This is a Pennsylvania decision affirming the dismissal of a legal malpractice case. The plaintiff alleged that his lawyer breached the duty of care by advising him to settle his workers’ compensation matter. Plaintiff also claimed that the lawyers gave him incorrect legal advice. But for that incorrect legal advice he would not have settled the case.
In the practice area, this is known as a bad deal case. Plaintiff agrees to settle a case and then regrets the settlement or believes that the settlement amount was too low. The complaint frequently contains an allegation that the lawyer pressured the client into the settlement.
Courts and defense lawyers do not regard the so-called “Bad Deal” case as a strong one. Defense lawyers believe that the plaintiff should not have settled the case if she did not believe it was a good deal.
Pennsylvania has taken the general dislike of Bad Deal cases even further, with a legal doctrine that bars such lawsuits unless the plaintiff can show that he was fraudulently induced to sign the agreement.
In this case the trial court granted summary judgment to the defendant law firm. The court applied a doctrine recognized in the case captioned Muhammed v. Strassberger, McKenna, Messer, Shilobod and Gutnick, 587 A.2d 1346 (Pa. 1991). It explained:
In Muhammad, plaintiffs filed a legal malpractice action against defendant law firm as a result of defendant’s representation of plaintiffs in a medical malpractice lawsuit following the death of plaintiffs’ child. Defendant law firm negotiated a settlement of the medical malpractice case. Plaintiffs verbally accepted the settlement offer. Thereafter, plaintiffs changed their minds about the settlement before signing a written accord. Defendant law firm filed a Rule to Show Cause why the settlement agreement should not be enforced. After an evidentiary hearing, the trial court enforced the agreement. The court ordered the defendants in the medical malpractice case to pay the settlement funds and instructed the prothonotary to mark the case settled. Plaintiffs hired new counsel, appealed the order, and this Court affirmed. Muhammad v. Childrens Hospital of Pittsburgh, 487 A.2d 443 (Pa. Super. 1984) (unpublished memorandum opinion).
Thereafter, plaintiffs filed a legal malpractice case against the law firm that had negotiated the medical-malpractice settlement. The legal malpractice case was dismissed, and our Supreme Court affirmed that dismissal, stating:
This case must be resolved in light of our longstanding public policy which encourages settlements. Simply stated, we will not permit a suit to be filed by a dissatisfied plaintiff against his attorney following a settlement to which that plaintiff agreed, unless that plaintiff can show he was fraudulently induced to settle the original action. An action should not lie against an attorney for malpractice based on negligence and/or contract principles when that client has agreed to a settlement. Rather, only cases of fraud should be actionable.
Muhammad, 587 A.2d at 1348 (emphasis added). The Court further stated:
[W]e foreclose the ability of dissatisfied litigants to agree to a settlement and then file suit against their attorneys in the hope that they will recover additional monies. To permit otherwise results in unfairness to the attorneys who relied on their client’s assent and unfairness to the litigants whose cases have not yet been tried. Additionally, it places an unnecessarily arduous burden on an overly taxed court system. We do believe, however, there must be redress for the plaintiff who has been fraudulently induced into agreeing to settle. It is not enough that the lawyer who negotiated the original settlement may have been negligent; rather, the party seeking to pursue a case against his lawyer after a settlement must plead, with specificity, fraud in the inducement.
Id. at 1351.
Silvagni claims that the trial court improperly applied the Muhammad doctrine because he did not enter into the settlement voluntarily. Silvagni’s claim is not supported in the record.”
The Muhammed doctrine is not recognized in Illinois. However, the defense it provides is very consistent with the legal profession’s general opinion of Bad Deal cases. There is little sympathy for a plaintiff who accepted a settlement and cashed a check only to later blame his lawyer that the amount of the check was too low.
Edward X. Clinton, Jr.