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Case Law Alerts

PA Superior Court Upholds Gist of the Action Doctrine to Bar Legal Malpractice Claim

Outerlimits Techs., LLC v. O’Connor, No. 169 EDA 2023, 2023 WL 8524299 (Pa. Super. Ct. Dec. 8, 2023) (non-precedential decision)

April 1, 2024

by Scott R. Eberle

The Pennsylvania Superior Court affirmed the trial court’s dismissal of the appellant’s legal malpractice action against a law firm on the basis of the gist of the action doctrine. The appellant filed a complaint in assumpsit against the law firm, alleging legal malpractice premised on a breach of contract. The appellant alleged that the law firm had provided it legal assistance to secure patents and trademarks and for other intellectual property matters. In 2014, the appellant realized that it had executed numerous flawed contracts that resulted in financial losses and the loss of intellectual property rights and attributed the flaws to the law firm. However, the appellant did not file its legal malpractice action against the law firm until almost four years later, on December 1, 2018, forcing it to proceed under a breach of contract theory, only. 

The law firm filed a motion for summary judgment, seeking to dismiss the breach of contract action alleging that the “gist” of the action against it was negligence. The trial court agreed, granted the law firm’s motion and dismissed the complaint. 

On appeal, the Superior Court engaged in a detailed discussion of legal malpractice law and the court’s recent application of the gist of the action doctrine to professional liability actions to bar contract claims when the “gist of the action” sounds in negligence. The Superior Court upheld the trial court’s decision finding that “the substance of the allegations in the complaint confirms that Appellee’s purported failure to exercise the requisite level of skill and knowledge was the basis for Appellant’s request for damages.” 


Case Law Alerts, 2nd Quarter, April 2024 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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Appellate Division Affirms Dismissal of Legal Malpractice Counterclaim Against Martin Law Firm

In Martin v. Loury, 2026 N.J. Super. Unpub. LEXIS 1617 (App. Div. July 15, 2026), Martin Law Firm represented Kirk Loury in an employment matter Mr. Loury filed against his former employer, Concord Equity Group Advisors LLC (“Concord”). The allegations included, among other things, that Loury was not fairly compensated for his employment with Concord. After a bench trial finding in Loury’s favor, the Appellate Division remanded this matter in February 2016 for a second trial. During the second trial, Concord CEO, Lee Argush, testified to lower compensation estimate than first trial. On remand, the second trial judge awarded Mr. Loury the same damages as the first judge, finding Mr. Argush not credible. After the findings during the second trial, Martin Law Firm filed an action against Mr. Loury to recover legal fees and costs of representing Mr. Loury in a second bench trial and Mr. Loury filed a counterclaim against Martin Law Firm for legal malpractice, alleging he should have received an even higher award in the second bench trial. In this allegation, Mr. Loury, through his expert, claimed that Martin Law Firm should have recalled Mr. Loury to the stand to rebut Mr. Argush’s testimony to allege an alternative theory of damages. Mr. Loury’s expert admitted that the second judge already rejected Mr. Argush's theory and accepted Loury's damages theory. The trial court barred Mr. Loury’s expert and dismissed Loury's counterclaim with prejudice before convening the collection trial, and the jury ruled in Martin Law Firm’s favor. Mr. Loury appealed the trial court's pretrial rulings barring his liability expert from testifying in support of his legal malpractice counterclaim, denying his motion for summary judgment on that counterclaim, and denying his motion to amend his counterclaim by adding attorney Joseph A. Martin as a codefendant. In affirming the trial court’s decision, the Appellate Division held that the trial court properly excluded Loury’s expert testimony in the counterclaim against Martin Law Firm because the expert could not explain how calling Loury as a rebuttal witness would have increased damages when the second judge already rejected Mr. Argush's testimony and accepted Loury's damages theory, making the expert’s causation opinion speculative. The Appellate Division also held that the trial court properly denied Mr. Loury's summary judgment motion on his malpractice counterclaim because reasonable minds could differ on whether Mr. Martin's alleged failures would have changed the second judge's damages award, given the judge already found Mr. Argush not credible, creating genuine factual disputes precluding summary judgment. Also, the Appellate Division held that the trial court properly denied Loury's May 2023 motion to add Joseph Martin individually because the statute of limitations expired in February 2022, six years after the 2016 appellate remand when Mr. Loury incurred new legal costs, and relation back did not apply because Mr. Loury knew Mr. Martin's identity throughout and strategically chose to sue only Martin Law Firm in his 2019 counterclaim.