2012 PROFESSIONAL LIABILITY UPDATE - Eckert Seamans

not be set aside. On July 7, 2005, the Court granted the motion to set aside the agreementand subjected the plaintiff’s assets to an equitable distribution hearing. On July 28, 2006,the plaintiff met with defendant Downey to discuss a legal malpractice action against theConnelly defendants. On October 26, 2006, Downey sent a letter to the Connellydefendants indicating they committed malpractice, informing the Connelly defendants toinform their insurance carrier, and stating the statute of limitations began to run on July 7,2005, the date of the judge’s order. On March 30, 2007, the plaintiff signed an officialagreement to file suit, but Downey did not file the lawsuit. On February 25, 2008, Downeysent the plaintiff a letter terminating the representation because the two-year statute oflimitations began to run on August 2, 2004, the date of the hearing, and, therefore, itexpired on August 2, 2006, before the plaintiff met with Downey. The plaintiff filed suit onJuly 6, 2009 against the Connelly defendants and against Downey alleging legalmalpractice. Downey filed a motion for summary judgment alleging the statute oflimitations barred any cause of action against the Connelly defendants, and, therefore, thelegal malpractice claim against Downey failed as a matter of law. The district courtapplied the occurrence rule, and found the claim barred by the statute of limitation, whichbegan to run on August 2, 2004, the date of the hearing. The Third Circuit reversed,finding the discovery rule applied and the statute of limitations did not begin to run untilJuly 7, 2005, the date of the order.The court noted that “under the occurrence rule, ‘the statutory period commencesupon the happening of the alleged breach of duty.’” Knopick, 639 F.3d at 607 (citingWachovia Bank N.A. v. Ferretti, 935 A.2d 565, 572 (Pa. Super. Ct. 2007)). “Where aplaintiff could not reasonably have discovered his injury or its cause, however,Pennsylvania courts have applied the discovery rule to toll the statute of limitations.” Id.(citing Wachovia, 935 A.2d at 572–74). If the discovery rule applies, the statute oflimitations begins to run when the plaintiff knew or in the exercise of reasonable diligenceshould have known of the injury and its cause. Id. (citing Crouse v. Cyclops Indus., 745A.2d 606, 611 (2000)). The court noted the discovery rule is “grounded on considerationsof basic fairness.” Id. (quoting Taylor v. Tukanowicz, 435 A.2d 181, 183 (1981)).The court outlined cases in which the discovery rule applied, including medicalmalpractice claims. It noted the principle for the discovery rule’s applicability in medicalmalpractice claims, i.e., that the plaintiff is not held responsible for knowing of an injuryuntil the abnormal condition manifests itself, is applicable in the context of legalmalpractice. Id. at 609. The court noted Pennsylvania courts and federal courts applyingPennsylvania law have applied the discovery rule to legal malpractice causes of action. Id.Courts apply the discovery rule where “the injured party is unable, despite the exercise ofdue diligence, to know of his injury or its cause.” Id. It is applied where requiring theplaintiff’s knowledge would be unreasonable and it tolls the statute until the plaintiff is putin a position to discover the injury or its cause. The court noted knowledge can be imputedwhere an adverse action is taken against the plaintiff.The court noted the Pennsylvania Supreme Court has not addressed the discoveryrule’s applicability to legal malpractice actions in a civil suit. It analyzed the PennsylvaniaSuperior Court decisions discussing the rule’s applicability in the civil context as well as162