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Knopick v. Downey

United States District Court, M.D. Pennsylvania

August 5, 2013

NICHOLAS KNOPICK, Plaintiff
v.
PHILIP A. DOWNEY, Defendant

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[Copyrighted Material Omitted]

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For Nicholas Knopick, Plaintiff: Joshua M. Autry, LEAD ATTORNEY, Clymer, Musser & Conrad, P.C., Lancaster, PA.

For Daniel P. Hunt, Movant: Daniel P. Hunt, South Pasadena, CA.

For Philip A. Downey, Defendant: Robert W. Sink, Law Offices of Robert W. Sink, Philadelphia, PA; William F. McMurry, William F. McMurry and Associates, Louisville, KY.

For John J. Connelly, Jr., Susan M. Kadel, James, Smith, Durkin & Connelly, L.L.P., Amici: Edwin A.D. Schwartz, LEAD ATTORNEY, Marshall Dennehey Warner Colman & Goggin, Harrisburg, PA; Robert W. Sink, Law Offices of Robert W. Sink, Philadelphia, PA; William F. McMurry, William F. McMurry and Associates, Louisville, KY.

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MEMORANDUM

SYLVIA H. RAMBO, United States District Judge.

In this civil action invoking this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, Plaintiff filed a complaint alleging that two groups of attorneys committed legal malpractice related to their representations of Plaintiff in connection with a property settlement agreement and legal malpractice action arising therefrom. Presently before the court are two motions. ( See Docs. 94 & 96.) The first motion, filed by Plaintiff, requests that the court reconsider its December 29, 2009 order dismissing the Connelly Defendants. (Doc. 96.) The second motion, filed by Defendant Downey, requests the court enter judgment in his favor on the basis that he was not the proximate cause of Plaintiff's harm. (Doc. 94.) Both motions rely, in part, on a December 20, 2012 Pennsylvania Superior Court decision, Coleman v. Duane Morris, LLP, 2012 PA Super 281, 58 A.3d 833 (Pa. S.Ct. 2012). For the following reasons, the court will deny both motions.

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I. Background

At the heart of the instant motions is this court's December 29, 2009 order granting the Connelly Defendant's motion to dismiss. (Doc. 29.) In reaching its conclusion, the court found that Plaintiff's complaint failed to adequately plead a breach of contract action for legal malpractice, but adequately pleaded a cause of action arising in professional negligence. ( Id. at p. 9 of 12.) Finding that the gist of the action against the Connelly Defendants was subject to a two-year statute of limitations that had expired before Plaintiff commenced this lawsuit, the court dismissed the Connelly Defendants from the matter.

A. Facts[1]

On May 11, 1998, Plaintiff separated from his wife pursuant to a Property Settlement Agreement (" PSA" ) drafted by his attorney at the time. (Doc. 1, ¶ 8.) Plaintiff alleged that, at the time he and his wife entered into the PSA, his wife was fully aware of all his assets, which included approximately $2 million worth of stock. ( Id. at ¶ ¶ 10, 14.) Plaintiff also alleged that his wife was aware, at the time of the PSA, that the stock was encumbered by a loan. ( Id. at ¶ 14.)

On July 30, 1999, Plaintiff filed for divorce. ( Id. at ¶ 16.) Despite the existence of the PSA, Plaintiff's wife filed for, inter alia, an equitable distribution of the marital assets in the Court of Common Pleas of Perry County, Pennsylvania ( Id. at ¶ 17), claiming that the PSA was invalid because she was unaware of the two million dollars of stock held by Plaintiff ( Id. at ¶ 18). On October 31, 2001, Plaintiff retained the Connelly Defendants as his counsel. ( Id. at ¶ ¶ 21-24.) Prior to a hearing on the validity of the PSA, Plaintiff's wife offered to settle the case if Plaintiff would transfer to her $300,000.00 of his stock. ( Id. at ¶ 26.) The Connelly Defendants assured Plaintiff that the PSA was valid and that his wife was not entitled to more than the $60,000.00 she already received. ( Id. at ¶ 27.) The Connelly Defendants further assured Plaintiff that, even if the PSA was found to be invalid, Plaintiff would only have to pay his wife the amount that the stock was worth at the time the PSA was executed, which would have been zero dollars because the stock was encumbered by a $2 million loan. ( Id. ¶ 28.)

On August 2, 2004, a hearing was held in the Court of Common Pleas of Perry County, Pennsylvania, before the Honorable Kathy A. Morrow. ( Id. at ¶ ¶ 30, 34.) Plaintiff alleged that, prior to this date, he informed the Connelly Defendants that several witnesses were available to testify that his wife was aware of the stock at the time she entered into the PSA. ( Id. at ¶ 32.) None of these witnesses were called at the hearing. ( Id. at ¶ 31.) Afterward, the Connelly Defendants assured Plaintiff that the hearing had gone well and that he should win. ( Id. at ¶ 33.)

On July 5, 2005, Judge Morrow issued an order invalidating the PSA finding that Plaintiff had failed to provide his wife with a full and fair disclosure of his assets. ( Id. at ¶ 34.) On August 29, 2005, Plaintiff discharged the Connelly Defendants. ( Id. at ¶ 39.)

On July 31, 2006, Plaintiff contacted Attorney Downey wishing to have his case

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reviewed for any potential malpractice claims against the Connelly Defendants. ( Id. at ¶ 46.) Defendant Downey contacted the Connelly Defendants, requesting information regarding their representation of Plaintiff at the August 2, 2004 hearing. ( See id. at Ex. D.) On March 30, 2007, Defendant Downey and Plaintiff entered into a contingent fee agreement. ( Id. at Ex. E.) The scope of the agreement provided that " [Plaintiff] retains [Defendant Downey] to institute, prosecute, negotiate and compromise claims or actions as may be deemed advisable by [Defendant Downey] in [Plaintiff]'s best interest to recover damages from [the Connelly Defendants]." ( Id. ) Defendant Downey never filed a malpractice suit against the Connelly Defendants ( Id. at ¶ 51), and on February 25, 2008, Defendant Downey informed Plaintiff that he would not pursue a legal malpractice claim against the Connelly Defendants because Plaintiff was " limited to a claim for breach of contract" and that the statute of limitations on that claim was two-years, which had begun to run on August 2, 2004, when the Connelly Defendants failed to call potentially relevant witnesses at the hearing ( Id. at Ex. F).

B. Procedural History

Plaintiff initiated this case by filing a complaint on July 6, 2009. [2] The complaint named two sets of defendants, and brought, what Plaintiff labeled as, a breach of contract claim against the Connelly Defendants in connection with their state court representation of Plaintiff in the PSA proceedings (Count I), and a legal malpractice (Count II) and breach of contract claim (Count III) against Defendant Downey in connection with his failure to adequately prosecute Plaintiff's legal malpractice claim against the Connelly Defendants. ( See Doc 1.) Plaintiff set forth the following in support of his breach of contract claim against the Connelly Defendants:

57. When an attorney enters into a contract to provide legal services, there automatically arises a contractual duty on the part of the attorney to render those services in a manner that comports with the profession at large.
* * *
59. [By retaining the Connelly Defendants], the [Connelly Defendants], by implication, agreed to provide [Plaintiff] with professional services consistent with those expected of the profession at large.
* * *
61. [The Connelly Defendants] had a duty to conduct themselves as a reasonable attorney would act.
62. [The Connelly Defendants] owed [Plaintiff] a duty to possess and employ the skill and knowledge that ordinarily ...

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