X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Philadelphia Common Pleas Judge Joseph I. Papalini has ruled that attorney Alan B. Epstein and his law firm, Spector Gadon & Rosen, must pay a referral fee and punitive damages to attorney Nancy Kanter for her part in the case filed on behalf of “Tara M.,” a child who was severely abused by her foster parents. Papalini found in his opinion, Kanter v. Epstein and Spector Gadon & Rosen, that Epstein and his firm breached their duty to deal fairly with Kanter by not paying her the allegedly promised $431,000 referral fee and that the defendants breached their duty to the court by disregarding the judge’s orders to produce documents and filing premature appeals. This opinion is the most recent development in a drawn-out battle over a guardian ad litem’s right to a referral fee in a suit filed on behalf of an abused child. After a trial in 2002, a jury awarded Kanter $215,000 in compensatory damages, finding that Epstein and his firm had breached a contract with Kanter and that they had committed a conversion of the funds owed to her. The jury declined to award Kanter punitive damages. Granting Kanter’s motion for additur, Papalini increased the compensatory damages award to $431,000 a year ago. The judge then overruled the jury’s finding of no punitives and imposed $645,000, tripling the jury’s compensatory award. The judge has also ordered the defendants to pay more than $211,000 in attorney fees and contempt citations. Both sides have filed appeals in the case. Papalini’s 85-page opinion is striking in its condemnation of the defendants’ allegedly “improper behavior” throughout the case and his repeated use of bold and italic typeface to amplify his criticism. Papalini described how the defendants refused to comply with his orders to provide documents during the punitive damages phase of the trial and continued to refuse to produce the information after the verdict when plaintiffs were attempting to learn about defendants’ financial assets. The judge reprimanded the defendants for filing “multiple, premature appeals” following the jury’s verdict on punitives. In addition, the defendants presented Papalini with 104 issues each defendant intended to pursue on appeal to the Superior Court. The judge said the number was substantially more than the Superior Court would permit them to address. “This went beyond lawyering, and was another attempt to overwhelm and overburden this court and pervert the court system,” Papalini wrote. “If the type of activity engaged in by the defendants were to be permitted, our court system would break down. Those attorneys who delay and obfuscate would be rewarded; while those who play by the rules would suffer. Our legal structure, which is based on honesty and fair play, would come to an end.” Epstein referred a request for comment to his attorney, Gabriel L.I. Bevilacqua of Saul Ewing. Bevilacqua declined to comment. Spector Gadon & Rosen’s lawyers are Richard Sprague and Geoffrey R. Johnson of Sprague & Sprague. Johnson said yesterday that he and his client respectfully disagreed with the positions Papalini laid out in his opinion. “We think that the record and the law will bear us out on appeal,” Johnson said. George Bochetto of Bochetto & Lentz represented Kanter, who still practices in the Philadelphia area. Bochetto declined to comment on Papalini’s decision or the case. The fee dispute stems from a federal civil rights lawsuit brought against the city of Philadelphia, an adoption agency and others on behalf of Tara M., according to the opinion. Kanter was Tara M.’s child advocate and later appointed as her guardian ad litem (the girl has since been adopted). Tara M.’s estate, through Kanter, hired Epstein and his former law firm, Jablon Epstein Wolf & Drucker, to represent her interests in the lawsuit against the city. The lawsuit was settled for $4.31 million in 2000, and the federal court awarded Epstein’s firm $1.29 million in attorney fees, which came out of Tara M.’s recovery, according to court documents. The city had named Kanter as a third-party defendant in the lawsuit. Her legal malpractice insurer contributed $10,000 to the settlement, according to Papalini’s opinion. Kanter then filed suit in state court in Philadelphia against Epstein and Spector Gadon, claiming anticipatory breach of contract and conversion, and demanding compensatory and punitive damages, according to Papalini’s opinion. Epstein’s lawyers have said in court documents that the case was meritless and never should have gone to trial because, under state case law and the rules of professional conduct, a referral fee for Kanter would have been improper because of her fiduciary status as the child’s guardian. Kanter argued that her scope as guardian was limited to setting up a bank account in which to deposit money donated by members of the public after Tara M.’s situation was publicized, according to court filings. Papalini’s opinion said that there was no mention of Kanter’s referral fee in the written agreement for Epstein — on behalf of Jablon Epstein Wolf & Drucker — to represent Tara M.’s interests. When Epstein moved to Spector Gadon & Rosen in 1998, he continued to represent Tara M.’s estate in the litigation, according