2012 PROFESSIONAL LIABILITY UPDATE - Eckert Seamans

In finding Plaintiff’s claims barred, the court noted that Plaintiff petitioned the court toappoint new counsel to represent him in the appeal of the first PCRA petition in 1999. After newcounsel was appointed in December 1999, Plaintiff was no longer represented by Defensecounsel. Therefore, the court noted that the termination of the attorney-client relationshipoccurred on the date of appointment of new counsel. Accordingly, the court found Plaintiff’sclaims against Defense attorney were barred by the statute of limitations.In Wachovia Bank, N.A. v. Ferretti, 935 A.2d 565 (Pa. Super. Ct. 2007), the SuperiorCourt examined when a cause of action for legal malpractice accrues when an attorney failed tomark a judgment as satisfied. The Superior Court reiterated that “the trigger for the accrual of alegal malpractice action, for the statute of limitations purposes, is not the realization of actualloss, but the occurrence of a breach of duty.” Id. at 572. The court explained that an exceptionto the occurrence rule is the equitable discovery rule, which provides the statute of limitations istolled when the “injured party is unable, despite the exercise of due diligence, to know of theinjury or its cause.” The court cautioned, “[l]ack of knowledge, mistake or misunderstandingwill not toll the running of the statute.” Id. The Superior Court stressed that Pennsylvania doesnot follow the actual loss rule, where the statute of limitations is tolled in the legal malpracticesuit until a final judgment is entered in the underlying lawsuit. Id.The Superior Court explained that the statute of limitations began to run when theattorney failed to mark the judgment as satisfied, that is, when the attorney breached a duty. Id.Furthermore, the court stated that the equitable discovery rule could only toll the statute oflimitations until the time when the client was informed that a proceeding was being institutedagainst them regarding judgment that their attorney failed to mark as satisfied. Id. at 574. Thecourt recognized that the occurrence rule requires the filing of a legal malpractice claim beforethe client in the underlying claim knows whether he will suffer any damages as a result of hisattorney’s negligence. Id. at 574 The court stated while there is a dilemma in taking competingpositions in the underlying claim and the legal malpractice claim, the public policy concern ofavoiding stale claims must prevail over the public policy concern over having two casessimultaneously proceed with inconsistent positions. Id. The court reasoned, “[t]he purpose ofthe statute would not be served if an attorney is kept in the state of breathless apprehension whilea former client pursues appeal from the trial court, to the Court of Appeal, to the Supreme Court .. . during which time memories fade, witnesses disappear or die, and evidence is lost. Id. Insum, the public policy concern of raising stale legal malpractice claims requires the filing of aclaim for legal malpractice at the time of the breach of a duty. The statute of limitations willonly be tolled under the doctrine of equitable discovery until the time clients are made aware ofproceedings against them, even if the clients are uncertain whether they will prevail in defendingthe underlying claim.”The United State Court of Appeals for the Third Circuit addressed the applicabilityof the discovery rule to legal malpractice claims in Knopick v. Connelly, 639 F.3d 600 (3dCir. 2011). In Knopick, the plaintiff hired the Connelly defendants to represent him in alawsuit involving a motion to set aside a separation and property agreement between himand his wife. His wife alleged the plaintiff failed to disclose two million dollars worth ofstock prior to entering the agreement. The plaintiff informed the defendants of fourwitnesses who could testify as to his wife’s knowledge of the assets. At the August 2, 2004hearing, the defendants called no witnesses, and assured the plaintiff the agreement would161