Young, J. v. Lippl, J. ( 2021 )

J-A28003-20
2021 PA Super 56JANE YOUNG : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
JOHN E. LIPPL., P.E. : No. 227 WDA 2020
Appeal from the Judgment Entered March 10, 2020
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): Case no. GD-12-019194
JANE YOUNG : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
JOHN E. LIPPL, P.E. :
:
Appellant : No. 499 WDA 2020
Appeal from the Judgment Entered March 10, 2020
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD12-019194
BEFORE: OLSON, J., MURRAY, J., and McCAFFERY, J.
OPINION BY OLSON, J.: FILED: March 31, 2021
In this cross-appeal, Jane Young (“Young”) and John E. Lippl, P.E.
(“Lippl”) appeal different aspects of the March 10, 2020 judgment entered
upon a jury verdict in favor of Young in the amount of $114,947.99. 1 We
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1 A review of Young’s notice of appeal demonstrates that Young appealed the
January 17, 2020 order granting, in part, Lippl’s post-trial motion to correct a
mathematical error in the amount of the jury verdict. “[A]n appeal to this
Court can only lie from judgments entered subsequent to the trial court's
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affirm. We remand this case, however, for the limited purpose of calculating
and awarding post-judgment interest as discussed, infra.
The trial court summarized the factual and procedural history as follows:
Beginning in April 2008, [Young] and her former husband, Bruce
Goldblatt ("Goldblatt"), entered into an agreement with [a]
builder[,] Custom Homes, Inc. ("Custom Homes")[,] for the
construction of a [house] in Eighty-Four, Pennsylvania. Numerous
disputes arose such that [Young] refused to allow Custom Homes
to finish construction, resulting in [Custom Homes commencing]
an arbitration action [against Young and Goldblatt] before the
America Arbitration Association ("AAA").
At the [arbitration hearing, Lippl2] argued on behalf of [Young]
and Goldblatt that the [house] was continuing to settle and
required stabilization due to Custom Homes' failure to dig to firm
clay after charging for extraordinary ground preparation.
[Lippl] consulted with John L. Suhrie, P.E. ("Suhrie") to provide
expert analysis of and a detailed report [(“the Suhrie Report”)] on
the claims against Custom Homes for use at [the] arbitration
[hearing. Lippl] did not obtain [geotechnical] soil testing in
support of [Young’s] and Goldblatt's claims.
Arbitrator David Scotti,[Esquire (“Arbitrator”)] issued an award on
October 14, 2010[,] in favor of Custom Homes in the amount of
$64,032.21. The Arbitrator found that [Young] and Goldblatt []
wrongfully terminated [their contract with] Custom Homes, [and
denied the builder an] opportunity to correct any issues or to
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disposition of any post-verdict motions, not from the order denying post-trial
motions.” Johnston the Florist, Inc. v. TEDCO Constr. Corp., 657 A.2d
511, 514 (Pa. Super. 1995) (citation omitted). Here, the judgment in favor
of Young and against Lippl was entered March 10, 2020. Therefore, Young’s
notice of appeal shall be treated as filed on March 10, 2020, and as an appeal
from the entry of judgment. See McEwing v. Lititz Mut. Ins. Co., 77 A.3d
639, 645 (Pa. Super. 2013). The caption has been corrected accordingly.
2 Lippl is an attorney licensed to practice law in the Commonwealth of
Pennsylvania. Lippl is also a professional engineer licensed to practice in the
Commonwealth of Pennsylvania.
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complete the [construction] project. The Arbitrator dismissed
[Young’s] counterclaims for[,] inter alia[,] negligent construction,
which asserted that Custom Homes' work was defective and
incomplete. Following the award, [Lippl] was terminated as
counsel by [Young] and Goldblatt.
[Young] hired GeoMechanics, Inc. ("GeoMechanics"), an
engineering company, to conduct [geotechnical] soil testing. As
a result [of the soil testing, Young] learned that Custom Homes
had poorly compacted the fill material under her [house].
Moreover, GeoMechanics exposed the footers of the foundation
and discovered that Custom Homes had not dug deep enough to
reach firm clay.
[Young] then filed suit on May 1, 2012[,] against Nottingham
Township's building inspector, Code.Sys Consulting, Inc.
("Code.Sys"), alleging that it should have required an engineered
caisson foundation rather than a spread footer foundation given
the soil conditions. [Young] claimed damages for repair costs
based on [building] code violations including[,] but not limited to,
failure of the foundation system, permanent loss of use of the
property, depreciation in value and marketability of the property,
an inability to obtain refinancing[,] and escalating expert and
engineering fees. [On September 27, 2017, a] jury ruled in favor
of [Young and awarded her] $412,750.00 [in damages].
In lieu of an appeal, [Young and Code.Sys] settled for
$455,250.00 and executed a settlement and release agreement
that specifically discharged any claims [Young] had or may have
had against Code.Sys. The language in the agreement stated that
[Young],
". . . forever discharges [Code.Sys] from any and all
liabilities, charges, claims, causes of action or suits, of
whatever kind or nature, absolute, contingent, unliquidated
or otherwise, including, but not limited to, any rights,
obligations or claims arising out of or related to the lawsuit,
which liabilities, charges, claims, causes of action or suits
[Young] and her affiliates, agents, representatives, heirs,
executors, attorneys, successors and assigns can, shall or
may have against [Code.Sys] by reason of any matter,
cause or thing whatsoever, occurring prior to the date of this
agreement."
Thus, [Young] satisfied any claim she had or may have had
against Code.Sys for the defective foundation and subsequent
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repairs. The [settlement and release] agreement also discharged
Code.Sys from any claims that [Lippl] may have had against it
arising out of or related to [Young’s] lawsuit.
[Young] filed suit against [Lippl] in December 2012[,] for legal
malpractice while the Code.Sys litigation was pending.
[Young] claimed that [Lippl’s] failure to obtain [geotechnical] soil
testing caused her and Goldblatt to lose at arbitration. She also
asserted that the Suhrie [R]eport had recommended that the
[geotechnical soil] testing be done. [Young] further argued that
[Lippl] could have avoided the finding of improper termination had
he shown that Custom Homes' failure to dig to a depth of firm clay
was not only a material breach but also fraudulent.
