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Manzitti v. Amsler
550 A.2d 537
Pa.
1988
Check Treatment

*1 rеversed, Order retail theft charge reinstated case is remanded trial. Jurisdiction is relinquished. Manzitti,

Thomas A. Appellants, MANZITTI and Patricia AMSLER, Williamsport Dr. R. Fred Jr. and Orthopedic Hospital, Appellees.

Superior Pennsylvania. Court of

Argued Feb. 1988.

Filed Oct. 1988.

Reargument Denied Nov. supra. Secondly, review of support our the record does not evidence insane, appellee for the conclusion that the was other than the bald evidence, psychiatrist, by any assertion that such unsubstantiated medical finding properly presented drawn from facts at hearing held below. *2 Jr., Youngman, Williamsport, appellants. for John C. Drust, Wilkes-Barre, appellees. for Joann POPOVICH, CAVANAUGH, OLSZEWSKI and Before JJ.

OLSZEWSKI, Judge: Manzitti, appeal from Thomas A. and Patricia Apрellants, to enforce petition granting appellees’ the trial court’s order and loss of injuries for agreement personal settlement our review: issues for Appellants present consortium. two claim for spouse’s of an (1) injured whether settlement loss of non-injured spouse’s disposes personal injuries agreement (2) whether a settlement a case settles attorney wrongfully where an is enforceable client. For of his/her obtaining first the consent without below, affirm the trial court’s order stated we the reasons agreement. enforcing the settlement malpractice Thomas Manzitti filed this medical Appellant arising of an opera- out appelleеs injuries Amsler, M.D., Fred on Dr. performed by appellee, tion included, inter injuries Mr. Manzitti’s August alia, spinal nerves, permanent severed loss of bowel and control, bladder and sexual impotency. Patricia Appellant Manzitti, Thomas', filed jointly wife a claim for loss of her consortium. husband’s appellants represented Kocsis, were

Originally, by John Esquire. early February appellees’ insurance carrier, through general agent, its negotiated settlement $150,000.00 directly Attorney with Kocsis and offered settle the claims of both appellants.1 Attorney Kocsis indi- agent cated to the insurance that he had settle and, on case February accepted settlement offer on of both аppellants. Appellees behalf tendered the occasions, draft appellants settlement on several appellants, expressing abrogate their intention to the oral agreement, to accept refused the settlement and sign the releases. *3 April counsel,

On appellants, through new filed continuance, counsel, a motion for withdrawal of and re- motion, moval of the case from the list. In trial signed by appellants, and verified the following statements were made:

10. Patricia never by Manzitti was consulted Attorney respect Kocsis with to giving authority to settle her case and never authorized settlement her case at time any or for any price.

11. The offеr of the defense for Fifty One Hundred ($150,000.00) Thousand 00/100 was Dollars not an alone, offer to settle the case of Thomas but Manzitti was an offer to settle the case of both Thomas Manzitti and Patricia Manzitti for a One payment total Hundred ($150,000.00) Dollars, Fifty Thousand and 00/100 and no division the two cases was in said between made offer.

12. Thomas Manzitti authorized the settlement of his ($150,- case Fifty for One Hundred Thousand 00/100 000.00) Dollars represented on the belief as by Attorney $100,000.00 Appellees pay 1. would while the Medical Professional $50,000.00. Catastrophe Loss Fund would contribute the additional could verdict was jury the most he obtain Kocsis that ($200,000.00) Thousand and 00/100 Dollars. Two Hundred motion and re- subsequently granted trial The court from the trial list. moved the case to responded petition with enforce Appellees thereafter trial on argued was court settlement which before At the trial court ruled that hearing, March 18, 1986 motion appellants’ April 11 and 12 of paragraphs appellants of Thomas Manzitti’s by admissions judicial were personal injury to settle his claim. express authorization however, on court, to hear wheth- The trial refused evidence acquired express authority Kocsis actually er Attorney prior accepting appel- to settle the case Patricia Manzitti of Mr. The trial court found that settlement lees’ offer. of Mrs. Manzitti to extinguished Manzitti’s claim her further with cause action bеcause proceed any was derivative of her husband’s loss of consortium claim addition, relying claim. on Rothman personal injury Fillette, trial court enforceable agreement concluded that the settlement appellants’ Kocsis had ex- regardless Attorney of whether Thus, trial their claims. court settle press agreement with the settlement appellants comply ordered this followed. timely appeal is erred Appellants’ first contention trial court spouse’s loss of consortium claim finding non-injured that a of his/her spouse’s injured barred this discussing claim. For the personal injury purpose *4 issue, determined that properly we find that the trial court personal injury authorized settlement his Mr. Manzitti addition, court refused to hear claim. since trial authorization of her alleged evidence on Mrs. Manzitti’s assume, she not purposes, we for did will review claim. of her loss of consortium authorize settlement Pennsylvania note it is we well-settled Initially, is for of consortium derivative of the that an action See, Winner v. Oakland injured spouse’s e.g., claim. 405, (1893); A. v. Linebaugh Pa. 27 1110 Township, 158 458

