McLane, Graf v. Rechberger CV-97-398-JD 04/29/99 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
McLane, Graf, Raulerson & Middleton, P.A.
v. Civil No. 97-398-JD
Alfred A. Rechberger and ARC Partners, Ltd.
O R D E R
This litigation arises from a fee dispute for legal work
done by several attorneys for Alfred Rechberger and his company
ARC Partners, Ltd. The plaintiff law firm, McLane, Graf,
Raulerson & Middleton, P.A. ("McLane"), moves for partial summary
judgment (document no. 65) as to part of the fees and expenses it
claims from defendants, Alfred A. Rechberger and ARC Partners,
Ltd. (referred to collectively as "Rechberger"). Third-party
defendant Jon L. Meyer has filed motions both for judgment on the
pleadings (document no. 57) and for summary judgment (document
no. 64) in his favor on the only remaining claim against him.
The pending motions, which are opposed by Rechberger, are
resolved as follows. Background1
Alfred Rechberger first contacted attorney Edward Hahn in
March of 1995 concerning a suit in state court filed by
Rechberger's daughter, Marion Jacobi, charging him with sexual
abuse. See Jacobi v. Rechberger, et al.. No. 94-C-482 (Merrimack
County Superior Court, filed 1994). Hahn allegedly advised
Rechberger that his daughter's suit was a "$50,000 case" and that
litigation costs for his defense would be "around $200,000." In
June of 1995, Hahn joined the law firm of Backus, Meyer, and
Solomon, and Jon Meyer of that firm worked on the Jacobi case
with Hahn. Ms. Jacobi's attorney made a settlement demand in
December of 1995 that Hahn rejected. Soon after, Rechberger's
motion to dismiss on statute of limitations grounds was denied.
The Backus firm billed Rechberger during this time, and he paid
the bills.
Rechberger also used Hahn to handle legal matters pertaining
to his business, ARC Partners Ltd. In January of 1996, Hahn
filed suit on behalf of Rechberger and ARC to recover losses
arising from a failed stock purchase agreement. See Rechberger,
et al. v. BioSan Laboratory, et al.. No. 96-44-JD (D.N.H. filed
1The background is summarized from the parties' pleadings, motions, and memoranda and is provided only as general background information.
2 1996).
In March of 1996, Hahn joined the McLane firm, bringing his
client Rechberger with him. Attorney Wilbur Glahn of the McLane
firm filed appearances in both the Jacobi and BioSan cases, and
Hahn continued to work on both cases. In addition, an associate
at the McLane firm, Mark Whitney, worked on the cases.
Rechberger did not have a written fee agreement with the McLane
firm. He was billed regularly for the work done by the firm and
expenses, and he paid the bills in a timely manner without
dispute.
Rechberger alleges that in January of 1997, Glahn informed
him that his liability in the Jacobi case could be between four
and ten million dollars. Rechberger immediately instructed Glahn
to settle the case. The case was settled in February of 1997 for
1.35 million dollars. Rechberger then stopped paying his bills.
In response to his reguest, the McLane firm sent Rechberger
detailed billing statements for the firm's work and expenses on
the Jacobi case.
When Rechberger failed to pay the outstanding fees and
expenses, the McLane firm filed suit against Rechberger and ARC
Partners in state court by a writ dated July 11, 1997. The writ
alleged claims in three counts of assumpsit, guantum meruit, and
bad faith based on the defendants' failure to pay for legal
3 services received from the firm. Rechberger removed the action
to this court and filed counterclaims against the McLane firm and
third-party claims against Edward Hahn and Jon Meyer. Meyer
filed a counterclaim against Rechberger for the amount of unpaid
legal fees for his work. Summary judgment was granted in favor
of the McLane firm, Jon Meyer, and Edward Hahn on Rechberger's
claims of legal malpractice and infliction of emotional distress
leaving only the third count which alleges breach of an implied
covenant to charge reasonable fees against the McLane firm as a
counterclaim, and against Jon Meyer and Edward Hahn, as third-
party defendants.
