J-S73017-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
NITA M. FANDRAY & A BRIGHT FUTURE IN THE SUPERIOR COURT OF
ADOPTIONS, INC. PENNSYLVANIA
Appellants
v.
ALAN S. BAUM, MATIS BAUM O’CONNOR
(FORMERLY MATIS BAUM RIZZA
O’CONNOR), & PRO ASSURANCE
SPECIALTY INSURANCE, INC.
Appellees No. 199 WDA 2016
Appeal from the Order January 13, 2016
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD-12-015513
*****
NITA M. FANDRAY & A BRIGHT FUTURE IN THE SUPERIOR COURT OF
ADOPTIONS, INC. PENNSYLVANIA
Appellants
v.
ALAN S. BAUM, MATIS BAUM O’CONNOR
(FORMERLY MATIS BAUM RIZZA
O’CONNOR), & PRO ASSURANCE
SPECIALTY INSURANCE, INC.
Appellees No. 200 WDA 2016
Appeal from the Order January 13, 2016
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD-12-015513
BEFORE: FORD ELLIOTT, P.J.E., LAZARUS, J., and JENKINS, J.
J-S73017-16
MEMORANDUM BY LAZARUS, J.: FILED NOVEMBER 17, 2016
Nita Fandray (“Fandray”) and A Bright Future Adoptions, Inc. (“Bright
Future”), (collectively “Plaintiffs”), appeal from two orders1 entered in the
Court of Common Pleas of Allegheny County granting summary judgment.
The first order, in favor of Alan Baum and Matis Baum O’Connor (formerly
Matis Baum Rizza O’Connor) (“Baum”), and the second, in favor of
ProAssurance2 Specialty Insurance Company (“ProAssurance”), resulted in
the dismissal of Plaintiffs’ Amended Complaint with prejudice. After our
review, we affirm.
Fandray, a Pennsylvania attorney, owned and operated an adoption
agency, Bright Future. In 2009, Patrick and Kimberly Hannon filed a lawsuit
in Lawrence County against another adoption agency, Adoption Related
Services, Inc., alleging breach of contract, defamation, and intentional
infliction of emotional distress (“the Hannon suit”). The Hannon suit
stemmed from the Hannons’ efforts to adopt two children from Bright Future
and Adoption Related Services, Inc. In 2010, Fandray and Bright Future
____________________________________________
1
See Strausser v. Pramco, III, 944 A.2d 761, 764 (Pa. Super. 2008)
(where multiple defendants in single action are removed from case in
piecemeal fashion by separate orders, each separate judgment becomes
appealable when matter is resolved against final defendant, and appeal of
those orders may be commenced as to all defendants by single notice of
appeal taken from order resolving claim against final defendant).
2
We note that “Pro Assurance” and “ProAssurance” are used
interchangeably throughout the trial court record and appellate filings.
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were added as defendants in the suit. At that time, Fandray and Bright
Future were insured by ProAssurance. ProAssurance assigned Attorney
Baum and his firm to represent Plaintiffs in the Hannon suit.
On September 17, 2010, ProAssurance notified the insureds, Fandray
and Bright Future, that Baum would represent them and that they were
represented under a reservation of rights. Thus, to the extent that the
Hannons’ claims were not caused by a “professional incident” as defined in
the policy, or were specifically excluded from coverage under the policy,
there would be no coverage for the claims. ProAssurance explained that it
“reserves the right to deny indemnity for any damages awarded in this case
for claims excluded from coverage.” ProAssurance Letter to Policyholders,
9/17/10. In essence, if the Hannons suit were successful, there was the
potential that Fandray and Bright Future would be left to pay a jury award
out of personal assets. Notably, the ProAssurance policy contained an
“eroding liability” limit, so that when defense costs exceeded $100,000.00,
further defense costs would erode the $100,000.00 indemnity coverage.
Thus, the longer the action went on, the greater the potential for Fandray
and Bright Future to be left with little or no insurance money to pay any jury
verdict, should the Hannons ultimately win at trial or on appeal.
