CD Realty Advisors, Inc. v. Riley Piper Hollin

• Court: Superior Court of Pennsylvania
• Decided: August 27, 2014
• Docket: 3327 EDA 2013
• Status: Unpublished

Opinion

J-A20040-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CD REALTY ADVISORS, INC., CD : IN THE SUPERIOR COURT OF REALTY ENTERPRISE DRIVE : PENNSYLVANIA ASSOCIATES, LLC, AND SILVER LAKE : OFFICE PLAZA, LLC, : : Appellants : : v. : : RILEY RIPER HOLLIN & COLAGRECO, : P.C., JEANETTE N. SIMONE, ESQ., : BRETT M. McCARTNEY, ESQ. BERGER : HARRIS, LLC, BENJAMIN J. BERGER, : ESQ., AND JOHN G. HARRIS, ESQ., : : Appellees : No. 3327 EDA 2013

Appeal from the Order entered on October 16, 2013 in the Court of Common Pleas of Philadelphia County, Civil Division, No. 2508 December Term 2010

BEFORE: FORD ELLIOTT, P.J.E., MUNDY and MUSMANNO, JJ.

MEMORANDUM BY MUSMANNO, J.: FILED AUGUST 27, 2014

), CD Realty Enterprise Drive

Motion for Summary Judgment filed by Riley Riper Hollin & Colagreco, P.C. J-A20040-14

In 2005, CD Realty, on behalf of Silver Lake and Enterprise, entered

licensed real estate agent in

who is not a licensed real estate broker.

The Agreements provided that Colliers would act as the exclusive real

estate agent for commercial properties owned by Silver Lake and Enterprise

in Delaware. Certain pre-existing leases between CD Realty as landlord and

the State of Delaware as tenant were renewed while Colliers was acting as

the real estate agent, after which Colliers demanded payment of

commissions.

In 2007, Colliers filed a Complaint against Appellants, asserting

breach-of-

Appellants retained the Riley Law Firm to provide legal representation in

their defense of the Underlying Action. At the subsequent bench trial, the

Riley Law Firm argued that the Agreements were unenforceable under

Delaware law because Colliers was not properly licensed, and that Colliers

1 The Agreements were executed after almost a month of negotiations,

both of whom are licensed salespeople working as independent contractors for Colliers.

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was not entitled to collect commission. After the parties submitted their

proposed Findings of Fact and Conclusions of Law, Berger and Harris

terminated their employment with the Riley Law Firm and founded the

Berger Harris Law Firm. The Berger Harris Law Firm replaced the Riley Law

Firm as counsel for Appellants in the Underlying Action.

On October 27, 2009, the trial court issued an Order and Opinion. The

trial court held that Colliers was a fully licensed corporation under Delaware

law, and

license. Accordingly, the trial court awarded damages to Colliers in the

amount of $421,933.12, which included interest and counsel fees.

Neither the Riley Law Firm nor the Berger Harris Law Firm filed post-

trial motions on behalf of Appellants. The Berger Harris Law Firm filed an

appeal, which this Court quashed for failure to file post-trial motions. While

the appeal was pending, Silver Lake and Enterprise initiated a capital call to

Sil

security for the bond. Appellants have an outstanding liability for those

funds which they have not yet repaid.

The trial court set forth the background of the instant action as

follows:

In December 2010, [Appellants] filed the instant action against [Appellees]. The Amended Complaint filed by [Appellants], styled as a civil action for [legal malpractice], asserts the claims of breach-of-contract against all [Appellees], professional negligence against all individual [Appellees], and

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vicarious liability against the Riley Law Firm and the Berger Harris Law Firm.