Discussion
Third-party defendant Jon Meyer filed a motion for judgment
on the pleadings, and then, in response to Rechberger's expert
witness's report, filed a motion for summary judgment. Meyer's
motions for judgment on the pleadings and summary judgment both
address Rechberger's only remaining claim against him, breach of
an implied covenant to charge reasonable fees. In his motion for
judgment on the pleadings, Meyer contends that Rechberger's
allegations are insufficient as a matter of law to support a
claim that his fees were unreasonable. For purposes of summary
judgment, Meyer relies on Rechberger's expert witness's opinion
4 that Meyer's bills were reasonable to show undisputed facts in
his favor. As Meyer's motion for summary judgment is dispositive
of the claim, it is not necessary to also consider Meyer's motion
for judgment on the pleadings.
The McLane firm filed a motion for partial summary judgment
on its claim and Rechberger's counterclaim to the extent the
claims are based on legal fees and expenses that McLane contends
are not disputed. Rechberger opposes the motions and also seeks
leave to amend his complaint.
Summary judgment is appropriate when "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed. R. Civ. P.
56(c). The record is taken in the light most favorable to the
nonmoving party. Perkins v. Brigham & Women's Hosp., 78 F.3d
747, 748 (1st Cir. 1996). "An issue is only 'genuine' if there
is sufficient evidence to permit a reasonable jury to resolve the
point in the nonmoving party's favor, while a fact is only
'material' if it has the potential to affect the outcome of the
suit under the applicable law." Bourque v. F.D.I.C., 42 F.3d
704, 707-08 (1st Cir. 1994) (guotations omitted). "[T]he mere
existence of some alleged factual dispute between the parties
5 will not defeat an otherwise properly supported motion for
summary judgment . . . Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247-48 (1986) .
A. Meyer's Motion for Summary Judgment
Rechberger's expert witness, attorney Finis Williams,
reviewed the billing records of Backus, Meyer, and Solomon, and
gave his opinion in his report that the Backus firm's billing was
excessive by one guarter to one-third of the amount billed, but
he also concluded that "Attorney Meyer's bills are considered to
be reasonable." Rechberger offers no evidence to dispute
Williams's conclusion that Meyer's bills were reasonable, and
instead seems to accept that fact as undisputed. Instead,
Rechberger argues in opposition to summary judgment that Meyer is
vicariously liable for the allegedly excessive and unreasonable
billing by Edward Hahn while he worked for the Backus firm.
The Backus firm is not a party to the present litigation.
Rechberger's third-party complaint does not allege a claim of
vicarious liability against Meyer. Nevertheless, Rechberger
argues that Meyer should have been on notice of a vicarious
liability claim against him because he was the primary trial
attorney in the Jacobi case and Hahn billed excessively while
under Meyer's supervision. Even if Rechberger's theory were
6 included in his complaint, which it is not, there are no facts
pled to support a vicarious liability theory, and Rechberger has
presented no legal basis for imposing vicarious liability on
Meyer for Hahn's allegedly excessive billing.
"Under the doctrine of respondeat superior, an employer may
be held vicariously responsible for the tortious acts of an
employee committed incidental to or during the scope of
employment." Trahan-Laroche v. Lockheed Sanders, Inc., 13 9 N.H.
483, 485 (1995). An employer may also be directly liable for
negligent supervision of an employee. See Cutter v. Farmington,
126 N.H. 836, 840 (1985). There appears to be no dispute that
Edward Hahn and Jon Meyer were both employed by the Backus firm.
Rechberger provides no facts or argument that Meyer, rather than
the firm, was Hahn's employer.
While derivative or vicarious liability might also be based
on another agency relationship, Rechberger presents no facts or
legal argument to support a theory that any agency relationship
existed between Meyer and Hahn to make Meyer legally responsible
for excessive billing. C f . Carrier v. McLlarkv, 141 N.H. 738,
739 (1997) ("An agency relationship is created when a principal
gives authority to another to act on his or her behalf.").
Rechberger was Hahn's client before Hahn joined the Backus firm
and continued to be Hahn's client after he moved to the McLane
7 firm. Although Meyer was the primary trial attorney for the
Jacobi litigation while Hahn was with the Backus firm, the
circumstances, gleaned from the pleadings and the record
presented for summary judgment, suggest that Hahn retained the
primary relationship with Rechberger. Rechberger has alleged no
facts that even suggest that Meyer had any supervisory obligation
to review Hahn's bills or that Meyer knew or should have known
what Hahn billed. In fact, Williams points out in his expert
report that Meyer was billing ten dollars less per hour than Hahn
during the Jacobi litigation, which also indicates that Hahn, not
Meyer, had the primary relationship with Rechberger.
Based on the record presented for summary judgment, it is
undisputed that Meyer's bills to Rechberger were reasonable.