[Lippl] raised numerous affirmative defenses and argued that any
reference to [geotechnical] soil testing in the Suhrie [R]eport was
related to the risk of future settlement and that such testing would
not have revealed that the foundation problems were incapable of
repair.[FN1] [Lippl] also asserted that the testing would not have
affected the arbitration award since the Arbitrator determined that
[Young] and Goldblatt had wrongfully terminated Custom Homes.
In fact, it was [Young’s] and Goldblatt's prior attorney[,] and not
[Lippl,] who had recommended terminating Custom Homes.
[FN1] In this case, [Young] alleged that she was precluded
from seeking recovery against Custom Homes for the total
loss of her [house] because of the doctrines of res judicata
and collateral estoppel. [Young] alleged that Custom
Homes would not have been able to cure the defective
construction because the [house] was now a total loss.
However, this did not preclude [Young] from seeking
damages against Code.Sys for repairs to the foundation.
The [trial] court granted [Young’s] motion in limine to preclude
any evidence of or reference to the Code.Sys litigation.[FN2]
Therefore, the jury had no knowledge of [Young’s] prior recovery
against Code.Sys. [Young] was also precluded from offering
evidence that was not in existence or capable of being generated
in August 2010.
[FN2] The [trial] court also denied [Lippl’s] motion for
judgment on the pleadings without prejudice for [Lippl] to
argue to offset any damages awarded [in the instant case
by the amount previously awarded] in the September 27,
2017 jury verdict [against Code.Sys.]
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A seven-day trial was held beginning September 17, 2019. The
jury found for [Young] and awarded her $368,401.14 in damages.
As noted on the verdict slip, the award consisted of $253,453.15
for "work defective due to structural/foundation issues and
repairs," $13,000.00 for the Arbitrator's fees, and $37,915.78 for
legal fees. Also included [in the award for damages] was the
$64,032.21 arbitration award.
Following the dismissal of the jury, [Young] made an oral motion
to mold the verdict. The [trial] court granted [Young’s] motion to
mold the verdict based upon [its] assumption that the jury had
not included the arbitration award in its calculation of the total
judgment. Accordingly, the [trial] court entered a docketed
verdict in the amount of $432,433.35.
Trial Court Opinion, 3/16/20, at 1-4 (extraneous capitalization and record
citations omitted).
Lippl filed post-trial motions requesting that the trial court correct a
mathematical error in the molded verdict and grant judgment notwithstanding
the verdict, pursuant to Pa.R.Civ.P. 227.1. Young filed a post-trial motion
requesting the trial court award her pre-arbitration interest in the amount of
$127,384.20 and post-arbitration interest in the amount of $233,087.50.3 On
January 17, 2020, the trial court granted Lippl’s post-trial motion regarding
the mathematical error in the molded verdict and reduced the verdict to
$368,401.14. That same day, the trial court granted, in part, Lippl’s post-trial
motion for judgment notwithstanding the verdict and further reduced the
verdict to $114,947.99. The trial court also denied Lippl’s post-trial motion
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3 Young’s calculations for pre-arbitration and post-arbitration interest were
based upon the $432,433.35 molded verdict. Young requested pre-arbitration
interest at a rate of 12 per centum per annum and post-arbitration interest at
a rate of 6 per centum per annum.
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for judgment notwithstanding the verdict, in part, as to Lippl’s request to
overturn the verdict in its entirety. Finally, that same day, the trial court
denied Young’s post-trial motion for pre-arbitration and post-arbitration
interest.
On February 14, 2020, Young filed notices of appeal from the trial court’s
January 17, 2020 orders that (1) denied her post-trial motion for
pre-arbitration and post-arbitration interest, (2) granted, in part, Lippl’s
post-trial motion for judgment notwithstanding the verdict and reduced the
verdict to $114,947.99, and (3) granted Lippl’s post-trial motion request to
correct a mathematical error in the verdict. In a March 6, 2020 per curiam
order, this Court directed Young to file a praecipe to enter the judgment. The
judgment was entered on March 10, 2020. On April 14, 2020, Lippl filed a
notice of appeal from the entry of judgment against him in the amount of
$114,947.99.4 Both Young and Lippl filed concise statements of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b), and the trial court
subsequently filed separate Rule 1925(a) opinions.
Lippl raises the following issues for our review:
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4 In a Second Supplemental Order entered on April 1, 2020, our Supreme
Court suspended “all time calculations for purposes of time computation
relevant to court cases or other judicial business, as well as time deadlines”
through April 30, 2020, due to the COVID-19 pandemic. See In re General
Statewide Emergency, Judicial Docket Nos. 531 and 532, Second
Supplemental Order, 4/1/20. Lippl’s appeal from the entry of judgment,
therefore, was timely filed on April 14, 2020.
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1. Whether the trial court erred in refusing to dismiss this case
for failure to join an indispensable party, because the case
was filed by only one of two persons having a joint interest
in the subject matter of the case[?]
2. Whether the trial court erred in denying the request for
judgment notwithstanding the verdict, because the verdict
was not supported by sufficient evidence[?]
3. Whether the trial court erred in denying the request for
judgment notwithstanding the verdict, because of an
impermissible variance between the complaint and the
theories at trial[?]
Lippl’s Brief at 4.
Young raises the following issues for our review:
1. Did the trial court err in reducing the verdict in favor of
[Young] by $253,453.15 based on the judgment that was
awarded in [Young’s] lawsuit against Code.Sys?
2. Where the jury determined that, but for [Lippl’s] negligence,
[Young] would have obtained an arbitration award in the
amount of $432,433.35, did the trial court err in denying
[Young’s] post-trial motion to mold the verdict to add
interest on the award she should have received in the
underlying arbitration?
Young’s Brief at 11.5
We begin by addressing the issues raised by Lippl. All three of Lippl’s
issues challenge the trial court’s denial of his request for judgment
notwithstanding the verdict. Our standard of review in such cases is
well-settled. An appellate court will reverse a trial court’s denial, or grant, of
a request for judgment notwithstanding the verdict only when the trial court
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5 For ease of disposition, Young’s issues have been re-organized.
