Third Circuit upholds trial court ruling in legal malpractice action

By Nicholas Malfitano | Dec 13, 2016

PHILADELPHIA – A panel of appellate judges has recently ruled to affirm a trial court’s decisions on the subjects of judgment on the pleadings and a denial of a motion for reconsideration in a legal malpractice litigation.

On Nov. 10, judges Michael A. Chagares, Thomas M. Hardiman and Anthony J. Scirica ruled for the defendant law firm Spector, Gadon & Rosen and against plaintiff Robert M. Fishman.

Fishman was employed as Chief Executive Officer by United American Indemnity, Ltd. (UAI) until his termination in May 2007. After his termination, Fishman brought a breach of contract claim against UAI, retaining attorney Alan B. Epstein and the law firm Spector. Gadon & Rosen to represent him for said claim.

Due to Fishman’s employment agreement with UAI contained an arbitration clause, Fishman’s case proceeded to binding arbitration before the Honorable James R. Melinson. Before the arbitration and during discovery, Epstein began settlement negotiations with UAI on Fishman’s behalf. On July 17, 2009, the parties negotiated several potential terms of settlement.

“For instance, the parties proposed that Fishman would testify in a separate litigation – the Keane litigation – in favor of UAI’s position in exchange for a $1,000,000 payout to Fishman. Although Fishman was not present at the July 17 meeting, Epstein called him to convey the proposed settlement terms,” Chagares said.

Epstein and UAI continued to engage in settlement discussions by telephone and email over the next few months. On Nov. 29, 2009, after UAI settled the Keane litigation (and thus, negating the need for Fishman’s testimony), UAI informed Fishman that it was withdrawing its $1,000,000 settlement offer.

Though Epstein filed to enforce the settlement agreement, Melinson denied that motion and ruled there had been no enforceable agreement.

“Judge Melinson based this conclusion, in part, on his determination that any ultimate settlement would have required ratification from the UAI Board of Directors. He further reasoned that because UAI Board approval had not been obtained, there had been no ‘meeting of the minds’ with respect to the settlement,” Chagares stated.

Fishman then secured other counsel to represent at him at the arbitration. Fishman and UAI ultimately reached a settlement agreement, whose terms were apparently less favorable than those Epstein had negotiated with UAI.

Fishman initiated a legal malpractice lawsuit for professional negligence against Epstein and Spector, Gadon & Rosen and breach of contract against Epstein alone.

“Epstein and Spector, Gadon & Rosen moved for judgment on the pleadings, denying the allegations of malpractice and arguing that Fishman failed to state a plausible claim for relief. After considering the arbitrator’s opinion, the District Court granted judgment on the pleadings in favor of Epstein and Spector Gadon. The District Court subsequently denied Fishman’s motion for reconsideration,” Chagares outlined.

This led Fishman to appeal.

“On appeal, Fishman argues that the District Court erred by considering the arbitrator’s opinion in rendering judgment. Fishman also argues that the District Court erred by concluding that Fishman failed to state viable claims of professional negligence and breach of contract. We have considered Fishman’s arguments, and for the following reasons, we will affirm the District Court’s determination,” Chagares said.

“Fishman first argues that the District Court erred by: 1) refusing to strike the arbitrator’s opinion, and 2) failing to convert the motion for judgment on the pleadings into one for summary judgment. We do not agree. Fishman explicitly relied on the arbitrator’s opinion in his complaint. Indeed, Judge Melinson’s denial of the motion to enforce settlement was integral to Fishman’s malpractice claim,” Chagares added.

Chagares continued the District Court was right to decide Fishman failed to state a cognizable claim for professional negligence; since under Pennsylvania law, the elements of a legal malpractice claim are: “(1) the employment of the attorney or other basis for a duty; (2) the failure of the attorney to exercise ordinary skill and knowledge; and (3) that such failure was the proximate cause of damage to the plaintiff.”

“Fishman’s complaint alleged several bases for Epstein’s purported malpractice, including, inter alia, that Epstein failed to: (1) memorialize the negotiated settlement or put its terms on the record; (2) control the drafting of the settlement agreement; (3) seek UAI Board approval for the settlement or inform Fishman that such approval was required; and (4) produce Fishman for deposition in favor of UAI’s position in the Keane litigation. These allegations do not plausibly suggest that Epstein failed to exercise the ordinary skill and knowledge required of attorneys under similar circumstances,” Chagares said.

Chagares said the District Court “correctly concluded that Fishman has not pleaded that any alleged malpractice on Epstein’s part prevented Fishman from achieving a binding settlement with UAI”, and felt “Fishman’s alleged damages were too remote to support a malpractice claim.”

“Finally, we perceive no error with the District Court’s determination that Fishman failed to state a viable breach of contract claim. The breach of contract claim was premised on the same conduct underlying the malpractice claim,” Chagares said.

“Because the alleged facts do not plausibly suggest professional negligence, they similarly do not make out a breach of a contractual duty. For the foregoing reasons, we will affirm the District Court’s orders granting judgment on the pleadings and denying the motion to reconsider,” Chagares concluded.

In Spector, Gadon & Rosen v. Fishman:

The plaintiff is represented by Daniel J. Dugan and Johan A. Ashrafzadeh-Kian of Spector, Gadon & Rosen, in Philadelphia.

The defendant in represented by Aaron E. Moore of Marshall Dennehey Warner Coleman & Goggin in Philadelphia, plus Matthew B. Weisberg and David A. Berlin of Weisberg Law, in Morton.

In Fishman v. Spector, Gadon & Rosen Et.Al:

The plaintiff is represented by Matthew B. Weisberg and David A. Berlin of Weisberg Law, in Morton.

The defendants are represented by Aaron E. Moore and Joseph J. Santarone Jr. of Marshall Dennehey Warner Coleman & Goggin in Philadelphia, plus Demetra Arapakis Christos of Foley & Mansfield, in Chicago, Ill.

U.S. Court of Appeals for the Third Circuit case 16-1094

U.S. District Court for the Eastern District of Pennsylvania cases 2:13-cv-02691 & 2:13-cv-05198

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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