On September 21, 2010, Attorney Baum entered his appearance on
behalf of Fandray and Bright Future. He filed an Answer and New Matter to
Plaintiffs’ Amended Complaint, and raised all affirmative defenses Fandray
believed protected her and Bright Future in the underlying action. He
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participated in discovery, filed a motion for judgment on the pleadings, and
prepared a brief in support of that motion. Fandray, an experienced
practicing attorney herself, participated in her defense, and she directed
Attorney Baum to withdraw the motion for judgment on the pleadings. See
Praecipe to Withdraw Motion, 6/9/11.
By letter dated May 19, 2011, ProAssurance and its outside counsel,
Anthony J. Williot, Esquire, advised Fandray that ProAssurance believed a
settlement with the Hannons was in Fandray’s and Bright Future’s best
interests. In mid-June, through direct negotiations between ProAssurance
and counsel for the Hannons, ProAssurance settled the claim for $62,000.00,
within policy limits, without Fandray’s consent.
Thereafter, Fandray and Bright Future filed a legal malpractice action
against Attorney Baum and his law firm and a breach of contract/bad faith
action against ProAssurance (“the Fandray suit”). The Fandray suit alleged
that ProAssurance, in bad faith, needlessly settled the Hannon suit for
$62,000 because Baum negligently failed to put forth defenses available to
Fandray and Bright Future, which would have caused them to be dismissed
from the case. The Fandray suit averred that the unwarranted settlement
ruined her professionally and financially, devastated her emotionally, and
destroyed her adoption agency.
Baum and ProAssurance filed separate motions for summary
judgment. The trial court granted both motions. Plaintiffs appealed and
they present the following issues for review:
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1. Did the trial court abuse its discretion and/or err as a
matter of law in granting summary judgment [and]
dismissing the complaint against Alan Baum and his
law firm?
2. Did the trial court abuse its discretion and/or err as a
matter of law in granting summary judgment [and]
dismissing the complaint against ProAssurance
Specialty Insurance Company?
Appellants’ Brief, at 3-4.
We review an appeal of the trial court’s entry of summary judgment as
follows:
Our scope of review of a trial court’s order granting or denying
summary judgment is plenary, and our standard of review is
clear: the trial court’s order will be reversed only where it is
established that the court committed an error of law or abused
its discretion. Summary judgment is appropriate only when the
record clearly shows that there is no genuine issue of material
fact and that the moving party is entitled to judgment as a
matter of law. The reviewing court must view the record in the
light most favorable to the nonmoving party and resolve all
doubts as to the existence of a genuine issue of material fact
against the moving party. Only when the facts are so clear that
reasonable minds could not differ can a trial court properly enter
summary judgment.
Englert v. Fazio Mechanical Services, Inc., 932 A.2d 122, 124 (Pa.
Super. 2007) (citations omitted).
In order to establish legal malpractice, a plaintiff must establish: 1)
employment of the attorney or other basis for a duty; 2) the failure of the
attorney to exercise ordinary skill and knowledge; and 3) that such
negligence was the proximate cause of damage to the plaintiff. Epstein v.
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Saul Ewing LLP, 7 A.3d 303, 313 (Pa. Super. 2010); Myers v. Robert
Lewis Seigle, P.C., 751 A.2d 1182, 1184 (Pa. Super. 2000).
Pennsylvania Rule of Civil Procedure 1035.2 states, in relevant part:
After the relevant pleadings are closed, but within such time as
not to unreasonably delay trial, any party may move for
summary judgment in whole or in part as a matter of law . . . 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.
Pa.R.C.P. 1035.2(2).
Count I of Plaintiffs’ Amended Complaint, Negligence/Malpractice,
avers the following:
Defendants Baum and the Firm negligently failed to properly
assert and prosecute in the Suit the absolute defenses available
to Plaintiffs, said negligence directly and proximately causing the
damages set forth herein.
Defendant Baum’s negligence and malpractice was the result of
his being preoccupied with certain personal, inappropriate
desires and interests, and the overt expressions of said interests
and desires to Plaintiff Fandray, followed by her rejection of said,
said desires and interests being inconsistent with the
professional duties and obligations he maintained toward
Plaintiffs.
