J-A23036-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
NORTHWEST SAVINGS BANK IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
BABST, CALLAND, CLEMENTS AND
ZOMNIR, P.C. AND ELIZABETH A.
DUPUIS, ESQUIRE
Appellees No. 1611 WDA 2014
Appeal from the Judgment Entered September 9, 2014
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD-12-012585
BEFORE: GANTMAN, P.J., LAZARUS, J., and MUSMANNO, J.
MEMORANDUM BY GANTMAN, P.J.: FILED NOVEMBER 19, 2015
Appellant, Northwest Savings Bank (“Bank”), appeals from the
summary judgment entered in the Allegheny County Court of Common
Pleas, in favor of Appellees, Babst, Calland, Clements and Zomnir, P.C.
(“Appellee Law Firm”) and Elizabeth A. DuPuis, Esquire (“Appellee DuPuis”).
We affirm.
The relevant facts and procedural history of this case are as follows.
Bank held two mortgage liens on a commercial property in Lebanon County
known as Hillbilly Jack’s Restaurant (“the Property”). Bank and the owners
of the Restaurant, Zimark LLC (“Owners”), executed the first mortgage,
valued at $430,000.00, on March 1, 2007. Bank and Owners executed the
second mortgage, valued at $40,000.00, on January 8, 2008. In 2009, Bank
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contacted Appellee Law Firm to represent Bank in a possible foreclosure
action on the Property. The parties did not enter into a formal
representation agreement.
On August 5, 2010, Ellen Cowan (“Ms. Cowan”), contacted Bank’s
credit administrator, Paul DeArment (“Mr. DeArment”), and indicated the
Owners had hired Ms. Cowan as a realtor to sell the Property. Ms. Cowan
also informed Mr. DeArment that a sheriff sale was pending based on two
years’ of back taxes. Ms. Cowan asked if Bank was interested in paying the
back taxes to remove the Property from the sale. Mr. DeArment
subsequently emailed Appellee DuPuis and informed her of the situation with
the Property. Appellee DuPuis responded on August 9, 2010, and told Mr.
DeArment that the sale scheduled for September 2010 was an upset tax sale
that would not divest Bank of its mortgage liens on the Property. Appellee
DuPuis also told Mr. DeArment that a judicial sale was not currently
scheduled and the Lebanon County Tax Claim Bureau would have to provide
Bank with formal notice before such a sale could occur. Nobody bid on the
Property at the tax upset sale on September 13, 2010, and Bank’s interest in
the Property remained unaffected.
On September 23, 2010, Ms. Cowan contacted Mr. DeArment by email,
and told Mr. DeArment that the Lebanon County Tax Claim Bureau (“Tax
Claim Bureau”) was preparing for a judicial sale of the Property, tentatively
scheduled for either December 6, 2010 or December 13, 2010. Ms. Cowan
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told Mr. DeArment that if the judicial sale went forward, Bank would lose its
lien interest in the Property and a new buyer would take the Property free
and clear of all liens. Mr. DeArment forwarded the email to Appellee DuPuis
and suggested that they should discuss the situation with the Property. The
following week, Mr. DeArment and Appellee DuPuis had a telephone
conversation in which Appellee DuPuis told Mr. DeArment that a judicial sale
of the Property was not yet scheduled.
On October 22, 2010, the Tax Claim Bureau filed a petition for sale of
unsold properties, including the Property. On October 26, 2010, the
Lebanon County Court of Common Pleas issued a rule on all interested
parties to show cause why the properties listed in the petition should not be
sold, free and clear of their respective claims, liens, and mortgages. The
court scheduled a hearing for November 30, 2010.
On November 3, 2010, the sheriff’s department served notice of the
judicial sale at Bank’s Lebanon County branch office. The sheriff’s
department also served notice of the judicial sale at Bank’s York County
branch office on November 5, 2010. For unknown reasons, the notices
received at the two branches were not successfully delivered to Mr.
DeArment at Bank’s headquarters in Warren County. As a result, neither Mr.
DeArment nor Appellee DuPuis attended the November 30, 2010 hearing,
and the court subsequently listed the Property as one of the properties to be
sold free and clear of all liens at the judicial sale on December 20, 2010.
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The Property sold for $27,000.00 to LJE and LLE Investment Resource
Holdings at the public auction on December 20, 2010, with neither Bank nor
Appellee DuPuis present.
