No. 3 E.D. Appeal Docket 1983, Appeal from the Order of the Superior Court, No. 93 Philadelphia, 1981, which Affirmed the Order Entered November 21, 1980, of the Court of Common Pleas, Trial Division, Law, for the County of Philadelphia, at No. 5193, October Term, 1972
Alan H. Ross, Philadelphia, for appellants.
Edgar R. Einhorn, Philadelphia, for appellee.
Earl Britt, Philadelphia, for amicus, State Farm.
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Hutchinson, J., concurs in the result. Larsen, J., files a dissenting opinion.
We are here called upon to resolve the difficult problem of who must bear the burden of loss between innocent parties where the attorney for one of the parties has acted beyond the scope of his authority and has misappropriated funds. This appeal reflects the wake of hardship that
follows from an attorney's failure to meet the standard of trust required of his office. Mindful of the adage that hard cases make bad law, we are constrained to conclude that the innocent client must bear the brunt of his counsel's errant behavior.
Appellee, Philip Rothman, was involved in an automobile accident which occurred on November 15, 1971 and, as a result thereof, sustained personal injuries. He retained Irving Madnick, Esq., to institute suit to recover for the loss sustained. A complaint in trespass was filed on November 2, 1972 in the Court of Common Pleas of Philadelphia County against Gloria and Ronald Fillette. The Fillettes were insured by the Liberty Mutual Insurance Company. After negotiations, Liberty Mutual, in 1974, agreed to settle the case for the sum of Seven Thousand ($7,000) Dollars. Pursuant to the settlement agreement, Liberty Mutual delivered to Madnick a release containing the terms of the proposed settlement and requiring the signature of appellee. The release was returned to Liberty Mutual purportedly signed by Philip Rothman and attested to by two witnesses. In return, Liberty Mutual presented to Madnick a check in the amount of Seven Thousand ($7,000) Dollars, payable to Philip Rothman and Irving L. Madnick. This check was thereafter purportedly endorsed by Philip Rothman and cashed. On order of Madnick, the case was marked settled, discontinued and ended on September 9, 1974.
Approximately five years later on November 20, 1979 Rothman filed a petition seeking a rule to remove the Order marking the case settled, discontinued and ended. In that petition it was alleged that Rothman had no knowledge of the purported settlement and that he did not sign the release nor did he endorse the check. It was his contention that since he was neither aware of, nor had he authorized the ...