McMahon v. Shea

• Decision Date: 25 April 1995
• Citation: 441 Pa.Super. 304,657 A.2d 938
• Court: Pennsylvania Superior Court
• Parties: , 63 USLW 2576 Robert M. McMAHON, Appellant, v. John G. SHEA, Esquire, Phyllis McCormick Shea, Esquire, Michael S. Dinney, Esquire and Shea & Shea, A Partnership, Appellees.

Page 938

657 A.2d 938

441 Pa.Super. 304, 63 USLW 2576

Robert M. McMAHON, Appellant, v. John G. SHEA, Esquire, Phyllis McCormick Shea, Esquire Michael S. Dinney, Esquire and Shea & Shea, A Partnership, Appellees.

Superior Court of Pennsylvania.

Argued Dec. 6, 1994.

Filed Feb. 23, 1995.

Reargument Denied April 25, 1995.

Joseph W. Fullem, Jr., Philadelphia, for appellant.

Patrick T. Ryan, Philadelphia, for appellees.

Before ROWLEY, President Judge, and CAVANAUGH, WIEAND, CIRILLO, DEL SOLE, POPOVICH, JOHNSON, HUDOCK and SAYLOR, JJ.

WIEAND, Judge:

If, before a client signs a written agreement, his or her lawyer negligently fails to advise the client correctly about pertinent principles of law or the impact of the agreement upon the client's future rights and obligations, is the lawyer immunized from liability to the client because the agreement was executed in settlement of a pending marital dispute? The trial court held that the lawyer was immune from liability under such circumstances and sustained preliminary objections in the nature of a demurrer to the client's complaint seeking damages for legal malpractice. The client appealed. After careful review, we reverse and remand for further proceedings.

When Robert McMahon was separated from his wife, the law firm of Shea and Shea represented and advised him. Upon his lawyer's advice, McMahon entered an agreement to pay his wife the sum of $791.00 per week, half of which was deemed child support and the other half of which was deemed alimony. The only provision for termination of these weekly payments was a clause referring to the time when "the youngest child reached age twenty-one, is emancipated or finishes college, whichever occurs last." Subsequently, Mrs. McMahon filed a complaint in divorce. Allegedly upon the advice of Shea and Shea, McMahon agreed that the agreement for alimony should be incorporated but not merged into the decree in divorce.

Approximately two months after the divorce decree had been entered, Mrs. McMahon was remarried. McMahon was advised by his lawyers that his obligation to pay further alimony was terminated by the provisions of the Divorce Code, and a petition was filed to terminate the order requiring the payment of such alimony. The trial court, however, refused to grant relief, and the Superior Court affirmed. These courts held that the parties' agreement had survived the decree of divorce ending the marriage and required McMahon to pay alimony until the youngest child became twenty-one, was emancipated or finished college. See: McMahon v. McMahon, 417 Pa.Super. 592, 612 A.2d 1360 (1992).

McMahon then filed an action against his lawyers, alleging that Shea and Shea had been guilty of negligence for failing to advise him regarding the duration of his duty to pay alimony under the Divorce Code and for failing to review the agreement and explain to him the duration of his duty to pay alimony under the agreement. He also contended that the lawyers had been negligent for allowing the property settlement agreement to be incorporated but not merged in the final decree of divorce. When Shea and Shea filed preliminary objections in the nature of a demurrer to McMahon's complaint, the trial court dismissed the action. It held that, because McMahon had voluntarily signed the agreement in settlement of a pending action, he could have no cause of action against the lawyers.

In reviewing the trial court's ruling, we accept as true all facts which have been well pleaded and all inferences reasonably deducible therefrom. We then determine whether, on the facts alleged, the law says with certainty that no recovery is possible. If a doubt exists, that doubt must be resolved in favor of the plaintiff. Collas v. Garnick, 425 Pa.Super. 8, 12, 624 A.2d 117, 119 (1993), allocatur denied, 535 Pa. 672, 636 A.2d 631 (1993); Kemper Nat'l P & C Cos. v. Smith, 419 Pa.Super. 295, 299, 615 A.2d 372, 374 (1992); Taras v. Wausau Ins. Cos., 412 Pa.Super. 37, 42, 602 A.2d 882, 884, allocatur denied, 532 Pa. 657, 615 A.2d 1313 (1992).

