No “settling and suing” allowed. Court relies on Muhammad and settlement colloquy by judge and defense counsel to reject legal malpractice claim.

The plaintiff sued his former attorney for failing to advise him of the effects of his workers’ compensation settlement. The plaintiff entered into a settlement agreement for $60,000. The trial judge colloquied the plaintiff regarding the several topics, including the following: (1) settlement amount; (2) take-home amount ($48,000 given the attorney’s contingency fee); (3) voluntariness of settlement; (4) impact of settlement on his workers’ compensation benefits; (5) satisfaction of the defendant’s representation; (6) sufficient time to decide on the settlement; and (7) waiver of appeal. Counsel for the plaintiff’s employer, Jersey Shore Steel Company, also colloquied the plaintiff regarding the subrogation interest and impact on the third-party lawsuit. The plaintiff satisfied the court regarding the above issues, and the court accepted the terms of the settlement agreement. The Superior Court of Pennsylvania rejected the plaintiff’s appeal, relying upon Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 587 A.2d 1346 (Pa. 1991) (requiring that a legal malpractice claim based on a settlement must show fraud) and the detailed colloquy provided by the court and defense counsel. The Superior Court affirmed the trial court’s summary judgment dismissal of the plaintiff’s legal malpractice claim. This case highlights the impact a detailed and substantive colloquy can have on preserving a settlement agreement.

_{Case Law Alerts, 1st Quarter, January 2016}

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