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abused its discretion or erred as a matter of law. Rost v. Ford Motor Co.,
151 A.3d 1032, 1042 (Pa. 2016).
In his first issue, Lippl challenges the order denying his request for
judgment notwithstanding the verdict on the grounds that the trial court failed
to join Goldblatt6 as an indispensable party in Young’s legal malpractice action
against Lippl. Id. at 14-29.
The failure to join an indispensable party implicates the trial court’s
subject matter jurisdiction and presents a question of law. Orman v.
Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015). As such, our standard
of review is de novo and our scope of review plenary. Id.A party is indispensable when his or her rights are so connected
with the claims of the litigants that no decree can be made without
impairing those rights. If no redress is sought against a party,
and its rights would not be prejudiced by any decision in the case,
it is not indispensable with respect to the litigation. [This Court
has] consistently held that a trial court must weigh the following
considerations in determining if a party is indispensable to a
particular litigation[:]
1. Do absent parties have a right or an interest related
to the claim?
2. If so, what is the nature of that right or interest?
3. Is that right or interest essential to the merits of the
issue?
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6 At the time Young filed a praecipe for writ of summons to initiate her action
against Lippl on October 11, 2012, Young and Goldblatt were engaged in a
divorce action. Goldblatt commenced a divorce action against Young on April
28, 2010, and a final divorce decree was entered on April 19, 2016.
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4. Can justice be afforded without violating the due
process rights of absent parties?
In determining whether a party is indispensable, the basic inquiry
remains whether justice can be done in the absence of a third
party.
Id. at 406-407 (quotation marks, original brackets, and citations omitted).
Lippl contends that Young and Goldblatt were both parties to the
construction agreement with Custom Homes, that they jointly retained Lippl
to represent them in the arbitration action, and that the arbitration award was
entered jointly against both Young and Goldblatt and viewed as a joint debt
in their subsequent divorce. Lippl’s Brief at 21. Lippl argues that, “[i]t follows
as a matter of logic that, because the cause of action against Custom Homes,
and the adverse result in the litigation with Custom Homes, were shared
jointly by Young and Goldblatt, so too is the cause of action for legal
malpractice arising from the claimed loss of that joint cause of action.” Id. at
22 (emphasis omitted). Lippl asserts that Goldblatt is an indispensable party
because, inter alia, “justice cannot be afforded without violating Goldblatt’s
rights because [] his interests were not represented, protected, or accounted
for in this [legal malpractice action] and the [subsequent] judgment
entered[.]” Id. at 23.
In determining that Goldblatt was not an indispensable party in Young’s
legal malpractice action against Lippl, the trial court stated,
Goldblatt had no rights or interests in [Young’s] claim against
[Lippl for legal malpractice]. Although Goldblatt was a party to
the April 2008 contract with Custom Homes, he subsequently
renounced his spousal interest in the property and signed a waiver
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of spousal interest and spousal subordination and consent.
Additionally, the Custom Homes[’] collection action was filed
solely against [Young], and she further testified that she alone
paid the $64,032.21 award.
Notably, Goldblatt was deposed in this matter and his video
deposition was played at trial. Goldblatt expressed no interests
or rights in this lawsuit. Though he was aware of the pending
litigation, he never asserted any claims against [Lippl]. Goldblatt
also testified that he expected [Young] to pay any judgment that
resulted from the [arbitration].
Further, [Lippl] specifically acknowledged that his joint retention
[by Young and Goldblatt] in no way lessoned the duties [he] owed
individually to [Young]. Both [Young] and Goldblatt had[ the right
to terminate [Lippl] at any time, either jointly or severally.
Moreover, there is no Pennsylvania case law that requires
Goldblatt to be joined as a party simply because he and [Young]
were co-clients.
Clearly, the basic inquiry in the joinder analysis can be answered
in the affirmative. Justice can [be,] and has been[,] afforded
without the joinder of [Young’s] former spouse as a party in this
matter.
Trial Court Opinion, 6/11/20, at 7.
A review of the record demonstrates that Young filed a cause of action
against Lippl for legal malpractice arguing that, due to Lippl’s professional
negligence, Young did not prevail in her prior claim against Custom Homes for
the defective construction of her house. Young’s Complaint, 12/28/12, at
¶¶19-33. Young’s prior action against Custom Homes stemmed from the
defective construction of a house that, albeit titled in both Young’s and
Goldblatt’s names, was solely Young’s property by virtue of the prenuptial
agreement between Young and Goldblatt and the waiver of spousal interest in
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the property executed by Goldblatt.7 See Goldblatt v. Young, 2017 WL
3276525, at *13 (Pa. Super. 2017) (unpublished memorandum) (stating,
“[t]he only reason [Goldblatt’s] name was on the property [deed] was so that
[Young] could obtain financing”). It is axiomatic that the legal malpractice
cause of action, which derived from Young’s loss of her defective construction
claims against Custom Homes, was Young’s sole cause of action to assert, as
well.8 We concur with the trial court that Goldblatt had no right or interest in
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7 Goldblatt and Young executed the agreement with Custom Homes for the
construction of Young’s house on April 12, 2008. On April 15, 2008, Goldblatt
executed the waiver of his spousal interest in the house.
8 Lippl asserts that, “[b]ecause Young and Goldblatt jointly had a cause of
action against Custom Homes, it followed that any debt or adverse judgment
associated with the pre-separation lawsuit was also one owed by them jointly.”
Lippl’s Brief at 19. This contention overlooks several important features of
the legal interests at play by the time Young commenced her legal malpractice
claim against Lippl. First, even within the context of the arbitration case,
Young’s claim for defective construction against Custom Homes was asserted
solely in her own right as the only party with an interest in the house. Second,
although Goldblatt may have been jointly liable for breach of contract at the
conclusion of the arbitration proceeding because he executed the agreement
with Custom Homes along with Young, his liability for the arbitration award
did not negate the legal effect of his waiver of his ownership interest in the
house. Third, in view of Goldblatt’s waiver of any interest in the house before
Young’s commencement of the legal malpractice action, Goldblatt lacked any
distinct, identifiable legal interest in the outcome of Young’s professional
negligence claims against Lippl. In the prior divorce litigation between Young
and Goldblatt, this Court reasoned that the mortgage secured by the property
was Young’s sole responsibility because it stayed with and attached to the
property and Goldblatt relinquished any claim or interest he had in the house.
