That’s the question on the minds of many in the legal malpractice community after a noteworthy decision in Pennsylvania.
It’s probably reasonable to assume — at least from the defense standpoint — that the success rate of a statute of limitations (SOL) defense to a legal malpractice claim is virtually zero. This may be more so in some jurisdictions, especially those that permit a litigant to pursue tort as well as a breach of contract theory in these scenarios.
A dual theory approach may not make much of a substantive difference but it certainly does in states like Pennsylvania, which carries a two-year statute of limitations for tort and a four-year statute for breach of contract. Thus, a litigant already time-barred under a malpractice theory could simply pursue the breach of contract approach. Not to fear, as the gist of the action doctrine could apply to limit the claim to tort. The Pennsylvania Superior Court may have just gutted that argument, however.
The court recently held in Poteat v. Asteak, 2024 PA Super 52, that the gist of the action doctrine cannot be used to convert a breach of contract action against a plaintiff’s former attorney to a professional liability action sounding in tort, and reiterated that retainer agreements include an implied duty of the attorney to perform legal services in a professional manner. As explained below, the ruling seems to more definitively expand the statute of limitations for legal malpractice claims from two years to four after a number of earlier cases suggested otherwise. This could be a tough blow to Pennsylvania attorneys subject to a malpractice claim.
Pennsylvania’s gist of the action doctrine provides a framework for determining whether a plaintiff bringing a breach of contract claim can also bring a tort claim based on the same conduct. The inquiry questions whether the facts of a plaintiff’s claim allege the breach of a duty “created by the parties by the terms of their contract — i.e., a specific promise to do something that a party would not ordinarily have been obligated to do but for the existence of the contract,” or “the defendant’s violation of a broader social duty owed to all individuals, which is imposed by the law of torts and, hence exists regardless of the contract.” Poteat (quoting Bruno v. Erie Insurance Company, 106 A.3d 48, 68 (Pa. 2014)). Where a plaintiff could allege both malpractice and breach of contract, the statute of limitations was already effectively four years.
Poteat appealed pro se from the trial court’s decision sustaining his former attorney’s dismissal based on the gist of the action doctrine. Consequently, the statute of limitations had already run, so the court dismissed the action.
The Superior Court, in reversing, relies on what it calls the Pennsylvania Supreme Court’s “holding” in Bailey v. Tucker that “of course, an attorney who agrees for a fee to represent a client is by implication agreeing to provide that client with professional services consistent with those expected of the profession at large.” Bailey v. Tucker, 533 Pa. 237, 251-52, 621 A.2d 108, 115 (1993). While Bailey has a number of holdings, that sentence does not read like one. The requirement of competence comes straight from the Rules of Professional Conduct, which, without any apparent regard to whether or not a fee is paid, say that “a lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Pa. RPC 1.1. Consider also Pa. RPC 6.1, requiring pro bono services, the explanatory comment to which states, in pertinent part, “the basic responsibility for providing legal services for those unable to pay ultimately rests upon the individual lawyer […].”
In Poteat, reliance on an implied contractual term of minimal competence, which every attorney must bring to every representation whether or not there is a retainer agreement, seems to convert every attorney-client relationship involving such an agreement into a breach of contract action with a four-year statute of limitations, regardless of the nature of the allegations. This starkly contrasts with recent superior Court prior analyses, most notably in Johnstone v. Raffaele, which concluded that “the gist of the action doctrine can be applied to dismiss contract claims, while allowing the tort claims to proceed.” Johnstone v. Raffaele, 241 A.3d 479 (Pa. Super. Ct. 2020). Johnstone, in reaching that conclusion, surveyed several other Superior Court decisions, including Meksin v. Glassman, Seidner v. Finkelman, and Julia v. Cerato, which involved precisely the issue in Poteat: whether a contract claim against an attorney sounding in malpractice must proceed as a tort, and they all came out contrary to Poteat.[1] Moreover, while Johnstone and the cases it surveys are unpublished, and therefore not binding precedent, both Johnstone and Meksin are recent enough to qualify for citation for their persuasive value pursuant to Pa.R.A.P. 126(b).
Poteat’s apparent doubling of the statute of limitations for legal malpractice claims, by reading a pre-existing duty of competence into every retainer agreement, arguably contradicts the court’s own prior analyses of the gist of the action doctrine, and suggests that the time may be right to seek clarified guidance from the Pennsylvania Supreme Court. For now, Pennsylvania attorneys may be subject to a four-year statute of limitations, as opposed to the two year statute that the legislature seemingly sought to apply.
[1] Meksin v. Glassman, 217 A.3d 416, 2019 Pa. Super. Unpub. LEXIS 1993, 2019 WL 2183809 (Pa. Super. 2019); Seidner v. Finkelman, 195 A.3d 1048, 2018 Pa. Super. Unpub. LEXIS 3249, 2018 WL 4178147 (Pa. Super. 2018); and Julia v. Cerato, 118 A.3d 441, 2015 Pa. Super. Unpub. LEXIS 3295, 2015 WL 7573074 (Pa. Super. 2015)
