A Philadelphia trial judge has ordered the principals of Philadelphia personal injury firm Pansini & Mezrow to pay nearly $117,000 plus interest to Montgomery County solo attorney John I. Gordon as a referral fee in an injury case that settled for $1.5 million and garnered $600,000 in attorney fees.
In Gordon v. Pansini, Philadelphia Court of Common Pleas Judge Gary S. Glazer issued an October 31 ruling granting Gordon’s motion for partial summary judgment, saying Michael O. Pansini and Steven M. Mezrow breached their contract with Gordon, which had provided for a referral fee of one-third of the total attorney fees in the case.
According to Glazer, Gordon was hired by Gina Bennett in 2006 to represent her in an automobile accident case. In 2008, Gordon referred the case to Pansini and Mezrow and they agreed to pay him a one-third referral fee.
Pansini and Mezrow alleged that Gordon, knowing he could not win the case because both liability and disability were in dispute, made fraudulent misrepresentations at a March 6, 2008, meeting in order to convince them to take the case and to pay him the one-third referral fee, according to Glazer.
At the meeting, Glazer said, Gordon provided Pansini with the police report from the accident and “extremely limited and scant medical records.”
Pansini and Mezrow filed suit on behalf of Bennett in the Philadelphia Court of Common Pleas in November 2008, Glazer said.
The defendants claimed that in May 2010 they informed Gordon that, because Bennett’s case was so weak, they could not represent her without a revised referral fee agreement, according to Glazer.
The defendants alleged that Gordon orally agreed to a revised fee arrangement in which he would receive one-third of the attorney fees on a recovery up to $250,000 but only 10 percent of the attorney fees on any recovery in excess of $250,000, Glazer said.
In July 2010, Bennett’s injury case settled during trial for $1.5 million, with attorney fees totalling $600,000, according to Glazer.
That August, Glazer said, Pansini sent Gordon a check for $83,333.
Pansini told The Legal on Thursday that the $83,000 figure represented one-third of the attorney fee on the first $250,000 plus 10 percent of the attorney fee on the remaining $1.25 million.
Gordon responded by demanding one-third of the total attorney fees and arguing that he never agreed to a revised fee agreement, according to Glazer.
Gordon filed suit against Pansini and Mezrow alleging breach of contract and the defendants responded with a counterclaim for breach of contract, fraudulent misrepresentation and unjust enrichment, according to Glazer.
Gordon then filed his motion for partial summary judgment, Glazer said.
The defense argued that not withdrawing from the case created a novation that voided the original referral fee agreement, but Glazer disagreed.
“Defendants did not submit any evidence that they had found alternative counsel to represent Ms. Bennett, defendants did not submit an affidavit from Ms. Bennett that she would agree to the firm’s withdrawal, and furthermore defendants did not submit an expert report that they would have been allowed to be released from representing Ms. Bennett,” Glazer said. “Therefore, defendants’ claim that there was a novation fails for lack of consideration. Thus, defendants do not have a viable claim for breach of contract and are liable under the original contract.”
Pansini and Mezrow alleged in their memorandum in support of their answer to Gordon’s motion for partial summary judgment that Gordon had told them the case was “a slam dunk” and that they had trusted his word because they had considered him a friend, having attended Villanova Law School with him in the 1980s.
But Glazer said the defense’s fraudulent misrepresentation and negligent misrepresentation claims failed because they had sufficient time to verify Gordon’s statements.
“In the instant case, defendants had the police report, limited medical records, and the client to consult,” Glazer said. “Plaintiff referred the client to defendants in March of 2008. However, defendants did not file a complaint in the matter until November of 2008, more than six months after the referral. Defendants had adequate time and documentation to verify the statements of the plaintiff.”
Pansini, however, told The Legal on Thursday that he believes the issues of whether there was fraudulent misrepresentation and whether Gordon agreed to a revised referral fee agreement should be left for a jury to decide.
Pansini also told The Legal that Glazer granted summary judgment before the discovery and expert report deadlines expired.
Pansini said he plans to file a motion for reconsideration.
Glazer also rejected the defendants’ unjust enrichment claim, citing the state Superior Court’s 2006 ruling in Lackner v. Glosser, in which it held that unjust enrichment does not apply when there is a written agreement or express contract between parties.
“There is no dispute as to the intentions and agreement of the parties on March 6, 2008, when creating the one-third referral fee,” Glazer said. “Therefore, this is an express contract and the unjust enrichment does not apply.”
Glazer ordered Pansini and Mezrow to pay Gordon $116,666, which represents the remainder of the one-third referral fee after the $83,333.
In addition, Glazer said Gordon is also entitled to 6 percent annual simple interest, which began to accrue on August 17, 2010, the date on which Pansini wrote the original referral fee check.
Gordon’s attorney, Timothy P. Creech of Creech Law in Philadelphia, said he and his client intend to seek punitive damages.
“A lawyer makes a promise to you, they make a promise,” Creech said. “It’s a straightforward case.”
But Pansini said he had trusted Gordon’s word about the quality of the case and was misled.
“My firm and I donate hundreds of thousands of dollars to charities and worthy causes because it’s the right thing to do, but we will fight paying him another nickel as what he is doing is wrong,” Pansini said. “It’s not about the money, it’s about what’s right and it’s about what’s wrong.”
(Copies of the eight-page opinion in Gordon v. Pansini, PICS No. 12-2156, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •