PITTSBURGH – A New York City attorney has motioned for judgment on the pleadings in response to allegations that he and his firm provided inadequate representation to a former client, a Pennsylvania contractor who lost $1 million in an underlying bankruptcy action.
Odyssey Contracting Corporation of Houston, Pa. first filed suit in the Allegheny County Court of Common Pleas on Jan. 5 versus Chris Georgoulis and Georgoulis, PLLC, of New York, N.Y.
“Defendant represented plaintiff in litigation in the U.S. District Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh, Pennsylvania. The underlying litigation involved a contract dispute between Odyssey and L&L Painting Co., Inc. for a project on the Queensboro Bridge. At a pre-trial conference, defendant entered into a stipulation on behalf of plaintiff which provided if the court determined Odyssey was the breaching party, then all of the claims were disposed of in their entirety with prejudice,” the suit said.
“After the court determined that Odyssey was the breaching party, Odyssey appealed. L&L claimed that the stipulation waived Odyssey’s right to appeal. The court agreed and dismissed the proceeding with prejudice. Defendant appealed and the Third Circuit agreed that Odyssey waived its right to appeal.”
According to the plaintiff, this stipulation made by the defendant was counter to instructions provided by Odyssey to preserve the right to appeal, and furthermore, a breach of the defendant’s duty for the same.
The plaintiff said this turn of events caused it significant damages in the underlying action, significant fees to the defendant to prosecute the appeal and that it paid the over $1 million in legal fees, only to see the case dismissed on the basis of the defendant’s stipulation.
“Defendant had a duty to plaintiff to provide competent and adequate legal services. Defendant breached the duty to plaintiff by entering the stipulation without preserving plaintiff’s right to appeal. Defendant’s breach caused plaintiff significant damages in the loss of the underlying case and the defendant’s charges to prosecute the appeal to justify his own actions,” the suit stated.
“Plaintiff contracted with defendant for legal services. Defendant breached the contract by failing to follow plaintiff’s instructions, and entering a stipulation which waived plaintiff’s rights of appeal. Defendant not only caused plaintiff damages by losing the underlying case, but then charged plaintiff additional monies to prosecute the appeal which was the result of defendant’s own conduct.”
The defendants filed to remove the case to the U.S. District Court for the Western District of Pennsylvania on Feb. 23, citing both diversity of citizenship between the parties and the amount of damages at stake as reasons for the removal.
“This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. Section 1332 because there is complete diversity between the plaintiff and all of the defendants, and more than $75,000 is at stake. The complaint alleges that the plaintiff is a Pennsylvania corporation. The individual defendant, Mr. Georgoulis, is a citizen of the State of New Jersey. Georgoulis, PLLC is a New York Professional Limited Liability Company. No member of Georgoulis, PLLC is a citizen of the Commonwealth of Pennsylvania,” according to the removal notice.
“The malpractice is alleged to have occurred in a bankruptcy proceeding where the claims exceeded $1 million. The complaint claims that plaintiff paid over $1 million in legal fees. Therefore, this Court has original subject matter jurisdiction over this action pursuant to 28 U.S.C. Section 1332(a).”
The defendants answered the complaint on March 14, presenting a number of affirmative responses.
“An attorney is not liable for a mistaken opinion on a point of law that has not been settled by a court of last resort and on which reasonable doubt may well be entertained by informed lawyers. If an attorney exercises a reasonable degree of care, skill and dispatch while acting in an unsettled area of the law, which is to be evaluated in the context of the state of the law at the time of the alleged negligence, then the attorney does not breach the duty owed to the client, so as to be liable for legal malpractice,” the answer stated.
“As the opinion of the U.S. Court of Appeals recognized, at least two Circuits had reached contrary results on the issue presented, and thus issued precedential opinion in accordance with Internal Operating Procedure 5.2 of the U.S. Court of Appeals for the Third Circuit (published on its website). Precedential opinions are not issued when the law is clear and well-settled.”
In affirmative defenses, the defendants argued the Court does not have personal jurisdiction over either defendant as neither defendant does business in Pennsylvania, that venue is improper here for that same reason, that the action is barred by the statute of limitations and that the complaint fails to state a cause of action.
UPDATE
The defendants motioned for judgment on the pleadings on March 28, arguing that the Court does not have personal jurisdiction over these defendants, the two causes of action are barred by the statute of limitations, the cause of action for breach of contract does not lie and judgmental immunity bars the cause of action for legal malpractice.
“Plaintiff alleges that the defendants are ‘doing business’ in Pennsylvania. But, there is no question that neither defendant is ‘doing business’ in Pennsylvania. It is undisputed that they do not have an office in Pennsylvania, and judicial notice may be taken that neither the individual defendant nor the limited liability company are admitted to practice law in Pennsylvania. In short, their activities are not ‘so continuous and systematic as to render it essentially at home in the forum State,” according to the motion.
“The tort action is plainly barred by the two-year statute of limitations, because the breach occurred at the time that the stipulation was signed on Sept. 13, 2017 and, even if some discovery rule applied, the action would accrue, at the latest, on Dec. 20, 2018, when this Court dismissed the appeal based on the stipulation. A contract cause of action is governed by a four-year statute of limitations, which similarly accrued on Sept. 13, 2017 and as such is time-barred.”
The defendants added that “there is no attorney-client contract attached to the complaint, the complaint does not include its essential terms and does not set forth a specific breach of a duty imposed by the contract, as required by Pennsylvania law, rather, it simply states that defendants failed to follow instructions, not that there was a breach of a duty imposed by the contract.”
Lastly, the defendants argued that under the doctrine of judgmental immunity, there can be “no liability for acts and omissions by an attorney in the conduct of litigation which are based on an honest exercise of professional judgment.”
For counts of negligence and breach of contract, the plaintiffs are seeking judgment in their favor and against the defendants, and further demand a trial by jury.
The plaintiff is represented by Stephen J. Taczak of Taczak Law, in Canonsburg.
The defendants are both representing themselves and are being further represented by Lori W. Azzara of Cohen Seglias Pallas Greenhall & Furman, in Pittsburgh.
U.S. District Court for the Western District of Pennsylvania case 2:22-cv-00338
Allegheny County Court of Common Pleas case GD-22-000179
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com