Duke & Co. v. Anderson

• Court: Pennsylvania Superior Court
• Writing for the Court: Author: Spaeth
• Citation: Duke & Co. v. Anderson, 418 A.2d 613, 275 Pa.Super. 65 (Pa. Super. Ct. 1980)
• Decision Date: 13 February 1980
• Parties: DUKE & COMPANY, a Pennsylvania Corporation, Appellant, v. Malcolm ANDERSON; Griggs, Moreland, Blair & Anderson, and Anderson, Moreland& Bush, a successor partnership.

418 A.2d 613

275 Pa.Super. 65

DUKE & COMPANY, a Pennsylvania Corporation, Appellant, v. Malcolm ANDERSON; Griggs, Moreland, Blair & Anderson, and Anderson, Moreland& Bush, a successor partnership.

Superior Court of Pennsylvania.

February 13, 1980

Argued April 10, 1979.

Maurice A. Nernberg, Jr., Pittsburgh, for appellant.

David B. Fawcett, Jr., Pittsburgh, for appellees.

Before VAN der VOORT, SPAETH and WATKINS, JJ.

SPAETH Judge:

This is an appeal from an order denying a motion to remove a compulsory nonsuit.

A nonsuit is proper only if the jury, after viewing the evidence in the light most favorable to the plaintiff, and then giving the plaintiff the benefit of all reasonable inferences arising from that evidence, could not reasonably conclude that the elements of the cause of action had been established. Watkins v. Sharon Aerie No. 327 F O. E., 423 Pa. 396, 223 A.2d 742 (1966); Herman v Horst, 255 Pa.Super. 232, 386 A.2d 594, 595 (1978). Viewed in this light, the evidence may be stated as follows:

On February 1, 1971, James Bishop and two others filed a complaint against the Duquesne Brewing Company of Pittsburgh, the company's pension plan and pension board, and Raymond Sigesmund and Franklyn Jeans, who were officers of the company. The complaint alleged in paragraph 20 that "The Retirees are entitled to the death benefits which defendant Duquesne, Pension Plan, Pension Board, Sigesmund and Jeans sought to terminate in that said death benefits were earned as deferred wages by the Retirees during their employment by Duquesne," and in paragraph 30 that "Defendants Duquesne, Pension Plan, Pension Board, Sigesmund and Jeans have been unjustly enriched by the acts and deeds herein set forth."

On February 3, 1971, the Pittsburgh Post-Gazette published an article reporting the lawsuit. The article stated that the plaintiffs claimed that the company, Sigesmund, and Jeans had been " 'unjustly enriched' by withdrawing the death benefits, particularly since that feature of the company's retirement package had been earned by employe contributions." The following day, Sigesmund and Jeans met with Malcolm Anderson, who was counsel for Duquesne Brewing Company. They asked Anderson to file a defamation action against the Post-Gazette. Anderson agreed that he would file "some kind of a notice." Record at 185a. Sigesmund testified that he did not again discuss the matter with Anderson. Record at 127a. Jeans testified that in mid-March he asked Anderson about the matter and Anderson replied that "he was moving forward with it." Record at 187a. In fact, no action had been filed.

In April 1971 the Duquesne Brewing Company terminated its relationship with Anderson, and subsequently turned its files over to new counsel. No file was turned over in the Post-Gazette matter. ^[1] Jeans only learned in March 1972 of Anderson's failure to file a defamation action against the Post-Gazette, when he questioned new counsel about it. Record at 231a. By then the statute of limitations barred a defamation action.

In June 1974 the Duquesne Brewing Company (by then known as Duke and Company) filed an action in assumpsit against Anderson and his law firm. The action was tried before a jury, on February 27 and 28, 1978, and the defendants' motion for nonsuit was granted. On May 23, 1978, the lower court refused Duke's motion to remove the nonsuit, and this appeal followed.

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We have received the benefit of a careful opinion by the lower court, SILVESTRI, J. In its opinion the court reasoned that although in assumpsit, the action should be treated as sounding in tort, as many jurisdictions treat legal malpractice actions. Acting on this premise, the court went on to hold that Duke had to show some injury before it could recover any damages. The court reviewed the evidence and concluded that Duke had failed to show any injury because it had failed to prove that it would have been successful if Anderson had filed a defamation action against the Post-Gazette.

As appellant, Duke argues that the lower court erred in treating its action against Anderson and his law firm as sounding in tort. In its view, we should hold that where a client testifies that his attorney was specifically engaged to file an action, but failed to do so, the case should go to the jury, for if the jury accepts the client's testimony, it may find a breach of contract and award at least nominal damages.

