Breach of contract claim against attorney, firm resulting from failure to file malpractice claim can proceed, judge rules

A federal judge in Philadelphia has denied a bid by a local lawyer and his firm to dismiss

a breach of contract claim that had been lodged against them by a woman who had originally retained the defendants to represent her in a malpractice case against her dentist.

In a Jan. 15 ruling, U.S. District Judge Joel Slomsky, of the Eastern District of Pennsylvania, allowed Ingrid Lodato’s civil case against attorney Joseph Silvestro and the firm Mutzel, Wesner & Silvestro, to proceed, simultaneously giving the defendants 20 days in which to respond to the plaintiff’s complaint.

The defendants had sought dismissal of Lodato’s lawsuit based on the plaintiff’s supposed failure to plead recoverable damages under Pennsylvania law.

Silvestro and the firm cited the state Supreme Court case of Bailey v. Tucker, in which the high court limited recoverable damages in a legal malpractice claim based on breach of contract to the “amount actually paid for the services plus statutory interest.”

In Lodato’s case, the woman had retained the defendants on a contingency fee basis to pursue the malpractice claim against her dentist.

Lodato signed a standard contingency fee contract with the defendants in late 2007.

In March 2010, more than two years after the fee agreement was signed, Silvestro and his firm informed Lodato that her claim was time-barred because the firm had failed to file suit against the dentist within the two-year statute of limitations.

Lodato filed her suit against the defendants in early March 2012. She seeks to be reimbursed for the amount of money she would have recovered from a jury or settlement stemming out of the lawsuit that was supposed to have been filed against the medical practitioner.

The defendants subsequently moved to dismiss the entire complaint solely on the breach of contract claim.

In his opinion, Slomsky wrote that the Bailey case cited by the defendants in their dismissal motion involved a claim of attorney malpractice in a criminal case, and that the Pennsylvania Supreme Court has never addressed whether the limitation on damages also applies to a case where the underlying claim is a civil action.

Instead, the judge cited the recent Pennsylvania Superior Court case of Coleman v. Duane Morris LLP, in which the court held that damages recoverable in a contract-based civil attorney malpractice action are not limited solely to legal fees paid.

Therefore, Slomsky refused to toss the plaintiff’s breach of contract claim against the defendants because of her failure to pay the defendants for their legal representation.

The defendants had also argued that Lodato has not sufficiently pled a breach of contract claim under Pennsylvania law because the element of contract damages has not been sufficiently pled in the complaint.

The court, however, disagreed.

“Plaintiff seeks recovery of damages for present and future dental expenses, among other things, that would have been awarded to her in the dental malpractice case but for Defendants’ alleged breach of contract,” the opinion states. “At the motion to dismiss stage, Plaintiff has stated a cognizable claim for resultant damages.

“In the Complaint, Plaintiff seeks reimbursement ‘for the amount … she would have recovered from a jury or settlement of the lawsuit that the Defendants were hired to pursue on the Plaintiff’s behalf.’ Therefore, Defendants’ Motion to Dismiss will be denied."