Similarly, we said that Young solely retained any claims for defective
construction of the house because such claims stayed with and attached to
the property. Lastly, Young’s satisfaction of the arbitration award suggests
strongly that she retained an exclusive interest in any recovery stemming from
alleged legal malpractice which led to that judgment.
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Young’s legal malpractice claim because it was directly tied to the real estate,
which was solely Young’s property. Therefore, Goldblatt was not an
indispensable party in the instance case. Consequently, Lippl’s first issue is
without merit.
Lippl’s second issue challenges the order denying his request for
judgment notwithstanding the verdict on the grounds that the evidence was
insufficient to support a finding of causation. Lippl’s Brief at 29-36.
The denial of a request for judgment notwithstanding the verdict based
upon insufficient evidence is appropriate if, reading the record in the light most
favorable to the verdict winner and affording that party the benefit of all
reasonable inferences, a court would conclude that there is sufficient evidence
to sustain the verdict. Rost, 151 A.3d at 1042. In reviewing a challenge to
the sufficiency of the evidence, an appellate court will reject all evidence that
does not support the verdict. Id.
In order to establish a claim of legal malpractice, a
plaintiff/aggrieved client must demonstrate three basic elements:
[1.] employment of the attorney or other basis for a duty;
[2.] the failure of the attorney to exercise ordinary skill
and knowledge; and
[3.] that such negligence was the proximate cause of
damage to the plaintiff.
An essential element to this 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
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or value of damages. In essence, a legal malpractice action in
Pennsylvania requires the [aggrieved client] to prove that he[, or
she,] had a viable cause of action against the party he[, or she,]
wished to sue in the underlying case and that the attorney he[, or
she,] hired was negligent in prosecuting or defending that
underlying case (often referred to as proving a “case within a
case”).
Kituskie v. Corbman, 714 A.2d 1027, 1029-1030 (Pa. 1998) (citations
omitted).
Here, Lippl asserts that, “Young’s theory of liability at trial was that Lippl
should have procured geotechnical testing to convince the arbitrator that the
foundation was not built on firm clay” and that if Lippl had procured the
geotechnical testing, Young would have prevailed in her cause of action
against Custom Homes. Lippl’s Brief at 31. Lippl contends that Young “failed
to present sufficient evidence that obtaining geotechnical testing would have”
caused Young to prevail in her claim against Custom Homes. Id. Lippl asserts
that his failure to procure geotechnical testing of the foundation’s soil base
was not the reason the arbitrator found in favor of Custom Homes and against
Young in the arbitration matter. Id. at 34. Rather, Young did not prevail in
her claim against Custom Homes because Young and Goldblatt wrongfully
terminated their agreement with Custom Homes. Id. at 34.
In finding sufficient evidence to demonstrate the element of causation,
the trial court stated,
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Attorney Gary Hunt,[Esquire (“Attorney Hunt”),] a civil trial
lawyer, was qualified as an expert[9] and opined as to [Lippl’s]
representation of [Young] during the [arbitration hearing].
...
Attorney Hunt ultimately concluded that[] had [Lippl] obtained
geotechnical testing[,] he would have been able to show that not
only did Custom Homes materially breach the contract, but also
that it committed fraud in the process.[10] Further, the []
Arbitrator would not have found [Young’s] termination of Custom
Homes to be improper but for [Lippl’s] failure to prove the material
breach and subsequent fraud. Based on the testimony of Attorney
Hunt, [Young] established her 'case within a case' by proving she
had a viable cause of action against Custom Homes. [Young] also
established cause[-]in[-]fact through the opinion of Attorney Hunt
that she would have won at the [arbitration hearing] but for
[Lippl’s] failure to obtain the geotechnical testing to prove the
material breach.
The Jury found Attorney Hunt to be credible and answered
Questions #2 and #3 of the verdict slip in the affirmative, which
read:
[2.] Do you find that, but for [] Lippl's negligence, [Young]
would have avoided the Arbitrator's Award in the sum
of $64,032.21?
[3.] Do you find that, but for [] Lippl's negligence, [Young]
would have prevailed in the Arbitration Action and
obtained a monetary award in [her] favor?[]
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9Attorney Hunt was qualified as an expert in litigation, construction law, AAA
arbitration, and jury trials. N.T., 9/18/19, at 10.
10 In the arbitration matter, Young’s causes of action against Custom Homes
included a breach of contract claim for failure to construct the home in
accordance with the parties’ agreement, together with a claim for fraud based
upon allegations that Custom Homes invoiced Young for work that had not
been completed, including work related to the installation of “a solid
foundation.” N.T., 9/18/19, at 29-30.
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[Young] established, cause-in-fact by showing that her harm
would not have come about but for [Lippl’s] negligence.
Trial Court Opinion, 6/11/20, at 9-10 (record citations omitted).
A review of the record demonstrates that, regarding Young’s
counter-claim against Custom Homes, the Arbitrator stated,
[Young] has made a series of claims related to work that was
allegedly defective or not complete. The claims made do not
consider the cost to [Custom Homes] in performing this work. The
damages sought are based on having an outside contractor
perform this work. However, [Young] wrongfully terminated
[Custom Homes] and[,] therefore[, Custom Homes] was
wrongfully denied the opportunity to correct or complete the work
complained of by [Young]. Accordingly, [Custom Homes] is
discharged of its obligation to perform under the [construction]
contract and these claims are denied.
Trial Exhibit 12C (Award of Arbitrator), at 2 (extraneous capitalization
omitted).
In explaining that Lippl’s failure to obtain geotechnical testing of the soil
conditions supporting the foundation was the proximate cause of Young’s
inability to obtain a judgment against Custom Homes for its defective
construction of her house, Attorney Hunt explained,
if the geotechnical studies had been performed as [Suhrie] said
they should have been, then we would have know[n] what they
show[ed about the soil conditions underlying the foundation].
That question mark would have been removed. The arbitrator
would have heard evidence that this [house was not] built on firm
clay. This [house] was built on loose[,] and to a great extent[,]
unconsolidated soil[. That is] why the [rear portion of the house]
is falling away from the rest of the house[. T]he arbitrator would
have had more than sufficient evidence to conclude that there was
a material breach of [the construction] contract, and if there was
a material breach of this contract[, then] the contract could be
terminated. The arbitrator would have had everything the
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arbitrator needed to reach the conclusion that there was a
material breach, and therefore, the basis that the arbitrator used
to essentially dismiss [] Young's claims would have been taken
away[. Young would be entitled to a judgment in her favor against
Custom Homes].
N.T., 9/18/19, at 66. Attorney Hunt agreed with the Suhrie Report
recommendation that geotechnical testing was necessary to identify the cause
of continuing settlement of the house and to prove Young’s claims against
Custom Homes. Id. at 36; see also Suhrie Report, 3/30/10, at § 4.1.7
(stating, “This type of crack indicates that settlement of the house foundation
is occurring toward the rear. This is a potentially serious problem given the
amount of fill and the slope of the embankment behind the house. Further
geotechnical investigation is required to assess this risk.”). GeoMechanics
performed geotechnical testing of the soil base underlying the foundation and
concluded, inter alia, that the fill beneath the house had “low strength and
high compressibility” for purposes of foundational support and presented a
risk for future differential settlement of the house. See Geotechnical
Engineering Investigation Report, 2/4/13, at 16. Attorney Hunt opined that
the geotechnical testing established that Custom Homes did not excavate to
firm clay as required by the construction contract and that the house was built,
instead, on loose, unconsolidated fill. N.T., 9/18/19, at 38-39; see also
Construction Contract – Description of Materials, 2/21/08 (requiring, that
Custom Homes excavate “to firm clay”). Attorney Hunt explained that Custom
Homes’ failure to excavate to firm clay constituted a material breach of the
construction contract. N.T., 9/18/19, at 58. Moreover, Custom Homes
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invoiced Young for the additional charge of over-excavation to reach firm clay,
which amounted to fraud in Attorney Hunt’s opinion. Id. at 61-62. Attorney
Hunt opined to a reasonable degree of legal and professional certainty that
Lippl failed to identify the seriousness of the Suhrie Report recommendation
to obtain geotechnical testing of the soil base underlying the foundation to
determine the cause of continuing settlement prior to the arbitration hearing.
Id. 68-69. Explaining Custom Homes’ election to build the house on loose,
unconsolidated fill and its failure to excavate to firm clay were critical
components of the arbitration hearing, Attorney Hunt explained, and Lippl’s
failure to obtain the geotechnical testing, despite the Suhrie Report
recommendation, was the reason Young did not prevail in her counter-claims
against Custom Homes. Id.
In considering all of the evidence in the light most favorable to Young,
as verdict winner, we find there was sufficient evidence to allow the jury, as
trier-of-fact, to find that Lippl’s legal negligence was the proximate cause of
Young’s failure to prevail in her causes of action against Custom Homes.
Consequently, Lippl’s second issue is without merit.
Lippl’s third issue challenges the order denying his request for judgment
notwithstanding the verdict on the grounds that there was a material variance
between Young’s complaint and proof at trial. Lippl’s Brief at 36-48.
A variance denotes difference and in reference to legal
proceedings[,] it refers to a disagreement or difference between
the allegations made and the proof shown, not in the sense that
there is a failure of proof, but that, contrary to the fundamental
principle of good pleading and practice, the proof fails to materially
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correspond to the allegations. A material variance consists of a
departure in the evidence from the issues on which the cause of
action must depend.
For purposes of determining whether a claimed or apparent
discrepancy between pleadings and proof constitutes a variance,
the entire pleadings and evidence should be considered.
Generally, in order to constitute a variance, the discrepancy must
exist between the allegations and proofs of the particular party,
with the result that a party is not permitted to introduce evidence
that is inconsistent with or fails to correspond to the allegations
made by that party.
The modern rules of pleading and practice are relatively liberal.
Consequently, the impact of variance may be diminished by the
preference for a liberal[,] if not informal[,] evaluation of pleadings
emphasizing the determination of cases based upon their merits
rather than based on mere technicalities, which policy, for
example, may allow a party to cure a variance by offering, during
or after trial, to amend the pleadings to conform to the proof.
General pleading allegations which are not objected to because of
their generality, may have the effect of extending the available
scope of a party's proof, such that the proof would not constitute
a variance, beyond that which the party might have been
permitted to give under a more specific statement.
Graham v. Campo, 990 A.2d 9, 13-14 (Pa. Super. 2010) (ellipsis omitted),
appeal denied, 16 A.3d 504 (Pa. 2011). “Although the allegata and probata
may not entirely agree, if the defendant is not misled, and the variance
does not in any way affect the trial on its merits, or set up a different cause
of action, or impose any different burden on the defendant, the variance
will not be considered material.” Higgins Lumber Co. v. Marucca, 48 A.2d
48, 49-50 (Pa. Super. 1946) (emphasis in original).
Here, Lippl contends that, “while Young [pleaded] that Lippl failed to
properly pursue negligence claims in the arbitration action, and that her
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[house] was a total loss, [Attorney] Hunt instead faulted Lippl for not
properly developing fraud and breach of contract claims and not proving
how the [house] could be repaired.” Lippl’s Brief at 38 (emphasis in
original). Lippl argues that Young’s complaint set forth a claim for legal
malpractice premised on the theory that because Lippl failed to obtain
geotechnical testing of the soil base supporting the foundation, Young was
unable to prevail against Custom Homes on a cause of action for negligence.
Id. at 42. Lippl asserts that at trial, however, Young introduced evidence
that, due to Lippl’s legal malpractice, Young was unable to prevail against
Custom Homes for claims of breach of contract and fraud. Id. Lippl contends
the resulting variance between Young’s pleadings and her proof at trial was
material and extremely prejudicial. Id. at 41-42.
