SCF Consulting, LLC, Aplt. v. Barrack Rodos

• Court: Supreme Court of Pennsylvania
• Decided: December 19, 2017
• Docket: 7 EAP 2017
• Status: Published

Opinion

[J-58-2017] [MO: Saylor, C.J.] IN THE SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT

SCF CONSULTING, LLC, : No. 7 EAP 2017 : Appellant : Appeal from the Judgment of Superior : Court entered on 7/8/2016 at No. 1413 : EDA 2015 affirming the Order entered v. : on 4/24/2015 in the Court of Common : Pleas, Philadelphia County, Civil : Division at No. 01613 February Term, BARRACK, RODOS & BACINE, : 2015. : Appellee : ARGUED: September 12, 2017

CONCURRING OPINION

JUSTICE DOUGHERTY DECIDED: December 19, 2017

I join the Opinion Announcing the Judgment of the Court (“OAJC”) in full, and

agree that fee-splitting agreements between attorneys and non-attorneys should not be

held to be automatically unenforceable. See OAJC, slip op. at 6. I write separately to

articulate an additional danger of a bright-line per se rule. As noted by Justice Wecht in

his dissenting opinion, holding fee-splitting agreements between attorneys and non-

attorneys are always unenforceable may not discourage attorneys from entering into

such unenforceable agreements. Dissenting Opinion at 3. In fact, it is my view that a

per se rule might have the effect of emboldening unscrupulous attorneys — who are

often in a superior negotiating posture as compared with their non-attorney contracting

counterparts — to enter into illusory fee-splitting agreements with full knowledge the

agreement may never be enforced. See, e.g., Geisinger Clinic v. Di Cuccio, 606 A.2d

509, 512 (Pa. Super. 1992) (“If the promise is entirely optional with the promisor, it is said to be illusory and, therefore, lacking consideration and unenforceable. The

promisor has committed him/herself to nothing.”) (internal citations omitted). Under

such circumstances, the non-attorney who has performed under the contract, seeks

payment and is rebuffed, will be left without a remedy at law for the breach. Even if

equitable remedies are available, their outcome is far less certain and potentially more

limited than an action for breach of contract. See, e.g., D.A. Hill Co. v. Clevetrust Realty

Investors, 573 A.2d 1005, 1009 (Pa. 1990) (to recover under equitable theory of unjust

enrichment, party seeking recovery must demonstrate other party received and retained

benefit without providing compensation); Meehan v. Cheltenham Twp., 189 A.2d 593,

595 (Pa. 1963) (to recover under equitable remedy of unjust enrichment, party seeking

restitution must demonstrate: “(1) an enrichment, and (2) an injustice resulting if

recovery for the enrichment is denied.”); see also Burgettstown-Smith Twp. Joint

Sewage Auth. v. Langeloth Townsite Co., 588 A.2d 43, 45 (Pa. Super. 1991) (“The most

significant requirement for recovery is that the enrichment is unjust. We must focus not

on the intention of the parties but on the extent [to which] the enrichment is unjust.”)

(internal citations omitted).

In my view, allowing a case-by-case determination of the validity of a given fee-

splitting agreement via a breach of contract action will not undermine or conflict with any

additional potential consequences an attorney may face in disciplinary proceedings for

running afoul of the Rules of Professional Conduct.

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