Opinion ID: 774802
Heading Depth: 2
Heading Rank: 1

Heading: Failure To Keep Case Active Against Sacred Heart & Dr. Harrison

Text: 20 There is no question that Baratta and B&F knew, prior to applying for professional liability insurance, that the Court of Common Pleas had dismissed the Lees' medical malpractice complaint against Sacred Heart and Dr. Harrison for lack of activity and that the decision of the Court of Common Pleas had been affirmed by both the Pennsylvania Superior Court and the Supreme Court of Pennsylvania. Moreover, Baratta and B&F knew by May of 1996 that the Lees were dissatisfied with the legal representation they had received. To repeat the relevant portion of Kenneth Lee's January 13, 1995 letter to Baratta: You have, for whatever reason that you never explained, dragged this case on since 1979. You have constantly brushed off inquiries for a case status report. You caused and continue to cause great anguish to me and my family by ignoring my case, my plight, my right to expect you to abide by your contract with me, to represent me and my best interest . . . . 21 In our view, a reasonable attorney in possession of these facts would have realized that Baratta had breached a professional duty by failing to prosecute the Lees' case against Sacred Heart and Dr. Harrison, and that consequently there might be a basis for a claim. 3 A reasonable attorney also would have realized that he had a dissatisfied client who would undoubtedly take further legal action absent a miraculous and unlikely turnaround in events. Selko, 139 F.3d at 154. 22 Baratta and B&F nevertheless contend that they had no reason to foresee a legal malpractice claim by the Lees because, by the time of the effective date of the Policy in May of 1996, the Lees' legal malpractice action was already time-barred by the Pennsylvania statute of limitations. We disagree. When an attorney has a basis to believe he has breached a professional duty, he has a reason to foresee that his conduct might be the basis of a professional liability claim against him. He cannot assume that the claim will not be brought because he subjectively believes it is time barred or lacks merit. 23 In this case, there remains an open question whether the statute of limitations had run out on the Lees' malpractice action by the time Baratta and B&F applied for professional liability coverage with Coregis. Relying upon Sherman Industries Inc. v. Goldhammer, 683 F. Supp. 502 (E.D. Pa. 1988), Baratta and B&F argue that the statute of limitations began to run in January of 1994 when the Lees were informed that their case had been dismissed. Baratta and B&F maintain that they therefore had no reason to foresee a claim in May of 1996 because the two year statute of limitations under a tort theory of legal malpractice had expired by January of 1996. 24 However, we do not believe that a reasonable attorney could have been certain in May of 1996 that the statute of limitations had run on the Lees' claim. In Pennsylvania, the point of time at which the injured party should reasonably be aware that he or she has suffered an injury is generally an issue of fact to be determined by the jury. Sadtler v. Jackson-Cross Co., 587 A.2d 727, 732 (Pa. Super. Ct. 1991). Only where the facts are so clear that reasonable minds cannot differ may the commencement of the limitation period be determined as a matter of law. Id. In the Lees' case, application of the discovery rule would have involved a highly fact sensitive and legally complex inquiry that might have resulted in equitable tolling of the statute of limitations. For example, Mr. Lee's letter to Baratta on January 13th, 1995 evidences confusion over whether the Lees' case had been reinstated, stating [y]ou are still my attorney bound by our contract. I want from you, in writing, to tell me what the status of my case is, what you have done to correct your error, and when we can plan to proceed to court. You have exactly two weeks to reply. On the basis of this letter, the statute of limitations arguably was tolled if the Lees had not been provided sufficient information to determine whether they had suffered an injury meriting a malpractice action against their attorney. In any event, to this date the Lees' malpractice action against Baratta and B&F has not been dismissed on statute of limitations grounds. 25 In short, we are uncertain when the statute of limitations began to run on the Lees' legal malpractice claim and whether the limitations period had expired by the effective date of the Policy in May of 1996. In our view, a reasonable attorney in Baratta and B&F's position could not have been certain, and thus should not have assumed, that the limitations period had expired as a matter of law. Rather, a reasonable attorney would have foreseen that there might be the basis for a claim because the statute of limitations may have been tolled beyond May of 1994 under the discovery rule. 26 For similar reasons, we believe Baratta and B&F had reason to foresee that there might be the basis for a malpractice claim based on a breach of contract theory, for which the statute of limitations (of four years) had not expired in May of 1996. The Court of Common Pleas may conclude that a complete failure to prosecute the case against Sacred Heart constitutes a failure to perform a specific instruction by the Lees to develop and prosecute that case. See Edwards v. Thorpe, 876 F. Supp. 693, 694 (E.D. Pa. 1995). Baratta and B&F were not justified in assuming otherwise and therefore had reason to foresee that there might be the basis for a claim against them. 27 We therefore affirm the District Court's determination that Exclusion B of the Policy precludes coverage of the Lees' claim alleging that Baratta committed legal malpractice by failing to keep their case active against Sacred Heart and Dr. Harrison.