Kituskie v. Corbman
| Decision Date | 07 August 1998 |
| Citation | 714 A.2d 1027,552 Pa. 275 |
| Parties | Leo J. KITUSKIE, D.M.D., Appellant, v. Scott K. CORBMAN, Esquire, and Garfinkle, Corbman, Greenberg, and Jurikson, P.C., Appellees. Leo J. KITUSKIE, D.M.D., Appellee, v. Scott K. CORBMAN, Esquire, and Garfinkle, Corbman, Greenberg, and Jurikson, P.C., Appellants. |
| Court | Pennsylvania Supreme Court |
H. Robert Fiebach, Daniel P. McElhatton, Philadelphia, for S. Corbman and Garfinkle, Corbman, Greenberg and Jurikson, P.C.
Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, and NIGRO, JJ.
This Court granted allocatur in this matter in order to address two issues. The first issue is whether the collectibility of damages in an underlying action is relevant to and, therefore, admissible in a legal malpractice action. The second issue is, if collectibility of damages should be considered, which party bears the burden of proving collectibility. Because we find that collectibility of damages in the underlying action should be considered in a legal malpractice action and that the defendant/attorney bears the burden of proof, we affirm the order of the Superior Court and remand for further proceedings consistent with this opinion.
The facts relevant to this appeal are not in dispute. Leo J. Kituskie is a Pennsylvania resident who is a practicing periodontist. On September 3, 1989, Kituskie was injured in a two-car automobile accident during his vacation in San Jose, California. The traffic collision report for the accident stated that a vehicle being driven by Evan Mark Trapp crossed a highway on-ramp into the path of Kituskie's automobile after it struck a curb and a cyclone fence. The traffic collision report also indicated that Trapp was driving while intoxicated and that his vehicle was being operated at the time of the accident at a high rate of speed. After the accident, Kituskie returned to the Philadelphia area in order to begin treatment for his injuries. As a result of this automobile accident, Kituskie avers that he suffers from a degenerative and arthritic back condition which makes it difficult for him to work full-time as a periodontist.
On September 9, 1989, Kituskie retained Scott K. Corbman, Esquire, to pursue his claim against Trapp for the personal injuries he sustained in the accident. Corbman is an attorney licensed to practice law in the Commonwealth of Pennsylvania and is a principal/shareholder in the law firm of Garfinkle, Corbman, Greenberg and Jurikson, P.C. (the "Garfinkle firm"). 1
Corbman proceeded to obtain Kituskie's medical reports. After reviewing the medical reports, Corbman made a claim on Kituskie's behalf against Trapp's insurance carrier, California State Automobile Association ("CSAA"). During settlement negotiations with CSAA, Corbman learned that Trapp's insurance policy had a limit of $25,000.
On September 17, 1990, more than one year after the accident, Corbman discovered that the California statute of limitations for injuries such as those suffered by Kituskie was only one year as opposed to the two-year statute of limitations in Pennsylvania. CSAA ultimately informed Corbman that it would not make a settlement offer to Kituskie because the one-year statute of limitations had passed without Corbman instituting a formal legal action. As soon as Corbman learned this information, Corbman met with Kituskie and informed him that his claim had been terminated because no suit was filed or settlement reached within the one-year statute of limitations period. During this meeting, Corbman advised Kituskie to seek the services of another attorney in order to assert a legal malpractice claim against Corbman and the Garfinkle firm.
On August 28, 1991, Kituskie, represented by new counsel, filed a legal malpractice claim against Corbman and the Garfinkle law firm in the Montgomery County Court of Common Pleas. 2 Immediately prior to jury selection, counsel for each side filed motions in limine requesting that each side be precluded from presenting expert testimony on the issue of CSAA possibly settling the matter within the policy limits of Trapp's policy. 3 Neither of these motions dealt directly with the issue of whether the jury in this legal malpractice action could consider Kituskie's ability to collect on an underlying judgment against Trapp. However, the trial court, realizing that its resolution of whether collectibility of damages in an underlying case could be an issue at trial, withheld its disposition of the two motions in limine. On January 6, 1995, prior to commencing the trial in this matter, the trial court decided that collectibility of damages in an underlying case was not relevant to a legal malpractice claim in Pennsylvania. Thus, the trial court granted both motions in limine.