In mid-January of 2011, Bank learned of the sale of the Property and
notified Appellee DuPuis. Appellee DuPuis filed a petition to re-open the sale
on behalf of Bank on February 4, 2011, alleging Bank received defective
notice of the sale. On August 12, 2011, the court held a hearing on the
petition, determined Bank received sufficient notice of the sale, and denied
Bank’s petition to re-open the sale.
On January 9, 2013, Bank filed a complaint against Appellees in which
Bank alleged Appellees had committed legal malpractice and breached their
fiduciary duty to Bank with respect to the Property. Appellees filed a motion
for summary judgment on July 10, 2014. The court granted summary
judgment in favor of Appellees on September 9, 2014. On October 2, 2014,
Bank timely filed a notice of appeal. The court did not order Bank to file a
concise statement of errors complained of on appeal pursuant to Pa.R.A.P.
1925(b), and Bank did not file one.
Bank raises the following issues for our review:
WHETHER THE TRIAL COURT COMMITTED ERROR OF LAW
BY FAILING TO IDENTIFY A GENUINE ISSUE OF MATERIAL
FACT ARISING FROM CONTRADICTORY TESTIMONY ON
THE MATERIAL ISSUES OF WHETHER THE BANK ADVISED
[APPELLEE DUPUIS] THAT THE PROPERTY WAS BEING
EXPOSED TO THE JUDICIAL SALE BEFORE THE SALE
OCCURRED, AND WHETHER [APPELLEE DUPUIS] FALSELY
ADVISED THAT THE SALE WAS NOT HAPPENING[?]
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WHETHER THE TRIAL COURT COMMITTED ERROR OF LAW
BY FAILING TO IDENTIFY AND CREDIT THE
UNCONTRADICTED OPINIONS OF [BANK’S] EXPERTS THAT
[APPELLEE] DUPUIS FELL BELOW THE STANDARD OF CARE
FOR A PENNSYLVANIA COLLECTIONS ATTORNEY[?]
WHETHER THE TRIAL COURT COMMITTED ERROR OF LAW
BY GRANTING SUMMARY JUDGMENT ON [BANK’S] CLAIMS
FOR BREACH OF CONTRACT AND BREACH OF FIDUCIARY
DUTY WHERE THE MOTION FOR SUMMARY JUDGMENT
ONLY RELATED TO [BANK’S] ALLEGATIONS OF
NEGLIGENCE[?]
(Bank’s Brief at 3-4).
Our standard of review of an order granting summary judgment
requires us to determine whether the trial court abused its discretion or
committed an error of law. Mee v. Safeco Ins. Co. of Am., 908 A.2d 344,
347 (Pa.Super. 2006).
Judicial discretion requires action in conformity with law on
facts and circumstances before the trial court after hearing
and consideration. Consequently, the court abuses its
discretion if, in resolving the issue for decision, it
misapplies the law or exercises its discretion in a manner
lacking reason. Similarly, the trial court abuses its
discretion if it does not follow legal procedure.
Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000)
(internal citations omitted). Our scope of review is plenary. Pappas v.
Asbel, 564 Pa. 407, 418, 768 A.2d 1089, 1095 (2001), cert. denied, 536
U.S. 938, 122 S.Ct. 2618, 153 L.Ed.2d 802 (2002). In reviewing a trial
court’s grant of summary judgment,
[W]e apply the same standard as the trial court, reviewing
all the evidence of record to determine whether there
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exists a genuine issue of material fact. We view the record
in the light most favorable to the non-moving party, and
all doubts as to the existence of a genuine issue of
material fact must be resolved against the moving party.
Only where there is no genuine issue as to any material
fact and it is clear that the moving party is entitled to a
judgment as a matter of law will summary judgment be
entered. All doubts as to the existence of a genuine issue
of a material fact must be resolved against the moving
party.
Motions for summary judgment necessarily and directly
implicate the plaintiff’s proof of the elements of [a] cause
of action. Summary judgment is proper if, after the
completion of discovery relevant to the motion, including
the production of expert reports, an adverse party who will
bear the burden of proof at trial has failed to produce
evidence of facts essential to the cause of action or
defense which in a jury trial would require the issues to be
submitted to a jury. In other words, whenever there is no
genuine issue of any material fact as to a necessary
element of the cause of action or defense, which could be
established by additional discovery or expert report and
the moving party is entitled to judgment as a matter of
law, summary judgment is appropriate. Thus, a record
that supports summary judgment either (1) shows the
material facts are undisputed or (2) contains insufficient
evidence of facts to make out a prima facie cause of action
or defense.
