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Both sides scored significant victories in a Pennsylvania Superior Court appeal of a hotly contested dispute between attorneys Robert J. Mongeluzzi and the law firm of Pansini & Lessin over how to split the fees from a $15 million settlement of three personal injury cases. Rejecting appeals from both sides, the Superior Court panel upheld a verdict of $480,000 in Mongeluzzi’s favor rendered by Philadelphia Common Pleas Judge C. Darnell Jones II after a non-jury trial. In the appeal, Mongeluzzi and his lawyers — Howard D. Scher and Craig D. Mills of Buchanan Ingersoll — argued that the award was just a fraction of what Mongeluzzi deserved for his work on the case. By contrast, Pansini & Lessin and its lawyer, Philip G. Kircher of Cozen O’Connor, argued that Mongeluzzi deserved nothing or very little since he admitted that he did almost no work on the case. Finding no error by the trial judge in his findings of fact, the Superior Court upheld the two central rulings in the verdict — that Mongeluzzi was entitled to be compensated, and that his brief involvement in the case had assisted the lawyers from Pansini & Lessin in raising the settlement from $12.6 million to $15 million. In the suit, Mongeluzzi claimed he had agreed to join forces with Pansini & Lessin in three lawsuits against the Philadelphia Electric Co. on behalf of some of the victims of a natural gas explosion in Norristown in November 1995. Mongeluzzi’s lawyers argued that the highest offer from PECO prior to Mongeluzzi’s being hired was just $2.6 million. As a result, they said, Mongeluzzi deserved a much larger share of the $6 million fee paid to the Pansini firm when the case settled. But Kircher argued that prior to Mongeluzzi’s involvement, attorney Arlin M. Adams of Schnader Harrison Segal & Lewis had conversations with PECO’s lead lawyer, William J. O’Brien of Conrad O’Brien Gellman & Rohn in which O’Brien made much higher offers. In a memorandum opinion handed down Monday in Mongeluzzi v. Pansini & Lessin, Superior Court Judges John T. Bender and Stephen A. McEwen found no fault with any of the factual findings or legal conclusions in the decision by Jones. Judge Frank J. Montemuro wrote a concurring opinion. “It is not disputed that Mongeluzzi performed services at defendants’ request. Clearly, he is entitled to recover some compensation for his services; the only remaining question is the amount of his recovery,” the court wrote. “Nonetheless, [the Pansini firm's] first argument on this issue is that [Mongeluzzi and his firm, Saltz Mongeluzzi Barrett & Bendesky] are entitled to absolutely nothing for Mongeluzzi’s services,” the court said. “Ostensibly, defendants believe that they were entitled to his services gratis. Such a claim is absolutely devoid of any merit.” The appellate panel likewise rejected the Pansini firm’s alternative argument that Mongeluzzi’s award should have been limited to $60,000. “Defendants have completely ignored the trial court’s extensive analysis of this issue wherein it considered numerous factors in arriving at its judgment,” the court said. In a 28-page opinion announcing his verdict, Jones wrote: “Defendants retained an attorney who rendered extraordinarily valuable assistance to them, yet they have failed to pay Mongeluzzi any part, whatsoever, of the attorney fees that his actions helped produce.” Jones found that Mongeluzzi was entitled to compensation on his unjust enrichment claim under a quantum meruit theory because Mongeluzzi’s strong reputation was valuable to Pansini & Lessin. “The record is satiated with the accomplishments and reputation of plaintiff Mongeluzzi and his firm. Essentially, like everything else in the service industry, the better the service, the higher the premium for the service,” Jones wrote. “As with most, if not all areas of the professional service industry, if a lawyer produces unparalleled results, the lawyer can, and usually does, charge more for his or her services. This is true in all fields, whether they be orthopedic surgery, entertainment, sports, criminal defense attorneys, or civil plaintiffs and defense lawyers,” Jones wrote. Jones found that Pansini & Lessin’s own reputation had “increased substantially” as a result of its success in the PECO cases. Regardless of reputation, Jones said, a standard contingency fee is “generally the same among plaintiff personal injury lawyers.” But Jones also found that “the significance of the ‘big gun’ syndrome is that it generates more of those contingency fees. Thus, common sense and human experience permits the logical inference that the services of plaintiffs added significant value to the PECO action cases.” Now the Superior Court, in its own words, has said essentially the same thing. “At the