Rechberger did not plead a claim of vicarious liability against
Meyer. Accordingly, Meyer is entitled to judgment in his favor
on the single remaining claim against him. Count III of
Rechberger's third-party complaint, alleging breach of an implied
covenant not to charge unreasonable fees.
B. Leave to Amend the Third-Party Complaint
In his objection to Meyer's motion for summary judgment
(document no. 69), Rechberger asks to be allowed to amend his
complaint if it is determined that he did not plead a claim of vicarious liability against Meyer. Meyer objects on grounds that
the proposed amendments include vicarious or derivative liability
theories which are new to the case, lack supporting expert
opinion, and are untimely and unduly prejudicial.
After the opposing party has answered the plaintiff's
complaint, leave to amend is to be "freely given when justice so
reguires." Fed. R. Civ. P. 15(a). Despite the liberal amendment
policy, the court will not exercise its discretion to permit
amendment if a defendant demonstrates that there was undue delay
in filing or that undue prejudice would result if the amendment
were allowed. Acosta-Mestre v. Hilton Int'l, 156 F.3d 49, 51
(1st Cir. 1998) (citing Foman v. Davis, 371 U.S. 178, 182
(1962)). Undue prejudice is likely if an amendment is proposed
after the close of discovery or after motions for summary
judgment have been filed. See Grant v. News Group Boston, Inc.,
55 F.3d 1, 5-6 (1st Cir. 1995); Resolution Trust Corp. v. Gold,
30 F .3d 251, 253 (1st Cir. 1994).
This case is scheduled for trial during the trial period to
begin on June 15, 1999, less than two months away. Discovery
will close in less than three weeks time, on May 15, 1999; the
deadlines for disclosure of expert witnesses has passed; and
dispositive motions are pending. Rechberger has been on notice
since Meyer's motion for judgment on the pleadings filed last September that Meyer disputed his theory of liability as pled in
his third-party complaint. Rechberger offers no explanation at
all for his delay in seeking leave to amend at the eleventh hour.
Under these circumstances, Meyer has demonstrated both undue
delay and prejudice that is sufficient to convince the court that
amendment of the third-party complaint would not serve the
interests of justice at this time. In addition, as Rechberger's
claims proposed in the amended third-party complaint are largely
conclusory, the proposed amendments would likely be futile. See
Judge v. Lowell, 160 F.3d 67, 80 (1st Cir. 1998); Maldonado v.
Dominguez, 137 F.3d 1, 11 (1st Cir. 1998) .
Accordingly, leave to amend the third-party complaint is
denied.
C. McLane's Motion for Summary Judgment
McLane brings three claims against Rechberger: Count I
(contract) alleging that Rechberger has not paid for fees and
expenses incurred in the McLane firm's representation of him
primarily in the Jacobi case; Count II (guantum meruit) that
Rechberger is unjustly enriched by failing to pay for the
services he has received; and Count III that Rechberger acted in
bad faith in refusing to pay McLane's bills for fees and
expenses. Rechberger has one remaining counterclaim against
10 McLane asserting that McLane charged unreasonable fees for the
services it provided. McLane contends that it is entitled to
partial summary judgment on two of its claims. Counts I and II,
and on Rechberger's counterclaim. Count III, in the amount of the
legal fees and expenses that are not disputed to be reasonable.
Rechberger argues that partial summary judgment is not
available to resolve only part of a claim or counterclaim.
Federal Rule of Civil Procedure 56(a), however, provides that
"[a] party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory judgment may . . . move
with or without supporting affidavits for a summary judgment in
the party's favor upon all or any part thereof." In addition, if
a case is not fully adjudicated by a motion for summary judgment,
the court "shall if practicable ascertain what material facts
exist without substantial controversy and what material facts are
actually and in good faith controverted." Fed. R. Civ. P. 56(d).
In this case, McLane asks for partial summary judgment in
its favor as to the amount of fees and expenses that it contends
are not disputed and are claimed in Counts I and II of its
complaint and against Rechberger on Count III of his third-party
complaint and counterclaim. To the extent the record supports
judgment in McLane's favor, partial summary judgment is available
pursuant to Rule 56(a) and (d). See, e.g.. United States v. St.
11 Paul Mercury Ins. Co., 24 F. Supp. 2d 218, 220 (D.R.I. 1998);
Bell Microproducts, Inc. v. Global-Insvnc, Inc., 2 0 F. Supp. 2d
938, 941 (E.D. V a . 1998) .