Pennsylvania courts have long-held as a general principal that “plaintiffs
should not be forced to elect a particular theory in pursuing a claim” and risk
the “possibility that meritorious claims will fail because the wrong legal theory
was chosen.” Schreiber v. Republic Intermodal Corp, 375 A.2d 1285,
1291 (Pa. 1977) (citation omitted). “Although a plaintiff is not required to
specify the legal theory underlying the complaint, the material facts which
form the basis of a cause of action must be alleged.” Lampus v. Lampus,
660 A.2d 1308, 1312 n.2 (Pa. 1995).
In the case sub judice, Young pleaded, in pertinent part, the following
material facts in support of her cause of action for professional negligence,
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8. Although [Lippl] specifically raised a counter[-]claim premised
upon negligent construction of the [house], he did not pursue this
cause of action, instead choosing to focus on economic damages
caused by [Custom Homes].
9. During his representation of [Young, Lippl] retained [Suhrie] to
provide expert analysis and opinion for [Young’s] defenses and
affirmative claims.
...
11. [Suhrie] specifically opined that further geotechnical
investigation was required to assess the risk of foundation
movement.
12. [Lippl] did not obtain any further geotechnical investigation.
13. [Young] requested that [Lippl] make further investigation into
the foundation issues as recommended by [the Suhrie Report],
but [Lippl] made no further inquiries.
...
23. As a result of [Lippl’s] representations [as an attorney that
specialized in construction litigation, Young] retained [Lippl’s]
services to represent her in the underlying action.
24. During the cour[se] of his representation, [Lippl] learned,
through his retained expert witness, that there may be structural
issues caused by problems with the manner in which the
foundation was engineered and constructed.
25. [Lippl’s] retained expert specifically recommended that further
geotechnical evaluation be performed to determine the exact
issues causing settlement problems on the property.
26. [Lippl] ignored this recommendation and did not retain a
geotechnical report.
27. [Lippl] ignored [Young's] request to further investigate the
recommendation that he retain a geotechnical report.
28. [Lippl,] through his training and obligations as an attorney[,]
knew, or should have known, that a geotechnical report was
needed to determine the exact nature of problems with the
foundation and uncompacted fill materials.
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29. Had [Lippl] retained a geotechnical report, he would have
learned that the [house] was built upon uncompacted fill materials
and that due to this fact, the [house] would never be approved
for occupancy.
Young’s Complaint, 12/28/12, at ¶¶8-9, 11-13, 23-29 (record citations and
extraneous capitalization omitted). Young alleged that as a result of Lippl’s
professional negligence in failing to obtain geotechnical testing of the soil base
underlying the foundation, she was precluded from bringing a cause of action
against Custom Homes, including a negligence action, for the total loss of her
house. Id. at ¶¶30(d) and 31.
A review of Young’s complaint demonstrates that she set forth the
material facts in support of her claim against Lippl for professional negligence.
Specially, Young alleged that Lippl owed her a duty as her attorney (a fact
which is not contested by Lippl), that Lippl did not exercise ordinary skill and
knowledge in his representation of Young when he failed to obtain the
recommended geotechnical testing, and that because of Lippl’s failure to
obtain the geotechnical testing, Young was precluded from bringing a viable
cause of action against Custom Homes. We concur with the trial court that
Young was not required to set forth her legal theory as to the precise cause
of action or causes of action she was precluded from bringing against Custom
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Homes as a proximate cause of Lippl’s professional negligence.11 Therefore,
Lippl’s third issue is without merit.
We now turn to Young’s cross-appeal and the issues raised therein. In
her first issue, Young claims the trial court erred when it granted, in part,
Lippl’s request for judgment notwithstanding the verdict and reduced the
verdict by $253,453.15 on the grounds that Young previously recovered these
damages in her suit against Code.Sys. Young’s Reply Brief at 12-31.
This issue raises a question of law for which our standard and scope of
review are well-settled. We review a trial court’s decision to apply the one
satisfaction rule and off-set the jury verdict for an abuse of discretion or error
of law. Baker v. ACandS, 755 A.2d 664, 667 n.4 (Pa. 2000). Our scope of
review for such matters is plenary. Id. Under the long-standing Pennsylvania
precedent known as the “one satisfaction rule,” an injured party may only
recover one satisfaction for the same injury. Garman v. Angino, 230 A.3d
1246, 1256 (Pa. Super. 2020); see also Brown v. City of Pittsburgh, 186
A.2d 399, 402 (Pa. 1962) (stating, “[i]t has long been the law that for the
same injury, an injured party may have but one satisfaction, and the receipt
of such satisfaction, either as payment of a judgment recovered or
consideration for a release executed by [the injured party], from a person
____________________________________________
11 Moreover, Lippl was aware that Young was unsuccessful in her advance of
claims that Custom Homes breached its contract and committed fraud in
connection with the construction of the home because these causes of action
were set forth by Lippl as counter-claims in the arbitration matter.
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liable for such injury necessarily works a release of all others liable for the
same injury” (citation omitted)).
Here, Young contends that, “the one-satisfaction rule only applies where
one party’s liability is ‘predicated upon the negligence of another.’” Young’s
Reply Brief at 14 (citation omitted). Young asserts that Lippl’s liability for
legal malpractice is predicated, not on Code.Sys’s negligence in failing to
properly inspect the foundation and its construction, but, rather, on Custom
Homes’ defective construction of the foundation and its failure to dig to firm
clay. Id. at 13. Young argues that Lippl is not entitled to a set-off of the jury
verdict entered against him by the amount Young received in her settlement
with Code.Sys. Instead, Young characterizes the settlement with Code.Sys as
a “fortuitous collateral remedy” and under the collateral source rule,12 Lippl is
____________________________________________
12 We find Young’s reliance on the collateral source rule to be misplaced. The
collateral source rule “prohibits a defendant in a personal injury action from
introducing evidence of the plaintiff’s receipt of benefits from a collateral
source [(for example, insurance coverage, social security benefits,
unemployment compensation, or employee benefits, such as accumulated sick
pay)] for the same injuries which are alleged to have been caused by the
defendant.’’ Simmons v. Cobb, 906 A.2d 582, 585 (Pa. Super. 2006)
(citation omitted, emphasis added) (stating, the collateral source rule is
intended to protect tort victims). “[T]he primary focus of the collateral source
rule is to avoid the preclusion or diminution of the damages otherwise
recoverable from the wrongdoer based on compensation recovered from a
collateral source [and], in some instances, the violation of the collateral source
rule can affect the jury's deliberation and decision on the issue of liability.”