Lehr, 135, Pa.Super. (1986); 351 505 A.2d 303 Scattaregia Wu, v. Shin Shen 452, 343 Pa.Super. (1985); 495 A.2d 552 Blanco, Hopkins 116, 224 Pa.Super. 302 A.2d 855 90, aff'd, Jarvis, Little (1974); 139 219 156, (1971); 280 617 Paving Elser Union Pa.Super. A.2d Co., 62, Pa.Super. A.2d 529 The rationale for considering the claim derivative has explained been as fol lows:

The consortium claim and personal claim injury are interconnected; total, closely together, represent they compensable damages and indirect —suffered aas —direct principal plaintiffs result Viewed in this injury. it light, makes little sense to hold that an injured party’s

negligence would or limit direct bar his for recovery but would not injury, spouse’s affect recovery indirect injury.

The plaintiff has ... suffered no direct inju- ry____ derived, to recover is both in a [His/Her] sense, legal literal and from injury suffered by spouse. [his/her]

Scattaregia, Pa.Super. 455-456, at 495 A.2d at 553-554 (quoting Maidman v. 299, Stagg, 304, 82 A.D.2d N.Y. (1981)). S.2d

The question of whether the non-injured spouse’s claim for loss consortium is by barred the injured spouse’s settlement and personal release his/her injury claim yet has to be directly addressed a Pennsylvania appellate however, court. Pennsylvania decisions, Several support our holding that a loss today of ‍‌‌‌‌‌​‌​​​‌​‌‌​‌‌​​‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‌‌‌‌​‌​‌​​​‌‍consortium claim is a separate and distinct cause of from the injured spouse’s derived; claim from it and, which was consequent ly, that a claim for loss of consortium not barred settlement and injured spouse’s release personal claim. See Nunamaker v. New Alexandria Bus (1952); 371 Pa. Walker v. Philadelphia, 88 A.2d 697 (1900); Buttermore v. Aliquippa Hospi tal, 368 Pa.Super. Vickodil v. Ass’n, Ins. Pennsylvania Guar.

459 denied, 639, 523 346 (1986), A.2d 635 A.2d allocatur 116, Blanco, Pa.Super. 224 302 A.2d 855 (1987); Hopkins 90, Pa. Kowal (1973), 457 aff'd, 593, 515 Com., Transp., Pa.Cmwlth. Department of 116, 649, Pa. denied, 514 524 A.2d A.2d allocatur loss our Court intimated that early Supreme As as In cause of action. separate is a and distinct of consortium (1900), Pa. our Philadelphia, Walker Court, a сlaim for loss commenting on husband’s Supreme is on his own consortium, stated: “His now of for loss of to his wife’s right compensation common-law her claim could disposition settlement or services. No Walker, his 195 Pa. at without consent.” affect A. at Ass’n, Ins. Pennsylvania Vickodil v. Guar. presented this Court

Super. attempted a husband and wife with situation where for and loss of proceeds personal injury collect insurance damages through Pennsylvania Insurance consortium 1701.101, Act, seq. 40 Pa.S.A. et Guaranty Association § an The which was issued insolvent policy, insurance insurer, for provided compensation expressly damages personal injury was included agreed This Court with Insurance recovery. claimant’s Guaranty only obligated pay Association that it was analysis, As a of the this part individual claim of husband. Court stated: attempt opposing interpreta- reconcile

[W]e tions of the nature of a loss of consortium one is proper purpose, namely which one the other which recovery spouse “separate,” of a as unites the two proper liability when limitation separate “persons language under the injured” claims [of as in this case. policy], insurance Vickodil, 638. While our at 514 A.2d at Vickodil, was to enforce contractual purpose supra, in accordance with the provisions policy of the insurance provisions statutory Pennsylvania Insuranсe Guaran- ty Act, Association' this acknowledged Court its willingness *6 to a “separate” allow and distinct loss of consortium claim. Court, in Buttermore v. Aliquippa Hospi-

