Advertising Disclosure Email Disclosure

Where an owner settles a contractor's claims and assigns its rights against the architect, the contractor is not barred from pursuing the claims if the contractor was "not a stranger" to the claims at issue.

January 11, 2013
Mar-Paul Company, Inc. v. Jim Thorpe Area School District, 2011 Pa. Dist. & Cnty. Dec. LEXIS 580, 25 Pa. D&C5th 206 (Carbon County, 2011)

The contractor sued the owner school district for delay claims, and the owner joined the architect. The owner settled with the contractor and assigned its rights against the architect to the contractor. The contractor continued action against the architect in the owner's name. The architect moved for summary judgment, claiming that the assignment was unenforceable as it constituted Champerty. Champerty is a bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered. Champerty seeks to bar a party from speculating and profiting in litigation in which he has no legitimate interest. A champertous agreement is one in which a person having otherwise no interest in the subject matter of an action undertakes to carry on the suit at his/her own expense in consideration of receiving a share of what is recovered. To invalidate the assignment, the architect had to show: (1) the contractor had no legitimate interest in the suit; (2) the contractor must be spending his own money to prosecute the suit; and (3) the contractor must by his bargain with the owner share in any recovery. The architect showed (2) and (3), but his motion was denied because he could not show (1); rather, the contractor was not a stranger to the litigation or claims as it was the original plaintiff and its claims were resolved in the same litigation.

Case Law Alert, 1st Quarter 2013

Affiliated Attorney

Gregory J. Kelley
Shareholder
(610) 354-8273
gjkelley@mdwcg.com

Practice Areas

Before you send this email please note:

You are attempting to send email, through a link on our website, to an attorney of Marshall Dennehey Warner Coleman & Goggin or an employee in our firm. Please note that your email may not be treated as confidential and does not create an attorney-client relationship. You should not rely upon the transmission of an email through this website if you are seeking to enter into such a relationship. Until such time as we have agreed to represent you, no information in your email will be treated as confidential. Please contact us directly by telephone at 1.800.220.3308 if it is your intent to seek legal counsel with our firm or convey confidential information.

If it is still your intent to send this email, knowing that it may not be treated as confidential, you may accept our terms of agreement by pressing "OK". If you choose not to accept these terms of agreement you may navigate away from this page by pressing "Cancel."