A unanimous Pennsylvania Superior Court panel reversed a $3.28M legal malpractice verdict against an attorney where Plaintiff-Appelle failed to timely file his claims within the two-year statute of limitations.
In the underlying matter in Lorenzo v. Milner v. Quaglia, Plaintiff-Appelle retained defendant attorney to defend him in foreclosure proceedings relating to commercial property Plaintiff-Appelle owned. A former tenant had vacated and vandalized the property on April 16, 2001, rendering the property un-rentable. Plaintiff-Appelle sought coverage from his insurance carrier. The insurance policy included a suit limitation clause prohibiting lawsuits after two years from the date the damage occurred. Accordingly, the date by which to file a lawsuit under the insurance policy was April 16, 2003. On November 5, 2003, the insurance carrier denied coverage of Plaintiff-Appelle’s claims.
Plaintiff-Appelle subsequently discharged defendant attorney and retained a second attorney who filed suit against Plaintiff-Appelle’s insurance carrier. The suit resulted in a $4 million verdict in favor of Plaintiff-Appelle and against the insurance carrier. The insurance carrier appealed the verdict and the Pennsylvania Superior Court reversed in February 2009.
On January 31, 2011, approximately eight years after the suit limitation clause had expired, Plaintiff-Appelle filed a legal malpractice action against defendant attorney for failure to file a timely claim against his insurance carrier.
Defendant attorney filed a Motion for Summary Judgment on the basis that the alleged breach of duty occurred in 2003, when the suit limitation expired, and that Plaintiff-Appelle’s claims should be barred because the two-year statute of limitations on legal malpractice claims had run. Plaintiff-Appelle argued that the statute of limitations was tolled during the pendency of the Superior Court appeal in the litigation against his insurance carrier. The trial court denied defendant attorney’s motion for summary judgment. At the conclusion of the trial, the jury returned a verdict in favor of Plaintiff-Appelle and against defendant attorney in the amount of approximately $3.28 million. Defendant attorney then filed an appeal to the Pennsylvania Superior Court.
The Pennsylvania Superior Court noted the application of the statute of limitations is a question of law reviewed de novo. Furthermore, Pennsylvania favors strict application of the statutes of limitation. Specifically, in legal malpractice claims the statute begins to run when the attorney breaches his or her duty, and is tolled only when the client, despite the exercise of due diligence, cannot discover such breach. The Court also noted that during the underlying insurance litigation, Plaintiff-Appelle testified that as of July 27, 2006, he was aware that his insurance policy contained a two-year suit limitation. Accordingly, the Court held that even applying the discovery rule, which would have tolled the statute of limitations until July 2008, the statute of limitations had run by the time Plaintiff-Appelle commenced suit three years later in 2011. In a footnote, the Court specifically rejected Plaintiff-Appelle’s argument that he could not file a legal malpractice action until the underlying litigation was finally resolved through the appeal process and reaffirmed Pennsylvania law that the statute of limitations is not tolled in legal malpractice actions until all appeals in the underlying actions have been exhausted.