Recently, this tal, 49, Pa.Super. (1987), 368 533 A.2d 481 again recognized of an of possibility independent loss consortium claim not which is eliminated the settlement personal of Ruling claim. on an issue injury similar to that currently us, before this Court stated: Finally, we must briefly address the Appellants’ conten- tion that the court in lower erred of dismissing the claims Mrs. when granted Buttermore it in summary judgment the Appellees. agree favor of We with this contention. Mrs. Buttermore was never a to party the release which her signed, husband and we find no basis in the present right record foreclose her proсeed on of consortium claim.

Buttermore, 60, 368 Pa.Super. at 533 A.2d at 487.

Further, Court, Supreme our in Nunamaker v. New Alexandria Bus (1952), 371 Pa. 88 A.2d 697 stated: wife, death, to a not Injury resulting in confers upon and her and her husband separate distinct of rights (when for) action for which are separate both sued ver- dicts must separate be returned and judgments entered. So each independent of other are the of rights substantive and that, husband wife the indicated at circumstances law, common the two causes could be only sued Wiser, Fries separate actions: see 62 Pa.Super. joinder permitted. Their in one was not [1915]. A statute procedural to effect our necessary change to that end. May See Act of P.L. ’54 12 P.S. 1621 et seq.2 § superseded by of

2. The Act been has Pa.R.Civ.P. Rules 2228 and interpreting prior Cases the Act versions of Rules 2228 and 2232, however, validity retain their because the new versions those merely provisions Rules recognizing restate the of the Act while pursue woman’s a loss of consortium cause of action. Pres- ently, Pennsylvania joinder Civil Rules of Procedure mandate plaintiffs. related added). Similar (emphasis at 699 at 88 A.2d Pa. Id. 371 Blanco, Pa.Super. Hopkins ly, (1974), this Court 90, aff'd, injury infliction of a non-fatal “The stated: unequivocally rights and distinct separate now confers spouse one upon at Id. upon spouses.” both of actions added). Thus, Nunamaker (emphasis A.2d at 858 a loss position our current expressly support Hopkins distinсt cause separate claim is a consortium it was claim from which injury personal action from derived. that loss of has also indicated addition, legislature our injured independently compensable claim. personal and release

spouse’s *7 8528(c),3 are recoverable damages 42 Pa.C.S.A. Under § for, alia, earnings, loss of inter against the Commonwealth loss of consor and suffering, expenses medical pain 100 Pa.Cmwlth. Com., Dept. of Transp., In Kowal v. tium. inter (1986), Court 593, 116 the Commonwealth 515 A.2d from separate recoveries 8528(c)to authorize Section preted of con and loss injured spouse the Commonwealth to the are similar facts of Kowal claimant. The sortium law, promotе Pennsylvania in order undisputable that is It verdicts, requires that economy inconsistent judicial and avoid be of consortium claim must personal injury claim and the loss disposition of the emphasize that our brought single We in a action. joinder As rules. judice the aforementioned sub does not alter case 116, Blanco, Hopkins v. 224 stated in this Court spouse’s join other (1973): spouse to "The failure of one Donoghue non-joining spouse. v. the claim of the will forever bar 181, (1902); Todd Company, Pa. 201 Traction Consolidated Thus, (1952).... rights Bercini, A.2d 538 92 v. 371 121, Pa.Super. at one suit.” Id. 224 spouses be redressed in both at A.2d 302 8528, part, Damages, pertinent Limitations § 3. 42 Pa.C.S.A. reads: Damages shall be recoverable (c) damages Types of recoverable. — only for: earning capacity. earnings (1) future loss of Past or (2) suffering. Pain including---- expenses (3) dental Medical and (4) of consortium. Loss (5) Property losses.... 462

case at the injured bar husband his personal settled claim the Commonwealth but his wife did not settle loss of expressly consortium claim. The Com- monwealth Court stated: concede,

The Kowal’s they must, as loss of claim since derivative it arises from the impact spouse’s one physical injuries upon the other spouse’s marital privileges and not, amenities. This does however, alter the uninjured spouse’s plaintiff status as a in her damages, own since her derivative, although are personal her.

Id. at 597, 515 A.2d at 119.