to the opinion. In support of the jury’s finding, Papalini concluded in his opinion that Kanter had presented sufficient evidence from which the jury could conclude that Epstein had agreed to pay Kanter a fee, creating an implied contract between them, and that Epstein later intentionally refused to pay Kanter what he had promised. Papalini also concluded that Kanter wasn’t legally precluded from recovering a referral fee as Tara M.’s guardian, nor was any referral fee for Kanter rendered invalid when she was named as a third-party defendant and contributed to the settlement in the civil rights lawsuit. The jury awarded $215,000 in compensatory damages. The judge next directed Epstein and his firm to give the plaintiff information about their financial assets in order to proceed to the punitive damages phase of the trial. The defendants didn’t comply with this instruction, Papalini wrote. The trial went on nonetheless, and the jury did not award punitive damages, Papalini said. Post-trial motions followed the verdict, and Kanter requested a new trial on punitive damages, arguing that Epstein and his firm had not brought all relevant information concerning their net worth to trial. Epstein had brought in a document detailing his retirement plan, saying it was all he owned individually, according to court documents. Kanter also argued that the defendants’ statements during the punitive damages trial were misleading and intended to trick the jury into believing the $215,000 award was a final judgment and that it would be paid immediately to the plaintiff, according to the opinion. The defendants said the testimony meant only that they would pay the amount after all their appeals were exhausted and it became a final judgment, according to the opinion. Papalini ordered Epstein, his wife and their accountant to comply with post-verdict asset discovery, according to the opinion. In court filings, the defendants assert that when faced with this prospect, they requested that the court prothonotary enter final judgment on the jury’s original $215,000 award and appealed that judgment to the Superior Court. But Papalini said this appeal was premature because all parties had agreed to extend the rule governing entry of such judgments for three months, according to the opinion. He twice more ordered the defendants to participate in the post-verdict asset discovery and imposed daily fines for each day the defendants didn’t comply, according to the opinion. On March 10, 2003, Papalini granted Kanter’s post-trial motion for additur, increasing her compensatory award to $431,000. He also granted her motion for pre- and post-judgment interest and ordered defendants to pay $124,200 in attorney fees and thousands of dollars in fines and contempt citations, according to the opinion. Because the defendants “willfully” refused to comply with his orders, Papalini said, he gave Kanter an option for either a new trial on punitives or an award of $645,000 in punitives (tripling the jury’s compensatory award), according to the opinion. Kanter chose the latter on March 12 , 2003 , and Papalini suspended the defendants’ accrual of fines for non-compliance because further discovery was unnecessary, according to court filings. The defendants appealed all the judge’s orders, arguing that Papalini’s two orders to comply with the post-verdict discovery were in violation of appellate procedural rules. In their appeal, Epstein and his firm argue that the judge should not have set aside the jury’s finding of no liability on the punitive damages issue because this deprived the defendants of their right to due process and a jury trial on that issue, according to court filings. “With all due respect, the substantial issues that were presented were mainly left unaddressed by the judge,” Johnson said of Papalini’s opinion. The most important issues, Johnson said, were whether the judge had the authority to award a new trial on punitive damages and whether he could have “unilaterally established the amount of punitives by himself,” Johnson said. Johnson noted that the only issue the parties argued over after the verdict was the defendants’ alleged failure to produce the financial documents the plaintiff sought during trial. “That issue goes to the amount of punitive damages — not whether there was liability for punitive damages,” Johnson said. “For the judge to take away the jury’s decision on punitive damages is not only a legal error but a constitutional error.” Epstein and his firm also objected to the judge’s contempt citations, the granting of attorney fees and his imposition of the additur to compensatory damages, saying they were given no opportunity to present evidence on these issues at hearings. In response to these arguments, Papalini said in his opinion, “The defendants have caused both the court and counsel for plaintiff to expend documented hours of unnecessary labor because of their intentional and willful disregard for the orders of the court. They acted with contempt of the judicial system when they prematurely entered judgment and filed appeals. To contend that we have not given them their day in court to defend themselves is nothing less than disingenuous.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.