UPDATE: Third Circuit Upholds Grant of Summary Judgment on Appeal

Following the events described below, the legal malpractice insurer filed an appeal to the United States Court of Appeals for the Third Circuit.  The Third Circuit affirmed the grant of summary judgment for the Firm’s client on the basis that he was not a joint tortfeasor with the third attorney, who allowed a default judgment to be entered.

Oral argument was conducted by Dan Ryan.  You can read coverage of the argument by The Legal Intelligencer HERE.

In its opinion, the court held that it was appropriate to apply the multifactor test to determine whether the Firm’s client and the third attorney were joint tortfeasors.  The court found that the two attorneys owed different duties to the business owners and years passed between their actions.  Finally, the court found that the default judgment may have been a direct result of the actions of the Firm’s client, but it was caused solely by the actions of the third attorney.  Therefore, the two attorneys did not cause a single, unapportionable injury to the business owners and the two attorneys were not jointortfeasors.

Since this determination alone was sufficient to affirm Judge Tucker’s grant of summary judgment, the Third Circuit did not reach the question of whether the Firm’s client was a proximate cause of any harm to the business owners.

Marshall L. Schwartz¬†obtained summary judgment in the United States District Court for the Eastern District of Pennsylvania on behalf of an attorney in a legal malpractice case. The Firm’s client had represented business owners in a Bucks County township whose application for an occupancy permit was denied. The business owners felt that the permit was denied for improper reasons and sought to bring suit against the township and certain township officials. The Firm’s client prepared a complaint with RICO and civil rights causes of action but declined to continue with his representation of the business owners. The business owners filed the complaint pro se.

The business owners then retained a second attorney to pursue the federal action. The federal action was eventually dismissed. Three township officials then sued the business owners under the Dragonetti Act, alleging wrongful use of civil proceedings. A third attorney was retained to defend the business owners. However, he failed to file an answer to the Dragonetti Act complaint and a default judgment was taken.

Liability having been admitted through the default judgment, a trial on damages returned a verdict of $3,030,000 against the business owners. The business owners then sued their third attorney for legal malpractice. The third attorney’s legal malpractice insurer resolved both of these actions through the payment of $1,500,000 to the township officials.

The legal malpractice insurer then sued the Firm’s client and the second attorney for contribution, alleging that they were also negligent in their representation of the business owners. At the close of discovery, summary judgment motions were filed.

The Honorable Petrese B. Tucker granted the Firm’s motion, finding that its client could not be a joint tortfeasor with the third attorney, a requirement for contribution. Judge Tucker also granted summary judgment as to the Firm’s second argument, that its client was not a proximate cause of any harm to the business owners as the subsequent events were not foreseeable. After granting summary judgment for the Firm’s client, Judge Tucker held that summary judgment was also appropriate for the second attorney on the same grounds.

You can read the December 28, 2011 story on this case published in The Legal Intelligencer HERE.