of the settlement. After the trial court enforced the settlement agreement, plaintiffs asserted negligence, contract, breach of fiduciary duty and other claims against their attorney related to his alleged malpractice in failing to secure a more lucrative settlement. In support of its holding, the Court in Muhammad relied heavily on the "strong and historical public policy of encouraging settlements" of lawsuits and noted that lawyers would be afraid to settle cases if they were subject to suit by a client who later became disgruntled. 587 A.2d at 1349.
It does not clearly appear from plaintiff's allegations that its claims are barred by Muhammad.
This is not an action by a client who later became dissatisfied with a settlement agreement consummated by his attorney with the client's assent. It is an action by a client dissatisfied with his attorney for allegedly failing to communicate settlement offers and depriving his client of an opportunity to settle a case on terms far more favorable than those later available in the circumstances in which the client was placed because of the attorney's conduct.
Defendant argues that because plaintiff agreed to settle the underlying suit for an amount it has acknowledged to be "reasonable," this case falls within the ambit of Muhammad. What plaintiff has alleged is that the ultimate settlement "was reasonable under the circumstances." As alleged by plaintiff, these circumstances include a failure to pursue a more favorable settlement opportunity before the damage claim was bolstered, a failure adequately to prepare a defense and a failure timely to alert plaintiff of the need to secure new counsel which placed plaintiff in a much weaker position by the time of trial.
Unlike plaintiffs in Muhammad and its progeny, plaintiff in this case did not agree to the acts of which it now complains. Plaintiff has not become dissatisfied with the consequences of "his" decision to settle. Martos v. Concilio, 427 Pa. Super. 612, 629 A.2d 1037, 1039 (1993). Plaintiff is not expressing "retrospective unhappiness" with a settlement agreement. Spirer v. Freeland & Kronz, 434 Pa. Super. 341, 643 A.2d 673, 675 (1994). Plaintiff is unhappy at having to settle a case on far less advantageous terms than it allegedly could have if defendant had timely communicated and pursued prior settlement opportunities, or prepared plaintiff's case more competently or apprised plaintiff of a conflict in time for new counsel adequately to prepare its case.
Indeed, at the time of settlement, plaintiff expressly reserved its claims against defendant. Such a reservation of rights does not itself create rights. It does underscore, however, that plaintiff has not had a change of heart about the action of an attorney to which it had assented.
This case more closely resembles White v. Kreithen, ___ Pa. Super. ___, 644 A.2d 1262 (1994) than Muhammad. The Court in White held that a claim that plaintiff was forced to settle a case on terms less advantageous than she could have because of her discharged attorney's negligent preparation and representation was not barred by Muhammad. 644 A.2d at 1265. The Court in White noted that on its face Muhammad did not apply as the attorney charged with malpractice had not consummated the settlement agreement. Similarly, defendant in this case did not represent plaintiff at trial or when it agreed to the mid-trial settlement.
To allow plaintiff's claim would not undermine the policy of encouraging settlement of legal disputes. To the contrary, it would further that policy by providing an additional incentive for lawyers faithfully to communicate all settlement offers to their clients. On the facts alleged by plaintiff, defendant's failure to do so in this case resulted in a consumption of additional court time and resources, the avoidance of which is a paramount consideration behind the policy of encouraging settlements. Muhammad, 587 A.2d at 1350.
To allow plaintiff's claim would not make lawyers more fearful of settling cases. It might make them more reluctant not to communicate settlement offers timely to their clients or generally to keep them apprised of all matters pertinent to the representation.
The court concludes that Muhammad does not preclude relief on the type of allegations set forth by plaintiff in its complaint. Defendant's motion will be denied. An appropriate order will be entered herewith.
AND NOW, this day of November, 1994, upon consideration of defendant's Motion to Dismiss Plaintiff's Complaint and the response of plaintiff thereto, consistent with the accompanying memorandum, IT IS HEREBY ORDERED that said Motion is DENIED.
BY THE COURT:
JAY C. WALDMAN, J.
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