Upon appellate review, we are not bound by the trial
court’s conclusions of law, but may reach our own
conclusions.
Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 61 (Pa.Super. 2006)
(internal citations and quotation marks omitted).
In its first issue, Bank argues there is a genuine issue of material fact
created by Mr. DeArment and Appellee DuPuis’ “contradicting testimony.”
Bank claims Appellee DuPuis’ testimony that she did not remember receiving
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a forward of Ms. Cowan’s September 23, 2010 email contradicts Mr.
DeArment’s testimony that Appellee DuPuis told him that Ms. Cowan’s email
was incorrect and a judicial sale of the Property was not scheduled. Bank
asserts this contradictory testimony, when viewed in the light most favorable
to Bank as the non-moving party, establishes that Appellee DuPuis gave
incorrect legal advice about the judicial sale. Bank concludes the court
either disregarded the testimony or made improper credibility
determinations which should have been left to the jury, and this Court
should reverse and remand for trial. We disagree.
“To maintain a claim of legal malpractice based on negligence, a
plaintiff must show an attorney-client or analogous professional relationship
with the defendant-attorney.” Hess v. Fox Rothschild, LLP, 925 A.2d 798,
806 (Pa.Super. 2007), appeal denied, 596 Pa. 733, 945 A.2d 171 (2008).
Significantly:
Absent an express contract, an implied attorney-client
relationship will be found if (1) the purported client sought
advice or assistance from the attorney, (2) the advice
sought was within the attorney’s professional competence;
(3) the attorney expressly or impliedly agreed to render
such assistance; and (4) it is reasonable for the putative
client to believe the attorney was representing him.
Cost v. Cost, 677 A.2d 1250, 1254 (Pa.Super. 1996), appeal denied, 547
Pa. 727, 689 A.2d 233 (1997) (internal citations omitted).
In a cause of action for legal professional malpractice based on
negligence, the plaintiff must demonstrate: (1) employment of the attorney
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or other basis for a duty; (2) failure of the attorney to exercise ordinary skill
and knowledge; and (3) that such failure was the proximate cause of
damages to the plaintiff. Sabella v. Estate of Milides, 992 A.2d 180, 186-
87 (Pa.Super. 2010), appeal denied, 608 Pa. 642, 9 A.3d 631 (2010). “[A]n
attorney who undertakes representation of a client owes that client both a
duty of competent representation and the highest duty of honesty, fidelity,
and confidentiality.” Capital Care Corp. v. Hunt, 847 A.2d 75, 84
(Pa.Super. 2004).
Significantly, “[a]n attorney will be deemed negligent if he or she fails
to possess and exercise that degree of knowledge, skill and care which
would normally be exercised by members of the profession under the same
or similar circumstances.” Fiorentino v. Rapoport, 693 A.2d 208, 212
(Pa.Super. 1997), appeal denied, 549 Pa. 716, 701 A.2d 577 (1997)
(internal quotation marks omitted). “A lawyer should exert [her] best efforts
to insure that [actions] of [her] client are made only after the client has
been informed of relevant considerations.” Collas v. Garnick, 624 A.2d
117, 120 (Pa.Super. 1993), appeal denied, 535 Pa. 672, 636 A.2d 631
(1993). “A lawyer is not required to be infallible; however, …she is expected
to conduct that measure of research sufficient to allow the client to make an
informed decision.” Fiorentino, supra at 213. “The existence of a duty is
a question of law for the court to decide.” R.W. v. Manzek, 585 Pa. 335,
346, 888 A.2d 740, 746 (2005).
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Instantly, Bank and Appellees agree Appellee DuPuis’ response to Mr.
DeArment’s August 5, 2010 email correctly informed Bank that the tax upset
sale, scheduled for September 2010, would not divest Bank of its mortgage
liens on the Property. The parties also agree Appellee DuPuis told Bank that
the Tax Claim Bureau would have to provide Bank with formal notice before
a judicial sale of the Property could occur. For purposes of the motion for
summary judgment, the parties further agree that Mr. DeArment forwarded
Ms. Cowan’s September 23, 2010 email to Appellee DuPuis about a possible
judicial sale, and Appellee DuPuis promptly replied to Mr. DeArment by
telephone that a judicial sale of the Property was not scheduled at that time.
