Coleman v. Duane Morris, LLP

58 A.3d 833, 2012 Pa. Super. 281, 2012 WL 6625041, 2012 Pa. Super. LEXIS 4100
CourtSuperior Court of Pennsylvania
DecidedDecember 20, 2012
StatusPublished
Cited by25 cases

This text of 58 A.3d 833 (Coleman v. Duane Morris, LLP) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coleman v. Duane Morris, LLP, 58 A.3d 833, 2012 Pa. Super. 281, 2012 WL 6625041, 2012 Pa. Super. LEXIS 4100 (Pa. Ct. App. 2012).

Opinion

OPINION BY

MUSMANNO, J.:

Eric C. Coleman (“Coleman”) and Linda Coleman (“Linda”), husband and wife, and Timothy G. Carroll (“Carroll”), individually and as executor of the estate of Louis Carroll, deceased,1 (collectively “Plaintiffs”) appeal from the Order granting judgment on the pleadings in favor of Duane Morris, LLP and Kathleen M. Shay (collectively “Defendants”).2 We reverse.

The pertinent facts of this case are as follows:

Plaintiffs [] Coleman and [] Carroll owned BCA Management, Inc. Their respective spouses[,] Linda [ ] and Louise Carroll (now deceased)!,] owned BCA Professional Services, Inc. [BCA Management, Inc. and BCA Professional Services shall hereinafter be referred to as “BCA.”] Due to the fact that BCA had accumulated approximately $2.16 million in unpaid employee withholding, wage and sales taxes to state and local taxing authorities and the IRS for which Plaintiffs were personally liable, Plaintiffs began to consider a possible sale of the companies in order to alleviate their tax liability.
[] Coleman and [] Carroll entered into preliminary negotiations with Mira-bilis Ventures, Inc. (hereinafter “Mira-bilis”) for the sale of BCA, and on or about May 19, 2006, [ ] Coleman sought Attorney Kathleen Shay’s [“Attorney Shay”] legal advice concerning a nonbinding letter of intent. The letter of intent provided that Mirabilis would purchase 100% of BCA’s stock for a minimum of $2.5 million.
Plaintiffs allege that Attorney Shay orally agreed to represent the Plaintiffs and BCA in the sale of stock to Mirabil-is. Plaintiffs further allege that it was their understanding that Attorney Shay would bill BCA for her services, and [835]*835Mirabilis would pay the legal fees after acquiring BCA’s stock.
Subsequently, Plaintiffs submitted a Draft Agreement for the sale of BCA to Attorney Shay for her review. The Draft Agreement provided that Plaintiffs would sell 100% of BCA’s stock to Mirabilis and resign their positions in exchange for a payment of $300,000
Plaintiffs allege that they asked Attorney Shay for confirmation that the sale of BCA would terminate their personal liability for the unpaid taxes, and she advised them that it would.
The provisions contained in the Draft Agreement[,] in addition to Attorney Shay’s revisions[,] were incorporated into the final agreement, “Agreement for the Purchase and Sale of Common Stock.” At the closing on July 14, 2006, Plaintiffs and Attorney Shay were advised that Avant Services would be substituted for Mirabilis in the Stock Purchase Agreement. Avant was formed two days prior to the closing and was owned by Mirabilis. Plaintiffs questioned Attorney Shay about the significance of the substitution of Avant, and she allegedly replied that Avant would assume liability for the taxes, assuring Plaintiffs that they had “gotten everything they wanted, and more” in the transaction. Plaintiffs subsequently executed the Stock Purchase Agreement.
BCA retained its identity after the stock transfer, and [ ] Coleman ... continued to operate the company. Several months after the closing, Plaintiffs learned that, despite the transfer, they would remain personally liable for the taxes until they were paid.
Then, [ ] Coleman was fired from BCA in the beginning of 2007. In March 2007, [ ] Coleman petitioned the Court of Common Pleas of Chester County to regain control of BCA after allegedly receiving complaints from former clients that BCA had canceled their contracts and otherwise acted improperly and unprofessionally. The Chester County [common pleas] court thereafter granted [] Coleman power of attorney and ordered him to perform an accounting.
[ ] Coleman alleges that he then learned that BCA’s assets had been plundered, and the taxes had not yet been paid. The taxes that were owed by BCA were finally paid after the IRS seized a bank account in BCA’s name as part of BCA’s assets.
Plaintiffs ... commence[d] this action in assumpsit alleging Breach of Contract by filing their Complaint on November 5, 2010. They did not bring a Trespass (negligence) action. After Defendants filed Preliminary Objections on December 9, 2010, Plaintiffs filed their Amended Complaint on January 10, 2011. Defendants filed their Answer to Plaintiffs Amended Complaint with New Matter on February 18, 2011, alleging that Plaintiffs did not consult Attorney Shay concerning BCA’s tax liability, and Plaintiffs concealed the nature and extent of BCA’s tax liability from Defendants. Defendants further alleged that Duane Morris’s invoices for Attorney Shay’s legal services had not been paid. Plaintiffs filed their Reply to Defendants’ New Matter on March 28, 2011, denying that they concealed the extent [836]*836of their tax liability from Defendants and alleging that they were without knowledge as to whether Defendants’ invoices were ever paid.
Defendants filed their Motion for Judgment on the Pleadings on April 21, 2011, alleging that because Plaintiffs never paid for Duane Morris’s services, they had not suffered any recoverable damages. Plaintiffs filed a reply on May 16, 2011, contending that they could recover for damages resulting from Defendants’ legal malpractice under a theory of breach of contract because the case [that] Defendants relied on discussed legal malpractice in connection with the handling of a criminal matter. Defendants thereafter filed a Reply in Support of the Motion for Judgment on the Pleadings on May 23, 2011, and Plaintiffs filed a response on May 26, 2011.
[The trial c]ourt granted Defendants’ Motion for Judgment on the Pleadings on May 26, 2011. On June 16, 2011, Plaintiffs timely filed an appeal from the May 26, 2011 Order. Plaintiffs then filed their [timely court-ordered] Concise Statement of Matters Complained of on Appeal pursuant to Pa.R.A.P. 1925(b) on July 12, 2011....

Trial Court Opinion, 4/28/10, at 1-5 (footnote in original).

Plaintiffs raise the following issue on appeal: “Did the trial court err in granting [the Defendants’] Motion for Judgment on the Pleadings?” Brief for Appellants at 5.

Plaintiffs contend that the trial court erred in granting Defendants’ Motion for judgment on the pleadings by holding that the Pennsylvania Supreme Court, in Bailey v. Tucker, 533 Pa. 237, 621 A.2d 108, 115 (1993), limited damages for all legal malpractice actions based on breach of contract to legal fees paid plus statutory interest. Plaintiffs assert that, under governing contract law, they are entitled to consequential damages for breach of contract.3

Our standard of review is as follows:

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Cite This Page — Counsel Stack

Bluebook (online)
58 A.3d 833, 2012 Pa. Super. 281, 2012 WL 6625041, 2012 Pa. Super. LEXIS 4100, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coleman-v-duane-morris-llp-pasuperct-2012.