A Philadelphia judge has ruled that Pennsylvania has specific personal jurisdiction over a Philadelphia law firm’s $218,000 legal-fee collection lawsuit against clients based in Delaware.
Philadelphia Court of Common Pleas Judge Patricia A. McInerney, one of the judges sitting in the commerce program for business litigation, overruled the preliminary objections of the Delaware-based defendants that Pennsylvania could not assert in personam jurisdiction over them after they sought legal counsel in Pennsylvania about legal representation in Delaware against another former attorney.
The Delaware defendants have minimum contacts with Pennsylvania, and their conduct shows that they had enough connection with Pennsylvania that they should have reasonably anticipated being hauled into the Pennsylvania court system, the judge said.
Law firm Cohen Seglias Pallas Greenhall & Furman sued 999 LLC, which is engaged in the construction business in Delaware; JJC999 LLC; FLC999 LLC; Joseph Corrado, the sole owner of JJC999 who has an interest in 999 through JJC999; and Frank Corrado, the brother of Joseph Corrado, the sole owner of FLC999 who has an interest in 999 through FLC999.
The fact that the defendants received a letter of engagement on letterhead identifying Cohen Seglias as a Philadelphia-based firm, that payments were made to the Philadelphia offices, and that Joseph Corrado and other defendants twice visited the Philadelphia office "shows that Joseph Corrado invoked the benefits and protections of this commonwealth on behalf of defendants by purposefully directing his activities at a resident of Pennsylvania, and by purposefully availing himself and his companies of the privilege of conducting activities therein," the judge said.
Cohen Seglias sent an engagement letter to 999 on August 6, 2007, according to the opinion. Philadelphia-based Cohen Seglias attorney Roy S. Cohen said in the letter that he would take the lead on all meetings and hearings, and that "I will be primarily responsible for pushing the litigation."
Cohen also wrote that real estate attorney James Harker and associate Eric Monzo, who bills at $200 an hour, would "be able to put together a complaint both quickly and cost-effectively." Cohen also wrote that partner Edward Seglias, managing partner of the firm’s Delaware office, would jump in on occasion.
Several payments were made to the firm in its Philadelphia office.
But, at some point, Joseph Corrado concluded the legal fees were excessive because too many lawyers were involved, according to the opinion’s reference to Corrado’s deposition.
Joseph Corrado said he was aware that work was done on behalf of 999 in Philadelphia, Pittsburgh and Wilmington, according to the opinion.
The defendants argued that personal jurisdiction was not triggered because the meetings in the underlying litigation took place in Delaware, Cohen Seglias has an office for the practice of law in the state of Delaware, and their minimum contacts with Pennsylvania are "’random,’" "’fortuitous’" and "’attenuated.’"
The judge also rejected dismissing the action on the grounds that it would violate "traditional notions of fair play and substantial justice" for Pennsylvania to exercise jurisdiction in this situation.
According to the opinion, the factors in considering what exercise of jurisdiction will or will not violate traditional notice of fair play and substantial justice are the burden on the defendants, the forum state’s interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the "’interstate judicial interest’" in obtaining an efficient resolution of the controversy, and the "’shared interest of the several states in furthering fundamental substantive social policies.’"
McInerney said it was not a burden for the defendants to come to Philadelphia from neighboring Delaware, that Pennsylvania has a significant interest in providing a forum to address an alleged failure of the defendants to pay more than $218,000 in legal fees, that Cohen Seglias has an interest in obtaining convenient and effective relief in Pennsylvania, and that it would not diminish the interstate judicial system’s interest in efficient resolution of controversies or the shared interest "of the several states in furthering fundamental substantive social polices" to have the case adjudicated in Pennsylvania.
The judge also rejected resolving at this stage the defendants’ argument that Cohen Seglias cannot claim a breach of a suretyship contract.
Cohen Seglias’ attorney, Michael Lipuma of Philadelphia, did not respond to a request for comment.
The defendants’ counsel, Kevin Gibson of Gibson & Perkins in Media, Pa., said they have asked the judge to rephrase her order so the defense can take an appeal.
McInerney issued her opinion in Cohen Seglias Pallas Greenhall & Furman v. 999 on January 17.
This article first appeared in Delaware Law Weekly, a sibling publication of Pennsylvania Law Weekly.
(Copies of the 17-page opinion in Cohen Seglias Pallas Greenhall & Furman v. 999, PICS No. 13-0305, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •