In the Matter of Lyndon Jay PARKER
No. 291 Disciplinary Docket No. 3.
Supreme Court of Pennsylvania
Feb. 6, 1997
688 A.2d 1178
PER CURIAM:
AND NOW, this 6th dаy of February, 1997, a Rule having been entered by this Court on December 30, 1996, pursuant to
ORDERED that the Rule is made absolute; Lyndon Jay Parker is placed on temporary suspension and he shall comply with all the provisions of
Robert M. MCMAHON, Appellee, v. John G. SHEA, Esquire, Phyllis McCormick Shea, Esquire, Michael S. Dinney, Esquire and Shea and Shea, a Partnership, Appellants
Supreme Court of Pennsylvania
Decided Feb. 14, 1997
Submitted July 2, 1996.
688 A.2d 1179
Joseph W. Fullem, Jr., Philadelphia, for Robert M. McMahon.
Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO and NEWMAN, JJ.
OPINION ANNOUNCING THE JUDGMENT OF THE COURT
ZAPPALA, Justice.
This case involves the application of our decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 526 Pa. 541, 587 A.2d 1346 (1991), cert. denied, 502 U.S. 867, 112 S.Ct. 196, 116 L.Ed.2d 156 (1991), to a legal malpractice action based upon alleged attorney negligence in the drafting and execution of a property settlement agreement in a domestic relations matter.
Appellee, Robert McMahon, and Janet McMahon, now Janet Marshall, were married in 1976. Three children were born of the marriage. In September, 1986, the couple separated. Mr. McMаhon thereafter retained Appellants, John G. Shea, Phyllis McCormick Shea, Michael S. Dinney, and Shea and Shea, a partnership, to represent him in the divorce proceedings. In January, 1987, the trial court ordered Mr. McMahon to pay $791.00 per week to his wife and children. Mr. McMahon appealed and, prior to a hearing, he and his wife entered into a written settlement agreement dated March 31, 1987. The agreement provided that half of the weekly amount was deemed child support and the other half was deemed alimony. The only provision for termination of these payments was a clause referring to the time when “the youngest living child reaches the age of twenty-one, is emancipated or finishes college, whichever occurs last.” Mr. McMahon also
Mrs. McMahon subsequently filed a complaint in divorce. Upon advice of counsel, the parties entered into a stipulation wherein the previous agreements would be incorporated but not merged into the final divorce decree.2 Approximately two months after the divorce decree had been entered, Mrs. McMahon remarried. On behalf of Mr. McMahon, Appellants filed a petition to terminate the order requiring payment of alimony on the grоund that such obligation was extinguished by the provisions of the Divorce Code. The trial court denied the petition, holding that the parties’ agreement had survived the decree of divorce ending the marriage. The court further directed Mr. McMahon to pay alimony until the youngest child became twenty-one, was emancipated or finished college. The Superior Court affirmed. McMahon v. McMahon, 417 Pa.Super. 592, 612 A.2d 1360 (1992). We denied allocatur.
Mr. McMahon thereafter filed a civil complaint against Appellants, alleging that their conduct in failing to merge his alimony agreement with the final divorce decree was a breach of their duty to exercise reasonable care, skill and diligence on his behalf. Specifically, the complаint alleged that Appellants advised Mr. McMahon with respect to a stipulation to provide that the agreement be incorporated but not merged with the
Relying on our decision in Muhammad, the trial court sustained Appellants’ preliminary objections in the nature of a demurrer and dismissed the complaint. Based upon the disposition of the issue addressed in this appeal, the trial court did not dispose of Appellаnts’ preliminary objection that the complaint failed to state a claim upon which relief may be granted with respect to exemplary damages. An en banc panel of the Superior Court reversed the trial court‘s order. McMahon v. Shea and Shea, et al., 441 Pa.Super. 304, 657 A.2d 938 (1995). Writing for the majority, Judge Wieand found that the policy set forth in Muhammad was not applicable where the attorneys’ allegеd negligence does not lie in the judgment regarding the amount to be accepted or paid in a settlement, but rather lies in the failure to advise a client of
The standard for reviewing preliminary objections in the nature of a demurrer is limited. All material facts set forth in the complaint as well as all inferences reasonably deducible therefrom are admitted as true. The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it. Mahoney v. Furches, 503 Pa. 60, 66, 468 A.2d 458, 461-62 (1983).
We have held that an aggrieved client must establish three elements in order to recover for legal malpractice: (1) the employment of the attorney or other basis for duty; (2) the failure of the attorney to exercise ordinary skill and knowledge; and (3) that such negligence was the proximate cause of damage to the plaintiff. Rizzo v. Haines, 520 Pa. 484, 499, 555 A.2d 58, 65 (1989).
Appellants contend that our decision in Muhammad prohibits a disgruntled client from suing his attorney for malpractice involved in the negotiation of a settlement. In Muhammad, the рlaintiffs, following negotiations, had agreed to accept the sum of $26,500 in full settlement of their medical malpractice claim arising from the death of their infant son. They subsequently became dissatisfied with the settlement amount, however, and commenced a legal malpractice action against their lawyers. The trial court sustained рreliminary objections, concluding that the action was barred by the doctrine of collateral estoppel. The Superior Court reversed, finding that collateral estoppel did not preclude the subsequent legal malpractice claim.
