The lawyer at the center of the lawsuit over the Philadelphia family courthouse had a preliminary victory on one theory, but lost on another, to have his former law firm cover him for any legal malpractice liability.
Allegheny County Court of Common Pleas Senior Judge R. Stanton Wettick Jr., who was specially appointed to preside over the Philadelphia County case, ruled that attorney Jeffrey B. Rotwitt cannot claim that he and his ex-firm, Obermayer Rebmann Maxwell & Hippel, are joint tortfeasors and thus that the law firm owes him contribution.
Wettick said that Rotwitt can only seek contribution if Rotwitt can show that other Obermayer Rebmann attorneys knew or should have known that Rotwitt had allegedly kept undisclosed to the Philadelphia court system that he got on the other side of the courthouse deal from representing the First Judicial District legally as its tenant representative by becoming a co-developer.
Wettick said that Rotwitt can amend his claim for contribution.
While Wettick said he agrees with Rotwitt that the defendant has a cognizable contribution claim if the other lawyers employed by Obermayer Rebmann also did legal work for the FJD, those other Obermayer Rebmann lawyers knew or should have known that Rotwitt was a co-developer and that they breached separate duties of care owed to the FJD by failing to inform the FJD that Rotwitt was a co-developer, Wettick said Rotwitt’s actual pleadings do not make out a contribution claim.
Obermayer Rebmann’s counsel, Jeffrey B. McCarron and Candidus K. Dougherty of Swartz Campbell, argued in court papers that Rotwitt cannot establish a claim against Obermayer Rebmann because an entity “can only act through its agents” or because there cannot be joint tortfeasors involving only economic loss.
Wettick expressly rejected the argument that there cannot be joint tortfeasors for economic loss only.
Rotwitt’s counsel, Gerald J. Dugan and Eugene J. Maginnis Jr. of Dugan Brinkmann Maginnis & Pace, wrote in court papers that Rotwitt asserts other Obermayer Rebmann attorneys actively worked on counseling the FJD, those attorneys owed independent duties to the FJD and that Obermayer Rebmann “would be vicariously liable for the negligence of these attorneys other than attorney Rotwitt.”
For example, Rotwitt argues that other Obermayer Rebmann attorneys, Warren Ayres, Hugh Sutherland, John Ryan and Michael Weinstein, prepared documents as the FJD’s tenant representative, were aware of Rotwitt’s role, and “any duties owed by attorney Rotwitt … were also independently due from each of the other Obermayer lawyers who prepared documents or otherwise provided counsel to the FJD for the family court project,” according to court papers.
“Perhaps a better way to crystallize this distinct liability is to consider that attorney Rotwitt could have chosen to join attorneys Ayres, Sutherland, Ryan and Weinstein, asserting that their independent negligence contributed to the harm and damages asserted by the FJD,” Rotwitt’s counsel said. “Instead of joining each of these attorneys, attorney Rotwitt chose to assert only Obermayer’s vicarious liability for their breach of duties.”
Rotwitt’s counsel said, if the claim for contribution was found unspecific, that they would file an amended cross-claim to specifically identify the Obermayer Rebmann attorneys he claims owed separate duties to the FJD.
McCarron declined comment. Dugan and Maginnis did not respond to a request for comment.
Wettick also overruled Obermayer Rebmann’s preliminary objections to Rotwitt’s claim for indemnity based upon his partnership agreement with the firm.
The judge rejected the argument that the FJD’s complaint against both defendants should be taken as true and that Rotwitt thus does not meet the requirements of the partnership agreement.
The partnership agreement said “‘the partnerships shall, the fullest extent permitted by law, indemnify any partner … against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if said partner acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the partnerships and the partnerships’ client,’” according to Wettick’s opinion.
“The claims by plaintiff include allegations of self-dealing, dishonest and fraudulent conduct by Rotwitt against his client, plaintiff. If found liable to plaintiff, then Rotwitt will necessarily be found to have acted in bad faith and in opposition to the interests of ORMH’s client, plaintiff, and vitiate any claim for indemnity under the partnership agreement,” McCarron and Dougherty argued in court papers.
But Dugan and Maginnis argued in court papers that “if it was Obermayer’s intent that a client’s allegations against any Obermayer partner would determine if that partner was entitled to indemnity under the partnership agreement, it could have so stated, but it did not.”
Wettick also ruled that Rotwitt’s cross-claim that Obermayer Rebmann breached its contract with him by not paying all of the compensation he was owed as a departing partner must be heard separately.
(Copies of the seven-page opinion in First Judicial District v. Rotwitt, PICS No. 12-2027, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)