A Philadelphia judge has found the Lundy Law firm breached its contract with a referring attorney over a referral fee, but her order has left unresolved how the referral fee will be awarded given several firms won the damages and only one signed the referral fee agreement.
In a one-paragraph order issued late last month in Mark v. Lundy Law , Philadelphia Court of Common Pleas Judge Patricia McInerney granted in part plaintiff Dennis J. Mark’s motion for summary judgment. She granted the motion as to the breach of contract count as to liability only. Mark also sought damages under theories of promissory estoppel and unjust enrichment.
Mark is seeking $226,666 in referral fees from Lundy Law, which represents one-third of the legal fees generated from the $1.7 million settlement in a hormone-replacement therapy case brought in Philadelphia by Pauline Lescinski.
Lescinski contacted Mark about her injuries from taking HRT drugs and asked if he could handle her case or if he knew a lawyer who could. She had seen an ad on television for Lundy Law and suggested Mark look into that firm, according to Mark’s motion for summary judgment. Mark did and Lundy Law agreed to take the case.
Mark now points to a May 7, 2004, letter from Lundy Law confirming the engagement and their agreement to pay Mark, as “referral counsel,” a “one-third share of the total legal fee” from any recovery earned in the case as proof that there was a contract and Lundy Law violated it when it didn’t pay him the fee after the 2010 settlement in Lescinski’s case.
Mark said in his motion for summary judgment that Lundy Law would argue it only owed Mark one-third of the legal fee it earned. According to Mark’s motion, Lundy Law said the total legal fees were $680,000, but it worked with other law firms on the case and shared those fees with those firms.
According to an exhibit attached to Mark’s court filings, the other firms that worked with Lundy Law on the case were Montgomery, Ala.-based Beasley, Allen, Crow, Methvin, Portis & Miles; Conshohocken, Pa.-based Pogust, Braslow & Millrood; and Houston-based Littlepage Booth. The exhibit, which was a letter from Beasley Allen to Lescinski, said Lundy Law would earn 9.25 percent of the settlement, Beasley Allen would get 20.35 percent, Pogust Braslow would get 3.7 percent, and Littlepage Booth would get 3.7 percent.
Under that calculation, Lundy Law received about $157,250 in fees and would propose to give Mark $52,417. But the firm has argued there was no valid referral fee agreement in place with Mark to begin with.
In its response in opposition to summary judgment, Lundy Law recognized it signed a referral agreement but said that was done under false pretenses as Mark did not represent Lescinski or do any substantive research on her case or in finding her new counsel.
Lundy Law said Mark, who is Lescinski’s cousin, knew from the start he couldn’t handle the case. In the firm’s response opposing summary judgment, it said Lescinski already knew of Lundy Law when she went to Mark and Mark couldn’t prove he had done any research into Lundy Law.
“Any alleged contract between plaintiff and defendants would not have existed but for Mr. Mark’s misrepresentation that Ms. Lescinski was a client of his, and is therefore void or voidable,” Lundy Law said in its response.
There has been no movement on the docket since McInerney issued her order June 29.
Mark is a Scranton-based attorney who initially filed his suit against Lundy Law and the late Marvin Lundy in Lackawanna County. The case was transferred to Philadelphia in September 2011.
Michael D. Shaffer and Michael H. Gaier of Shaffer & Gaier represented Mark. Jeffrey B. McCarron and Josh J.T. Byrne of Swartz Campbell represented Lundy Law.
According to a statement from Shaffer, Mark had referred a second case to Lundy Law at the same time he referred Lescinski’s case. Shaffer said that case, involving HRT plaintiff Judy Mulderig, recently settled for $3.4 million and Mark sought one-third of the legal fees from Lundy Law and has still not been paid. Mark filed a second suit against the firm in Philadelphia on July 3 seeking the referral fee in that underlying case.
Shaffer cited McInerney’s ruling in the second lawsuit as evidence Lundy Law was allegedly in breach of the contract in the Mulderig case. He said Tuesday he thinks McInerney’s ruling means his client is due the full fee and a hearing will have to be held for proof of damages.
McCarron said his client still believes there was not a legitimate referral fee agreement in the case.
“Lundy isn’t reneging on referral fees as a practice,” McCarron said, reiterating the firm didn’t believe one existed in this case.
He said Lundy Law intends to also argue as to damages that Mark could only be due one-third of the fees Lundy Law collected, not the total fee in Lescinski’s case.
As for the Mulderig case, McCarron said it is a “similar situation,” but said he thinks Mark got ahead of himself in filing the suit because the ink is still drying on Mulderig’s settlement. He wouldn’t comment as to whether Lundy Law had intended to pay Mark the fee in that case.
According to Shaffer, the referral fee at issue in the Mulderig case is $440,000. He said he did not know whether another firm worked on that case with Lundy Law. Pogust Braslow and Beasley Allen worked on the Mulderig case with Lundy when a Philadelphia jury handed up a $24.75 million verdict in her favor in December, according to previous reports from The Legal and the docket in that case. The case later settled for a previously undisclosed amount.