[i]t becomes obvious that by allowing suits such as this, which merely “second guess” the original attorney‘s strategy, we would permit a venture into the realm of the chthonic unknown. It is impossible to state whether a jury would have awarded more damages if a suit had been filed against another potеntial party or under another theory of liability. It is indeed possible that a smaller verdict would have been reached or a defense verdict ultimately would have been rendered. Thus, sanctioning these “Monday-morning quarterback” suits would be to permit lawsuits based on speculative harm; something with which we cannot agree.
This reasoning has no application to the facts of the instant case. There is no element of speculation as to whether a jury would return a verdict greater than the amount recovered by a settlement. Also, Mr. McMahon is not attempting to gain additional monies by attacking the value that his attorneys placed on his case. Instead, Mr. McMahon is сontending that his counsel failed to advise him as to the possible consequences of entering into a legal agreement. The fact that the legal document at issue had the effect of settling a case should not exempt his attorneys from liability. Prior to Muhammad, we held that the “necessity for an attorney‘s use of ordinary skill and knowledge extends to the conduct of settlement negotiations.” Rizzo v. Haines, 520 Pa. at 499, 555 A.2d at 65 (1989). We further stated that “an attorney may not shield himself from liability in failing to
It appears that confusion has arisen in this area of the law due to the unwarranted expansion of Muhammad in Miller v. Berschler, 423 Pa.Super. 405, 621 A.2d 595 (1993). In Miller, plaintiff/husband had entered into a property settlement agreement pursuant to which he agreed to pay alimony to his wife until his retirement, his wife‘s remarriage or the death of either party. The settlement agreement did not address the wife‘s possible cohabitation with another adult male. After a decree of divorce was entered, the wife cohabited with another man. The court denied the husband‘s petition to terminate his alimony payments on the ground that cohabitation was not specified in the agreement as an event which would cause alimony to terminate. The husband subsequently filed a malpractice action against his attorneys.
The trial court granted summary judgment in favor of the attorneys on the ground that Muhammad foreclosed legal malpractice actions based on negligence and/or contract principles when a settlement was involved. The Superior Court affirmed, finding that the rule of Muhammad was “well nigh absolute.” Id. at 407, 621 A.2d at 596. This interpretation is erroneous. As noted by Judge Wieand in his dissenting opinion in Miller, “[t]he policy which encourages settlements of law suits does not operate to relieve a lawyer from a duty to inform his or her client of all relevant considerations before the client enters and signs a complex legal agreement.” Id. at 416, 621 A.2d at 601. Finding Miller and the instant case to be based upon similar facts, the Superior Court here expressly overruled Miller. We agree and, to the extent that they present the same issue, we expressly overrule those cases relying on Miller.
In summary, we find that the analysis of Muhammad is limited to the facts of that case. The laudable purpose оf
The order of the Superior Court is affirmed.
CAPPY, J., files a concurring opinion in which CASTILLE and NEWMAN, JJ., join.
CAPPY, Justice, concurring.
I join the majority except to the extent that the majority limits this court‘s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 526 Pa. 541, 587 A.2d 1346 (1991) to the facts of that case. I write separately to emphasize the continuing need for, and validity of, this court‘s decision in Muhammad.
Today, the majority holds that when counsel fails to advise a client as to the controlling law applicable to a settlement contract, he may be subject to a malpractice claim based on a theory of negligence. In doing so, the court properly draws the legally relevant distinction between a challenge to an attorney‘s professional judgment regarding an amount to be accepted or paid in settlement of a claim, and a challenge to an attorney‘s failure to correctly advise his client about well established principles of law in settling a case. This is a reasonable and justifiable distinction. However, in addressing this issue, the majority steps beyond merely distinguishing Muhammad, and limits Muhammad to the facts of that case. To the contrary, while the case sub judice may be distinguishable from Muhammad, Muhammad is as necessary and valid today as it was when rendered only five years ago, and deserves no such limitation.
In Muhammad, plaintiffs Pamela and Abdullah Muhammad accepted a settlement agreement terminating their medical
Our decision in Muhammad was based on this Commonwealth‘s strong and historic public policy of encouraging settlemеnt. Muhammad was also forged with the similarly desirable policies of reducing litigation and encouraging an end to disputes in mind. These public policies, set forth in more detail in Muhammad, are as of equal import today as they were five years ago, and, in light of our overcrowded courtrooms, are perhaps of even greater significance. It is axiоmatic that allowing plaintiffs to challenge their attorneys’ professional judgment regarding settlement amounts, after accepting a settlement agreement, would erode our policy of encouraging settlements, validate client second guessing, promote “litigation concerning litigation,” and lead to interminable disputes. Moreover, to allow plaintiffs to sue their attorneys because they are not satisfied with the amounts obtained in settlement would enable plaintiffs to obtain monies from a party, and in a manner in which they were previously unable to secure such funds. To permit such an action is unfair, and, for purposes of judicial economy, unsound. Finality and closure in these situations are not only laudable goals, but after settlement, they become paramount.
In light of these policies and principles, the majority‘s attempt to limit Muhammad to the facts of that case must fail. The policy rationales pronounced in Muhammad may offer room for the exception that the majority carves out todаy; however, the prohibition against suit where a deficien-
To reiterate, today the majority draws a needed distinction between holding an attоrney accountable to inform a client about the ramifications of existing law and allowing the second guessing of an attorney‘s professional judgment in an attempt to obtain additional monies, once a settlement agreement has been reached. However, this decision merely creates one exception to this сourt‘s otherwise necessary and valid determination in Muhammad.
CASTILLE and NEWMAN, JJ., join in this concurring opinion.
Notes
“AND IT IS FURTHER ORDERED, ADJUDGED AND DECREED, pursuant to