On the deadline for the filing of dispositive motions in the instant action, December 17, 2012, the Riley Law Firm filed a [M]otion for [S]ummary [J]udgment asking [the trial] court to enter judgment in favor of the Riley Law Firm, [Simone] and [McCartney]. Subsequently, on December 28, 2012, the Berger Harris Law Firm filed its [M]otion for [S]ummary [J]udgment asking [the trial] court to dismiss all claims asserted against the Berger Harris [Law Firm, Berger and Harris]. [Appellants] timely filed their responses in opposition to the two [M]otions for [S]ummary [J]udgment. On May 30, 2013, [the trial] court issued an Order denying the [M]otions for [S]ummary [J]udgment on the grounds that the court perceived the existence of issues of fact as to whether [Appellees] had apprised [Appellants] about the merits of certain defenses in the Underlying Action, and whether [Appellees] had explored the possibility of settlement in light of such potentially weak defenses. On June 25, 2013, the Riley Law Firm filed [a] [M]otion for [R]econsideration, and CD Realty timely filed it[s] response in opposition. On September 27, 201[3], a pre-trial conference was scheduled before [the trial] court. The court held oral arguments on the [M]otion for [R]econsideration and the Riley Law Firm and CD Realty argued their respective

Trial Court Opinion, 10/16/13, at 5-6 (footnotes omitted). The trial court

summary judgment in favor of Appellees.2 The Appellants filed a timely

Notice of Appeal.

On appeal, Appellants raise the following questions for review:

I. Whether the [trial c]ourt erred in determining as a matter of law that Appellants could not have succeeded in an appeal, had

2 Although the Berger Harris Law Firm, Berger, and Harris did not seek reconsideration or present oral argument, the trial court nevertheless entered summary judgment in favor of all Appellees. Appellants do not raise any issue with this procedure.

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Appellees timely filed post-trial motions in the [U]nderlying [A]ction, by proving that the underlying broker agreements were illegal, void and unenforceable under Delaware law[?]

II. Whether the [trial c]ourt erred in determining as a matter of law that Appellants[] sustained no actual loss despite evidence that (1) each entity paid legal bills to Appellees in the [U]nderlying [A]ction; (2) each entity had a legal obligation to repay the loan made by their members to secure the bond to appeal the judgment entered in the [U]nderlying [A]ction; and (3) each entity had, in fact, either repaid or was in the process of repaying the loan by their members to secure the bond to appeal the judgment entered in the [U]nderlying [A]ction[?]

III. Whether the [trial c]ourt erred in determining as a matter of law that Appellants failed to show they suffered an actual loss as collective failure to evaluate the

communicate with Appellants in the [U]nderlying [A]ction[?]

Brief for Appellants at 5 (issues renumbered for ease of disposition).

Summary judgment is proper where the pleadings, depositions,

affidavits and materials of record show that there is no genuine issue of

material fact and that the moving party is entitled to judgment as a matter

of law. Weiner v. Am. Honda Motor Co., 718 A.2d 305, 307 (Pa. Super.

1998). We review the record in the light most favorable to the opposing

party and resolve all doubts and reasonable inferences about the existence

of an issue of fact in favor of the nonmoving party. Telega v. Security

Bureau, Inc., 719 A.2d 372, 375 (Pa. Super. 1998). We will reverse the

grant of summary judgment only upon a clear abuse of discretion or error of

law. Tenaglia v. P & G, Inc., 737 A.2d 306, 307 (Pa. Super. 1999).

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together. In their first claim, Appellants assert that the trial court erred in

holding that Appellants could not have proven that the Agreements at issue

in the Underlying Action were illegal and void. Brief for Appellant at 19.

Appellants claim that the trial court improperly relied on the Findings of Fact

and Conclusions of Law in the Underlying Action. Id. Specifically,

Appellants challenge the determination that Colliers was a fully licensed

brokerage firm. Id. Appellants, citing both statutory and common law,

claim that the Agreements were illegal because Steinhart was not a

Delaware-licensed broker. Id. at 20-21. Additionally, Appellants assert that

a claim seeking commission is unenforceable where the signatory on the

listing agreement is not licensed. Id. at 21. Further, Appellants argue that

if Appellees had filed timely post-trial motions, the appellate court in the

Underlying Action would have made a determination regarding the

enforceability of the Agreements. Id. at 22.

