Labrum & Doak v. Brown (In re Labrum & Doak, LLP)

226 B.R. 161, 1998 Bankr. LEXIS 1318
United States Bankruptcy Court, E.D. Pennsylvania·Decided October 19, 1998·No. Bankruptcy No. 98-10215DAS; Adversary No. 98-0134·Published·Cited by 4 cases

Opinion

SUPPLEMENTAL OPINION

DAVID A. SCHOLL, Chief Judge.

The seemingly modest purpose of the instant decision is to fix the fees due to LABRUM & DOAK, LLP (“the Debtor”), from the cases completed by the remaining defendants (“the Defendants”) in this adversary proceeding (“the Proceeding”) against whom we have already entered a declaratory judgment regarding the Debtor’s rights to a quantum meruit recovery in a previous decision of August 14, 1998, reported at 225 B.R. 93, 1998 WL 516145, at *10-*18 (“Labrum II”). The Defendants are JOHN R. BROWN, ESQUIRE; PATRICK GIBBONS, ESQUIRE; MICHAEL T. MeDON-NELL, ESQUIRE; DANIEL RYAN, ESQUIRE; and their law firm, RYAN BROWN McDonnell berger & gibbons (“the Firm”).

In Labrum II we required the Debtor to designate these completed cases handled by the Defendants regarding which it intended to present further evidence in order to liquidate its claims by September 4, 1998. We further scheduled a supplemental trial on September 16, 1998, to receive further evidence in support of these claims and a claim for a referral fee by Defendant WILLIAM LONGO, ESQUIRE (“Longo”). Id. at *18. The Debtor proceeded to timely designate the Williams, Bielun, Keller, Burke, Saracino, Maguire, and Fertal cases as the sources of its present claims. See id. at *15-*16.

On September 2, 1998, the Debtor also filed motion seeking discovery of the Firm’s time records in all of its former cases handled by the Firm. After a hearing on this motion of September 9, 1998, we entered an order requiring the Firm to answer that discovery as to only the seven designated cases by September 11, 1998. In light of a colloquy at the hearing relating to discovery from potential expert witnesses, our September 9 order further provided that the parties were to submit expert witness disclosures to the other simultaneously.

On September 14, 1998, the Debtor moved to continue the September 16, 1998, trial for 30 days because it had not yet obtained the expert which we had indicated in Labrum II, at *15, might be necessary to sustain its claims. That motion was promptly denied, because we believed that we had provided the Debtor with a carefully-timed dispensation in giving it an opportunity to present further evidence to support its claims. Compare In re Brown, 1998 WL 140889 (Bankr. E.D.Pa. March 24, 1998) (time structures established in sua sponte order allowing a party to present further evidence were strictly construed).

Nevertheless, on September 16, 1998, neither Defendants Brown nor McDonnell who, as the Defendants’ attorneys who were principally responsible for the seven designated cases at issue with the Firm and were obviously necessary witnesses, failed to appear at the trial. Nor did any other witnesses, including any expert on the behalf of the Debt- or, because it had not yet obtained such an expert. The explanation of Brown and McDonnell for not appearing was that they had not been subpoenaed until September 14; the subpoenas were not properly served on them; and they were presently involved in trials in forums outside of Philadelphia.

It seemed to us that Brown and McDonnell should have assumed that their presence was required on September 16 ever since we entered our order of August 14. We therefore continued the entire trial until September 23,1998, when Brown was available, thus effectively giving the Debtor a further opportunity to retain an expert. The parties ultimately agreed that a videotaped deposition of McDonnell would be taken on Sunday, September 20,1998, and lodged with the court in lieu of his testimony.

On or about September 16,1998, the Debt- or engaged as its expert C. George Milner, Esquire, a solo practitioner with a broad-based practice since 1965 who rents office space from the Debtor’s counsel. Applications were filed by the Debtor on September 18, 1998, to retain Milner and to present his testimony by videotape due to his having a [165]*165prior engagement on September 23. The Defendants answered these applications by seeking to preclude Milner's testimony and to require his attendance at trial. On September 21, 1998, we entered an Order denying the request to present videotaped testimony, nevertheless allowing Milner to be called as a witness, and reiterating the directive of our September 9 order that any expert witness disclosures were to be exchanged simultaneously.

Brown appeared on September 23 and his lengthy testimony consumed much of that day. The court scheduled Mimer's testimony for September 25, 1998. The Defendants reiterated their objection to his testimony, contending that they were inadequately prepared to cross-examine Milner and/or rebut his testimony with an expert of their own because certain expert witness disclosures provided unilaterally to them by the Debtor on September 21, in the absence of their providing any disclosures or commitment not to call an expert, did not fully comply with Federal Rule of Civil Procedure ("F.R.Civ. P.") 26(a)(2). The Defendants did not indicate whether they actually intended to call any expert witness in rebuttal, and therefore they provided no expert witness disclosures to the Debtors simultaneously with those of the Debtor's or otherwise.

After considering the Defendants' contentions, we stated, at the commencement of the September 25 proceedings, that, if they so desired, we would continue the Defendants' cross-examination and/or presentation of expert rebuttal testimony to either October 7, 1998, or October 9, 1998, thereby curing the Defendants' claims of lack of sufficient prior notice to prepare for Milner's testimony. Compare Brown, supra. In response to this offer, the Defendants opted to cross-examine Milner directly after his testimony and not to call any rebuttal witnesses. Therefore, at the close of that hearing, we directed the parties to submit supplemental briefs by October 2, 1998 (the Debtor), and October 9, 1998 (the Defendants).

The Defendants prefaced their brief with an extended discussion protesting our allowing the supplemental hearing to take place, on several grounds, which merit brief discussion. One argument~ is that because the Debtor defended a writ of mandamus pending in the Third Circuit Court of Appeals on the Defendants' unsuccessful jury demand, see Labru,m II, supra, at *2, by stating, on July 13, 1998, that this trial, conducted from June 8 to June 11, 1998, was over, they should be judicially estopped from now participating in this supplement to the June trial.

This argument might have some appeal if (1) the pleadings filed in the mandamus proceedings had been made part of the record in the Proceeding; and (2) it had been proven that the Debtor made contrary aver-ments in the mandamus pleadings while knowing full well that the instant record would be supplemented, or that it intended to request such relief. That is because, in Ryan Operations, G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 361 (3d Cir.1996), the court established that judicial estoppel

entails a two-part inquiry: (1) is [the party charged with estoppel's] present position inconsistent with a position it [previously] asserted ... and (2) if so, did [the party charged] assert either or both of the inconsistent positions in bad faith-i.e., with intent to play fast and loose with the court.

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Labrum & Doak v. Brown (In re Labrum & Doak, LLP), 226 B.R. 161, 1998 Bankr. LEXIS 1318 (Pa. 1998).

226 B.R. 161 (Labrum & Doak v. Brown (In re Labrum & Doak, LLP)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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