Under Pennsylvania state case law, stating a claim for legal malpractice as a breach of contract as opposed to sounding in tort required the showing that the lawyer “fails to follow a specific instruction of the client” breaches an express term of the agreement employing the lawyer. The trio of leading cases that supported this proposition were all decided by 3–judge Superior Court panels. In diversity cases, the federal district courts followed suit. Beginning with Gorski v. Smith, 812 A.2d 683 (Pa.Super. 2003), however, a seminal case which stands for several different principles of legal malpractice jurisprudence, another 3–judge panel rejected this “restricted view,” finding that implied in every agreement is a commitment by the attorney to provide competent services. The court based upon a more recent holding by the Pennsylvania Supreme Court in Bailey v. Tucker, 621 A.2d 108 (Pa. 1993), in which that court states: “Of course an attorney who agrees for a fee to represent a client is by implication agreeing to provide that client with professional services consistent with those expected of the profession at large.”

The court in Gorski notes that a 3-judge panel in Fiorentino v. Rapaport, 693 A.2d 208 (Pa.Super. 1997), appeal denied, 701 A.2d 577 (1997) cited Bailey with approval in its own recognition of breach of contract claim based upon the lawyer’s negligence.

What makes this an interesting development is that federal district courts in diversity cases, when confronted with claims for legal malpractice sounding in assumptive, continue to honor the older case law and totally ignore Bailey, Fiorentino, and Gorskey. Granted, they can try and argue that this quoted language from Bailey can be ignored as dicta only and, therefore, not binding as the ultimate pronouncement of state law and that Fiorentino, and Gorskey are persuasive authority only. But what is curious in the federal opinions on this point read by this author, is that this case law is not even acknowledged, so that their reasoning can be rejected or distinguished. This happened most recently in a middle district case.

In Javaid v. Weiss, 2011 WL 6339838 (M.D.Pa.), client sued his lawyer who had counseled him concerning, among other things, a guaranty he gave as part of a commercial loan. The guaranty contained a confession of judgment provision, which the lender could utilize upon default. The lawyer had also represented him four and six years later in proceedings that resulted from defaults of the loan. The ability to assert an assumptive action was critical because client was confronted with a serious statute of limitations issue with respect to the trespass theory.

In granting the lawyer’s motion to dismiss without prejudice (so that client could plead over), the court found that client had not “adequately pled a separate claim for breach of contract, but has instead simply repackaged his allegations of negligence and recast them as a breach of contract claim.” Relying in part on Superior Court case law dating even before Bailey, the court drew the distinction previously drawn by other federal district courts that assumpstive claims are limited to theories involving “a lawyer’s failure to follow instructions…” The court also acknowledged that a breach of contract claim would only grant “compensatory damages appropriate in contract…”

Why is it important which view a court takes with respect to the contours of legal malpractice as a breach of contract? From the client’s standpoint, the difference can be whether the claim is time barred. Legal malpractice as a tort is subject to a 2 year statute of limitations whereas as a breach of contract is subject to a 4 year statute. From the lawyer’s standpoint, and this case law has developed little since Bailey, the difference could mean a difference in the measure of damages. The damages in Bailey were limited to disgorgement of fees. But that opinion did not make it clear why disgorgement was deemed the appropriate measure of damages. It could have been that the court viewed that disgorgement was the appropriate measure of damages for all such claims sounding in breach of contract; or, it could have been premised upon a concept unique to criminal law that a criminal should not be allowed to profit from his crime (such as being allowed to reap the profits from a book he wrote about it).

In addition to the statute of limitation and damages questions, how the distinction is drawn between legal malpractice as a tort and as a breach of contract also raises a question with respect to defenses. Contributory negligence (as opposed to comparative negligence) is a defense to a legal malpractice claim sounding in tort. But is it a defense to a breach of contract claim that is premised upon the lawyer’s negligence? Although the Gorski court did not expressly state that a distinction must be drawn between negligence claims sounding in tort and those sounding in brief of contract, the court appeared to take great care in discussing the defense to “negligence” claims without drawing any distinction any distinction between tort and assumpsitive. In fact, there is at least one decision from the highest court of another state (Massachusetts to be specific), in which the client’s fault is recognized as a defense to a “negligence” claim sounding in breach of contract.

What lesson does the practitioner learn should the client not present the claim to him or her until the 2 year statute has run? Unless the claim involves a failure to follow the client’s instruction, the case should be brought in state court. Unfortunately, this may not provide complete protection should the defendant lawyer have a basis to remove the case to federal court based upon diversity jurisdiction, and, therefore, implicate the federal case law interpretation of legal malpractice as a breach of contract.