Deeds v. Univ. of Pennsylvania Med. Ctr., 110 A.3d 1009, 1013
(Pa. Super. 2015). Moreover, in the instant case, which does not involve a
personal injury cause of action, preclusion of evidence of the settlement with
Code.Sys for purposes of off-setting the jury verdict in the instant case runs
afoul of the one satisfaction rule.
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barred from “taking advantage of the fortuitous existence of a collateral
remedy.” Id. at 17-18.
Lippl contends that in a legal malpractice case, the aggrieved client may
only recover actual losses. Lippl’s Reply Brief at 67. Lippl asserts that the
jury verdict in the instant case represents the damages Young would have
recovered from Custom Homes for, inter alia, its improper construction of the
foundation, but for Lippl’s legal malpractice. Id. at 68. Lippl contends Young
recovered damages for the improper construction of the foundation in her
settlement with Code.Sys and, therefore, is precluded from receiving more
than one recovery for the same injury. Id. at 68-69.
In off-setting the jury verdict by $253,453.13 pursuant to the
one-satisfaction rule, the trial court explained,
[Young] has misapplied the [one-satisfaction] rule. [Lippl’s]
liability for "work defective due to structural/foundation issues and
repairs" is predicated upon Code.Sys's negligence in failing to
require a caisson foundation. It is irrelevant that [Young] won
against Code.Sys on a breach of contract theory because the
breach of a contractual duty may be and, in fact, was plead[ed]
in the alternative as negligence. [Young’s] damages in both this
case and the Code.Sys litigation included repairs to the
foundation. In her suit against [Lippl, Young] would not have
recovered these damages but for Code.Sys's failure to require a
caisson foundation system.
[T]he jury did not find liability against a party who has not been
sued. As noted above, the jury heard no evidence related to
Code.Sys [in the instant case]. Therefore, it could not find
Code.Sys liable for any damages. Instead, the [trial c]ourt
determined that [Young] had been compensated for damages
caused by Code.Sys's failure to require the installation of [a]
proper foundation.
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[Young] further argues that there is no way to know which repairs
the Code.Sys jury determined that Code.Sys was responsible for
and that, likewise, there was no way to know which repairs this
jury found to be caused by [Lippl]. However, [Young] cited to no
law that required the [trial c]ourt to complete a side-by-side
comparison of the damages that resulted from the "same injury."
It was, therefore, proper for the [trial c]ourt to apply the
[“one-satisfaction] rule" to reduce the verdict by the award for
"work defective due to structural/foundation issues and repairs."
Again, this is the same injury [Young] recovered damages for from
Code.Sys.
Trial Court Opinion, 3/16/20, at 7-8.
A review of the record demonstrates that in her action against Code.Sys,
Young alleged that Code.Sys failed to properly inspect and identify serious
deficiencies in the construction of the foundation, which ultimately led to
Young’s failure to obtain a certificate of occupancy and the certification of the
house as uninhabitable. A jury awarded Young $412,750.0013 for damages
sustained by Young as a result of Code.Sys’s breach of contract and
negligence.14 In the instant case, Young was awarded $253,453.15 for
Custom Homes’ defective construction work involving “structural/foundational
issues and repairs.” Lippl’s liability in the amount of $253,453.15 is predicated
upon the defective construction performed by Custom Homes that would have
____________________________________________
13 Young settled her suit against Code.Sys, post-trial, for $455,250.00.
14Young’s complaint sounded in a cause of action for negligence based upon
Code.Sys’s failure, inter alia, to properly inspect and identify the construction
deficiencies. Young also brought a cause of action for breach of the contract
Code.Sys had with the municipality in which the house was built and to which
Young was a third-party beneficiary.
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been discoverable but for Lippl’s failure to obtain geotechnical testing to
identify Custom Homes’ failure to reach firm clay prior to installing the
foundation.15 The amount awarded to Young due to Lippl’s legal malpractice
compensated Young for damages due to Custom Homes’ defective
construction of the foundation. Similarly, the amount awarded to Young due
to Code.Sys’s negligence and breach of contract compensated Young for
damages due to Custom Homes’ defective construction of the foundation. The
one-satisfaction rule prevents Young from recovering more than once for
claims that centered upon Custom Homes’ defective construction of the
foundation. We concur with the trial court that the one-satisfaction rule
requires the verdict in the case sub judice to be reduced by the amount
already recovered for the defective construction of the foundation, that is to
say $253,252.15. Therefore, Young’s first issue is without merit.
Young’s second issue challenges the trial court’s order denying her
post-trial motion to mold the verdict to include post-arbitration interest on the
award Young would have received in the underlying arbitration action but for
Lippl’s legal malpractice.16 Young’s Brief at 51-58.
____________________________________________
15The trial court stated incorrectly that Lippl’s liability was predicated upon
Code.Sys’s failure to require a caisson foundation.
16Although Young’s Rule 1925(b) statement also challenges the trial court’s
order denying pre-arbitration interest, Young failed to set forth this issue in
her statement of questions presented or develop an argument in support
thereof in her brief. Therefore, Young waived her challenge to the trial court’s
denial of a request for pre-arbitration interest. See Harkins v. Calumet
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Our standard of review of a trial court’s decision to deny, or grant, a
request to include post-judgment interest is “whether the trial court palpably
abused its discretion.” Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d
497, 500 (Pa. Super. 2009), appeal denied, 992 A.2d 890 (Pa. 2010).
In a legal malpractice claim, the aggrieved client is entitled to recover
damages equal to the difference between what the aggrieved client did
recover, if any, and what the aggrieved client would have recovered but for
the attorney’s negligence. Rizzo v. Haines, 555 A.2d 58, 68-69 (Pa. 1989).
