Kilmer, J. v. Sposito, J.
146 A.3d 1275
| Pa. Super. Ct. | 2016Background
- Janet Kilmer sued her former attorney, James Sposito, for legal malpractice and breach of contract based on advice given during estate administration of her deceased husband.
- Sposito advised Kilmer to file an election to take against the will under 20 Pa.C.S. § 2203, which she executed, effectively reducing her share from one-half (intestate share under § 2507(3)) to one-third.
- Kilmer later retained new counsel, challenged the election, and ultimately settled with the estate for 41.5% after uncertain prospects at hearing.
- Kilmer then sued Sposito (2015), alleging negligent and incorrect legal advice about her rights that caused her to accept a reduced share.
- Sposito filed preliminary objections arguing Kilmer’s claims are barred by Muhammad v. Strassburger because she settled, and that she cannot show actual loss.
- The trial court sustained the objections and dismissed Kilmer’s complaint; the Superior Court reversed, holding Muhammad inapplicable where the alleged malpractice was incorrect legal advice about substantive law, not second-guessing settlement judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Muhammad bars a malpractice claim when plaintiff later settled with new counsel after alleged negligent legal advice | Kilmer: Muhammad does not bar claims based on negligent advice about substantive legal rights (not mere settlement amount judgment) | Sposito: Muhammad bars malpractice suits by disgruntled clients after settling unless fraud is alleged | Held: Muhammad inapplicable; court distinguishes bad substantive legal advice from second-guessing settlement judgment and permits Kilmer's claim to proceed |
| Whether Kilmer sufficiently pleaded actual damages to state malpractice/breach claims | Kilmer: Alleged she accepted a lesser recovery (41.5%) than the one-half she would have obtained but for negligent advice, showing loss | Sposito: Settlement defeats malpractice damages and plaintiff cannot show actual loss | Held: Pleading of reduced recovery was sufficient at demurrer stage; trial court erred to dismiss on that basis |
Key Cases Cited
- Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 587 A.2d 1346 (Pa. 1991) (settlement generally bars malpractice claims absent fraudulent inducement)
- McMahon v. Shea, 688 A.2d 1179 (Pa. 1997) (distinguishes Muhammad where alleged negligence involved failure to advise client of established law and impact of agreement)
- Silvagni v. Shorr, 113 A.3d 810 (Pa. Super. 2015) (applies Muhammad to bar malpractice claims that second-guess settlement decisions)