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Allegheny Valve & Coupling, Inc. v. Quinn, Buseck, Leemhuis, Toohey & Kroto, Inc.

Superior Court of Pennsylvania

May 22, 2013



Appeal from the Judgment of April 23, 2012, in the Court of Common Pleas of Warren County, Civil Division at No. 778-2008




This is an appeal from a judgment entered in favor of Quinn, Buseck, Leemhuis, Toohey & Kroto, Inc. ("Law Firm") and John W. McCandless ("McCandless") (collectively referred to as "Appellees"). Prior to the entry of judgment, the trial court granted in part and denied in part Appellees' motion for summary judgment. Allegheny Valve and Coupling, Inc. ("Appellant") challenges the trial court's decision to enter summary judgment in favor of Appellees. We reverse the portion of the order that granted Appellees' motion for summary judgment and remand for further proceedings.

The trial court summarized the background underlying this matter in the following manner.

In December 2002, [Appellant] retained [Appellees] for representation in [Appellant's] corporate law suit against the former officers of [Appellant] (i.e. David Martin, Mary Garvey & Harold Johnson). [Appellees] actively pursued the claims until November 22, 2006, when [ ] McCandless filed a Praecipe for Discontinuance. On December 13, 2006, David Martin and Mary Garvey filed an action against [Appellant] for mandatory indemnification for the expenses they incurred in defending the original action. On September 4, 2007, the Erie County Court of Common Pleas entered judgment against [Appellant] and in favor of Martin and Garvey for $75, 003.19. [Appellant] appealed said judgment, but the Superior Court affirmed on October 2, 2008. While the Martin and Garvey suit was pending on appeal, the estate of the final former officer of [Appellant] (Harold Johnson) filed an action against [Appellant] for mandatory indemnification for $46, 847.00 on October 15, 2007. The parties agreed to stay those proceedings until the Martin and Garvey action was resolved on appeal. Thereafter, [Appellant] settled the action with Johnson's Estate on July 19, 2010.
On February 1, 2010, [Appellant] filed an Amended Complaint, in which [Appellant] asserts two causes of action against [Appellees], including Breach of Contract and Professional Negligence. More specifically, in [Appellant's] breach of contract claim, [Appellant] alleges that in the weeks preceding the filing of the discontinuance, [ ] McCandless advised [Appellant] that it would be prudent to discontinue the action against the former officers because [ ] McCandless had determined the former officers were judgment proof. It is further alleged that [Appellant] expressed concern to [ ] McCandless regarding the effect of a voluntary discontinuance upon [Appellant's] indemnification obligation and that [ ] McCandless "guaranteed" [Appellant] that there would be no effect (i.e. the former officers could not pursue [Appellant] for indemnification). Seemingly, [Appellant's] breach of contract count is based upon a breach of this alleged guarantee. In [Appellant's] professional negligence count, [Appellant] alleges that [Appellees] breached the applicable professional standard of care in three respects:
(1) by advising [Appellant] that a voluntary discontinuance could not trigger an indemnification obligation under applicable law;
(2) by failing to advise [Appellant] that the question of whether a voluntary discontinuance could trigger an indemnity obligation was at best an unsettled question of law in Pennsylvania; and
(3) by failing to attempt to obtain a release in exchange for the discontinuance.
[Appellant] now seeks compensatory damages in the amount of $179, 345.19 plus interest and costs of suit (which [Appellant] alleges is the amount of legal expenses and costs he [sic] incurred to defend the indemnity actions).
On May 7, 2010, [Appellees] filed an Answer and New Matter to [Appellant's] Amended Complaint. Therein, [Appellees] deny [Appellant's] allegation that [ ] McCandless made a guarantee and assert that [Appellees] advised [Appellant] that an indemnification suit should be anticipated. Further, on March 6, 2009, [Appellees] asserted a Counterclaim against [Appellant] for unpaid attorney fees in the amount of $43, 725.95 plus interest (for a total of $76, 679.41). . . .

Trial Court Opinion, 03/25/11, at 1-2.

Appellees filed a motion for summary judgment. On March 25, 2011, the trial court issued an order wherein it granted in part and denied in part Appellees' motion. The court determined that, in Appellant's breach of contract claim, Appellant failed to state a cause of action for which relief can be granted. Regarding Appellant's legal malpractice claim, the court concluded that Appellant failed to set forth sufficient evidence to establish the causation element of such a claim. For these reasons, the court dismissed Appellant's complaint. However, with regard to Appellees' counterclaim, the court concluded that summary judgment was inappropriate because an issue of material fact existed.

Appellant filed a motion for reconsideration, which the court granted. Later, however, the court effectively reinstated its March 25, 2011, order. As to Appellees' outstanding counterclaim, the parties entered into a consent judgment, signed by the trial court, whereby judgment was entered in favor of Appellees in the amount of $78, 000.00 plus interest. Appellant timely filed a notice of appeal from the entry of judgment.[1]

In its brief to this Court, Appellant asks us to consider the following questions:

1) Does Rule 1035.3(a) require a plaintiff to adduce evidence in support of an issue of fact not challenged in the defendant's summary judgment motion as lacking evidentiary support?
2) Is a plaintiff's failure to expressly allege a breach of the standard of care in a separate 'contract' count of a legal malpractice complaint grounds for summary judgment where it is otherwise pleaded in the correlative "negligence" count of the same complaint?

Appellant's Brief at 2.[2]

The general principles governing our review of orders granting summary judgment can be summarized in the following manner:

The standards which govern summary judgment are well settled. When a party seeks summary judgment, a court shall enter judgment whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery. A motion for summary judgment is based on an evidentiary record that entitles the moving party to a judgment as a matter of law. In considering the merits of a motion for summary judgment, a court views the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Finally, the court may grant summary judgment only when the right to ...

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