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Keywords

settlementattorneynegligencepleamalpracticelegal malpractice
contractsettlementbreach of contractplaintifflitigationattorneylawyernegligencemalpracticewilllegal malpracticeobjectionappellee

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Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 526 Pa. 541, 587 A.2d 1346

Facts

Pamela and Abdullah Muhammad had a son who died following a circumcision procedure. They initially retained attorney James Thomas, Jr. and later the law firm Strassburger, McKenna, Messer, Shilobod and Gutnick to represent them in a medical malpractice claim. After settlement negotiations, they accepted a $26,500 settlement offer but later expressed dissatisfaction with the amount. They subsequently filed a legal malpractice suit against their attorneys, claiming negligence and fraud.

At some point thereafter, the appellees informed their attorneys of their dissatisfaction with the amount of the settlement.

Issue

Whether the clients' claim of legal malpractice stemming from dissatisfaction with the settlement is barred by the doctrine of collateral estoppel and whether they have alleged sufficient facts to proceed with their action.

We granted allocatur to determine whether the appellees' claim of legal malpractice stemming from their dissatisfaction with the settlement of their prior medical malpractice action is barred by the doctrine of collateral estoppel and whether, as a matter of law, the appellees have alleged sufficient facts to entitle them to proceed with their action.

Rule

A legal malpractice claim cannot proceed if the client has agreed to a settlement unless they can show they were fraudulently induced to settle. Additionally, fraud must be pleaded with specificity.

Simply stated, we will not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which that plaintiff agreed, unless that plaintiff can show he was fraudulently induced to settle the original action.

Analysis

The court found that the clients' dissatisfaction with the settlement did not bar their claim under collateral estoppel, as the issues in the malpractice case were not identical to those in the prior case. However, the court determined that the clients failed to plead fraud with the necessary specificity, as their allegations were deemed mere suppositions without concrete evidence of fraudulent conduct by their attorneys.

Although we find that collateral estoppel does not bar this action, we do not believe that our inquiry need or should cease there. Rather, the preliminary objections should have been granted due the appellees' failure to state a claim for which relief can be granted.

Conclusion

The Supreme Court reversed the Superior Court's decision and dismissed the clients' complaint, concluding that they did not establish sufficient facts to support their claims.

Accordingly, for these reasons set forth herein, we hold that the plaintiffs' complaint does not establish sufficient facts, which if proved, would entitle them to relief.

Who won?

Attorneys prevailed in the case because the court found that the clients failed to plead fraud with sufficient specificity and that their dissatisfaction with the settlement did not constitute a valid basis for a malpractice claim.

The primary reason we decide today to disallow negligence or breach of contract suits against lawyers after a settlement has been negotiated by the attorneys and accepted by the clients is that to allow them will create chaos in our civil litigation system.

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