In their second claim, Appellants claim that they suffered actual loss

because Silver Lake and Enterprise had contributed to the funds the Holding

Company had used to pay the judgment.3 Id. at 19. Appellants also claim

3 Appel CD Realty, as CD Realty had admitted that it had not contributed to the

repay the Holding Company. Brief for Appellant at 17. However, Appellants argue that the trial court incorrectly relied on statements made by CD Realty, which is merely one of the three Appellant companies. Id.

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that Silver Lake and Enterprise suffered damages through payment of legal

fees, totaling $240,000, to the Riley Law Firm and the Berger Harris Law

Firm in the Underlying Action. Id. Additionally, Appellants argue that they

sustained a loss of $50,000, which Silver Lake paid for the award of Colliers

legal fees. Id.

The elements of a legal malpractice claim are well settled.

A cause of action for legal malpractice contains three elements:

exercise ordinary skill and knowledge; and the occurrence of damage to the

essence, a legal malpractice action in Pennsylvania requires the plaintiff to prove that he had a viable cause of action against the party he wished to sue in the underlying case and that the attorney he hired was negligent in prosecuting or defending that

Epstein v. Saul Ewing LLP, 7 A.3d 303, 313 (Pa. Super. 2010) (citations

and quotation marks omitted).

An essential element to [a legal malpractice] cause of action is proof of actual loss rather than a breach of a professional duty causing only nominal damages, speculative harm or the threat of future harm. Damages are considered remote or speculative only if there is uncertainty concerning the identification of the existence of damages rather than the ability to precisely calculate the amount or value of damages.

Kituskie v. Corbman, 714 A.2d 1027, 1030 (Pa. 1998) (citations omitted).

Initially, Appellants have established the first element of a legal

malpractice claim. Appellants employed all Appellees as counsel in various

stages of the Underlying Action. See Trial Court Opinion, 10/16/13, at 3-4.

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Next, we must ascertain whether Appellants would have succeeded on

appeal, had this Court not quashed the appeal for failure to filed post-trial

motions.

When reviewing a judgment from a non-jury trial,

we must determine whether the findings of the trial court are supported by competent evidence and whether the trial judge committed error in the application of law. Additionally, findings of the trial judge in a non-jury case must be given the same weight and effect on appeal as a verdict of a jury and will not be disturbed absent error of law or abuse of discretion.

, 776 A.2d 276, 281

(Pa. Super. 2001) (citing Hester v. Pennsylvania Fin. Responsibility

Assigned Claims Plan, 743 A.2d 926, 927 (Pa. Super. 1999)).

At the time the Agreements in the Underlying Action were executed,

Delaware statutory law contained the following provision relating to the

licensing of corporations:

Corporations, partnerships and associations shall not be licensed under this chapter, but nothing in this chapter shall prevent a corporation or partnership from acting as a real estate broker provided that every officer of the corporation and every member of any partnership actually negotiating or attempting to negotiate the listing, sale, purchase, rental, exchange or lease of any real estate or of the improvements thereon, or collecting rents or attempting to collect, on behalf of said corporation or partnership,

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24 Del. C. § 2910 (2005) (emphasis added).4

Before the trial court in the Underlying Action, the Riley Law Firm

argued, on behalf of Appellants, that the Agreements were unenforceable

because Steinhart was not licensed as a real estate broker, and that Colliers

was not entitled to collect commissions from renewal of the leases predating

the execution of the Agreements. See Trial Court Opinion, 10/16/13, at 4.

Nevertheless, the trial court held that Colliers is a fully licensed brokerage

firm in Delaware. See Trial Court Opinion, 10/27/09, at 10. The trial court

found that Colliers has satisfied the licensing requirements under section

2910. See id. The trial court further determined that Sayer is a licensed

real estate broker in Delaware, and the two salespeople who negotiated the

Agreement, Rowen and Chubb, are also licensed in Delaware. See id.

While Steinhart was not a licensed broker, the trial court found that his

involvement was limited to authorizing Colliers to enter into the Agreements.

