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CONNELLY v. WOLF

December 20, 1978

Eugene W. CONNELLY
v.
WOLF, BLOCK, SCHORR AND SOLIS-COHEN



The opinion of the court was delivered by: HUYETT

MEMORANDUM AND ORDER

This diversity action was filed by plaintiff Eugene W. Connelly ("Connelly") against Wolf, Block, Schorr and Solis-Cohen ("Wolf, Block") for alleged legal malpractice arising from Wolf, Block's participation in a suit between American East India Corporation ("American") and Ideal Shoe Company ("Ideal"). The factual background of that case is detailed in the reported decision, American East India Corp. v. Ideal Shoe Co., 400 F. Supp. 141 (E.D.Pa.1975), Aff'd, 568 F.2d 768 (3d Cir. 1978). Wolf, Block represented American in that action. At the time that suit was filed, and up until December 31, 1974, Connelly was president of American, a corporation owned by Indian interests. In his capacity as president, Connelly was American's liaison with its counsel. In addition to Wolf, Block, the New York law firm of Chadbourne, Parke, Whiteside and Wolff ("Chadbourne") represented American. Chadbourne was also American's counsel in two suits in the New York state courts. In one of those suits Commercial Trading Company ("Commercial") sought declaratory and injunctive relief against American; in the other, American sought damages against Commercial. All three suits involved a dispute as to whether American was entitled to payments for the importation of certain footwear. The crux of the Philadelphia action was that "Plaintiff, American East India Corporation (American), delivered goods to the defendant, Ideal Shoe Company (Ideal), and defendant paid the monies due, minus a deduction for estimated damaged and/or inferior goods, to a third party factor, Commercial Trading Corporation (Commercial)." American East India Corp. v. Ideal Shoe Co., supra at 146.

 In its complaint in the Philadelphia action, American sought damages of $ 27,542.40. The case was tried during May and June, 1973. Trial briefs and requested findings of fact were submitted in July of the same year. On July 16, 1975, the case was decided, and American was awarded $ 19,631.36, plus interest. Between the time of trial and the decision in the case, however, several significant events occurred that affect this case.

 In October, 1974, Connelly made arrangements with American for his retirement. It was agreed that Connelly would retire effective December 31, 1974, and that the Philadelphia action and the two New York cases would be assigned to Employment Counsellors, Inc., a New York corporation wholly owned by Connelly. The assignments were effective as of October, 1974. *fn1"

 Both before and after the assignments, Connelly expressed his dissatisfaction with certain aspects of Wolf, Block's handling of the trial and requested that certain information be put before the trial judge before a decision was rendered.

 After the decision in the Philadelphia case was handed down, and American had been awarded $ 19,631.36 of the $ 27,542.40 that it had sought, Wolf, Block filed with the court a "Motion to Amend the Court's Findings of Fact, to Make Additional Findings of Fact, for a New Trial to the Extent Necessary to Make such Findings, to Amend Conclusions of Law and to Amend the Judgment." The motion was supported by an affidavit by Connelly that was submitted after the motion was filed. On August 1, 1975, the motion was denied. Connelly Supplemental Affidavit, Exhibit D.

 Connelly asserts, as the basis for his malpractice claim, that Wolf, Block was not aware of the applicable law in the Philadelphia action; that it failed to bring the correct law to the judge's attention after being alerted to it by plaintiff; that it failed to use evidence of Commercial's fraud and deceit that he provided; that this malpractice continued from the time of trial until the decision was announced; and, that Wolf, Block failed to advise him in a timely fashion of the provisions of Federal Rule of Civil Procedure 59.

 Defendant Wolf, Block has now moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. In support of its motion defendant contends that Connelly does not have standing to bring this action; that the claim, if any, belongs to American; that the claim was never assigned to Connelly; and that Connelly is collaterally estopped from asserting that a malpractice claim was assigned to him by virtue of the decision in Connelly v. Chadbourne, Parke, Whiteside & Wolff, Index No. 15995/77 (S. Ct.N.Y.Cty., N.Y., Sept. 14, 1977).

 Rule 56(b) provides that "(a) party against whom a claim . . . is asserted . . . may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof." Rule 56(e) provides further that

 
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

 Plaintiff has filed two affidavits in opposition to defendant's motion for a summary judgment. We must determine, therefore, whether defendant has met its burden of showing the absence of any genuine issue as to all material facts and whether it is entitled to judgment as a matter of law. 6 Moore's Federal Practice P 56.15(3) (2d ed. 1976). Under proper circumstances, summary judgment can be granted on the basis of collateral estoppel. Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840 (3d Cir. 1974).

 Collateral Estoppel

 Defendant bases its collateral estoppel argument on the decision of the New York Supreme Court, New York County, in Connelly v. Chadbourne, Parke, Whiteside & Wolff, Index No. 15995/77 (Sept. 14, 1977). Connelly sued defendant in that case for malpractice in Chadbourne's representation of American between 1968 and June 1974 in the two New York actions and the Philadelphia action discussed Supra. Connelly based his right to bring the malpractice suit on the same assignments that are at issue in this case. The court noted that any malpractice occurred, if at all, prior to the October 1974 assignments, for the simple reason that Chadbourne had ceased to represent American before the assignment. The court's decision on Chadbourne's motion to dismiss therefore turned on the question whether the assignments of the suits by American included an assignment of any malpractice claim. The court held that "(t)he assignment in question clearly assigns only the three existing actions. Any claim for malpractice belongs to (American)." Connelly v. Chadbourne, Parke, Whiteside & Wolff, supra, slip op. at 3.

 To determine the effect of this decision on the instant action, we are required in this diversity action to look to the law of Pennsylvania to determine the applicable law of collateral estoppel. Comment g, § 95 of the ...


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