Superior Court of Pennsylvania applies occurrence rule to dismiss legal malpractice lawsuit on statute of limitations grounds, despite plaintiff’s claim it was unaware of the breach until a lawsuit was filed against it.

The plaintiff, the seller of lots for homes in a planned community, was sued by homeowners arising from misrepresentations contained in the Public Offering Statement concerning the status of the sewer system and problems with public water. Ultimately, the plaintiff settled the lawsuit with the homeowners, paying them over $1 million in attorneys' fees. The plaintiff then filed a legal malpractice lawsuit against the lawyers who drafted the Public Offering Statement, alleging that, after it was sued by the homeowners, it discovered the lawyers had made various omissions and misstatements in the statement. After a 35-day bench trial, the trial court entered judgment in favor of the attorney-defendants and against the plaintiff, finding that plaintiff’s claims were barred by the two-year statute of limitations. The Superior Court of Pennsylvania upheld the trial court’s ruling, emphasizing that Pennsylvania applies the ‘occurrence rule’ and that legal malpractice claims are thus triggered by the occurrence of the breach of duty, which in this case was the time of the drafting of the Public Offering Statement. The court further rejected the plaintiff’s claim that the discovery rule tolled the statute of limitations until the date the homeowners filed the lawsuit. The court held that the plaintiff could have learned of the breach through the exercise of reasonable diligence by reviewing the Public Offering Statement when it was provided to it years earlier and that the plaintiff was on notice of homeowners’ dissatisfaction well before the lawsuit.

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