See id. Thus, the trial court found that he did not perform the actions

4 At the time the Agreements were created, Delaware statutory law also included the following provision relating to the licensing of individuals:

§ 2906. Certificate requirement

(a) No person, partnership, association or corporation shall act as a real estate broker or real estate salesperson, or advertise or assume to act as such real estate broker or real estate salesperson without being registered and without a certificate of registration issued by the Commission.

24 Del. C. § 2906 (2005).

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typical of a real estate broker, and his involvement in the formation of the

Agreement did not require a license. See id.; see also 24 Del. C.

§ 2906(a) (2005). The trial court in the Underlying Action held that Colliers

was in compliance with the Delaware statutes, and Appellants failed to prove

otherwise. See Trial Court Opinion, 10/27/09, at 10.

Upon our review of the relevant statutes and record in the Underlying

Action, we conclude that the trial court acted within its discretion and did not

commit an error of law in concluding that Colliers was properly licensed and

could collect its commission. Here, Appellants have failed to provide any

have been reversed on appeal had Appellees filed post-trial motions. Thus,

Appellants have not proven that their appeal would have been successful 5 absent Appellee

Accordingly, we affirm the determination that this Court would have

denied Appellants relief on appeal had Appellees filed post-trial motions in

the Underlying Action. See Trial Court Opinion, 10/16/13, at 7-8. Because

Appellants have not satisfied the second element, their legal malpractice

5 Appellants cite to various Delaware cases to support their claim. However, upon our review, these cases are inapplicable to the case within a case.

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cause of action fails.6

Because Appellants have not proven that Appellees were negligent in

the course of the Underlying Action, Appellants have not demonstrated

actual loss stemming from

loss where Appellees were not negligent in their representation. Thus,

Appellants are not entitled to relief on their first two claims.

In their third claim, Appellants seem to raise a separate legal

malpractice claim. Specifically, Appellants argue that Appellees negligently

failed to investigate reasonable settlement options, and that their decision

not to proceed with settlement was uninformed because Appellees did not

communicate perceived weaknesses in the case. Id. at 23-24; see also

Rizzo v. Haines, 555 A.2d 58, 66 (Pa. 1989) (stating that an attorney must

investigate all proposed settlement offers so his client can make an informed

failure to investigate settlement options. Brief for Appellant at 23.

Appellants claim that counsel for Colliers suggested to McCartney that the

6 We note that the Riley Law Firm was not representing Appellants at the time of the award in this case, and thus was not responsible for filing post- trial motions. Furthermore, in 2012, Appellants and the Berger Harris Law Firm entered into a Settlement Agreement and Joint Tortfeasor Release

Law Firm, Berger, and Harris for any actions or omissions that occurred from October 1, 2009 forward. As the award in the Underlying Action was entered on October 27, 2009, the Settlement Agreement ostensibly released claims against the Berger Harris Law Firm, Berger, and Harris related to the failure to file post-trial motions.

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suit could settle for $150,000 to $200,000, but that McCartney did not

investigate the available settlement options. Id. at 24. Appellants point to

less than $850,000, then lowered that figure to $700,000. Id. Appellants

argue that the significant difference between the two potential settlement

figures raises an issue of material fact, and that the trial court in the

Underlying Action erred in making the determination that Appellants had not

suffered actual loss as a matter of law. Id. at 25.

theory of attorney malpractice because there is no evidence showing that

Colliers would have settled for an amount lower than the judgment of

See Trial Court Opinion, 10/16/13, at 10. The record

confirms that Appellants can only speculate as to whether the Underlying

Action would have settled if Appellees had informed them of a reasonable

settlement option. Further, we note that Appellants do not dispute that

when Berg was informed that Colliers indicated a settlement might be

possible for approximately $150,000 to $200,000, he rejected that

settlement range.

Because Appellants have not proven that a reasonable settlement offer

existed in the Underlying Action, they cannot now succeed on a claim that

Appellees were negligent in not communicating such an offer. See Trial

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Court Opinion, 10/16/13, at 12 n.28. Thus, Appellants have not satisfied the

second element of their legal malpractice claim and are not entitled to relief.

Based upon the foregoing, the trial court did not err in granting

summary judgment in favor of Appellees.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 8/27/2014

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