Matthew Weisberg, Weisberg Law

In this column on attorney liabilities, this author has oft discussed the legal malpractice statute of limitations as in flux. In light of the Pennsylvania Supreme Court's recent holding in Dittman, the legal malpractice statute of limitations in light of the economic loss/gist of the action doctrine(s) (the doctrine) must be revisited.

In Coleman v. Duane Morris, 58 A.3d 833 (Pa. Super. 2012), the Superior Court held that legal malpractice gives rise to two causes: legal malpractice negligence; and legal malpractice breach of contract.

The legal malpractice negligence statute of limitations is firmly: two years. In the legal malpractice breach of contract cause, Coleman, see also, Kituskie v. Corbman, 714 A.2d 1027 (Pa. 1998), held the four-year breach of contract statute of limitations also applies.

Coleman held that in every attorney-client relationship there exists a duty of the standard of care—both expressly as to competency (i.e., negligence); and implicitly contractually—as a matter of common law. As argued in Coleman, it is up to the legislature—not the court—to further distinguish between the statutes of limitations (e.g., two versus four years).

In every legal malpractice action, it is (arguably) held by Bailey v. Tucker, 621 A.2d 108 (Pa. 1993), that the statute of limitations commences upon the “occurrence” of the underlying malpractice. Of course, the discovery rule tolls the running of the statute of limitations upon the legal malpractice plaintiff's reasonable investigation of the occurrence. But see, Communications Network International V. Mullineaux, 187 A.3d 951 (Pa. Super. 2018).

Unlike other causes, all of the elements of the legal malpractice cause(s) need not be met prior to the commencement of the running of the statute of limitations. Specifically, damages need not eventualize prior to the statute of limitations commencing (and, in fact, the statute of limitations may expire prior to the realization of malpracticing attorney's damages to the client).

As an initial overview: the legal malpractice negligence statute of limitations is two years; the legal malpractice breach of contract statute of limitations is four years; the statute of limitations commences upon the occurrence of the malpractice; the statute of limitations' running is tolled by the discovery rule; but the statute of limitations is not truncated by the failure of the other unfulfilled elements (specifically, damages).

Since Coleman's bifurcation of legal malpractice into negligence and breach of contract (with their differing respective statutes of limitations), lower courts have sought to limit the implicit legal malpractice breach of contract cause to an explicit breach of the written attorney-client fee agreement: contrary to the deviation of the standard of care implied in the attorney-client relationship as held by Coleman. Even though Coleman specifically holds the statute of limitations is necessarily two and four years (because of the explicit and implicit reliance upon the attorney meeting the standard of care, courts—faced with the differing causes and statutes of limitations arising out of the same conduct—seek to abrogate (arguably, circumvent).  In so limiting, the attorney-client fee agreement has been nonprecedentially held to require specific breach.

Then, the economic loss/gist of the action doctrine(s) began being interposed.

The doctrine harkens back to courts' division between law (i.e., financial damages) and equity.  The doctrine generally holds that if the underlying conduct sounds in strictly financial loss then the tort (i.e., negligence) claim would be stricken.

Recently, it has been conversely held: if the misconduct's gravamen sounds in tort then the breach of contract cause would be stricken.

The doctrine's seminal Bilt-Rite decision (Bilt-Rite Contractors v. The Architectural Studio, 866 A.2d 270 (Pa. 2005)), was thereafter further clarified in Bruno v. Erie Insurance, 106 A.3d 48 (Pa. 2014)..

As to the doctrine—despite Coleman: most legal malpractice claims sounding in negligence effectively now nonprecedentially render the two-year statute of limitations only applicable.

Recently, however, in Dittman v. UPMC, — A.3d –, 2018 WL 6072199 (Pa. Nov. 21, 2018), the Pennsylvania Supreme Court muddied the doctrine's waters.

As reported, Dittman regarded the Supreme Court's holding that an entity has a common law duty to safeguard electronic data (specifically, employees' confidential electronic information).  That is, the employer could be liable for “hacking.”

What was missed in the reporting was the Supreme Court's subsidiary holding regarding the doctrine.

Relying on Tommy L. Griffin Plumbing v. Jordan, 463 S.E.2d 85 (S.C. 1995)., in applying Bilt-Rite, the Supreme Court held that the doctrine is inapplicable where there exists a legal duty independent from any contractual obligations—rejecting Excavation Technologies v. Columbia Gas Company of Pennsylvania, 985 A.2d 840 (Pa. 2009).

With Dittman, the doctrine has been reigned in: arguably sub silento affirming Coleman's two-year/four-year split causes.

While the doctrine's defensive statute of limitations' challenge will likely ongoing present itself, Bruno has been limited by Dittman to favor Coleman's rejection of Excavation Technologies with emphasis upon Bilt-Rite.

Said more simply, an attorney is more now than ever liable for deviating from the standard of care up to four years from the client's discovery of that occurrence.

Matthew B. Weisberg is the managing partner of Weisberg Law. He focuses his practice on consumer and individual rights throughout Pennsylvania and New Jersey. Weisberg Law represents victims of legal malpractice and other professional negligence resulting in financial injury, fraud, civil rights violations, consumer abuse and foreclosure actions.