Thursday, October 11, 2018

Punitive Damages Claim Allowed to Proceed in Legal Malpractice Action


 
In the legal malpractice case of Perez v. Mathis, et.al., No. 1769 - CV - 2018 (C.P. Monroe Co. Sept. 6, 2018 Williamson, J.), the court addressed an issue of first impression in Pennsylvania with regards to whether a claim for punitive damages should be allowed to proceed in these types of actions.  

The court noted that there was a considerable split of authority on how punitive damages are treated for purposes of professional negligence actions when reviewing cases from around the United States.  

The court noted that several states hold that punitive damages are meant to be a deterrent and a punishment for wrongdoing, which cannot be accomplished when they are assessed against anyone other than the original wrongdoer.  

Other courts emphasize the need to place the innocent client in the same position as he would have been absent the attorney’s negligence.   

In the end, the court allowed the Plaintiff to proceed on the claim for the lost punitive damages in the underlying bad faith claim as compensable damages in this legal malpractice suit.  The court ruled in this fashion as the Plaintiff was successful in the underlying lawsuit with substitute counsel and may have recovered punitive damages from the bad faith claim in that suit but for the original attorney’s alleged negligence in withdrawing the bad faith claim.  

More specifically, the Plaintiff had retained his original attorneys to pursue a lawsuit against Liberty Mutual Insurance Company.   The Plaintiff alleged that, over his objection, his original attorneys agreed to enter a stipulation to dismiss portions of the Plaintiff’s federal Complaint, including the claim for bad faith.    The Plaintiff alleged that the attorneys did so without his knowledge and indirect opposition to his expressed wishes. 

The Plaintiff eventually hired substitute counsel and ultimately secured a judgment against the insurance carrier on the remaining claims.  

In this follow-up legal malpractice case, the Plaintiff was additionally allowed to proceed on a  specific claim for punitive damages against the Defendant law firm.  The court denied the Preliminary Objections against the claim for punitive damages. 

The court found that punitive damages in the legal malpractice action were potentially warranted where the Plaintiff asserted that the attorney recklessly went against his wishes in the underlying action.  The court noted that a jury could potentially find that such acts or omissions by the Defendant law firm were outrageous.  As such, that claim was allowed to proceed.

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions.”  Pennsylvania Law Weekly (October 2, 2018).

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