Furthermore, persuaded we are by the opinions our sister states which support position that a claim for loss of consortium accrues spouse alone non-injured and is not barred the settlement and release of the injured See, e.g., West, Crouch v. spouse’s personal injury claim. Parks, 72, Deese v. Colo.App. 29 (1970); 477 P.2d 805 157 116, Brown v. Metzger, 118 Ga.App. (1981); 276 269 S.E.2d 855, aff'd, Ill.App.3d 74 Ill.Dec. 455 N.E.2d 834 Rosan 83 (1984); Ill.2d Ill.Dec. 470 N.E.2d 302 der v. Copco Steel and Engineering 429 N.E.2d 990 Lieberman, v. Oldani (Ind.App.1982); 144 Mich.App. Kozitza, 778 (1985); N.W.2d 361 N.W.2d 451 Huffer aff'd, Neely (Minn.App.1985), (Minn.1985); N.W.2d Kossove, Whitt N.J.Super. Miller, lesey See generally (Texas 1978). S.W.2d *8 Gillespie Papale, F.Supp. (D.C.Mass.1982); ‍‌‌‌‌‌​‌​​​‌​‌‌​‌‌​​‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‌‌‌‌​‌​‌​​​‌‍Harwood, Fleischman 10 F.R.D. 139 (D.C.N.Y.1950); Annot., (1984). 29 A.L.R. 4th 1200

Two of the opinions above-cited are very similar to the Copco Rosander v. Steel and Engineering case at bar. Company, 429 N.E.2d 990 (Ind.App.1982), appellant’s hus- bаnd personal settled his injury against claim Copco Steel. Subsequently, appellant filed suit Copco Steel for her loss of consortium from resulting her inju- husband’s court, ries. The trial in granting Copco Steel’s motion for summary judgment, reasoned: is of her right “Inasmuch as the the wife derivative to that a right, appears it this Court settlement husband’s claim is a settlement of his the husband of his likewise by to suit and the failure settle both spouse’s derivative spouse at the time should from subse- causes same bar loss of maintaining independent action for quently consortium.”

Id. opinion). court The of the (quoting analysis at 991 trial Rosander by is used court almost identical trial court in the case sub judice. The Indiana Court the trial trial court held: reversed the Appeals loss of cannot denied that a claim for consortium It be to one the spouse, is derivative in that without an such, no As spouse subject other would have action. it it some of defenses as the action from which the same v. Arthur Arthur (1973), 156 Ind.App. is derived. Nevertheless, actions in placing 296 N.E.2d 912. a deriv- posture give party ative doe not one waive rights party of another. was not to the Shirley Darwin, negotiated this she is by settlement and release by separate is free to cause pursue not bound it and See, Gimbel, Administrator v. Smidth of action. 7 Ind. 627.

Id. Indiana adopt by at 991. We used analysis Rosander, that, hold autho- Appeals Court absent spouse rization to sеttle by non-injured claim does not bar injured spouse’s claim subsequent prosecution of the loss of consortium non-injured spouse. us, the facts similar to the case before strikingly Under a loss of consor Jersey Court New ruled that Superior injured claim is the settlement tium not barred Kossove, Neely N.J.Super. spouse’s claim. Neely court addressed the “deriva

A.2d 788 The issue as tive” follows: claim is plaintiff’s contend that

Defendants further her husband’s entirely dependent upon derivative may prose- it her claim not be cause of action. Without *9 cuted. To conclude that because it is derivative it may not be instituted unless her husband’s claim is still action- able would ignore the fact that her claim is a sеparate and distinct cause of action. Derivative means “come from owing its existence to something fore- another — going.” Black’s (rev. Law Dictionary 530 4th 1957); ed. thus it is the husband’s not his cause of action that accounts for the creation of the right wife’s litigate. To succeed in her action she would still have to establish through credible evidence the liability tortfeasor as well as her damage loss. Her to do so cannot be affected injured spouse’s release of his claim since her right to a recovery separate and dis- tinct.

