As the calendar turns to 2025, a look back at the Pennsylvania appellate dockets shows a number of impactful legal malpractice decisions, including one that was recently reargued en banc with significant ramifications for law firms and legal malpractice insurance carriers across the Commonwealth.
The Pennsylvania Supreme Court kicked things off in May with its decision in N.W.M. v. Langenbach, which asked whether attorneys appointed by the court as guardian ad litem enjoy quasi-judicial immunity from legal malpractice claims. In N.W.M., the Court noted the unique role of a guardian ad litem in dependency hearings wherein the attorney must not only represent the legal interests of the child, defined as the child’s expressed wishes, but also the child’s “best interests,” i.e. what the attorney believes is best for the child. The Court further described how the guardian ad litem’s job “mixes legal work, social work, and investigative work.” While complicated and difficult, the Court nevertheless held a “dependency [guardian ad litem] is a lawyer with professional responsibilities to the client pursuant to the Rules of Professional Conduct. It is counterintuitive to insist that eliminating the possibility of malpractice suits is the way to incentivize proper representation of a child.” The ability of parents and relatives to bring malpractice claims on behalf of their children following what are almost uniformly difficult, emotionally charged cases presents a unique challenge for defenders’ associations and any nonprofit legal organization that represents children in dependency matters.
In a case more notable for its reminder of the importance of the claims handling process involving insurance carriers and third-party administrators, the Superior Court in Pyramid Philadelphia Management, LLC v. Gallagher Bassett Services, Inc. held that an insured failed to present a genuine issue of material fact in its claims against the TPA and lawyer that handled its workers’ compensation claim. In Pyramid, the Superior Court first held that an insured has no right of action against a TPA when the contract between the TPA and insurance carrier explicitly precludes any claim of third-party beneficiary status for the insured. Furthermore, the Court found that because the attorney who was assigned to represent the insured did not receive the case until after the allegations of the complaint were deemed admitted by the Court, any alleged failure to investigate the claim was moot. Finally, the Superior Court reiterated that expert reports must not be speculative as the liability expert in Pyramid opined only that helpful evidence could have been obtained if proper discovery was undertaken. While the nonprecedential decision in Pyramid did not create any new law, the facts are nevertheless instructive for insurance carriers, insureds, and attorneys on claims handling and legal malpractice liability expert opinions.
The most consequential decision in Pennsylvania came from the Superior Court in Poteat v. Asteak, which opinion was later rescinded and has since been reargued. Often disputed in Pennsylvania legal malpractice actions is the applicability of the gist of the action doctrine, and whether a plaintiff may bring a standard of care claim under a breach of contract theory. In Poteat, the Superior Court held there is an implicit term in every contract for legal services that the services be provided competently, and thus a plaintiff may pursue a breach of contract claim premised on negligence-based allegations. Of course, the effect of this principle is the evisceration of the two-year statute of limitations for legal malpractice cases. Plaintiffs that would have had a negligence claim but for the statute of limitations expiring, under the first Poteat decision, could simply recast the claim under a breach of contract theory to extend the period for bringing a lawsuit to four years. However, this opinion has since been rescinded and was reargued en banc on Nov. 7, 2024. All eyes in the Pennsylvania legal malpractice world will be focused on the result and potential Supreme Court appeal, as this issue is ripe for final resolution and will significantly impact lawyer liability and legal malpractice insurance carriers.
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