Amended Complaint, 11/14/12, at ¶¶ 19, 20 (emphasis added). In its
Answer, Baum denied the averments, stating that at all relevant times
“Attorney Baum and the Firm exercised the requisite skill, knowledge and
care required of members of the legal profession and adhered to all
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applicable professional rules, regulations, laws and guidelines.” Answer and
New Matter to Plaintiffs’ Amended Complaint, 2/4/13, at ¶19. Further,
Attorney Baum specifically denied “any type of personal or inappropriate
desires and interests towards Ms. Fandray or that he expressed any interests
or desires to Ms. Fandray.” Id. at ¶ 20.
In their Brief in Opposition to Summary Judgment, Plaintiffs
acknowledge that Attorney Baum in fact did raise the “absolute defenses of
immunity, privilege, statute of limitations, truth, and the corporate veil to
the underlying Hannon suit in the Answer and New Mattter he filed.”
Plaintiffs’ Brief in Opposition to Summary Judgment, 1/4/16, at 4. Further,
in her deposition, Fandray acknowledged this as well. See Fandray
Deposition Vol. I, 7/16/14, at 35-36.
The trial court noted that Plaintiffs now state that the legal malpractice
emanated from Attorney Baum’s failure to “timely prosecute” the defenses
and successfully terminate the Hannon suit prior to the date ProAssurance
settled the claim in mid-June 2011. However, Attorney Baum entered his
appearance on September 21, 2010 and did, as stated above, file an Answer
and New Matter containing the absolute defenses. He also drafted and
served interrogatories, took depositions and defended depositions,
participated in strategy sessions with Fandray, drafted and filed a Motion for
Judgment on the Pleadings, and drafted a brief in support of the Motion for
Judgment on the Pleadings. Notably, at Fandray’s request, Attorney Baum
withdrew the Motion for Judgment on the Pleadings on June 9, 2011. Thus,
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Plaintiffs claim Baum’s failure to have “timely prosecuted” the defenses and
won a full and final dismissal of all claims within nine months, before
ProAssurance settled the claim, fell below the standard of care and thus
amounted to legal negligence. As the trial court stated, “It is illogical to
require the trial lawyer defending the [u]nderlying [a]ction to structure a
defense based upon some fluid, potential deadline[.]” Trial Court Opinion,
4/12/16, at 8. In fact, Fandray acknowledged in her deposition that
Attorney Baum was not aware of the settlement until it had occurred.
Fandray Deposition, 9/29/14, at 169-70. Further, Fandray admitted that it
was ProAssurance’s decision to settle the case. Id. at 171. Plaintiffs’
deadline is arbitrary. We find no abuse of discretion or error of law in the
trial court’s determination that Plaintiffs have failed to produce evidence of
facts essential to show breach of duty or causation, essential elements of
their legal malpractice claim. Englert, supra.
Next, Plaintiffs claim the court erred in granting ProAssurance’s motion
for summary judgment. In their complaint, Plaintiffs alleged breach of
contract and bad faith in connection with ProAssurance’s settlement of the
Hannon suit. This claim, too, is meritless.
Under the terms of the policy, Fandray and Bright Future granted
ProAssurance the right and duty to settle any claims. The policy provides in
relevant part:
E. COVERAGE AGREEMENT RELATING TO THE DEFENSE OF
CLAIMS
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The Company shall have the right and duty to defend any
claim against the insured even if any of the allegations are
groundless, false or fraudulent. The Company may make
such investigation and settlement of any claim,
professional incident or occurrence which may result in a
claim, as it deems expedient.
Social Services Professional Liability Insurance and Commercial General
Liability Insurance Policy, 12/08, at 2 (emphasis added).
In mid-June 2011, “through direct negotiations between ProAssurance
and counsel for the Hannons, ProAssurance had the opportunity to settle the
[Hannon suit] on behalf of Fandray and Bright Future within the policy limits,
and therefore without any payment by Fandray or Bright Future.” Trial
Court Opinion, supra at 11. The court determined that by the terms of the
policy, there is no question that ProAssurance had the authority to settle the
Hannon claim without Fandray’s consent and that ProAssurance acted in
good faith. We agree that no reasonable juror could decide otherwise.
Therefore, we find no abuse of discretion or error of law. Englert, supra.
Orders affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/17/2016
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Fandray, N. v. Baum, A.
Combined Opinion