Id. 487 A.2d at 789. this Following reasoning, we hold that the non-injured spouse’s claim for loss of consortium is vested in the non-injured spouse personally and may only be released spouse who owns it. The loss of consortium claimant has separate independent status plaintiff as a in his/her right. own Accordingly, a derivative claim for loss of consortium is not barred by the settlement and release of the injured spouse’s claim. As stated in Neely, otherwise, it a husband “[w]ere who refuses to [or wife] litigate for whatever reason could effectively eliminate a claim that is not possessed by him Id. 487 A.2d [or her].” at 790. past, courts have expressed concern that allowing

a derivative independent but claim for loss of consortium to continue after settlement of the injured spouse’s action will create problems of double recovery and inconsistent verdicts. concerns, These however, are unfounded. The prospect that a knowledgeable insurer, securing a bargain release, for permit would double recovery through payment of a settlement greater than the value of the claims actually released is untenable. Additionally, to prevent double re- covery, the loss of consortium claimant is not entitled to recover loss of support. Maker, See Troue v. 253 Ind. 252 N.E.2d 800 Inconsistent verdicts are not *10 disposi- is not in instant situation as a release the problem the under Consequently, of an action. of the merits tive facts, and inconsist- recovery about double concerns instant After carеful not of consideration. are worth ent verdicts loss of non-injured spouse’s the we find that analysis, derivative, distinct separate is and though Therefore, claim. personal injury injured spouse’s from the give does not of the consortium claim posture the derivative rights the the to waive vested party power the injured of claim Settlement the consortium non-injured spouse. the the of consortium authorized loss expressly must be claimant. damages for based on a

Having ruled that lawsuit of despite claim continue the settlement may of consortium claim, we now will address underlying personal injury the the trial court erred second contention that appellants’ attorney where the enforcing agreement a settlement obtaining the settled the case without first wrongfully the court of client. We find that trial consent his/her in Roth- Supreme on our Court’s decision correctly relied Fillette, which man v. controlling a situation. such Rothman, the question Court was confronted with two innocent of loss between who bear burden acted parties for one of the has

parties attorney where the misappropri- and has beyond scope his/her as proceeds. The facts Rothman are ated the settlement Rothman was involved an automobile Philip follows: and, result, Roth- personal injuries. sustained accident as Madniek, to institute suit Irving Esquire, man retained filed A damages. cоmplaint subsequently was recover insurer, The Fillettes* and Ronald Fillette. Gloria agreed to Company, Insurance settle Liberty Mutual $7,000.00. offer Attorney accepted case for Madniek authorization, Lib- returned a release to without Rothman’s Rothman, and absconded erty signed by Mutual purportedly Madniek, case Attorney with the On order money. settled, discontinued, ended. marked Unaware was believing these events case go would eventually trial, Rothman maintained contact with his attorney. later, years Five Rothman discovered that his had attorney “settled” the and misappropriated case the the settlement Rothman hired proceeds. new counsel and petitioned settled, trial court to remove marking the order the case discontinued, and ended. The trial granted court peti- tion reinstated Rothman’s action against the Fillettes. ruling That affirmed appeal by on this Court. See Fillette, Rothman v. A.2d Court, (now On to our appeal Supreme Justice Nix Chief Justice), writing the majority, reversed this Court and explained:

The jurisdiction law this is quite attorney clear that an must have express authority to settle a cause action of the Masters, client. International Organization Mates America, and Pilots Local No. v.2 International Masters, Organization America, Mates and Pilots of Inc., 436, (1974); 456 Pa. v. Archbishop Karlak, (1973); 450 Pa. 294 A.2d McLaughlin v. (1927); A. Monaghan, 290 Lipschutz v. Lipschutz, (1936). 124 Pa.Super. 188 A. 556 issue presented

The thаt is here relates to where the allocation loss should fall as a agent’s result of the performance. unfaithful It must emphasized be our judgment both of the parties of this action were any innocent and free of fault. Mr. Rothman in selecting counsel, his a that time person at certified to law practice by this Court had no suspect reason to misconduct. Like- wise, the Fillettes their bargained and insurer in good faith appellee with and Mr. Madnick under circumstances reasonably give would not rise to any inference that counsel was a breaching trust the client. The Fillettes insurer every their had reason to believe under facts presented that the purported settlemеnt had been expressly approved Mr. Rothman. circumstances,

Under these we believe applicable long recognized principle that where one two persons innocent must suffer because of the fraud of a third, the one who has accredited him must bear loss. Co., Keller v. N.J. and Plate Glass Insurance Fidelity Wickersham, v. Mundorff 63 Pa. 87 As stated in Rykaczewski v. Kerry Homes, Inc., Pa.Super.