time that [the Pansini firm] contacted Mongeluzzi, they knew that the PECO case was sure to generate a fee in the millions of dollars. Despite investing thousands of hours into the PECO case, defendants had been unable to reach a settlement, and in fact had reached an impasse,” the court wrote. “At that juncture, they sought out Mongeluzzi, an attorney with an established record of extreme prominence in his chosen field, and made him their point man,” the court wrote. Kircher argued in the appeal that Mongeluzzi had agreed to work on the case at an hourly rate. At trial, Mongeluzzi insisted he never works at an hourly rate. Jones concluded after the trial that there was no contract in place, but instead that the lawyers had reached an “agreement to agree” on Mongeluzzi’s compensation at a later date. Now the Superior Court has sided with Mongeluzzi on that point, rejecting the Pansini firm’s argument that it “acted in reliance upon Mongeluzzi’s statements or omissions that indicated that he was providing his services at an hourly rate.” The panel concluded that since the agreement to agree later was not a contract, Jones was correct to view the case as a quantum meruit claim. “The parties vested themselves entirely and exclusively with the power to determine Mongeluzzi’s compensation, and they left it purely to their future subjective intentions. When these future intentions diverged, the resulting disagreement made the term of payment completely uncertain,” the court wrote. “Faced with this vacuity, the trial court was left with the task of affixing a price to the parties’ agreement without any objective measure to guide its determination. Were the court to do so, it would be creating an essential term of the contract, rather than interpreting a term agreed to by the parties. However, courts do not make contracts.” The panel found that a court “cannot enforce a contract unless it can determine what it is.” Since the payment terms were never expressed when Mongeluzzi was first hired, the panel found there was “no practicable method by which the court could possibly discern the parties’ intent.” As a result, the court said, “there is no enforceable contract.” The lack of a clear contract, the court found, was, for the Pansini firm, a mess of it own making. “It was [the Pansini firm's] misjudgment that led them to the situation that they now complain of. Simply put, they should have drafted an agreement expressly setting forth the essential terms with certainty. Instead they proceeded on what the trial court aptly referred to as ‘a leap of faith,’” the court wrote. “As their leap of faith subsequently landed them in a predicament, they are now before this court claiming that they justifiably relied on a few ambiguous words. We conclude that defendants’ purported reliance was unjustifiable, and therefore, we shall grant them no relief on this basis,” the court said. The court also offered a strong rebuke to the Pansini firm for accepting a “gift” of more than $1.1 million from the lead plaintiff in the underlying cases. Mongeluzzi had originally sued for a share of more than $7.1 million in “fees” generated by the cases, but later testified that he strongly disagreed with the ethics of the Pansini firm in accepting the $1.1 million gift in addition to its $6 million in fees. At trial, Mongeluzzi’s lawyers argued that Jones should order the Pansini firm to return the gift. But Jones found that Mongeluzzi had waived any claims relating to the additional $1.1 million. On appeal, the Superior Court also rejected Mongeluzzi’s argument, but nonetheless admonished the Pansini firm for accepting the client’s gift. Quoting from the 1986 Superior Court opinion in Rizzo v. Haines, the court said: “‘The acquisition of the client’s monies by an able-bodied attorney from a catastrophically and permanently injured and disabled client, for … supposed purposes of gratitude must be regarded in law as a void obscenity. Such conduct demands language of judicial indignation and condemnation.’” Adopting the Rizzo court’s language and applying it to the Pansini firm, the court said: “The [ Rizzo] court’s admonishment is appropriate in this case as well.” But the court found that Mongeluzzi had no standing to challenge the propriety of the gift. Instead, the court said, the issue was more appropriate for a disciplinary complaint. “Ultimately, as members of the bar of this Commonwealth, [Mongeluzzi's] claim against defendants on this issue is an ethical one,” the court wrote. “The power to investigate the conduct of an attorney and to impose disciplinary sanctions for violation of his oath, rests with few exceptions, singularly with the Pennsylvania Supreme Court and its official disciplinary organization.”

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