In Collas v. Garnick, supra, 425 Pa.Super. 8, 624 A.2d 117, the Superior Court said:

The elements which must be alleged in order to state a cause of action for legal malpractice are: "the employment of the attorney or other basis for duty; the failure of the attorney to exercise ordinary skill and knowledge; and that such negligence was the proximate cause of damage to the plaintiff." Liberty Bank v. Ruder, 402 Pa.Super 561, 567, 587 A.2d 761, 764-765, allocatur denied, 528 Pa. 637, 598 A.2d 994 (1991). See also: McHugh v. Litvin, Blumberg, Matusow & Young, 525 Pa. 1, 5, 574 A.2d 1040, 1042 (1990); Rizzo v. Haines, 520 Pa. 484, 499, 555 A.2d 58, 65 (1989). A lawyer will be found to be negligent if he or she fails to possess and exercise that degree of knowledge, skill and care which would normally be exercised by members of the profession under the same or similar circumstances. McPeake v. Cannon, Esquire, P.C., 381 Pa.Super. 227, 232, 553 A.2d 439, 441 (1989). The lawyer has a duty to inform himself or herself of the manner in which a proposed settlement affects the client and to inform the client regarding consequences thereof. 7A C.J.S. Attorney and Client, § 261 (1980), citing Wade v. Clemmons, 84 Misc.2d 822, 377 N.Y.S.2d 415 (1975). See also: In re Snitoff, 53 Ill.2d 50, 289 N.E.2d 428 (1972), cert. denied, Snitoff v. Board of Managers of Chicago Bar Assn., 412 U.S. 906, 93 S.Ct. 2292, 36 L.Ed.2d 971 (1973). As one trial court has observed,

a lawyer should exert his best efforts to insure that decisions of his client are made only after the client has been informed of relevant considerations.

Lang v. Anton, 40 D. & C.3d 47, 48 (Wash. [Pa.Com.Pl.] 1983). See also: Ziegelheim v. Apollo, 128 N.J. 250, 262, 607 A.2d 1298, 1304 (1992) (attorneys should advise clients with respect to settlements with the same skill, knowledge, and diligence with which they pursue all other legal tasks.). Although a lawyer is not expected to be infallible, he or she is expected to conduct that measure of research sufficient to allow the client to make an informed decision. 7A C.J.S. at § 257. In order for a lawyer to advise a client adequately, he or she is obligated to scrutinize any contract which the client is to execute, and thereafter must disclose to the client the full import of the instrument and any possible consequences which might arise therefrom. Id. at n. 96, citing Ramp v. St. Paul Fire & Marine Insurance Co., 263 La. 774, 269 So.2d 239 (1972); Gill v. DiFatta, 364 So.2d 1352 (La.App.1978). See also: Soderquist v. Kramer, 595 So.2d 825 (La.App.1992); Bush v. O'Connor, 58 Wash.App. 138, 791 P.2d 915 (1990). The lawyer, moreover, must be familiar with well settled principles of law and the rules of practice which are of frequent application in the ordinary business of the profession. George v. Caton, 93 N.M. 370, 377, 600 P.2d 822, 829 (1979).

Id. 425 Pa.Super. at 12-14, 624 A.2d at 119-120.

The provisions of the Divorce Code which establish that the payment of alimony shall terminate upon the payee-spouse's remarriage are well known to lawyers who practice marital law. See: 23 Pa.C.S. § 3706. These provisions state a rule of substantive law of which the defendant-lawyers in this case should have been aware. Moreover, even if the lawyers were unfamiliar with the provisions of the Divorce Code, they had an obligation to familiarize themselves with the law before advising their client to sign a legal agreement containing language which created rights contrary to and in excess of those established by statute. If the lawyers negligently advised their client incorrectly about the duration of the client's duty to pay alimony or allowed him to execute an agreement more onerous than the substantive law required, it would seem that the client would have a cause of action for legal malpractice.

The trial court held, however, that a cause of action was barred by the decision of a panel of the Superior Court in Miller v. Berschler, 423 Pa.Super. 405, 621 A.2d 595 (1993), which had extended the holding of the Supreme Court 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 circumstances similar to those in the instant case. The Superior Court directed reargument of the instant case before a court en banc so that the Miller decision might be reviewed.

In Muhammad, the defendant-lawyers had represented parents who were asserting a claim for medical malpractice which, allegedly, had caused the death of their son. The parents, following negotiations, agreed to settle their claim for the sum of $26,500.00. They subsequently became dissatisfied with the amount of their settlement and sought to avoid their agreement. However, the trial court held that they were bound by their agreement and refused to allow them to withdraw. Thereafter, the parents filed an action against their lawyers for legal malpractice. They contended that the lawyers had been negligent in recommending the settlement amount. The trial court sustained preliminary objections in the nature of a demurrer to the parents' complaint and dismissed the action. When the case subsequently reached the Supreme Court, that Court held that the trial court had correctly dismissed the complaint for failure to state a cause of action for which relief could be granted. The Court reviewed the principles which favored settlements of lawsuits and then reasoned further as follows:

Mindful of these principles, we foreclose the ability of dissatisfied litigants to agree to a settlement and then file suit against their attorneys in the hope that they will recover additional monies. To permit otherwise results in unfairness to the attorneys who relied on their client's assent and unfairness to the litigants whose cases have not yet been tried. Additionally, it places...