(1960): suffer, one of persons

Where two innocent must should himby put wrongdoer be borne who position trust and confidence and thus him enabled perpetrate the wrong. case law has expressed acting Our that a principal through agent in dealing party with an innocent third of the consequences agent’s bear fraud. Keller Co., N.J. Fidеlity supra.; v. Glass Incurance [sic] Cook, Wickersham, ‍‌‌‌‌‌​‌​​​‌​‌‌​‌‌​​‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‌‌‌‌​‌​‌​​​‌‍v. supra; Williams Mundorff Homes, Inc., supra; Rykaczewski Kerry supra. such instances the lack of agent has been rejected shifting as a basis for onto principal’s losses the innocent third party. Fidelity See Keller v. N.J. Cook, supra.; supra; Glass Insurance Williams v. Wickersham, supra; Rykaczewski v. Kerry Mundorff Homes, Inc., Herr, supra; Himes v.

(1896). The fact that the has agent wronged principal through agent’s unlawful act does provide not *12 predicate insulating the harm principal caused by agent expenses at the of the innocent third party who had no for the conduct of the responsibility agent. See Keller Fidelity v. N.J. and Glass Insurance Co., Cook, supra.; Williаms v. Wickersham, supra; Rykaczewski Mundorff Homes, Inc.,

Kerry supra. We believe that this view is consistent with fundamentally principals agency sound and equity that there were no other additional factors here present justify ignoring its applicability.

jfc ¡fc ift sit sit sf! The next step question must address the analysis as to agent whether the unauthorized actions of the bars

Rothman’s further pursuit of the claim.4 Logical consist would not ency be offended a finding that although the Fillettes were entitled to a credit for the payment made, the unauthorized settlement should be set aside provided Rothman opportunity establish that the damages exceeded the However, amount received. such a view must be rejеcted as being inescapably disrup tive of established policies. strong

There judicial policy parties favor of voluntarily settling lawsuits. Corporation Pennwalt Inc., (3d Plough, Cir.1982); F.2d 77 Castillo v. Roger (3d Construction 560 F.2d Cir.1977); Autera v. Robinson, 136 U.S.App.D.C. 419 F.2d 1197

# sjc [*] # sic # design We cannot our rules on the assumption that the members our Bar will participate in criminal behavior. We must rely upon the fidelity of our Bar main, experience has demonstrated the justification for that reliance. Where the unusual and unfortunate case occurs, of breach of trust here, such as we rely upon the procedures other established in our law to provide punishment and to serve as a deterrent against repetition of suсh conduct. 4 The harshness of this result is to some extent ameliorated this Court’s security establishment of a client fund which was de signed defalcating to assist attorneys. Pennsylvania clients of Client Fund, Enforcement,

Security Disciplinary Rules of seq. Rule 502 et 264-265, Id. 503 Pa. at (footnote A.2d at 545-547 omitted).

Instantly, appellants concede that Mr. Manzitti ex pressly authorized Attorney Kocsis to settle personal claim.4 Appellants argue, however, that Mrs. Man zitti did not expressly authorize Attorney Kocsis to settle continuance, counsel, In their motion for withdrawal of and remov- list, however, appellants Kocsis, al from the trial alleged Attorney through misrepresentation claims, fraudulent of the value of their сonvinced Mr. Manzitti unwisely. Appellants to settle his case main- Attorney intentionally tained that misrepresented Kocsis the value of $200,000.00 the claims to be recovery a maximum of at trial. This contention, however, currently is not before us for review. *13 her and distinct separate consortium claim. Even assuming that Mrs. Manzitti did not authorize expressly claim, Attorney Kocsis to settle her agree- settlement ment nonetheless was still enforceable. Rothman,

As in to this parties action were innocent free of Appellees fault. and their insurer had a reason able belief the oral settlement agreement had been authorized expressly by both Mr. and Mrs. Manzitti. By failing to obtain Mrs. Manzitti’s express сonsent to settle Kocsis Attorney acted beyond scope of his wrongfully settled her claim. Supreme Our “ explained Court in Rothman that one of two ‘[w]here persons suffer, innocent the loss should be borne by him put who wrongdoer position of trust and ” confidence and thus enabled him perpetrate the wrong.’ Id., 503 Pa. at 469 A.2d at 545 (quoting Rykaczewski v. Homes, Inc., Kerry 192 Pa.Super. (I960)). Accordingly, we find that the trial court did

not err by enforcing the agreement. We must be mindful that in the rare and unfortunate case where occurs, such a breach as in case, the instant the client “must rely upon the other procedures established in our law provide punishment and to serve as a deterrent repetition of such cоnduct.” Id. 503 Pa. at 469 A.2d at

Accordingly, the order of the trial court is affirmed. POPOVICH, J., concurring files dissenting Opinion.

