On Dec. 11th, the Superior Court released its long-awaited opinion in Poteat v. Asteak regarding the applicability of the gist of the action doctrine in legal malpractice matters, holding it does not apply and essentially rendering the two-year statute of limitations for such claims obsolete. In a short opinion, the Majority found that the retention of an attorney creates an “implied contractual provision requiring a lawyer to provide competent legal services” irrespective of any actual contractual provision promising to do so. The Majority therefore concluded the plaintiff’s claim that would have otherwise been barred by the statute of limitations applicable to torts can proceed as a breach of contract action.
In a sharp and thorough dissent from Judge Stabile, and joined by Judge Emeritus Panella and Judge King, the Minority emphasized that this decision overrules hundreds of years of jurisprudence dating back to English law. The Minority began its discussion by citing to 19th century case law identifying the problematic nature of blending these theories of recovery, including the differing damages available under each theory, defenses such as contributory negligence that are unavailable in a contract action, and the overwhelming case law that precludes courts from writing new provisions into a contract. In sum, the Minority explained how this decision effectively overrules extensive case law on contracts generally, and the distinction between contract and tort claims specifically.
The impact of the Majority’s opinion is to effectively double the statute of limitations for legal malpractice actions regardless of whether there is a written contract between an attorney and its client, and irrespective of what that contract provides. While the decision will likely be appealed to the Pennsylvania Supreme Court, attorneys and law firms will spend at least the next one to two years subject to what were once time-barred claims.
