Ruby v. Abington Memorial Hospital

50 A.3d 128, 2012 Pa. Super. 114, 2012 WL 1940570, 2012 Pa. Super. LEXIS 1036
CourtSupreme Court of Pennsylvania
DecidedMay 30, 2012
StatusPublished
Cited by23 cases

This text of 50 A.3d 128 (Ruby v. Abington Memorial Hospital) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ruby v. Abington Memorial Hospital, 50 A.3d 128, 2012 Pa. Super. 114, 2012 WL 1940570, 2012 Pa. Super. LEXIS 1036 (Pa. 2012).

Opinion

OPINION BY

SHOGAN, J.:

Appellant, Young, Ricchiuti, Caldwell & Heller, LLC (“YRCH”), appeals from the trial court’s May 26, 2011 order denying YRCH’s Petition for Determination of Attorneys’ Fees and ordering that an earlier attorneys’ fee award be apportioned such that Appellee, The Beasley Firm, LLC (“Beasley”), receives 75% of the fees and YRCH receives the remaining 25%. We affirm.

[130]*130The trial court set forth the factual and procedural history of this matter as follows:

Mr. Keith Erbstein, Esquire worked at the Beasley Firm, LLC., a Philadelphia-based personal injury law firm, for approximately 35 years. During the course of his employment with the Beasley Firm (hereinafter: Beasley or the Beasley Firm), Mr. Erbstein signed two separate employment contracts. The Undersigned ultimately found the two aforementioned contracts controlled the determination of the Petition for Determination of Attorneys’ Fees.
This Court is convinced that Mr. Erb-stein was a highly intelligent, skilled and knowledgeable attorney at the time that he signed the employment contracts material hereto. The record reveals that in 1996 Mr. Erbstein signed an “Employment Agreement” with Beasley, wherein Mr. Erbstein specifically agreed to immediately reimburse the Beasley Firm any outstanding case costs and pay 75% of any fees recovered thereon should he leave the firm for any reason. {See, 1996 Employment Agreement, ¶ 8.) Thereafter, in 2004, Mr. Erbstein signed the “Operating Agreement,” a second employment contract, with Beasley, wherein Mr. Erbstein once again confirmed his willingness to comport with the Firm’s employment terms.
To elucidate matters for the Appellate Court, the record confirms that Mr. Erbstein committed himself to the terms of the 2004 Operating Agreement in August 2004.1 The Undersigned found that Mr. Erbstein agreed to the following material terms. First, “Withdrawal Require[d] by Firm” in § 9.2 of the 2004 Operating Agreement holds:
Subject to the provisions of Section 9.4 [‘Obligations to Withdrawn Member’] below, the Management Committee may at any time require a Member to withdraw from the Firm at any specified date by giving not less than three (3) months’ prior written notice to such Member [... ]
Second, the record reflects that Mr. Erbstein also agreed to § 9.5 governing the future handling of ‘Client Files’ and holds:
(i) As to all client files which a withdrawing Member may take, pursuant to the written direction to the Firm by the respective Client, the withdrawing Member shall, prior to withdrawal from the Firm, bill each such file; accurately account for time dedicated to a client file; provide an accounting to the Firm for all files, fees owed thereon and unreimbursed expenditures due and owing, up through the date of withdrawal; and all such fees and unreimbursed expenditures shall be payable to and remain the sole property of the Firm, (emphasis added).
[•••]
(iii) Other provisions of this Agreement notwithstanding, with reference to all ‘contingency fee’ cases succeeded to by the withdrawing Member pursuant to the terms of this Agreement, unless otherwise established by the Managing Member, the withdrawing Member shall account to the Firm for all fee arrangements on all such files in accordance with the provisions of Exhibit ‘C’ [which is ‘Form-Employment Agreement’ confirming the aforementioned split fee agreement] hereto2 (emphasis added).
Thereafter, in October 2004, Mr. Erb-stein brought the above-captioned negligence case into the Beasley Firm. The Plaintiffs in the Ruby matter signed a contingency fee agreement with the [131]*131Beasley Firm and Mr. Erbstein. The record indicates that the action was instituted shortly thereafter. The case continued through the normal uneventful litigation course while Mr. Erbstein was at Beasley.
Unfortunately, for reasons not disclosed to this Court, on November 17, 2005, Mr. Erbstein was notified in writing that he was going to be released from the Beasley Firm on February 17, 2006, three (3) months notice, in accordance with § 9.2 of the 2004 Operating Agreement. Thereafter, Mr. Erbstein obtained employment with the law firm of Young, Ricchiuti, Caldwell & Heller, LLC (hereinafter: YRCH). Mr. Erb-stein worked his last day at Beasley on January 26, 2006.
On January 28, 2006, Mr. Erbstein notified the Rubys about his change in employment. In line with the terms of the employment agreements, Mr. Erb-stein gave the Rubys the choice to continue their relationship with Beasley or to follow him to his new practice. The Rubys opted to have their case litigated by Mr. Erbstein as opposed to the Beasley Firm. As such, at the direction of Mr. Erbstein, the Rubys severed their relationship with the Beasley Firm and signed an almost identical contingency fee agreement with YRCH. Importantly, the record reveals that Mr. Erbstein maintained control of the file until sometime in the summer of 2008, when he contracted a severe illness. (See, YRCH Memorandum of Law in Support of Petition for Attorneys’ Fees filed 8.11.11). Thereafter, other members of the YRCH Firm handled the case and brought it to its ultimate resolution in January 2011. (See, YRCH Memorandum of Law in Support of Petition for Attorneys’ Fees filed 3.11.11). Subsequent to the settlement, a dispute arose regarding the distribution of the
$643,333.32 in attorneys’ fees between YRCH and Beasley. The matter was transferred from Montgomery County Orphans Court to the Undersigned for resolution. The Undersigned entertained several memorandums of law and oral argument on the dispute. Thereafter, this Court entered its May 20, 2011 Order determining that the Appellant, the law firm YRCH is only entitled to 25% of the attorneys’ fees and the Ap-pellee, the Beasley Firm, shall receive 75% of the fee, pursuant to the contracts) which Mr. Erbstein signed while working at the Beasley Firm.

Trial Court Opinion, 10/13/11, at 1-4 (emphasis in original).

YRCH presents the following issues for this Court’s consideration:

1. Can a law firm enforce an agreement with its members against another law firm not party to that agreement?
2. Can a law firm that discharges one of its members successfully assert a claim for work performed on his contingency fee cases so far in excess of quantum meruit that both his ability to practice law and his [132]*132clients’ rights to choose counsel are compromised?

YRCH’s Brief at 2.

The trial court’s determination in this case is based on its interpretation of the 1996 Employment Agreement and 2004 Operating Agreement. Accordingly, our standard and scope of review is as follows:

Because contract interpretation is a question of law, this Court is not bound by the trial court’s interpretation. Our standard of review over questions of law is de novo and to the extent necessary, the scope of our review is plenary as the appellate court may review the entire record in making its decision. However, we are bound by the trial court’s credibility determinations.

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Bluebook (online)
50 A.3d 128, 2012 Pa. Super. 114, 2012 WL 1940570, 2012 Pa. Super. LEXIS 1036, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ruby-v-abington-memorial-hospital-pa-2012.