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PA: Privity Prevails

Mentzer & Rhey, Inc. v. Ferrari, 367 Pa. Super. 123 (Pa. Super. Ct. 1987)

PA. Underlying Real Estate Transaction

Student Contributor: Melissa Goldberg

Facts: Bruno Ferrari, the original Defendant, sold a parcel of land located in Westmoreland County to Mentzer and Rhey, Inc., the Plaintiff. A portion of the land located on Mentzer & Rhey’s used car lot collapsed, creating a dangerous hole. Mentzer & Rhey filed an action for damages alleging the cause of the collapse to be a defective culvert constructed by Ferrari and fraudulently concealed by him during the sales transaction. Ferrari filed a complaint to join Fisher, Long and Rigone, the law firm representing Mentzer & Rhey in the property sale. The complaint alleged that Mentzer & Rhey’s lack of knowledge of the existence of the culvert was due to the attorneys’ negligence in performing the title search and that therefore the proposed third-party attorneys should be solely liable to Mentzer & Rhey for damages or in the alternative should be jointly liable with original Defendant.

Issue: Were the attorneys who performed a title search for buyers of property properly joined as third-party Defendants under Pa.R.C.P. 2252(a) where the buyers sue the seller for damages resulting from an allegedly fraudulently concealed and defective culvert and the attorneys failed to discover the existence of the culvert in their title search?

Result: A party must show an attorney-client relationship or a specific undertaking by the attorney furnishing professional services as a necessary prerequisite for maintaining a suit.
• Ferrari is not in privity with Plaintiff’s attorneys, he has no cause of action against them and thus may not, under Pa.R.C.P. 2252(a), join the attorneys as third-party Defendants

Lesson: The general rule in Pennsylvania is that an attorney will be held liable for negligence only to his client. In the absence of special circumstances, he will not be held liable to anyone else.

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Posted in: Pennsylvania, Privity, Real Estate