Friday, October 2, 2020

Court Finds No Jurisdiction Over Legal Malpractice Claims

In the case of Dakota Oil Processing, LLC v. Hayes, No. 2018-10444-CT (C.P. Chester Co. April 16, 2020 Tunnell, J.), the court dismissed the Plaintiff’s legal malpractice Complaint after finding that neither general nor specific personal jurisdiction existed over the Defendants.

According to the Opinion, the Plaintiff was a limited liability company formed to develop and operate a crude oil refinery in North Dakota. In order to raise money in this endeavor, the Plaintiff entered into a collateral transaction loan with a venture financing firm. After the Plaintiff allegedly lost a $2.5 million dollar escrow payment, it filed this lawsuit for legal malpractice. 

The court noted that, generally speaking, it could exercise personal jurisdiction over a Defendant based upon either general jurisdiction or more specific, case-linked jurisdiction. 

Under the rules pertaining to general jurisdiction, a party can be sued in any state court for any claim regardless of where the underlying actions of the claim occurred where a Defendant can be found to be “at home” in the forum state. Under issues pertaining to specific jurisdiction, a party could be hailed into court on issues deriving from or connecting with the very controversy that established jurisdiction.

The court noted that one Defendant was a resident of Virginia and did not consent to jurisdiction in Pennsylvania. Another Defendant was a partnership formed in another state and which had also not consented to personal jurisdiction in Pennsylvania. The court ruled that none of the Defendants at issue were registered to do business in Pennsylvania and did not carry on any continuous or systematic part of its business in Pennsylvania. As such, no general personal jurisdiction was found. 

Under the issues of specific personal jurisdiction, the court found that no Defendants had purposefully availed themselves of the privilege of conducting business within Pennsylvania or purposefully directed its conduct in Pennsylvania. The court also noted that, the Plaintiff’s claims did not arise out of or relate to any activities by the Defendant within Pennsylvania. Lastly, the court also noted that, in order for jurisdiction to be fair and reasonable, a finding of jurisdiction must not offend traditional notions of fair play and substantial justice. 

The court found that the contacts relied upon by the Plaintiff in an effort to establish specific jurisdiction were very minimal and consisted only of limited email and telephone contacts, none of which communications had anything to do with the Plaintiff’s claims. 

As such, the court found that there was neither general nor specific personal jurisdiction to be exercised over the moving Defendants. Accordingly, the Preliminary Objections seeking the dismissal of the Complaint with prejudice were sustained. 

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Sept. 1, 2020).

Should you need an attorney to serve as an expert witness in your legal malpractice case, either on the plaintiff's side or the defense side, please do not hesitate to contact me at or at 570-319-5899.

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