Pennsylvania Superior Court Reverses Trial Court’s Coordination Order in Legal Malpractice Dispute

In a non-precedential opinion, the Pennsylvania Superior Court has rejected an attempt by a law firm to resolve a legal malpractice dispute with a former client in its forum of choice through the filing of a preemptive declaratory judgment action.

In Dillon McCandless King Coulter & Graham, LLP v. Rupert, No. 1573 WDA 2012 (Pa. Super. Sept. 24. 2013), upon learning of a dispute with a former client over alleged non-waivable conflicts of interest inherent in a joint representation that had been undertaken by the firm, the law firm filed a declaratory judgment action in Butler County seeking to affirm the validity of its contingency fee agreement with the client. In response to the complaint, the client filed preliminary objections to the complaint arguing that there was no actual dispute because she did not contest the validity of the agreement. While these objections were pending, she separately filed a malpractice suit in Allegheny County against the law firm. The law firm promptly moved under Rule 213.1 for an order from the Butler County court to coordinate the Allegheny County malpractice case with the declaratory judgment action pending before the court. The Butler County court subsequently resolved the preliminary objections in favor of the client, but afforded the law firm the opportunity to file an amended complaint. The amended complaint and an amended motion for coordination from the law firm followed. Over the client’s objection, the Butler County court, which had stayed the Allegheny County malpractice action pending its resolution of the motion for coordination, ordered that the malpractice action be coordinated with the declaratory judgment action pending before it. The client appealed the coordination order, essentially arguing that she had been deprived of her choice of forum even though the original complaint filed by the law firm in Butler County was a nullity.

The Superior Court agreed. Looking to its decision in VMB Enterprises, Inc. v. Beroc, Inc., 891 A.2d 749 (Pa. Super. 2006), which resolved a similar issue, the court held that it was improper to construe the law firm’s declaratory judgment action as the first-filed complaint for purposes of Rule 213.1 because it was predicated “upon fabricated allegations, which were not oversights or minor mistakes but which formed the complete underpinning for the lawsuit.” Consequently, although technically filed first, the law firm’s complaints commencing the declaratory judgment action were nullities. In addition, the court agreed with the client that the Butler County court did not properly consider the enumerated factors under Rule 213.1(c) in entering its coordination order, particularly since the malpractice action raised different issues than the declaratory judgment action. On these bases, the Superior Court concluded that the court had improperly deprived the client of her chosen venue of Allegheny County.

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