Kituskie v. Corbman

• Decision Date: 29 August 1996
• Citation: 452 Pa.Super. 467,682 A.2d 378
• Parties: Leo J. KITUSKIE v. Scott K. CORBMAN, Esquire and Garfinkle, Corbman, Greenberg and Jurikson, P.C., Appellants.
• Court: Pennsylvania Superior Court

Page 378

682 A.2d 378

452 Pa.Super. 467

Leo J. KITUSKIE v. Scott K. CORBMAN, Esquire and Garfinkle, Corbman, Greenberg and Jurikson, P.C., Appellants.

Superior Court of Pennsylvania.

Argued June 26, 1996.

Filed Aug. 29, 1996.

H. Robert Fiebach, Philadelphia, for appellants.

Fred J. Silverman, Plymouth Meeting, for appellee.

Before DEL SOLE, TAMILIA and BROSKY, JJ.

BROSKY, Judge.

Scott Corbman, Esquire, ("Corbman") and the law firm of Garfinkle, Corbman, Greenberg and Jurikson, P.C. ("Garfinkle firm") appeal from the judgment of the trial court following a $2,300,000 jury verdict in favor of plaintiff-appellee Leo J. Kituskie, D.M.D. ("Kituskie") and against appellants.

Corbman is an attorney licensed to practice in Pennsylvania; he was a principal/shareholder in the Garfinkle firm, which has its principal place of business in Philadelphia, PA.

Kituskie is a practicing periodontist and a Pennsylvania resident.

On September 3, 1989 Kituskie suffered personal injuries as a result of an automobile accident in San Jose, California; ¹ the other driver involved was California resident Evan Mark Trapp ("Trapp"). Trapp lost control of his vehicle and drove into the path of Kituskie's car; the two vehicles collided. Trapp was driving while intoxicated and was driving at a high rate of speed.

Kituskie returned to the Philadelphia area and began treatment with local health care providers. On September 9, 1989 Kituskie retained Corbman as counsel in Kituskie's claim against Trapp for personal injuries sustained in the automobile accident. Corbman obtained Kituskie's medical reports and records of out-of-pocket expenses. Corbman then made a claim on Kituskie's behalf against Trapp's insurance carrier, California State Automobile Association ("CSSA"). Negotiations took place over the summer of 1989.

Corbman learned that Trapp had a $25,000 liability policy with CSAA. Although counsel for all parties stipulated at trial that Trapp's liability limit with CSAA was $25,000, the jury was not permitted to hear this evidence. Corbman was under the belief that the California statute of limitations for personal injury actions was two years (as is the statute of limitations for Pennsylvania), but the California statute of limitations was only one year. On approximately September 17, 1990 Corbman learned that the California statute of limitations was only one year (and that it had expired in the instant case on September 3, 1990). After the expiration of the one year statute of limitations CSAA informed Corbman that it refused to make any settlement offer. Corbman then met with Kituskie and told him that his personal injury claim had been terminated since no suit was filed nor was settlement reached within the applicable one year period. Corbman advised Kituskie to seek the services of another attorney to assert a claim for legal malpractice against Corbman.

Kituskie filed a claim against United States Fidelity & Guaranty Co. ("USF & G"), which was the automobile insurance carrier for his father's car. Following arbitration, Kituskie was awarded $200,000, which was the limit of underinsured benefits available. Kituskie then retained new counsel and sued Corbman and the Garfinkle firm, in Montgomery County Common Pleas Court, on August 28, 1991 for legal malpractice.

Prior to jury selection counsel for both sides presented motions in limine requesting that each side's expert be precluded from testifying on the issue of the possibility of CSAA settling within the policy limits (the motions did not deal with the issue of collectibility of the underlying judgment in a malpractice claim against an attorney). The trial court stated at the start of the jury trial that, "[T]he issue of collectibility or potential jury verdict or settlement presented itself yesterday when the Court was conferring with counsel. This Court gave counsel last night and the rest of the day yesterday to delve into this issue to see if they could find authority for their respective positions." N.T., 1/6/95, at 11. The trial court ultimately determined that collectibility of the underlying judgment was not an issue in the instant case, and that evidence would not be admitted regarding the issue of collectibility. The trial court then granted both motions in limine.

The jury trial lasted from January 6, 1995 through January 11, 1995; at its conclusion the jury awarded Kituskie $2,300,000. This appeal followed.

Appellants' statement of questions involved is as follows:

1. Whether the lower court erred as a matter of law by failing to recognize that "collectibility" of any judgment which would have been obtained in the underlying matter is an essential element of a legal malpractice claim.

2. Whether the lower court erred as a matter of law by precluding evidence that any judgment which would have been obtained in the underlying matter would not have been collectible beyond the $25,000 insurance policy applicable to the accident.