The record makes clear Appellee DuPuis’ information about a possible
judicial sale was correct at the time given, because the Tax Claim Bureau did
not file its petition for sale of unsold properties until October 22, 2010.
Further, nothing in the record suggests Bank asked Appellee DuPuis to
monitor the court dockets for a judicial sale of the Property. Additionally,
nothing in the record supports Bank’s assertion that Appellee DuPuis should
have learned of the judicial sale after the Tax Claim Bureau filed its petition
on October 22, 2010. In fact, the record reveals, and the parties agree, that
Bank received notice of the judicial sale at two of Bank’s branches on
November 3, 2010 and November 5, 2010. Appellees did not receive notice
of the sale and were not attorneys of record with respect to the Property.
Thus, Appellee DuPuis consistently provided Bank with correct information so
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Bank would be on notice if a judicial sale was scheduled. Because the Bank
set forth no evidence to suggest Appellee DuPuis expressly or impliedly
agreed to monitor the dockets or anticipate that Bank would mishandle the
notice of judicial sale it had received, Appellees owed Bank no duty in this
context. See Sabella, supra. Therefore, no genuine issue of material fact
existed regarding whether the Property was being exposed to a judicial sale
at the time Appellee DuPuis told Bank that the sale was not scheduled.
Bank’s first issue merits no relief.
In its second issue, Bank argues its experts’ opinions create a genuine
issue of material fact that precludes summary judgment. Bank claims its
experts opined that Appellee DuPuis’ failure to contact the Tax Claim Bureau
to inquire about the status of the Property, after receiving Mr. DeArment’s
September 23, 2010 email, fell below the applicable standard of care for a
Pennsylvania collections attorney. Bank states Appellees did not offer any
evidence to contradict the opinions of Bank’s experts, so the court should
have credited the reasonable inferences from the opinions in favor of Bank
as the non-moving party. Bank avers the opinions of its experts directly
contradict the trial court’s findings in favor of Appellees. Bank concludes the
opinions of its experts create a genuine issue of material fact regarding
Appellee DuPuis’ actions and this Court should reverse and remand for trial.
We disagree.
With regard to expert opinions in the context of summary judgment,
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Pennsylvania law states that, the credibility and weight attributed to those
conclusions are not proper considerations at summary judgment. DeArmitt
v. New York Life Ins. Co., 73 A.3d 578 (Pa.Super. 2013) (citing Glaab v.
Honeywell Intern., Inc., 56 A.3d 693, 697-98 (Pa.Super. 2012)).
Likewise, neither the moving party nor the non-moving party can rely on its
own witness’ testimony via affidavits or deposition, either to prevail or
defeat summary judgment. DeArmitt, supra (citing generally Borough of
Nanty-Glo v. American Surety Co. of New York, 309 Pa. 236, 163 A.
523 (1932)). “The function of the summary judgment proceedings is to
avoid a useless trial but is not, and cannot be used[,] to provide for trial by
affidavits or trial by depositions. That trial by testimonial affidavit is
prohibited cannot be emphasized too strongly.” DeArmitt, supra at 595.
At the summary judgment stage, the court must initially determine whether
the plaintiff has alleged facts sufficient to establish a prima facie case; next
the court must determine whether there is any discrepancy as to any
material facts of the case; finally, the court must refrain from acting as fact-
finder by resolving any material issues of fact. Id. at 594-95.
Instantly, the record makes clear the Bank did not ask Appellee DuPuis
to monitor the status of the Property within the court dockets or with the
Tax Claim Bureau. Thus, the court correctly held that Appellees owed Bank
no duty to monitor the status of the Property, and Bank failed to make out a
prima facie case of legal malpractice. See DeArmitt, supra. Further, given
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the court’s determination that Appellees owed no duty to Bank, the court
was under no obligation to consider the opinions of Bank’s experts. Bank’s
suggestion that the court should have credited its experts’ opinions in Bank’s
favor is inappropriate where the court must refrain from making credibility
and weight determinations at the summary judgment stage. Id. Therefore,
the opinions of Bank’s experts did not create a genuine issue of material
fact, and Bank’s second issue on appeal warrants no relief.
