PA: Underlying personal injury action
Facts: Ammon was injured in an automobile accident and sued the driver of the car, Schussler. They settled for $14,000, and executed a release which discharged Schussler of liability. In another action against the owner of the other vehicle in the accident, Schussler was subsequently joined as a defendant. At that trial, Schussler’s attorney did not introduce evidence of the release of liability reached in the previous settlement until after a judgment was reached in favor of Ammon for $220,000. In response to a post-trial motion to introduce the release, the trial court deemed that the release had been negligently waived. Schussler then hired new counsel who negotiated a deal with Ammon to assign Schussler’s malpractice claim in return for a covenant not to enforce the judgment against Schussler. Ammon then commenced a legal malpractice action against Schussler’s former attorney and was awarded the $220,000 in damages that had previously been entered against Schussler. The former attorney appealed on the grounds that the plaintiff-assignee had failed to prove that the assignor had suffered any economic loss as a result of the attorney’s alleged negligence.
Issue: Is a claim for damages based on legal malpractice assignable?
Ruling: Yes. The Court follows the precedent set by Hedlund Mfg. Co., Inc v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357 (1988), that a claim for damages based on legal malpractice is assignable. The elements of the malpractice action still need to be proven however and defendant’s claim that there were no actual damages proven was rejected by the court. They reasoned that the judgment against Schussler constituted the actual damages necessary to maintain a malpractice action, and no further proof of damages was necessary. The court considers the right to assign a malpractice claim akin to a transferrable property right
Lesson: A judgment against a client-assignor constitutes actual damages. No further proof than the entry of judgment against a client-assignor is necessary to prove actual harm when an assignee prosecutes an assigned malpractice claim. When prosecuting an assigned malpractice claim, the assignee stands in the shoes of the assignor, so it is only necessary to prove that the assignor suffered actual damages