapuscinski argued malpractice/negligence in settling without his consent and without disclosure of terms suffices | Attorneys argued Muhammad bars malpractice claims based solely on dissatisfaction with a settlement; plaintiff must plead fraud inducing the settlement | Court held plaintiff must plead fraud to pursue malpractice after an agreed settlement; complaint lacked fraud allegations and was dismissed |
| Whether failure to disclose settlement terms and obtain consent equals actionable fraud | Kapuscinski contended non-disclosure and lack of consent amount to fraudulent inducement | Attorneys contended nondisclosure allegations were insufficient and plaintiff admitted agreement to the settlement at the hearing | Court held nondisclosure allegations lacked the particularized fraud pleading required by Pa.R.C.P. 1019(b); moreover, record showed Kapuscinski agreed to the settlement |
| Whether coercion by the settlement court supports malpractice or fraud claims | Plaintiff argued settlement was coerced and thus induced | Defendants argued coercion allegations were not pleaded and coercion by the court is irrelevant to attorney malpractice absent fraud pleaded against attorney | Court found coercion not alleged in the complaint and irrelevant to breach-of-skill element; dismissal affirmed |
| Whether facts pleaded were sufficient to satisfy the particularity requirement for fraud | Plaintiff urged courts should infer fraud from the pleadings and admissions | Defendants noted fraud must be pled with specificity (elements and facts) and plaintiff did not meet Pa.R.C.P. 1019(b) standards | Court held fraud was not pleaded with particularity and refused to infer it; demurrer sustained |
Key Cases Cited
- Muhammad v. Strassburger, McKenna, Messer, Shilobad & Gutnick, 587 A.2d 1346 (Pa. 1991) (holding a malpractice claim based on a settlement agreed to by the client is actionable only if the client was fraudulently induced to settle)
- Kituskie v. Corbman, 714 A.2d 1027 (Pa. 1998) (elements of legal-malpractice claim: employment/duty, breach of skill, proximate causation of damage)
- Majorsky v. Douglas, 58 A.3d 1250 (Pa. Super. 2013) (standards for reviewing preliminary objections/demurrers)
- Ellison v. Lopez, 959 A.2d 395 (Pa. Super. 2008) (setting forth the elements of fraud and the requirement of particularity in pleading fraud)