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The gist of the action doctrine in Pennsylvania legal malpractice actions after Poteat v. Asteak

4/15/24

By: Patrick J. Cosgrove and Edward Patrick Pozo

The Pennsylvania Superior Court has once again muddied the waters on the statute of limitations for a legal malpractice claim. In Poteat v. Asteak, 2024 Pa. Super. 52 (2024), the Pennsylvania Superior Court found that the gist of the action doctrine does not allow courts to recharacterize a contract claim as a tort claim, and thus, extinguish the plaintiff’s ability to recover on the contract and subsequently dismiss the recharacterized tort claim on the grounds that the statute of limitations had run. The Court emphasized the distinct context of legal malpractice claims, stating that legal services agreements by implication require the attorney to provide the client with professional services consistent with those expected of the profession at large and therefore the gist of the action doctrine does not extinguish contractual rights but “merely addresses whether a plaintiff can assert a tort claim when the duty set forth in the contract is similar to the duty that the plaintiff alleges in a tort claim.”  

For years, lawyers defending legal malpractice actions in Pennsylvania operated under the decision rendered in Bailey v. Tucker, 621 A.2d 108, 115 (Pa. 1993) in which the Pennsylvania Supreme Court “established the proposition that every contract for legal services contains, as an implied term of the contract, a promise by the attorney to render legal services in accordance with the profession at large.” The Pennsylvania Superior Court in Gorski v. Smith, 812 A.2d 683, 692 (Pa. Super. 2002) reaffirmed that attorneys with client engagement letters have a contractual duty to perform their services consistent with the profession at large. This led to Pennsylvania legal malpractice plaintiffs filing a breach of contract claim in addition to a negligence claim for every professional malpractice action. Given the four-year statute of limitations for a breach of contract claim in Pennsylvania, legal malpractice actions in the Commonwealth were subject to a de facto four year statute of limitations.   

This all appeared to change with the decision in Bruno v. Erie Insurance Company, 106 A.3d 48, 68 (Pa. 2014). In Bruno, the Pennsylvania Supreme Court examined the gist of the action doctrine and held that the underlying averments in the Complaint determine whether there was a breach of contract, i.e, a specific promise to do something that was breached, or a tort where there is a violation of a social duty owed to all individuals, which is imposed by the law of torts. In situations where the Plaintiffs allege that a broad social duty was breached, and not a specific contractual term, this was considered a tort claim and thus subject to a two-year statute of limitations.   

In Poteat the Pennsylvania Superior Court once again held that the gist of the action doctrine does not require the plaintiff to plead breach of a specific contractual agreement to maintain a breach of contract claim in a legal malpractice action. Poteat had entered into a written agreement with the defendant lawyers for legal representation in a criminal case in connection with charges for possession with intent to distribute. Poteat was convicted of the offenses and incarcerated for nearly four years due to the lawyer defendants alleged failure to perform their duties.  

Poteat later filed a breach of contract claim against the Defendants more than two years after the alleged occurrence, alleging the Defendants failed to comply with the applicable standards of competence and diligence of the profession of law. In response, Defendants filed preliminary objections arguing that Poteat’s claim was based in negligence, and the two-year statute of limitations for torts had expired. The trial court sustained the preliminary objections, stating that the “gist of the action” doctrine applies to the claim, recharacterizing the claim as a tort claim, and holding that the tort statute of limitations precluded suit.   

On appeal of the trial court’s order dismissing the Complaint, the Pennsylvania Superior Court reversed the decision, finding in favor of Poteat. While the court noted the similarities between the instant claim, and a hypothetical claim brought on the grounds of negligence, the Court held that Bruno did not apply, and the gist of the action doctrine cannot serve to extinguish Poteat’s contractual rights when the defendant’s contractual obligation is the same obligation as would be scrutinized under a tort claim.  

Once again, after the decision in Poteat, legal malpractice actions will be in essence subject to a four-year statute of limitations even in situations where the Plaintiff cannot point to a specific provision that was breached.   

For more information, contact Patrick J. Cosgrove at patrick.cosgrove@fmglaw.com, and Edward Patrick Pozo at edward.pozo@fmglaw.com, or your local FMG attorney.