POPOVICH, Judge, concurring and dissenting: While I agree wholeheartedly with the majority’s learned holding that a lawsuit for damages based on a loss of consortium claim may continue despite the settlement of the underlying personal claim, I respectfully dissent from the majority’s application of Fillette, Rothman v. (1983) 469 A.2d 543 to enforce the settlement agreement. *14 Rothman, supra, Supreme

In our Court unequivocally stated: outset,

At the it must be understood that under the question facts of this case there is no of an or an implied The apparent agency. jurisdiction quite law this attorney express an must have clear that client, a cause the settle added) (emphasis Masters, Organizаtion International Mates and Pilots America, Local No. 2 v. Organization International Masters, America, Inc., Mates and Pilots 436, 456 Pa. Karlak, Archbishop v. (1974); 535, 318 A.2d 450 Pa. (1973); McLaughlin v. Monaghan, 290 Pa. v. 74, Lipschutz Lipschutz, (1927); 138 A. 79 (1936). Rothman, A. 556 503 Pa. at A.2d at 545.

However, continued, stating: the Court circumstances, these applicable

Under we believe here long recognized the that where one of principle two innocent must suffer persons because of the fraud of a third, ‍‌‌‌‌‌​‌​​​‌​‌‌​‌‌​​‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‌‌‌‌​‌​‌​​​‌‍the one who has accredited him must the loss. bear Co., Keller v. Fidelity N.J. and Plate Glass Insurance Wickersham, (1932); v. 306 Pa. 159 A. 40 Mundorff 876, (1869). As we stated in Rykaczewski v. Kerry 63 Pa. Homes, Inc., 192 Pa.Super.

(1960): suffer, one persons

Where of two innocent must the loss should him who the put wrongdoer be borne position of trust and confidеnce and thus him enabled the perpetrate wrong. expressed principal acting Our case law has that a through agent dealing with an innocent third party Keller of the fraud. consequences agent’s bear Co., Fidelity supra; v. N.J. and Glass Insurance Cook, Williams v. Mun- Wickersham, supra; Rykaczewski v. v. Kerry dorff Homes, Inc., supra. such instances lack of au- of the has as a for thority agent rejected been basis losses onto the innocent third shifting principal’s See v. Fidelity Co., Keller N.J. Glass Insurance party. Cook, supra; Williams supra; v. Wickers Mundorff ham, supra; Homes, Inc., Rykaczewski Kerry supra; Herr, Himes v. 3 Pa.Super. The fact agent has wronged principal through the agent’s act provide predicate unlawful does not for insulating principal harm caused agent at expense innocent third had party who no responsi Keller v. N.J. Fideli agent. the conduct of the bility Glass ty supra; Cook, Insurance Williams v. Wickersham, supra; supra, Rykaczewski v. Mundorff *15 Homes, Inc., Kerry supra. We believe that this view consistent with sound fundamentally principals of agency and and that there equity were no other additional factors here present justify ignoring to its applicability. Roth man, 503 Pa. at 469 A.2d at 545-546. rationale, this

Applying the Supreme Court our reversed affirmance of the lower court’s decision.1 Clearly, the two from passages Supreme the quoted Court’s decision above and, inconsistent, are consequently, legal the еffect the Rothman opinion is vitiated that by inconsistency.

I am bemused the by Supreme application Court’s by in agency estoppel the context of an attorney-client relationship. Normally, “[ajuthority by estoppel occurs when a principal his by culpable negligence, permits an agent him, to exercise powers granted not though to even the principal did not know or have notice of agent’s the Apex Decker, Financial v. conduct.” Corp. Pa.Super. v. Reifsnyder Dougherty, Obviously, logical the conse- quence of that applying principal “agency law” to Rothman facts is prior to overrule Pennsylvania case law establish, law, and to Pennsylvania as the rule that settle- Fillette, 1. In Rothman we that, client, express authority attorney held absent from an cannot compromise his client’s release his cause of action or settle Thus, litigation. holding we affirmed the lower court’s that agreement by attorney settlement entered Mr. into Rothman’s without express authority his was unenforceable. by attorney ment of a client’s cause of action is enforce- the client had either attorney able where ex- I, however, or to settle. press, apparent implied authority result, Supreme do not our Court intended such a believe prior Pennsylvania regarding since case law the need for create an sеttlement express authority to enforceable overruled, and, fact, precisely not that case law expressly support was cited court’s decision. I to the conundrum

