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Since the attorney-client relationship is terminated when lawyers withdraw from a case, a federal judge has ruled that any new lawyer who takes over and secures a settlement cannot be sued for a portion of the fee or for interfering with the former counsel’s relationship. In his seven-page opinion in Frederick v. Davitt, U.S. District Judge Berle M. Schiller of Eastern District of Pennsylvania found that it was the former counsel who were attempting to interfere by naming the new lawyer as a defendant. “If allowed to proceed,” Schiller wrote, “[this case] would interfere with an attorney’s ability to represent any client that was formerly represented by different counsel.” Schiller also dismissed all claims brought by the former lawyers against the client after finding that a broadly worded arbitration clause in their contingent fee agreement called for arbitration of any fee dispute. In the suit, attorney Kathleen Frederick and the Cureton Caplan law firm brought claims for breach of contract, quasi-contract, fraud and quantum meruit against their former client, Patricia Davitt. Davitt’s new lawyer, Richard J. Orloski, was named in the suit for claims of tortious interference, quasi-contract, negligent misrepresentation and quantum meruit. According to court papers, Frederick joined with attorney Thomas Hunt to file an employment discrimination suit on behalf of Davitt and one of her co-workers. When the defendant made a global settlement offer, Davitt rejected it, but her co-worker accepted it. Frederick and Hunt then withdrew from the case, and Davitt acted as her own lawyer. Her discrimination claim was later dismissed on summary judgment, leaving only a claim for invasion of privacy. Davitt then hired Orloski and later struck a confidential settlement. At that point, the former lawyers claimed they were owed a portion of the fee. Frederick, now of Juneau, Alaska, and Hunt, now with Cureton Caplan in Delran, N.J., allege in the suit that Orloski specifically told them that he did not intend to represent Davitt but nonetheless went on to secure a settlement and keep the entire fee for himself despite knowing Davitt owed a fee to them. In their claim against Davitt, the former lawyers said she was obligated to pay at least 40 percent of her recovery to them. But Davitt’s lawyer, Glenn Matthew Goodge of Allentown, Pa.-based Goodge & Makoul, argued that any dispute the former lawyers had with Davitt should be sent to arbitration. In response, Frederick and Hunt’s lawyer, Michael S. Bomstein of Pinnola & Bomstein, argued that the arbitration clause was invalid because Orloski had asserted that the fee agreement was invalid. Schiller disagreed, saying, “Orloski is not a party to the contract or the arbitration clause that can contest the existence of the agreement.” Since Davitt does not contest the validity of the arbitration clause, Schiller found that it must be enforced. “Because the clause states arbitration will be applicable ‘if any dispute concerning this agreement arises between us,’ it is sufficiently broad to encompass the claims of breach of contract, fraud and quantum meruit against Ms. Davitt, which all stem from the allegation that Ms. Davitt did not pay Plaintiffs’ fee as required by the agreement,” Schiller wrote. Turning to the claims against Orloski, Schiller offered a harsh assessment. “It is clear to the court that plaintiffs’ complaint is based on unsupported conclusions and inflammatory suppositions that if allowed to proceed would interfere with an attorney’s ability to represent any client that was formerly represented by different counsel,” Schiller wrote. Since Frederick and Hunt withdrew before Davitt hired Orloski, the judge found that “the contractual relationship between the parties ended and could not be interfered [with] by Mr. Orloski’s assistance to Ms. Davitt.” Schiller closed the opinion by questioning the motives of the former lawyers. “It appears to the court that plaintiffs filed this complaint against Mr. Orloski in order to force the disclosure of the settlement amount obtained and the amount paid to Mr. Orloski, and not based on any facts upon which this court could draw reasonable inferences. Any inference to be drawn by these allegations would have the effect of interfering with the attorney-client relationship with Mr. Orloski and would have prejudiced Ms. Davitt in her case against her former employer,” Schiller wrote. Bomstein, in an interview, said that he disagrees with the judge’s decision but has not yet consulted with his clients about whether to appeal. The judge’s opinion left out a few critical facts, Bomstein said, including the amount of time Frederick and Hunt had logged on the case and the fact that their decision to withdraw was mandated by a conflict of interest that developed when one client opted to take the settlement and the other rejected it.

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