Following a trial on the matter, on January 11, 1995, a jury found that Corbman and the Garfinkle firm were liable to Kituskie for legal malpractice in the amount of $2,300,000. Corbman and the Garfinkle firm appealed to the Superior Court. The Superior Court, in a published opinion, vacated the judgment and remanded for further proceedings because it held that the collectibility of damages in an underlying case should be considered in a legal malpractice action. The Superior Court also held that the attorney being sued for legal malpractice bore the burden of proving as a defense in the form of mitigation of damages that the potential underlying case which formed the basis of the legal malpractice award would have been uncollectible. This Court granted allocatur in order to decide whether collectibility should be part of a legal malpractice action and, if so, which party bears the burden of proof as to that issue.
In order to establish a claim of legal malpractice, a plaintiff/aggrieved client must demonstrate three basic elements:
1) employment of the attorney or other basis for a 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). An essential element to this cause of action is proof of actual loss rather than a breach of a professional duty causing only nominal damages, speculative harm or the threat of future harm. Id. at 504-05, 555 A.2d at 68. Damages are considered remote or speculative only if there is uncertainty concerning the identification of the existence of damages rather than the ability to precisely calculate the amount or value of damages. Id. In essence, a legal malpractice action in Pennsylvania requires the plaintiff to prove that he had a viable cause of action against the party he wished to sue in the underlying case and that the attorney he hired was negligent in prosecuting or defending that underlying case (often referred to as proving a ).
A review of case law in the Commonwealth shows that the issue of whether collectibility of damages in an underlying case should also be a part of a legal malpractice action is one of first impression. Other jurisdictions, however, have addressed this issue and have held that collectibility of damages should also be considered in a legal malpractice action. See DiPalma v. Seldman, 27 Cal.App.4th 1499, 33 Cal.Rptr.2d 219 (1994), rev. denied,1994 Cal. LEXIS 6078 ); Smith v. Haden, 868 F.Supp. 1 (D.D.C.1994), aff'd, 69 F.3d 606 (D.C.Cir.1995); Teodorescu v. Bushnell, Gage, Reizen & Byington, 201 Mich.App. 260, 506 N.W.2d 275 (1993), appeal denied, 445 Mich. 936, 521 N.W.2d 607 (1994); Jourdain v. Dineen, 527 A.2d 1304 (Me.1987); Jernigan v. Giard, 398 Mass. 721, 500 N.E.2d 806 (1986); Larson v. Crucet, 105 A.D.2d 651, 481 N.Y.S.2d 368 (N.Y.App.Div.1984); Hoppe v. Ranzini, 158 N.J.Super. 158, 385 A.2d 913 (1978).
Like these other jurisdictions, this Court believes that collectibility of damages in the underlying action should also be part of the analysis in a legal malpractice action. We do so because we recognize that a legal malpractice action is distinctly different from any other type of lawsuit brought in the Commonwealth. A legal malpractice action is different because, as described above, a plaintiff must prove a case within a case since he must initially establish by a preponderance of the evidence that he would have recovered a judgment in the underlying action (here, the underlying action would have involved Kituskie's lawsuit against Trapp). It is only after the plaintiff proves he would have recovered a judgment in the underlying action that the plaintiff can then proceed with proof that the attorney he engaged to prosecute or defend the underlying action was negligent in the handling of the underlying action and that negligence was the proximate cause of the plaintiff's loss since it prevented the plaintiff from being properly compensated for his loss. 4 However, this Court has held that the plaintiff in a legal action should only be compensated for his actual losses. See Rizzo v. Haines, 520 Pa. at 499, 555 A.2d at 65. Actual losses in a legal malpractice action are measured by the judgment the plaintiff lost in the underlying action and the attorney who negligently handled the underlying action is the party held responsible for the lost judgment. However, as noted by the Superior Court, "it would be inequitable for the plaintiff to be able to obtain a judgment against the attorney which is greater than the judgment that the plaintiff could have collected from the third party; the plaintiff would be receiving a windfall at the attorney's expense." Kituskie v. Corbman, 452 Pa.Super. 467, 473, 682 A.2d 378, 382 (1996). Thus, we now hold that collectibility of damages in the underlying case is a matter which should be considered in legal malpractice actions. 5
Because this Court has concluded that...
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