Aggressive Advocates For Your Rights

The Den of Damages.

At times, Plaintiffs may not be happy with the counsel they have hired. However, unless there is actual loss, there is nothing actionable in court. Power Gourmet Concepts Inc. v. Irwin & McKnight, Cv-09-1199, Oct. 1, 2010 (M.D. Pa. 2010) is case which shows this concept in action. In the case, the plaintiffs alleged professional negligence and breach of contract against I & M, the defendant attorneys. On May 9, 2005, the Plaintiffs were issued a certificate of judgment against a defendant in Ohio. The plaintiffs then sought to make the judgment effective in Pennsylvania, where the other people held property. To accomplish this domestication of judgment, the Plaintiffs hired I & M. The professional negligence allegation was based on delay by their attorneys in domesticating the judgment. They claimed that the Ohio defendant had assets in Pennsylvania which dissipated during the time they waited for I & M to domesticate judgment. The Plaintiffs also alleged there was a contract breach because of the delay, and that I & M was responsible for the additional legal fees incurred to remedy the malpractice. I & M made a motion for summary judgment, because they believed that even if the facts were decided in favor of the plaintiffs, there was still no case.

To prevail on their legal malpractice claim, the plaintiffs in Pennsylvania must satisfy three elements. A plaintiff must show there is an attorney-client relationship creating a duty; the attorney failed to exercise ordinary skill and knowledge in breaching the duty; and that such negligence was the proximate cause of the damages suffered. The damages prong means actual losses must be suffered by an aggrieved plaintiff. This means damages can not be speculative, and a person must show how they were actually injured. This does not mean the damages need to be precisely calculated, but rather that damages exist. To put simply, this means the plaintiff must show there was a legitimate cause of action in the underlying action and but for his attorney's negligence would have received damages from the lawsuit. Although it is related to damages, the ability to actually collect on damages is a separate question.

In Pennsylvania, a plaintiff does not need to prove collectability to sustain a legal malpractice charged, but a defendant attorney can plead collectability as an affirmative defense. This means that if the defendant can prove by a preponderance of the evidence that damages were not collectable, then there would be no legal malpractice. Finally, a plaintiff is limited to collecting at most the amount awarded in the underlying suit from their attorneys.

There were 2 attempts to domesticate the Ohio decision in this case. The plaintiff's main argument was that without the defendants' delay, they would have been able to collect the assets from the Ohio case. Because the assets dissipated as a result of negligent delay by the defense attorneys, the court believed the Defendants did negligently handle the domestication action. The court also believed there was an issue concerning whether there were collectible assets in 2005, which would have been available had the defendants timely domesticated the action. As such, if there were assets at that time, then there were damages.

The Plaintiffs also argued the defense did not prove collectability by a preponderance of the evidence, as required by Pennsylvania law. In order to succeed in this case, I & M would have to prove the Ohio damages were not available because that defendant has neither assets nor money to cover such awards. There was a deposition which showed this information, but the court needed to decide whether the deposition testimony would reach that burden. Because this case was at the summary judgment stage, the court decided many facts in favor of the plaintiffs. This meant they could read into the fact that in a deposition later on, the Ohio defendant never completely admitted that he had the money. The court also did not believe that the defendants could not prove collectability as a defense at this stage because the defendant had held several jobs form which he may have had collectible assets.

The court ultimately denied the defendant's motion and allowed the case to move to trial. The significance of this case is showing the back and forth which may occur when a person can not afford a judgment or the judgment needs to be modified to be enforceable in a different state. In Pennsylvania, it seems that plaintiffs have a small advantage, which is rare in legal malpractice. The defense of collectability must be proven by the defendant, thus, a plaintiff is in some ways protected by attorneys who fail to see a judgment through to the end. While this is an important concept, it is even more important to note that if at trial, a jury did not believe the Ohio defendant had assets at all during the delay, then there would be no damages sustained by the Plaintiff. Without damages there is no malpractice.

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