In support of its motion for partial summary judgment,
McLane argues that it is undisputed that a contract existed
between McLane and Rechberger for legal services and payment of
reasonable fees and expenses. McLane points to Rechberger's
answer in which Rechberger admitted that attorneys in the McLane
firm did legal work for him and did not deny that he agreed to
pay reasonable fees for necessary services. McLane also contends
that because Rechberger's expert witness. Finis Williams, did not
contest the fees charged by McLane attorney Wilbur Glahn and
associate Mark Whitney and did not mention the unpaid expenses,
those fees and expenses were reasonable.
1. Rechberger's counterclaim. Count III
Rechberger's counterclaim charges breach of an implied duty
to charge reasonable fees in the Jacobi litigation. Both
Rechberger's expert witness and McLane's expert witness conclude
that Glahn's fees were reasonable.2 Rechberger's expert. Finis
Williams, did not evaluate the reasonableness of McLane associate
2Rechberger's expert actually said that he did "not find Attorney Glahn's bills to be unreasonable . . . ."
12 Mark Whitney's bills, but only criticized the billing practices
of Edward Hahn. In opposing summary judgment, Rechberger offers
no evidence to show that either Glahn or Whitney billed
excessively or unreasonably for their work on the Jacobi case.
Rechberger does not even argue that their bills were excessive or
unreasonable. Accordingly, to the extent Rechberger's
counterclaim. Count III, is based on fees billed by McLane
attorneys Wilbur Glahn and Mark Whitney, summary judgment is
granted in favor of McLane.
2. McLane's claims against Rechberger, Counts I and II.
McLane also seeks summary judgment that it is entitled to
payment of the amount of undisputed fees and expenses under its
breach of contract and guantum meruit claims. Rechberger
responds that there was no written fee agreement and that his
agreement to hire Edward Hahn to represent him was based on
Hahn's initial representation in May of 1995 that the Jacobi
matter was a $50,000 case that could be defended for $200,000.
Rechberger also contests McLane's guantum meruit claim saying
that the " [d]efendants received no benefit from the Plaintiffs
other than the opportunity for the Plaintiffs simply to generate
a lot of legal fees."
Rechberger does not dispute that an unwritten agreement
13 existed through which he received legal services from the McLane
firm and agreed to pay for those services, to the extent the fees
were reasonable. An agreement that is not reduced to writing may
be based on the parties' oral agreement or on their conduct.3
Goodwin v. Railroad, Inc. v. State, 128 N.H. 595, 604 (1986).
The existence and terms of an unwritten contract are factual
guestions to be determined based upon the intent of the parties
at the time of the agreement as demonstrated by their
circumstances and conduct at that time. Id.; see also Tavlor-
Boren v. Isaac, 723 A.2d 577, 580 (N.H. 1998).
To the extent Rechberger claims the agreement with McLane
was limited to $200,000 in fees based on statements he alleges
Hahn made before Hahn joined the McLane firm, the applicable
facts contradict his interpretations. When Hahn left the Backus
firm and moved to the McLane firm, the Backus firm had already
billed Rechberger $167,507.76 for legal services pertaining to
3Although the defendants (Rechberger and ARC) raised the statute of frauds as an affirmative defense in their answer, they have not pursued a statute of frauds defense in opposition to McLane's motion for summary judgment. For that reason, the court will not consider, sua sponte, whether the statute of frauds, RSA 506:2, would apply in the circumstances of this case. See, e.g., Mclntire v. Woodall, 140 N.H. 228, 231 (1995) (discussing the scope of New Hampshire's statute of frauds); Ives v. Manchester Suburu, Inc., 126 N.H. 796, 799 (1985) (same).
14 the Jacobi case.4 Thereafter, Rechberger received monthly
statements from the McLane firm and apparently paid bills without
protest that amounted to nearly $200,000 more in fees and
expenses for representation in the Jacobi case.
The circumstances show that he agreed to be represented by
the McLane firm, including Attorneys Glahn and Whitney, at the
rates that were charged in the bills. Rechberger does not
contest in his opposition to summary judgment the amount McLane
claims is owed for representation in the Jacobi case by Glahn and
Whitney. Rechberger also does not contest the expenses that were
billed for that representation. The McLane firm's expert witness
provides his opinion that the amounts charged by the McLane firm,
except a charge pertaining to the fee dispute, were reasonable.
