A Philadelphia judge has declined to toss a litigation funder‘s lawsuit that alleges a solo practitioner failed to distribute settlement proceeds to the lending company after his client took out a cash advance to pursue a personal injury claim.
Philadelphia Court of Common Pleas Judge Ramy Djerassi on Thursday denied Philadelphia attorney Louis Jay Arnold’s motion to dismiss the case Thrivest Legal Funding v. Arnold, which is being handled in Philadelphia’s commerce program. The decision to deny the attorney’s motion for judgment on the pleadings allows Thrivest’s breach of contract and tortious interference claims to move forward.
The case stems from a personal injury lawsuit Arnold pursued on behalf of Allegra King. According to Thrivest’s complaint, Arnold “aggressively sought funding” from the company to “keep the King case alive.”
According to Thrivest, King and the company entered into a cash advance agreement in May 2016 for more than $19,500. Thrivest said the money went toward King’s rent, food, medical and other expenses that allowed the case to “get to the finish line.” King’s underlying case eventually settled for $350,000, with $140,000 going to attorney fees, including $45,000 for Arnold. The money, according to Thrivest, was then distributed to King and the attorneys involved in the case.
However, according to Thrivest, the funding agreement had said that Thrivest had to be paid in full before any money was distributed to the client. The agreement also said Arnold was also supposed to place a lien and security interest against any future settlement proceeds, but he never did that either, Thrivest said.
According to Thrivest, $34,782 was due on the funding agreement as of December. The lawsuit, however, seeks more than $50,000, including punitive damages.
In May, Arnold filed a motion for judgment on the pleadings saying the case should be tossed because Arnold was neither a party nor a third-party beneficiary to the agreement. He also contended that Thrivest’s tortious interference claim was not viable, since none of his conduct led King to not follow the contract.
“There is no dispute that Arnold was serving as King’s attorney, and there is no suggestion that he engaged in any conduct outside the scope of his representation of King,” the motion said.
Djerassi’s one-page order allowing the case to proceed did not explain his reasoning behind the decision.
Attorney Aaron Moore of Marshall Dennehey Warner Coleman & Goggin, who represented Arnold, declined to comment about the case, except to note that two summary judgment motions are pending.
Thrivest’s attorney, William Mark Mullineaux of Astor Weiss Kaplan & Mandel, said he agreed with Djerassi’s decision, adding he didn’t think Arnold’s motion had merit. He also noted that both parties have summary judgment motions pending, and said it is possible the case will be decided on summary judgment.