Though explain am unable Rothman, creates, I Supreme assume that our supra, to from depart long Court did not intend established tradition which mandates invalidation of the Pennsylvania attorney express- settlement or release of a claim an not indeed, authorized his client so do. And ly Court, citing Karlak, Supreme Archbishop supra, alia, reinforced Monaghan, supra, inter McLaughlin however, very principle. Inexplicably, Supreme its proceeded depart Court from own statement of the law, sound applying “fundamentally principles agency to enforce a settlement there equity,” where was admit- tedly express authority Clearly, Pennsylvania no settle. “principle agency equity” case law commands that apply adjudicating attorney’s do not when unauthorized Therefore, of a I client’s claim. would follow *16 as in prior the mandate of case law stated v. McLaughlin Monaghan, supra:

An as such cannot release a client’s cause of attorney ..., or rights or surrender his substantial whole ..., in part compromise litigation, or or settle his client’s special without so to do. 138 A. authority McLaughlin, at 80. (1973); 299 A.2d 294 Archbishop, supra,

See also Interna- Masters, tional Amer- Organization Mates and Pilots of ica, Masters, International Organization Local No. 2 v. Inc., America, 456 Pa. 318 supra, Mates and Pilots of (1974); Tucker, A.2d 918 v. 370 Pa. 87 A.2d 650 Tucker (1952); Erie Avenue & Loan Starling Building West Association, (1939); A.2d 387 Lipschutz D’Alonzo, A. Garnet v. Lipschutz, supra, 263, 55 Pa.Cmwlth.Ct.

Moreover, Circuit, Third Appeals the Court of Co., 811 F.2d 802 Engineering Garabedian Allstates Cir.1987), (3rd recently held: general, an has no to settle his attorney by general power

client’s case virtue of his to solely Parker, (7 Cranch) handle case. Holker v. U.S. (1813). Instead, 3 L.Ed. 396 an can attorney enter a if only binding compromise the client has autho- him presumption rized to do so. While there is a that a settlement entered into has been autho- attorney client, rized by presumption rebuttal of the renders purported settlement ineffective. any generally, See An- notation, Authority Attorney Compromise Ac- tion, (1953). Garabedian, 30 ALR2d 944 811 F.2d supra, at 803.

See also Smith v. Delaware Auto Valley Spring (E.D.Pa.1986) (cited Rothman, F.Supp. supra, proposition 469 A.2d 543 for the sole that an must attorney settle). express authority have Instantly, paragraphs the lower court concluded that and 12 of the brief appellants’ (quoted majority opinion) constituted admissions of both judicial appellants’ However, express authorization of settlement. even a cur- sory review of those “admissions” reveals nei- clearly ther statement was an admission Mrs. Manzitti of As express authorization settle. the above discussion indicates, I would to the case apply judice only sub Rоthman, portion of which states: “The law in this supra, quite clear that an ex- jurisdiction attorney have client, press authority to settle cause of action of the (citations omitted).” Rothman, 503 Pa. at 469 A.2d at Therefore, that, I would find if Mrs. Manzitti did not authorize Kocsis expressly Attorney to settle her agreement then is unenforceable as the *17 appellees’ appellants’ offer was to settle both claims not merely Instantly, that of Mr. Manzitti. Mrs. Manzitti con-

tends that she did not authorize her to settle attorney of consortium claim. I Consequently, would remand case for an evidentiary hearing question on ‍‌‌‌‌‌​‌​​​‌​‌‌​‌‌​​‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‌‌‌‌​‌​‌​​​‌‍gave Attorney express whether Patricia Manzitti Kocsis her settle her claim. authority to A.2d Pennsylvania, Appellant, COMMONWEALTH Burton KAUFMAN.

Superior Pennsylvania. Court of

Argued Aug. 1988.

Filed Oct. 1988.

Reargument Denied Nov.

Case Details

Case Name: Manzitti v. Amsler
Court Name: Supreme Court of Pennsylvania
Date Published: Oct 3, 1988
Citation: 550 A.2d 537
Docket Number: 447
Court Abbreviation: Pa.
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