Hammer v. Crain Bros.

10 Pa. D. & C.3d 197, 1979 Pa. Dist. & Cnty. Dec. LEXIS 350
CourtPennsylvania Court of Common Pleas, Alleghany County
DecidedApril 4, 1979
Docketno. GD 78-4336
StatusPublished

This text of 10 Pa. D. & C.3d 197 (Hammer v. Crain Bros.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Alleghany County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hammer v. Crain Bros., 10 Pa. D. & C.3d 197, 1979 Pa. Dist. & Cnty. Dec. LEXIS 350 (Pa. Super. Ct. 1979).

Opinion

FINKELHOR, J.,

— The above action in assumpsit by plaintiff attorney, Paul L. Hammer, Esq., for the collection of counsel fees, came before the court on the prehminary objections of defendant, Crain Brothers, Inc., in the nature of a demurrer, and the alternate motion of plaintiff for summary judgment.1

[198]*198The issue, one of first impression, is whether an attorney is entitled to counsel fees from an adverse party where the judgment against said adverse party is reduced by virtue of a prior settlement between the attorney’s client and a third party.

The present litigation arose from an accident at the Pittsburgh & Lake Erie Railroad Company’s (P&LE) Colonna Coal Dock on the Ohio River, in which plaintiffs client, one Chester Dobbins, a member of the railroad’s river crew, was injured while working on a barge owned by Crain Brothers, Inc. (Crain).2

The injured workman and initial plaintiff Dobbins, represented by present plaintiff, attorney Hammer, commenced a suit in admiralty against his employer, Pittsburgh & Lake Erie Railroad in the District Court for Western Pennsylvania. A settlement was negotiated on January 3, 1975, in favor of Dobbins for the amount of $85,000 and a release as to P&LE was signed. Crain was not a party to the settlement agreement and Dobbins’ claim against Crain was preserved. See Dobbins v. Crain Bros., Inc., 432 F.Supp. 1060, 1071-72 (W.D.Pa. 1976). In addition, the Federal District [199]*199Court awarded to attorney Hammer a fee of $21,500 as his share of the settlement recovery. (Agreed Statement of Facts #3).

Thereupon, Mr. Dobbins, again represented by plaintiff, filed suit in admiralty against defendant Crain Brothers on the legal theories of the unseaworthiness of the barge and the provisions of the Federal Jones Act of March 4, 1927, 44 Stat. 1424, as amended, 33 U.S.C.A. §901 et seq.3 Crain interpleaded the P&LE for the purposes of indemnification and/or contribution: 33 U.S.C.A. §905.

The matter went to trial and the jury returned a verdict in the total amount of $320,000 against defendant Crain. As a result of special interrogatories relating to comparative negligence, the jury further found that Dobbins was 25 percent at fault and that, as between Crain and the railroad employer, P&LE was 75 percent at fault and Crain was 25 percent at fault. On the motion of defendant Crain before the district court, the judgment was amended to reduce the Dobbins’ recovery by 25 percent, to reflect the finding of comparative negligence, i.e., $240,000. The court further reduced the judgment against Crain to $155,000 to reflect the prior settlement between Dobbins and P≤ Dobbins v. Crain Bros., Inc., supra; and the district court awarded present plaintiff Hammer counsel fees in the amount of Vz of the reduced judgment of $155,000.

On appeal, the third circuit affirmed the judgment against Crain in favor of Dobbins but, based [200]*200upon the language of the prior settlement agreement and sections of the Longshoremen’s Act,4 found that P&LE was not a joint tortfeasor vis-a-vis Crain. However, the court adopted the reduction in judgment ordered by the district court and credited the prior settlement between P&LE and Dobbins against the verdict awarded Dobbins.

The court stated at page 566 as follows: “However, if plaintiff is allowed to recover $240,000 in this case, he will have recovered twice for his injuries, atleast to the extent of $85,000. . . . [W]eaxe satisfied that, in the exercise of our equitable powers, no barrier exists to our requiring that any amount which Dobbins was paid in settlement for the same injuries be credited to any award against Crain. There is no reason why Dobbins should be entitled to a double recovery.” Dobbins v. Crain Bros., Inc., 567 F. 2d 559, 566-7 (3d Cir. 1977).

It was the court’s further opinion that, under existing Federal law, there is “a clear policy against double recovery by the longshoremen.” 567 F. 2d at p. 567.

The reduction of the judgment against Crain was opposed by plaintiff Hammer at both the trial and the appellate levels. (Agreed Statement of Facts #5).