In addition, Rechberger does not contest the amounts claimed as
fees and expenses due for representation in the BioSan case and
for general corporate legal services to ARC Partners, Ltd.
Based on the record presented for summary judgment, no factual
dispute exists as to the existence of an agreement between
Rechberger and the McLane firm to provide services for payment of
reasonable fees and expenses as reflected in the invoices for
4And, it seems that Rechberger had paid the bills in a timely manner except for $5,000 that remains outstanding and is the subject of Jon Meyer's counterclaim against Rechberger.
15 services provided by Glahn and Whitney.5
Accordingly, the McLane firm is entitled to partial summary
judgment in its favor on its breach of contract claim Count I
(assumpsit) against Rechberger (and ARC Partners, Ltd.) to the
extent it is seeking payment of fees owed for services by Glahn
and Whitney on the Jacobi case, payment of expenses owed for the
Jacobi case, payment of fees owed for services on the BioSan
case, and fees and expenses for legal services on general
corporate matters.6 The amounts owed as to each of these
services and expenses, except the services of Attorneys Glahn and
Whitney, are stated in the affidavit of Wilbur Glahn attached to
the McLane firm's memorandum in support of its motion for summary
judgment, which Rechberger has not disputed.
With respect to the services of Glahn and Whitney, the
McLane firm asks more broadly that it be awarded fees for all
billed services that were not explicitly found to be unreasonable
by Rechberger's expert witness. Finis Williams. The McLane firm
5The McLane firm has not argued for purposes of summary judgment that its guantum meruit claim would provide a different result, and for that reason it is not considered.
6Since summary judgment has been granted in favor of the McLane firm on Rechberger's counterclaim (Count III), there is no basis for Rechberger's argument that he may be entitled to a reduction in the amount owed the McLane firm.
16 interprets the Williams report to find that only Edward Hahn's
fees were unreasonable. Based on that premise, the McLane firm
subtracts its calculation of the fees attributable to Edward Hahn
from the total amount of fees due for work on the Jacobi case,
and asks for that amount. Although Rechberger does not directly
dispute the McLane firm's calculation, the Williams report cannot
be interpreted as broadly as the McLane firm urges. Instead,
what is clearly undisputed for purposes of summary judgment are
the fees of Glahn and Whitney which may or may not be the
remainder of the fees when Hahn's fees are subtracted.
Accordingly, for purposes of partial summary judgment on
Count I of McLane's complaint, the amounts owed by Rechberger and
ARC Partners, Ltd. to the McLane firm are as follows:
Fees for the BioSan case $ 316.97
Fees for general corporate matters 27,303.00
Expenses for general corporate matters 1,254.21
Expenses for the Jacobi case 27,185.09
Fees for the work of Glahn and Whitney on the Jacobi case to be
submitted by joint statement or affidavit.
The parties are directed to use their best efforts to reach
an agreement as to the fees owed for the services of Attorneys
Glahn and Whitney on the Jacobi case. Assuming that agreement is
reached, the McLane firm shall file a joint statement of the
17 agreed amounts. In the event the parties are unable to agree
despite their best efforts to do so, the McLane firm shall submit
an affidavit documenting the fees claimed for work by Attorneys
Glahn and Whitney on the Jacobi case. Rechberger shall have ten
days from the date the affidavit is filed to file an appropriate
objection to the amounts claimed limited to challenging the
documentation offered for the fees. Because the reasonableness
of the fees charged by Attorneys Glahn and Whitney for work on
the Jacobi case has been resolved, no objection will be permitted
that raises a guestion as to the reasonableness of the fees.
D. Hearing and Attorneys' Fees
Both third-party defendant Jon Meyer and the McLane firm
reguest a hearing on their motions for summary judgment and both
reguest an award of attorneys' fees pursuant to 28 U.S.C.A. §
1927. A hearing on the motions is not necessary. The guestion
of an award of attorneys' fees reguires more consideration.
"Any attorney . . . who so multiplies the proceedings in any
case unreasonably and vexatiously may be reguired by the court to
satisfy personally the excess costs, expenses, and attorneys'
fees reasonably incurred because of such conduct." 28 U.S.C.A. §
1927. The First Circuit does not reguire a showing of an
attorney's subjective bad faith to meet the section 1927
18 standard. Cruz v. Savage, 896 F.2d 626, 631-32 (1st Cir. 1990).
