Miller v. Berschler

• Decision Date: 31 March 1993
• Citation: 423 Pa.Super. 405,621 A.2d 595
• Parties: Richard E. MILLER, Appellant, v. Jerold S. BERSCHLER and Saul Solomon, Ind. and T/A Solomon and Berschler, a Partnership.
• Court: Pennsylvania Superior Court

Page 595

621 A.2d 595

423 Pa.Super. 405

Richard E. MILLER, Appellant, v. Jerold S. BERSCHLER and Saul Solomon, Ind. and T/A Solomon and Berschler, a Partnership.

Superior Court of Pennsylvania.

Argued Aug. 13, 1992.

Filed Jan. 22, 1993.

Reargument Denied March 31, 1993.

Paul R. Beckert, Jr., Bensalem, for appellant.

Thomas D. Paradise, Philadelphia, for appellees.

Before CAVANAUGH, WIEAND and McEWEN, JJ.

CAVANAUGH, Judge:

This is an appeal from an order granting appellees' renewed motion for summary judgment. The issue to be decided in this appeal is whether the lower court correctly found that appellant's legal malpractice claim was not viable in light of the recent Supreme Court decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 526 Pa. 541, 587 A.2d 1346 (1991), reh. denied, 528 Pa. 345, 598 A.2d 27 (1991), cert. denied, 502 U.S. 867, 112 S.Ct. 196, 116 L.Ed.2d 156 (1991). Appellant makes divers arguments attempting to distinguish Muhammad. We agree with the lower court and three other courts of Common Pleas ¹ that have applied Muhammad and find that within its confines the rule of Muhammad is well nigh absolute.

The facts are as follows. The appellant, Richard E. Miller, was represented in a divorce action by Jerold Berschler, Esq., a partner in the law firm of Solomon and Berschler. During the course of the divorce action, Miller and his wife entered into a property settlement agreement. By its terms, Miller agreed, inter alia, to pay alimony to his wife until his retirement, his wife's remarriage, or the death of either party. The settlement agreement, however, did not address the wife's possible cohabitation with another adult male after the divorce.

After a decree in divorce was entered, the wife began cohabitation with an adult male around Thanksgiving of 1986. In 1987, Miller learned of the cohabitation and applied to the court to terminate his alimony payments. The court denied his application, finding that cohabitation was not specified in the agreement as an event which would cause alimony to terminate. This legal malpractice action against the appellee was subsequently filed.

Appellant complains that he was not advised or made aware of the impact of the Divorce Code, or the necessity of a cohabitation provision in the settlement agreement for termination of alimony liability. The complaint suggests that it was because he lacked this information that he assented to an agreement which did not expressly terminate the payments of alimony in the event of his wife's cohabitation. The damages the appellant has sought are essentially the amount of alimony payments that he has made as of the date of cohabitation until the date when, under the agreement, alimony terminates. A motion for summary judgment by the appellee was initially denied. However, after the Supreme Court's decision in Muhammad, supra, the appellee renewed his motion based on the import of that case. The court granted the appellee's motion, noting that Muhammad forecloses legal actions based on negligence and/or contract principles. This appeal followed.

The law relating to summary judgment is settled. A motion for summary judgment may be granted only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Intili v. Salak, 403 Pa.Super. 578, 584, 589 A.2d 761, 764 (1991); Johnson v. Woodland Hills School District, 135 Pa.Cmwlth. 43, 45 n. 2, 582 A.2d 395, 397 n. 2 (1990). In passing upon a motion for summary judgment, a court must examine the record in the light most favorable to the non-moving party, and must resolve all doubts against the moving party. Mariscotti v. Tinari, 335 Pa.Super. 599, 601, 485 A.2d 56, 57 (1984); Thorsen v. Iron and Glass Bank, 328 Pa.Super. 135, 140, 476 A.2d 928, 930 (1984).

The sole issue in this appeal is whether in the instant matter Muhammad, supra, bars actions for legal malpractice which arises out of the settlement of a prior claim. The appellant asserts that Muhammad is limited to allegations of attorney negligence in investigating a matter in anticipation of settlement or negotiating the settlement itself. He distinguished this situation, which he claims involves the duty of an attorney to explain the consequences of a proposed settlement. He characterizes Muhammad as arising out of circumstances where a dissatisfied litigant believed he should have received more money or a better settlement. He notes the undeniable harshness of a rule of law which would foreclose legal malpractice actions for an attorney's negligence in advising his client in regards to the provisions of a settlement agreement.

We find the appellant's argument unpersuasive. Muhammad, speaking in straightforward terms, bars litigants who have entered a settlement agreement from subsequently maintaining a suit against their attorney for legal malpractice unless fraud is alleged in the inducement of the agreement. While it may be argued that this is a fundamentally problematic holding, we are obliged to follow the pronouncements of our highest court. See, e.g., Commonwealth v. Dugger, 506 Pa. 537, 545, 486 A.2d 382, 386 (1985) ("The formal purpose of the Superior Court is to maintain and effectuate the decisional law of [the Supreme] Court as faithfully as possible.")

In Muhammad, plaintiffs' infant son died following surgery from improperly administered general anesthesia. Plaintiffs hired a law firm to bring a medical malpractice action against the anesthesiologist, the surgeon and the hospital. After settlement negotiations, the defendants offered a settlement of $23,000 to the plaintiffs. This offer was later increased to $26,500 at the suggestion of the court, and the plaintiffs accepted it. Subsequently, however, the appellees informed the law firm they were dissatisfied with the settlement. When they found out that the settlement agreement could not be broken, the plaintiffs retained new counsel and sued the law firm for legal malpractice. The law firm argued that under the doctrine of collateral estoppel, the action should be dismissed because it was trying to relitigate the settlement agreement. Although it found the doctrine of collateral estoppel inapplicable, the Supreme Court sua sponte promulgated a rule affording attorneys broad protection in malpractice cases.

Simply stated, we will not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which the plaintiff agreed, unless that plaintiff can show he was fraudulently induced to settle the original action. An action should not lie against an attorney for malpractice based on negligence and/or contract principles when the client has agreed to a settlement. Rather, only cases of fraud should be actionable.

Id., 526 Pa. at 546, 587 A.2d 1346. The court gave the following rationales for this rule: the court declared that the essence of settlement is contractual in nature, and similar to a contract, the time for questioning whether a settlement agreement is advantageous is before settlement, id. at 547-548, 587 A.2d at 1349; the contract principle of caveat emptor applies similarly to settlements, so that a person entering into a settlement agreement is locked into whatever compromise he agreed to once the settlement becomes effective, id. at 548, 587 A.2d at 1349; the Court found that overriding principles of public policy supported its result, as lawyers might be reluctant to settle a case if they feared a client might later find a way to sue them for something that " 'could have been done, but was not,' " id. at 548, 587 A.2d at 1349; the court was concerned with the lack of finality and delay in already overcrowded courts and believed "we [the court] should view 'litigation concerning litigation' cases with a jaundiced eye," id. at 549-550, 587 A.2d at 1350; litigation over settlements is of particular concern, because settlement is an essential part of the efficient operation of our judicial system, id. at 550, 587 A.2d at 1349; and finally, there are distinct societal advantages to a judicial system which is not adversarial in nature but attempts to resolve disputes by compromise or concession, id. at 551-552, 587 A.2d at 1351.

It appears that, given the broad policy rationales employed by the Supreme Court and the unqualified articulation of its "simply stated" holding, Muhammad proclaims a clear, bright line rule which, absent fraud, shields attorneys from legal malpractice claims sounding in negligence or contract where they involve cases concluded by completed settlement. Post-Muhammad, a party dissatisfied with the settlement agreement provided by their attorney can only seek redress if it can establish it was fraudulently induced into agreeing to settle, and it is incumbent on the client to plead with specificity fraud in the inducement. Id. at 552-53, 587 A.2d at 1351.

Given the doctrinal sweep of the court's decision, we find that the lower court, which interpreted Muhammad in a way similar to this opinion, did not err in granting summary judgment. If Muhammad is to be narrowed, direction must come from our Supreme Court.

Order affirmed.

WIEAND, J., files a dissenting opinion.

WIEAND, Judge, dissenting:

I respectfully dissent. The majority, in my judgment, paints with too broad a brush. By taking the decision 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), and applying it to facts to which that decision can have no reasonable application, the majority has unnecessarily and unwisely expanded the Supreme Court's holding. It has fashioned a rule of law which blindly protects the careless and does a disservice alike to those members of the lay public who must rely upon their lawyers for legal advice and the conscientious, careful practitioners who willingly...