[201]*201POSITION OF THE PARTIES

Based upon the above brief summary of the prior litigation, it is plaintiffs position that the reduction of the judgment against defendant Crain in the amount of $85,000 was a result of plaintiffs representation of Dobbins in the earlier settlement against P&LE. Plaintiff alleges that defendant Crain has secured the benefits of that settlement and that therefore plaintiff is entitled to a reasonable counsel fee, plus interest from May 14, 1976, the date of the judgment.

It is defendant Crain’s position that the opinion of the third circuit barring a double recovery of damages to Dobbins is equally applicable to counsel for Dobbins. It is Crain’s further argument that, at all times, the interests of Crain were adverse to and opposed by plaintiff Hammer.

DISCUSSION

We agree with Judges Knox, Teitelbaum and Friendly that this area of admiralty law is “riddled with a ‘byzantine maze of exceptions,’ ” 432 F. Supp. 1061, and produces neither fish nor fowl. To superimpose on this maze, the fragmented Pennsylvania rulings on recovery of attorney fees from third parties under the doctrine of “unjust enrichment” is to compound the confusion.

There is no question that, as a matter of fact, the liability of defendant Crain was reduced by the amount of the prior settlement of Dobbins and P&LE. There is also no dispute that attorney Hammer has received attorney’s fees on the $85,000 settlement made with the prior defendant P&LE.

It is well settled in Pennsylvania law that where [202]*202the services of an attorney are instrumental in the creation or preservation of a fund which inures to the benefit of not only his client but others, he may be allowed counsel fees from the fund so created: 1 Standard Pa. Pract., §244, 291; Schwartz v. Keystone Oil Co., 164 Pa. 415, 30 Atl. 297 (1894). See also Sprague v. Ticonic Nat. Bank, 307 U.S. 161 (1939); Dawson, Lawyers and Involuntary Clients: Attorney Fees From Funds, 87 Harvard Law Rev. 1597 (1974). Based on the theory that an attorney is entitled to be paid out of a fund which is created as the result of his individual labor and skill, compensation has been permitted out of funds which have been engendered through the attorney’s efforts: Jones v. Pittsburgh, 157 Pa. Superior Ct. 528, 43 A. 2d 554 (1945). In addition, a judgment which is paid by the set-off of another judgment has been treated in the same manner as a fund produced by litigation: Proie Bros., Inc. v. Proie, 323 F. Supp. 503 (W.D.Pa. 1971). Similarly, where one joint tortfeasor, in settling a case with an injured plaintiff, extinguishes the liabilities of the other joint tortfeasors, attorney’s fees have been assessed on a pro rata basis against the non-litigants: Caldwell v. Keystone Ins. Co., 212 Pa. Superior Ct. 379, 243 A. 2d 448 (1968); Furia v. Phila., 180 Pa. Superior Ct. 50, 118 A. 2d 236 (1955).

In Furia, supra, the court quoted from Harris’s Appeal, Jacoby’s Appeal, 323 Pa. 124, 186 Atl. 92 (1936), as follows:

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Related

Sprague v. Ticonic National Bank
307 U.S. 161 (Supreme Court, 1939)
Seas Shipping Co. v. Sieracki
328 U.S. 85 (Supreme Court, 1946)
Dobbins v. Crain Brothers, Inc.
432 F. Supp. 1060 (W.D. Pennsylvania, 1976)
Johnson v. Stein
385 A.2d 514 (Superior Court of Pennsylvania, 1978)
Furia v. Philadelphia
118 A.2d 236 (Superior Court of Pennsylvania, 1955)
Caldwell v. Keystone Insurance
243 A.2d 448 (Superior Court of Pennsylvania, 1968)
Corace v. BALINT (Et Al.)
210 A.2d 882 (Supreme Court of Pennsylvania, 1965)
Harris's Appeal
186 A. 92 (Supreme Court of Pennsylvania, 1936)
Jones v. Pittsburgh
43 A.2d 554 (Superior Court of Pennsylvania, 1945)
Schwartz v. Keystone Oil Co.
30 A. 297 (Supreme Court of Pennsylvania, 1894)
Long v. Marino Masse, Inc.
208 A.2d 920 (Superior Court of Pennsylvania, 1965)
Gold Star Service, Inc. v. Workmen's Compensation Appeal Board
342 A.2d 459 (Commonwealth Court of Pennsylvania, 1975)
Proie Bros. v. Proie
323 F. Supp. 503 (W.D. Pennsylvania, 1971)

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Bluebook (online)
10 Pa. D. & C.3d 197, 1979 Pa. Dist. & Cnty. Dec. LEXIS 350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hammer-v-crain-bros-pactcomplallegh-1979.