Instead, sanctions may be appropriate under section 1927 if an
attorney's conduct is "unreasonable and harassing or annoying"
judged from an objective standard, whether or not the attorney
intends to harass or annoy. I d . at 632. To be vexatious under
section 1927, however, the attorney's conduct must "be more
severe than mere negligence, inadvertence, or incompetence." Id.
_____ Counsel for Jon Meyer represents in his motion for sanctions
that he asked Rechberger to voluntarily dismiss the remaining
claim against Meyer, Count III, in light of the fact that
Rechberger paid virtually all of Meyer's bills without protest.
Counsel for Rechberger refused, and counsel filed a motion for
judgment on the pleadings. Rechberger objected to judgment on
the pleadings asking that he be allowed to establish his claim
that Meyer's fees were unreasonable through expert opinion. When
Rechberger disclosed his expert witness's opinion that Meyer's
fees were reasonable, Meyer's counsel again contacted
Rechberger's counsel to resolve Count III without success.
Counsel then filed a motion for summary judgment on Meyer's
behalf, and judgment is granted in Meyer's favor on Count III.
Counsel for the McLane firm also communicated with
Rechberger's counsel before filing the motion for partial summary
judgment attempting to resolve payment of the undisputed fees
19 based in part on the opinion of Rechberger's expert witness.
Rechberger's counsel's response was unhelpful, first claiming
that he did not understand the letter, and then debating whether
partial judgment can be entered on an undisputed amount. The
motion for partial summary judgment has been granted in McLane's
favor.
Counsel for Rechberger has not addressed the issue of
sanctions under 28 U.S.C.A. § 1927. In addition to the
circumstances presented by counsel for Meyer and the McLane firm,
the court notes that Rechberger's responses to the motions were
unhelpful and in large part were based on out-of-date cases from
other jurisdictions. See Pimentel v. Jacobsen Fishing Co . , 102
F.3d 638, 641 (1st Cir. 1996) (imposing sanctions for counsel's
"litigation tactics" including citing distinguishable authority
from other jurisdictions and omitting pertinent authority from
the First Circuit). Counsel's conduct seems to have been
sufficiently unreasonable and vexatious to justify the imposition
of sanctions to be paid by counsel, not by the client.
Accordingly, counsel pro hac vice Valeriano Diviacchi and New
Hampshire counsel Karen Breda shall show cause why they should
not have sanctions assessed against them to pay the reasonable
attorneys' fees and costs associated with the motion for judgment
on the pleadings and motion for summary judgment filed on behalf
20 of Jon Meyer and the motion for partial summary judgment filed on
behalf of the McLane firm. Counsel shall have ten days from the
date of this order to file an appropriate memorandum to show
cause why sanctions should not be assessed against them.
E. Settlement
The parties and their counsel are strongly urged to meet to
discuss settlement of the remaining claims in this case. The
claims are now sufficiently clear to allow a thorough review of
the case and the remaining parties' potential liabilities. The
court reminds all parties and their counsel that it expects a
good faith effort to reach settlement to avoid any unnecessary
expenditure of time and resources by the court and by the parties
and their counsel. All counsel shall provide copies of this
order to their clients for the purpose of facilitating settlement
of this case.
Conclusion
For the foregoing reasons, Jon Meyer's motion for summary
judgment (document no. 64) is granted except as to an award of
attorneys' fees, which is taken under advisement. Meyer's motion
for judgment on the pleadings (document no. 57) is denied as
moot. Rechberger's motion for leave to file an amended complaint
21 (document no. 69) is denied. Because Jon Meyer has a third-party
counterclaim against Rechberger, he continues to be a party.
The McLane firm's motion for partial summary judgment
(document no. 65) is granted except as to a determination of a
portion of the fees as explained in this order and as to an award
of attorneys' fees, which is taken under advisement. The McLane
firm's motion for a hearing (document no. 72) is denied.
Counsel for Rechberger, Valeriano Diviacchi and Karen Breda,
are granted ten days from the date of this order to file a
memorandum to show cause why sanctions pursuant to 28 U.S.C.A. §
1927 should not be assessed against them.
SO ORDERED.
Joseph A. DiClerico, Jr. District Judge
April 29, 1999
cc: James C. Wheat, Esguire Karen Schultz Breda, Esguire Valeriano Diviacchi, Esguire Robert R. Lucic, Esguire Peter G. Beeson, Esguire