Section 8101 of the Pennsylvania Judicial Code provides that, “[e]xcept as
otherwise provided by another statute, a judgment for a specific sum of money
shall bear interest at the lawful rate from the date of the verdict or award, or
from the date of the judgment, if the judgment is not entered upon a verdict
or award.” 42 Pa.C.S.A. § 8101. “Statutory post-judgment interest is a
matter of right where damages are ascertained by computation” and the
prevailing party is “entitled to interest on a judgment for a specific sum of
money from the date of the verdict.” Pittsburgh Constr. Co. v. Griffith,
834 A.2d 572, 590-591 (Pa. Super. 2003), appeal denied, 852 A.2d 313 (Pa.
2004). ‘‘[F]or purposes of computing interest, judgment and verdict are
synonymous, and the date from which interest accrues is the date of the
____________________________________________
Realty Co, 614 A.2d 699, 703 (Pa. Super. 1992) (stating, issues not identified
in the statement of questions or issues identified but not developed in the
argument section of the brief are waived).
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verdict, not the date judgment is finally entered.’’ Hutchison v. Luddy, 946
A.2d 744, 750 (Pa. Super. 2008) (citation omitted).
Here, Young argues that her request for post-arbitration interest on the
arbitration damages she would have been awarded but for Lippl’s legal
malpractice “is not being requested by direct operation of Section 8101” but,
rather, “is being sought as a component of damages in the context of a ‘case
within a case’ legal malpractice claim.” Young’s Brief at 53. Young contends
that the trial court’s denial of interest as a component of damages for her
“case within a case” legal malpractice claim incentivizes attorneys, such as
Lippl, “to resist settlement” and “strongly encourage[s attorneys] to engage
in extensive litigation – simply in an effort to ‘out last’ a malpractice plaintiff,
like [] Young.” Id. at 54. Young asserts that if she had been awarded
arbitration damages, absent Lippl’s legal negligence, she would been entitled
to interest pursuant to Section 8101. Id. at 57. Because the “interest is []
clearly a loss that [] Lippl caused, [] it is properly recoverable as an element
of damages in the ‘case with a case’” legal malpractice action. Id.
In denying Young’s request for post-arbitration interest, the trial court
stated,
[Young] is not entitled to pre-arbitration or post-arbitration
interest. [Lippl] did not hold money or property which belonged
in good conscience to [Young]. [Young] also waited more than
two years to file suit against [Lippl] following the arbitration
award. It would be unjust for the [trial c]ourt to require [Lippl] to
pay interest that accrued during that time.
Moreover, [Young] has not asserted that [Lippl] caused any undue
delay in the proceedings that would warrant such an excessive
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amount of interest on the judgment. The total molded award in
this [legal malpractice] case was $114,947.99. It would be
grossly unjust for the [trial c]ourt to award more than
$800,000.00 in interest on the judgment.
Last, [Young] is not entitled to post-[arbitration] interest from the
date of the arbitration award. The date of the award or verdict
referenced in 42 Pa.C.S.A. § 8101 means the verdict in this [legal
malpractice] case, not the [] arbitration award. [Young] cited no
support for such an interpretation.
Accordingly, [Young] is entitled to post-judgment interest solely
from the date of the jury verdict in [the legal malpractice] case.
However, [Young] never requested that [the trial c]ourt award her
post-judgment interest. Rather, [Young] requested
pre-arbitration and post-arbitration interest [be awarded in her
post-trial motion].
Trial Court Opinion, 3/16/20, at 10 (emphasis in original).
Young’s issue presents a question of first impression as to the
application of Section 8101 as it applies within the context of a “case within a
case” legal malpractice claim. As the proper interpretation, and application of
a statute, is a pure question of law, our standard of review is de novo, and
our scope of review is plenary. Grimm v. Universal Med. Servs., Inc., 156
A.3d 1282, 1286 (Pa. Super. 2017) (citation omitted).
A fundamental principal of a successful claim for legal malpractice is to
award the aggrieved client what they would have received if the underlying
matter had been litigated successfully but for the attorney’s negligence. See
Rizzo, 555 A.2d at 68-69. A prevailing party is entitled, as a matter of right,
to interest at the lawful rate from the date of the verdict until such time as
payment of the judgment is made to the non-prevailing party. See 42
Pa.C.S.A. § 8101; see also Perel v. Liberty Mut. Ins. Co., 839 A.2d 426,
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430 (Pa. Super. 2003) (stating, “for purposes of calculating post[-]judgment
interest, payment necessarily occurs when the amount of the verdict (or an
otherwise agreed upon amount) - whether sent by mail, courier, electronic
funds transfer, or other mode of delivery - is received by the creditor).
Because the interest is calculated upon a “specific sum of money” awarded, it
is axiomatic that within the context of a “case within a case” legal malpractice
action, the aggrieved client is entitled to interest calculated on the specific
amount awarded in the legal malpractice case from the date of the verdict in
the legal malpractice case and not the prospective date of a verdict in the
underlying cause of action.
In the case sub judice, we concur with the trial court that pursuant to
Section 8101, Young “is entitled to post-judgment interest solely from the
date of the jury’s verdict” in the legal malpractice case. Trial Court Opinion,
3/16/20, at 10. The trial court abused its discretion, however, in finding that
Young “never requested that [the trial c]ourt award her post-judgment
interest.” Id. A review of Young’s post-trial motion demonstrates that her
calculation of interest encompassed the period from the date of the jury
verdict in the instant case through the date her post-trial motion was filed,
October 7, 2019. Young’s Post-Trial Motion, 10/7/19, at 4. Young is entitled,
therefore, to interest calculated from the date of the jury verdict, September
26, 2019, until such date as the amount of the judgment is paid by Lippl to
Young. See 42 Pa.C.S.A. § 8101. Consequently, we remand this case for the
limited purpose that the trial court calculate and award post-judgment
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interest, pursuant to Section 8101, on the judgment totaling $114,947.99
from the date of the jury verdict in the instant case through and including the
date on which payment of the judgment is received by Young from Lippl.
Judgment affirmed. Case remanded for award of post-judgment
interest. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/31/2021
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