In its third issue, Appellant argues summary judgment was
inappropriate as to Appellant’s breach of contract and breach of fiduciary
duty claims. Appellant avers Appellees’ motion for summary judgment
related only to Appellant’s negligence claim and addressed neither
Appellant’s breach of contract claim nor Appellant’s breach of fiduciary duty
claim against Appellees. Appellant states it can assert a breach of contract
and a breach of fiduciary duty as well as a negligence claim against
Appellees. Appellant contends Appellees offered no basis for dismissal of
either Appellant’s breach of contract claim or breach of fiduciary duty claim.
Appellant concludes the court should have construed Appellees’ motion as a
motion for partial summary judgment with respect to negligence only, and
this Court should reverse and remand for trial on the breach of contract and
breach of fiduciary duty claims. We disagree.
“Activity is actionable if it constitutes breach of a duty imposed by
statute or by common law. Maritrans GP Inc. v. Pepper, Hamilton &
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Scheetz, 529 Pa. 241, 253, 602 A.2d 1277, 1283 (1992). A legal
malpractice claim based on breach of contract, “involves (1) the existence of
a contract, (2) a breach of a duty imposed by the contract, and (3)
damages.” Zokaites Contracting Inc. v. Trant Corp., 968 A.2d 1282,
1287 (Pa.Super. 2009), appeal denied, 604 Pa. 691, 985 A.2d 972 (2009).
With respect to a legal malpractice claim based on breach of contract, this
Court has stated:
[T]he attorney’s liability must be assessed under the terms
of the contract. Thus, if attorney agrees to provide…her
best efforts and fails to do so, an action in assumpsit will
accrue. An attorney who agrees for a fee to represent a
client is by implication agreeing to provide that client with
professional services consistent with those expected of the
profession at large.
Fiorentino, supra at 213 (internal citations omitted).
With respect to a breach of fiduciary duty claim, “a confidential
relationship and the resulting fiduciary duty may attach wherever one
occupies toward another such a position of advisor or counsellor as
reasonably to inspire confidence that [s]he will act in good faith for the
other’s interest.” Basile v. H & R Block, Inc., 777 A.2d 95, 102 (Pa.Super.
2001), appeal denied, 569 Pa. 714, 806 A.2d 857 (2002). The fiduciary
duty owed by an attorney arises from either an express or implied attorney-
client relationship. See Estate of Pew, 655 A.2d 521, 545 (Pa.Super.
1994).
The [Pennsylvania] Supreme Court [has] held that part of
the fiduciary duty which arises out of the attorney client
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relationship is that of undivided loyalty. This duty, the
Court emphasized, prohibits an attorney from engaging in
activity which constitutes a conflict of interest, and the
Court held that a breach of that duty by the attorney is
actionable.
Gorski v. Smith, 812 A.2d 683, 711 (Pa.Super. 2002), appeal denied, 579
Pa. 692, 856 A.2d 834 (2004).
Instantly, the record belies Bank’s claim. In Bank’s complaint, Bank
averred identical facts in support of its negligence claim, breach of contract
claim, and breach of fiduciary duty claim. Because all of the assertions
contained in Bank’s complaint raised the same misconduct, the trial court
properly assessed Bank’s claims as one. Additionally, Bank and Appellees
did not enter into a formal contract with respect to the Property, and
Appellee DuPuis made no promise to Bank that Appellee DuPuis would
monitor the status of the Property. Thus, no express or implied contract
existed between Appellees and Bank from which Bank could successfully
assert a breach of contract claim. See Zokaites Contracting Inc., supra.
Because no contract creating an attorney-client relationship existed between
the parties with respect to the Property at issue, Appellees owed Bank no
fiduciary duty in this context; and Bank’s breach of fiduciary duty claim fails
as well. See Estate of Pew, supra.
When Appellees filed their motion for summary judgment, they broadly
challenged Bank’s claim that Appellees owed a duty to Bank under any
theory asserted. The record makes clear that Bank did not ask Appellee
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DuPuis to monitor the status of the Property, and the trial court properly
determined Appellees owed Bank no duty under any theory alleged in Bank’s
complaint. Therefore, the trial court properly granted summary judgment in
favor of Appellees as to all of Bank’s claims; and Bank’s third issue on
appeal lacks merit. Accordingly, we affirm the summary judgment entered
in favor of Appellees.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/19/2015
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