Gurski v. Rosenblum And Filan, Llc.

885 A.2d 163 (2005)

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Nature of the Case

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Facts

P filed a voluntary petition for bankruptcy under chapter 11. The court issued an automatic stay of post-petition actions against P's property. Susan Lee then commenced an action against P, a podiatrist, for malpractice, alleging that, as a result of P's negligent and careless treatment of her feet in 1995 and 1996. P notified his insurance carrier who retained D to represent P. AIG informed P that the action filed by Lee was not covered under his policy and, accordingly, that it no longer would provide a defense or indemnification. The law firm informed P that, because he had no coverage, he would need to retain other counsel. The firm notified P that it had filed a motion to withdraw its appearance in July. It then notified P that the court had scheduled a hearing for settlement discussions in Lee's action on July 22. Neither P nor the law firm appeared, and the court entered a default judgment against P. In August, the law firm notified P of the default judgment, advised him of another hearing scheduled for August 27, 1998, and counseled him to attend that hearing. By letter dated October the law firm informed P that the motion to withdraw its appearance was scheduled for October 19, 1998. The court granted that motion on October 20, 1998. June 3, 1998, Lee filed a motion for relief from the stay, seeking an order permitting her to proceed with the malpractice action against P. The Bankruptcy Court ordered that Lee be permitted to proceed with the malpractice action, but not to execute on assets of the estate. On November 16, 1998, P received a certificate of closed pleadings notifying him that, on November 12, 1998, Lee had claimed the malpractice case to a hearing in damages. P forwarded that document to another law firm, and that firm notified P that the trial court had granted the law firm's motion to withdraw on October 20, 1998, and advising him to seek other counsel as soon as possible. P was unsuccessful, in retaining counsel and, because he had not entered a pro se appearance, he was not notified of the December 21, 1998 hearing in damages at which judgment entered against him for $152,000. P retained counsel, who moved to open the judgment. The trial court denied the motion. The judgment in favor of Lee was considered an administrative claim and was not subject to being discharged in P's pending bankruptcy proceedings. P filed a motion to compromise with the Bankruptcy Court regarding the judgment against him. A motion to compromise was granted to assign Lee an interest in P's malpractice claim against D. P commenced the present action against the law firm, alleging that its negligence and breach of contract were a proximate cause of his injury. D filed several special defenses, including a challenge to the assignment as violative of public policy. D moved for a directed verdict, challenging, inter alia, the enforceability of the assignment. The jury concluded that P had not breached the standard of care when treating Lee and that the law firm had breached the standard of care when representing P. P got a verdict for $220,318. D filed a motion to set aside the verdict and, thereafter, a motion for judgment notwithstanding the verdict; it is improper for a party to assign a legal malpractice claim to an adversarial party in the underlying litigation. The trial court denied both the motion to set aside the verdict and the motion for judgment notwithstanding the verdict. D filed for remittitur, which the trial court granted in part. Both P and D appealed.