An Allegheny County trial judge has ordered Wexford, Pa.-based law firm Malone Middleman to pay Pittsburgh-based Meyer, Darragh, Buckler, Bebenek & Eck nearly $15,000 in attorney fees and legal expenses from a wrongful death case that each firm worked on at separate times, but neither firm is entirely satisfied with the ruling.
The underlying case was settled for $235,000.
In a November 26 opinion explaining his July bench verdict in Meyer Darragh v. Law Firm of Malone Middleman, Allegheny County Court of Common Pleas Judge Alan Hertzberg said he based the amount of the verdict on Meyer Darragh’s quantum meruit claim for the work the firm actually did on the case before its former attorney, William Weiler Jr., took the file with him to Malone Middleman, rather than on its breach of contract claim for two-thirds of the total attorney fees.
In Meyer Darragh, Hertzberg said, Weiler, who is not a party to this fee dispute, represented the estate of Richard A. Eazor in a contingency fee wrongful-death action at the time he joined Meyer Darragh.
Once at Meyer Darragh, attorney Scott A. Millhouse took the lead on the case, with Weiler assisting him, Hertzberg said.
But when Weiler left the firm, he took the file with him to Malone Middleman without Meyer Darragh’s consent, according to Hertzberg.
In its appeal to the Superior Court, according to Hertzberg, Malone Middleman contends that Hertzberg erred in awarding Meyer Darragh attorney fees, arguing that predecessor attorneys may not bring quantum meruit claims against successor attorneys, but rather may only bring them against clients.
Hertzberg, however, disagreed, saying that despite some inconsistencies, Pennsylvania law does not prohibit predecessor attorneys from bringing quantum meruit claims against successor attorneys.
“If Malone Middleman is correct, Pennsylvania law would seem to encourage lawsuits by attorneys against their former clients since lawsuits against successor attorneys in contingent fee matters would be prohibited,” Hertzberg said. “If a predecessor attorney does not wish to sue a former client and Malone Middleman is correct, Pennsylvania law also says whichever attorney has the contingent fee case at the time it is favorably resolved gets the entire contingent fee, regardless of whether a predecessor attorney has done the bulk of the work.”
Hertzberg cited the Superior Court’s 1995 ruling in Feingold v. Pucello, in which it held that there are certain circumstances where it’s more appropriate for a predecessor attorney to bring a quantum meruit claim against a successor attorney than against a client.
“Since then, the Superior Court rulings that quantum meruit was inappropriate all involved cases in which agreements were applicable to the disputes,” Hertzberg said.
Meanwhile, in its own appeal to the Superior Court, Meyer Darragh argues that it did have a valid agreement with Weiler, under which the firm was entitled to two-thirds of the $67,000 in attorney fees Malone Middleman received when it settled the wrongful death suit, according to Hertzberg.
But Hertzberg said the fact that Weiler was not a partner at Meyer Darragh is “fatal to this claim.”
While the Superior Court ruled earlier this year in Ruby v. Abington Memorial that a successor firm owed 75 percent of its contingency fee to the predecessor firm pursuant to a contract between the predecessor firm and its former partner, Hertzberg said, it did so because the fee constituted “unfinished business” of a dissolved partnership under the Uniform Partnership Act.
That, however, was not the case in Meyer Darragh, Hertzberg said.
“With attorney Weiler not being a withdrawing partner, the Meyer Darragh partnership was not dissolved and attorney Weiler’s obligation to pay Meyer Darragh two-thirds of the Eazor contingent fee is not unfinished partnership business,” Hertzberg said. “Since Malone Middleman is not a party to the agreement between attorney Weiler and Meyer Darragh, and Malone Middleman cannot be subject to the agreement under the ‘unfinished business’ doctrine, Meyer Darragh’s claim under the contract fails.”
Likewise, Hertzberg said, since no applicable agreement exists, Meyer Darragh’s quantum meruit claim is appropriate.
But Meyer Darragh also contends on appeal to the Superior Court that Hertzberg miscalculated his quantum meruit verdict, arguing that $17,673 was the stipulated amount of its quantum meruit claim, according to Hertzberg.
“However, the proposed stipulated facts/trial documents filed by the parties states only that Meyer Darragh ‘requested payment of $17,673.93,’” Hertzberg said. “I do not view this language as acceptance by Malone Middleman that Meyer Darragh’s quantum meruit claim is in the amount of $17,673.93, and further doubt is cast upon there being any stipulated amount by the total for services and expenses in Meyer Darragh’s itemized bill being in the amount of $14,843.89.”
Hertzberg said he believed the parties allowed him to review Meyer Darragh’s itemized bill so that he could determine the amount the firm was owed by Malone Middleman.
“I determined that Malone Middleman was unjustly enriched as to all services and expenses described in Meyer Darragh’s itemized bill except for the final two service entries,” Hertzberg said. “Since the work described in the two final entries related to the fee dispute between Meyer Darragh and Malone Middleman, I excluded it to arrive at the verdict amount of $14,721.39.”
Hertzberg likewise rejected Meyer Darragh’s argument that he should have found Malone Middleman liable for conversion, noting that Meyer Darragh failed to file a conversion claim within two years of realizing it was injured and therefore was time-barred from doing so.
Hertzberg said Meyer Darragh was aware that the Eazor estate received $15,000 of the $235,000 settlement in July 2007 and had requested its share of the contingency fee from Malone Middleman.
“Meyer Darragh knew as early as July of 2007 that it was financially harmed by Malone Middleman’s failure to pay any part of the contingent fee from the $15,000 received by the Eazor estate,” Hertzberg said. “Certainly Meyer Darragh, using reasonable diligence by checking with the court, would have determined the full extent of the financial harm by June of 2008, six months after final settlement.”
Millhouse, who is representing Meyer Darragh in this case, could not be reached for comment at press time.
Paul S. Guarnieri, a shareholder at Malone Middleman who is handling the case on behalf of the firm, said the firm disagreed with Hertzberg.
(Copies of the 15-page opinion in Meyer Darragh v. Law Firm of Malone Middleman, PICS No. 12-2254, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •