This article originally ran in The Legal Intelligencer on March 31, 2016.
Attorneys are relied upon for their skill and judgment in the service they provide their clients. If an attorney's lack of skill leads to a harmful result, a straightforward legal malpractice claim arises. However, where the claim involves an attorney's exercise of professional judgment that ultimately proves wrong or harmful to the client's case, courts, including in Pennsylvania, have generally held that the attorney is not liable for malpractice pursuant to the attorney judgment rule, also commonly referred to as "judgmental immunity" or "error of judgment" rule. A 2014 decision by the Pennsylvania Supreme Court in the medical malpractice context, however, raises the question of whether attorney defendants and other professional negligence defendants in Pennsylvania can continue to rely on the judgment rule at trial.
Historically, the attorney judgment rule has acted to bar negligence claims based on an attorney's mere error in judgment. For example, in Navar v. Tribler Orpett & Meyer, No. 1-14-2641 (Ill. App. Ct., Oct. 19, 2015), the Illinois Appellate Court affirmed a ruling by the trial court finding that Manuel Navar's malpractice claims against Tribler Orpett & Meyer were precluded pursuant to the Illinois rule affording immunity to lawyers for errors of judgment. The underlying malpractice allegations related to Tribler's representation of Navar in a suit that arose out of Navar's sale of a residential real estate property to Dahlia Ponce. The suit between Navar and Ponce ultimately resulted in a judgment in favor of Ponce and an award of damages totaling $98,500. Following the adverse judgment, Navar sued Tribler, alleging that during the pendency of the suit with Ponce, Tribler negligently advised Navar that he would prevail in the action and failed to advise Navar to settle the case.
The appellate court affirmed the dismissal of the case, holding that many of Navar's allegations of negligence against Tribler were premised on Tribler's incorrect assessment of the strength of the lawsuit. The court noted that predictions as to the merits of a case amount to mere errors of judgment, which do not give rise to liability. With respect to the allegations regarding Tribler's failure to advise Navar to settle the case, the court distinguished between cases where an attorney fails to communicate a specific settlement offer, and ones, as alleged by Navar, where the attorney generally failed to guide the client to a settlement that later proves less than the ultimate judgment. The court noted that Tribler's advice to Navar to reject any settlement proposals in excess of $25,000 was a miscalculation of the settlement value, for which Tribler could not be liable.
Pennsylvania courts have also long recognized similar principles to the attorney judgment rule as a bar to claims of negligence where an informed judgment on the part of an attorney later proves to be wrong. (See, for example,Composition Roofers Local 30/30B v. Katz, 581 A.2d 607, 610 (Pa. Super. 1990) ("An informed judgment on the part of counsel, even if erroneous, is not negligence."); and Rizzo v. Haines, 555 A.2d 58 (Pa. 1989) ("An attorney's considered decision involving at a minimum the requisite exercise of 'ordinary skill and capacity,' and which is an 'informed decision,' does not constitute malpractice.").) That was, until a 2014 decision by the Pennsylvania Supreme Court in the medical malpractice context that essentially barred the use of "error in judgment" jury instructions.
In Passarello v. Grumbine, 87 A.3d 285 (Pa. 2014), the Pennsylvania Supreme Court held that jury instructions on error of judgment were confusing and unnecessary. The underlying facts in Passarello related to allegations by the parents of a deceased child that his death was caused by the defendant-physician's failure to properly diagnose and treat him. At trial, the jury returned a verdict for the defendant, but on appeal, the plaintiffs argued the trial judge improperly provided the jury with the "error in judgment" instruction, which states: "Under the law physicians are permitted a broad range of judgment in their professional duties and physicians are not liable for errors of judgment unless it's proven that an error of judgment was the result of negligence." The Superior Court agreed and ordered a new trial.
The physician then appealed the Superior Court's decision to the Pennsylvania Supreme Court. In affirming the Superior Court's decision, the Pennsylvania Supreme Court essentially held that physicians defending against medical malpractice suits are not entitled to a jury instruction that a "mere" or "honest" "error in judgment" does not constitute negligence. The court found that such instructions pose substantial risks of confusing juries with respect to the standard of care in medical malpractice cases. Specifically, the court held that errors in judgment instructions "wrongly suggest to the jury that a physician is not culpable for the … negligent exercise of his or her judgment … and wrongly inject a subjective element into the jury's deliberations."
While Pennsylvania courts have yet to apply Passarello outside the context of medical malpractice, this has not diminished litigators' concern on whether and how the holding will impact other professional negligence cases. What Pennsylvania courts ultimately decide to do is hard to predict. However, it is helpful to know that other jurisdictions restricting the use of error in judgment instructions in medical malpractice cases have generally not done the same in the legal malpractice context. It is also important to caution against overreading the Passarello decision as a complete bar to "error in judgment" jury instructions. While it is true that the Supreme Court held that error in judgment instructions should no longer be used in medical malpractice cases, the court was careful to explain that the "substance" underlying error in judgment instructions is not barred. The court suggested that defendants are still able to propose an instruction that conveys the principles that underlie the error in judgment rule, but without use of phrases such as "error in judgment," which it found to be confusing to jurors.
But even if Pennsylvania courts ultimately decide to apply the holding of Passarello in the context of legal malpractice, does that mean that attorneys can no longer rely on the attorney judgment rule?
The simple answer is no. Jurisdictions that have adopted the rule generally view it as a rule that enables courts to decide the issue of negligence as a matter of law. Indeed, courts in Pennsylvania and in other jurisdictions that have applied the attorney judgment rule have not hesitated to dismiss claims asserted against an attorney pursuant to the rule. As a result, an important function of the attorney judgment rule is the ability to invoke the rule in seeking dismissal of claims. That function remains regardless of how the eyebrow-raising ruling in Passarello is applied. •
Aya M. Salem is a sixth-year associate at Conrad O'Brien. She focuses her practice on representing Am Law 100 and regional firms in legal malpractice cases and other civil liability matters. Salem also has experience in the area of white-collar criminal defense, representing professionals, corporate clients, and government employees and agencies in investigations conducted by federal agencies and state regulators, including grand jury investigations.
Reprinted with permission from the March 31, 2016 issue of The Legal Intelligencer. © 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.