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Pa. Supreme Court To Reconsider If Settlement Can Trigger Malpractice Suit

11/9/17

By: Barry S. Brownstein
The Pennsylvania Supreme Court has agreed to reexamine the extent to which a settlement agreement can serve as the basis for a legal malpractice case. The case stems from Eileen McGuire’s efforts to sue a hospital after she was fired in July 2011 in what she claims was retaliation for her refusal to engage in multiple illegal or unethical acts. McGuire also claimed she was illegally targeted for termination on the basis of her age. The case concluded with a $7,000 settlement.
McGuire then proceeded to file a malpractice suit accusing her former attorneys for failing to include a claim for age discrimination and for failing to exhaust administrative remedies before the EEOC, claiming that such failures left her in a weakened position that forced her to accept a deficient settlement.
The case was dismissed on preliminary objections based on the Supreme Court’s 1991 decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, in which the justices declared they would “not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which that plaintiff agreed.” The decision, however, did leave open the door for claims in which a plaintiff can prove that he or she was fraudulently induced to settle.
The Superior Court upheld the dismissal of McGuire’s case, rejecting arguments from McGuire that the negligence of her former attorneys had not been in negotiating the settlement but, rather, in failing to properly pursue her case against the hospital.
The continued viability of the Muhammad case that bars legal malpractice suits following the settlement of a lawsuit absent a showing of fraud on the part of the attorney will be analyzed by the Pennsylvania Supreme Court.
If you have any questions or would like more information, please contact Barry S. Brownstein at bbrownstein@fmglaw.com.