As the lower court recognized, some Pennsylvania cases support appellant's argument. In Cox v. Livingston, 2 W and S 103 (1841), the plaintiff-client had instructed the defendant-attorney to file suit against a third party. The Supreme Court concluded that the jury should have been instructed that the defendant-attorney had breached his duty to the plaintiff-client and that even if the action against the third party would have been "unavailing," nominal damages could still be recovered. 2 W and S at 107. When the case was retried and reached the Supreme Court again, as Livingston v. Cox, 6 Pa. 360 (1847), the Court stated that the action was "in form as well as in substance upon a contract," 6 Pa. 363, and cited Pennsylvania cases for the proposition that where "the violated duty necessarily springs from contract alone, the action is quasi ex-contractu, though the gravamen is laid in tortious negligence or breach of duty by positive and express tort," 6 Pa. at 362. In McWilliams v. Hopkins, 4 Rawle 382 (1834), the Supreme Court reversed the granting of a nonsuit where an attorney had failed to file an action even though there had been no proof of actual damages. Finally, in Lichow v. Sowers, 334 Pa. 353, 6 A.2d 285 (1939), where the claim was that an attorney had negligently failed to file various petitions, the Court stated that the attorney "having accepted a retainer, and having agreed to file certain petitions, he cannot, by a demurrer to the statement of claim, raise the question as to whether (the petitions) would have been effective. It became his duty to file them and to have their merits passed upon by the court." 334 Pa. at 355, 6 A.2d at 286. Cf. Lawall v. Groman, 180 Pa. 532, 37 A. 98 (1897) (where attorney was negligent in title search and mortgage holder is deprived of security because there are prior liens on the property, client may sue, notwithstanding he has not yet suffered any damages); Youngman v. Miller, 98 Pa. 196 (1881) (if client had instructed attorney to bring two suits, attorney had duty to do so); Moore v. Juvenal, 92 Pa. 484 [275 Pa.Super. 70] (1880) (as soon as client's claim was barred by statute of limitations, client had right of action against attorney for negligence causing loss); Miller v. Wilson, 24 Pa. 114 (1854) (where attorney fails to record mortgages, client has cause of action against attorney, notwithstanding that client has not yet suffered any loss). These cases, however, do not persuade us that the lower court erred in requiring appellant to show actual loss.

Initially it may be noted that the cases are not entirely consistent. In Livingston, for example, after the Court treated the action as being in contract, it went on to apply a tort measure of damages. "(I)t is certainly true," the Court said, "that the measure of damages, in a case like the present is the actual loss sustained by the negligence of the attorney." 6 Pa. at 365. Similarly, in Miller the Court seemed to suggest that the client could recover on a tort theory of damages; thus the Court stated as "directly in point" a case holding that the client could recover "for all the probable loss he was likely to sustain from the invalidity of the security." 24 Pa. at 121 (emphasis in original). In Lichow the Court only held that the defendant-attorney could not contest the validity of the plaintiff-client's underlying claim by a demurrer; its opinion may be read as having left open the possibility that at trial the defendant-attorney would prevail upon proving that the petition in question would have been without merit.

We do not wish, however, to base our decision on such distinctions, which in a sense beg the question, for they will be found artificial or persuasive depending upon one's opinion of what our decision should be. However the cases are read, it must be agreed, we believe, that they are alike in all involving a situation in which the client has a choice: either to sue the attorney in assumpsit, on the theory that the attorney by failing to follow specific instructions committed a breach of contract; or to sue the attorney in trespass, on the theory that the attorney failed to exercise the standard of care that he was obliged to exercise. The question presented, therefore, is whether the client should be required to prove actual loss, whichever form of action the client chooses.

It is settled that if the action is in trespass, the client is required to prove actual loss, if the case is to get to the jury. In Schenkel v. Monheit, 266 Pa.Super. 396, 405 A.2d 493 (1979), this court set out the three elements of a cause of action 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."

Slip op. at 3, quoting R. Mallen and V. Levit, Legal Malpractice 123 (1977).

In Williams v. Bashman et al., 457 F.Supp. 322 (E.D.Pa.1978), the court stated: "The orthodox view, and indeed virtually the universal one, is that when a plaintiff alleges that the defendant lawyer negligently provided services to him or her as a plaintiff in the underlying action, he or she must establish by the preponderance of the evidence that he or she would have recovered a judgment in the underlying action...