3. Whether the lower court erred as a matter of law in failing to instruct the jury that Kituskie's claims against Corbman were barred by the doctrine of collateral estoppel and that, therefore, a directed verdict should have been entered in favor of Corbman.

4. Whether the lower court erred as a matter of law by failing to reduce the judgment by the amount recovered by Kituskie in a related arbitration against Kituskie's own insurance carrier under his underinsured motorist coverage.

Appellants' Brief at 3. We vacate the judgment of the trial court and remand for a hearing regarding the collectibility of the underlying judgment (i.e., any judgment that could have been recoverable from Trapp).

Appellants' issues number one and two are claims that (a) the trial court erred in holding that collectibility of the underlying judgment was not an essential element of a legal malpractice claim, and, (b) the trial court erred in holding that Kituskie had no burden to prove collectibility and that appellants were not permitted to prove that the underlying judgment would have been uncollectible.

Our Supreme Court stated in Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (1989),

[A]n allegedly aggrieved client must establish three elements in order to recover for legal malpractice. They are:

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.

....

[A]n essential element of the cause of action, whether the action be denominated in assumpsit or trespass, is proof of actual loss.

Id. at 498-500, 504-06, 555 A.2d at 65, 68.

Our Court stated in Ammon v. McCloskey, 440 Pa.Super. 251, 655 A.2d 549 (1995),

In any cause of action for [legal] malpractice, some harm must be shown to have occurred to the client....

The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm--not yet realized--does not suffice to create a cause of action for negligence. Hence, until the client suffers appreciable harm as a consequence of his attorney's negligence, the client cannot establish a cause of action for malpractice. [Citations omitted.]

Id. at 257-58, 655 A.2d at 552.

"Additionally, the plaintiff must be able to establish by a preponderance of the evidence that he or she would have prevailed in the underlying litigation." Rogers v. Williams, 420 Pa.Super. 396, 401, 616 A.2d 1031, 1034 (1992).

Our Court held in McCartney v. Dunn & Conner, Inc., 386 Pa.Super. 563, 563 A.2d 525 (1989), that in a legal malpractice action the plaintiff must establish that he or she would have recovered a judgment in the underlying action; the damages are measured by the "lost judgment." Id. at 568, 563 A.2d at 528.

We will not permit legal malpractice actions based upon speculations regarding settlement negotiations. Id. at 572-74, 563 A.2d at 530.

Our review of Pennsylvania caselaw, statutes and court rules reveals that the issue of the collectibility of an underlying judgment in a legal malpractice action has not been previously addressed.

Other jurisdictions around the country have included collectibility as an element to be proved or disproved in a legal malpractice case. California, Colorado, Connecticut, Florida, Georgia, Illinois, Iowa, Massachusetts, New York, North Carolina, Tennessee, Texas and Washington place the burden upon the plaintiff (in a malpractice action against an attorney) to prove collectibility of the underlying judgment. See: DiPalma v. Seldman, 27 Cal.App.4th 1499, 33 Cal.Rptr.2d 219 (1994); Lawson v. Sigfrid, 83 Colo. 116, 262 P. 1018 (1927); Palmieri v. Winnick, 40 Conn.Supp. 144, 482 A.2d 1229 (1984); McDow v. Dixon, 138 Ga.App. 338, 226 S.E.2d 145 (1976); Sheppard v. Krol, 218 Ill.App.3d 254, 161 Ill.Dec. 85, 578 N.E.2d 212 (1991); Beeck v. Aquaslide 'N' Dive Corp., 350 N.W.2d 149 (Iowa 1984); Jernigan v. Giard, 398 Mass. 721, 500 N.E.2d 806 (1986); Chiaffi v. Wexler, Bergerman and Crucet, 116 A.D.2d 614, 497 N.Y.S.2d 703 (1986); Rorrer v. Cooke, 313 N.C. 338, 329 S.E.2d 355 (1985); Payne v. Lee, 686 F.Supp. 677 (E.D.Tenn.1988); Mackie v. McKenzie, 900 S.W.2d 445 (Tex.App.1995); and, Tilly v. Doe, 49 Wash.App. 727, 746 P.2d 323 (1987). Maine, Michigan and New Jersey place the burden on the defendant-attorney to assert the affirmative defense of collectibility (i.e., the defendant-attorney must prove that the plaintiff could not have recovered the full value of the underlying judgment). See: Jourdain v. Dineen, 527 A.2d 1304 (Me.1987); Teodorescu v. Bushnell, Gage, Reizen and Byington, 201 Mich.App. 260, 506 N.W.2d 275 (1993); and, Hoppe v. Ranzini, 158 N.J.Super. 158, 385 A.2d 913 (1978).

We believe that in legal malpractice actions in Pennsylvania, it is time to add the requirement of placing upon the attorney being sued the burden of disproving the collectibility of the underlying judgment. ² While we recognize that...