Underground Storage Tank Indemnification Fund v. Morris & Clemm, PC

107 A.3d 269
CourtCommonwealth Court of Pennsylvania
DecidedDecember 30, 2014
StatusPublished

This text of 107 A.3d 269 (Underground Storage Tank Indemnification Fund v. Morris & Clemm, PC) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Underground Storage Tank Indemnification Fund v. Morris & Clemm, PC, 107 A.3d 269 (Pa. Ct. App. 2014).

Opinion

OPINION BY

Judge BROBSON.

Morris & Clemm, P.C. (Law Firm), Robert F. Morris (Morris), and Patrick J. Stanley (Stanley) (collectively, Moving Parties), in an action in this Court’s original jurisdiction, move for summary judgment against the Underground Storage Tank Indemnification Fund (USTIF). For the reasons discussed below, the motion is denied.

The factual background of this case stretches back more than a decade. In 1998, Stanley installed new underground storage tanks at his place of business, the Penndel Service Center. After installation, the soil surrounding the tank was tested for contaminants. During this testing, one of the tanks was damaged, causing gasoline to leak into the soil. Corrective action, including investigation and remediation, was required as a result of the leak. USTIF, acting in accordance with its statutory obligation, paid for corrective action costs totaling $807,000, and it had a subro-gation interest in recovering that amount.1

On July 6, 2001, Stanley filed an action in the Court of Common Pleas of Bucks County against Environmental Consulting, Inc.; Northeast Regional Probing, Inc.; and Monridge Construction, Inc. for damages arising from the gasoline leak (Common Pleas Action). Stanley then entered into a contingent fee arrangement with Morris of Law Firm to represent him in the suit. This contingent fee agreement provided that Morris and Law Firm would receive one-third of “whatever sum is paid to [Stanley] or on [his] behalf as a result of this claim, either by way of settlement or verdict.” (Moving Parties’ Mot. for Summ. J., Ex. C.) USTIF retained its own counsel, Rawel and Henderson, LLP (R & H), and on April 2, 2003, petitioned to intervene in the Common Pleas Action in order to protect its subrogation interest. Stanley and Morris initially opposed US-TIF’s intervention on the basis that they were adequately protecting USTIF’s interests, but they later consented to the intervention.

The parties eventually settled the Common Pleas Action for $752,000. It is from this settlement that the instant case arises. The settlement allocated proceeds between Stanley and USTIF, with Stanley receiving $250,000 and USTIF receiving $502,000. The settlement funds were sent to Morris for distribution. Morris distributed the funds to Stanley, withholding one-third of Stanley’s portion (approximately $83,000) in accordance with the contingent fee agreement. Morris also distributed USTIF’s funds, after also withholding one-third of USTIF’s settlement proceeds (approximately $167,333 — the disputed funds). Morris informed USTIF that he had withheld one-third of the funds in payment of his contingent fee based upon the authority of Shearer v. Moore, 277 Pa.Super. 70, 419 A.2d 665 (1980). USTIF informed Morris that he had no authority under the terms of the settlement agreement to withhold the disputed funds and that his reliance on Shearer was misplaced.

Shortly thereafter Law Firm commenced an action in the Court of Common Pleas of Montgomery County to compel USTIF to pay the $167,333 as its “pro-rata share of the fee for [Law Firm’s] services [271]*271in recovering the [settlement] funds.” Law Firm’s complaint contained three counts-equity, an attorney charging lien, and a declaratory judgment action, each asking that the common pleas court recognize Law Firm’s right to the disputed funds and allow Law Firm to disburse the disputed funds to itself.2

USTIF commenced a separate action in this Court’s original jurisdiction against Law Firm, Morris, and Stanley, seeking to recover the remaining portion of its settlement proceeds — i.e., the same $167,333 that was subject to the action in the Court of Common Pleas of Montgomery County. USTIF’s complaint also contained three counts — conversion, unjust enrichment, and conspiracy, each asking this Court to enter judgment in USTIF’s favor for the disputed funds, as well as interest, costs, punitive damages, and attorney’s fees.

The Court of Common Pleas of Montgomery County transferred Law Firm’s action to this Court’s original jurisdiction by stipulation of the parties and order. Our Court consolidated the cases sua sponte.3 Thereafter, the Moving Parties filed a Motion for Summary Judgment.

The Moving Parties assert that discovery is completed and that no genuine issues of material fact exist. They argue that they are entitled under various equitable theories4 to summary judgment, because Morris was lead counsel for both Stanley and USTIF, and USTIF failed to litigate its own claims in the Common Pleas Action, relying instead upon Morris to achieve a favorable outcome.

USTIF filed a Response in Opposition to the Motion for Summary Judgment,5 asserting, first, that the motion was premature because discovery is not yet complete and, second, that genuine issues of material fact exist. USTIF emphatically disputes Morris’s claim that he was lead counsel for USTIF and that USTIF relied - upon Morris to litigate the Common Pleas Action. Third, USTIF argues that even if no genuine issues of material fact exist, the Moving Parties are not entitled to payment from USTIF under any theory.6

[272]*272Summary judgment is appropriately granted only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. 401 Fourth St, Inc. v. Investors Ins. Grp., 583 Pa. 445, 879 A.2d 166, 175 n. 4 (2005); Pa. R.C.P. No. 1035.2.7 A party is entitled to judgment as a matter of law only where the entire record, including all pleadings, depositions, answers to interrogatories, admissions, affidavits and expert reports, establishes that the moving party’s right is “clear and free from doubt.” LJL Trnnsp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 962 A.2d 639, 647 (2009). We examine the record in the light most favorable to the non-moving party, and any doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Id.

The Moving Parties assert a subrogation claim against USTIF, relying on Shearer v. Moore, 277 Pa.Super. 70, 419 A.2d 665 (1980). In Shearer, Tracy Shearer, a minor and welfare recipient, was seriously injured when she was struck by a car driven by John Moore. The Department of Public Welfare paid for Tracy’s medical expenses, in the amount of $1,703. Tracy’s guardian filed suit against Moore on behalf of Tracy and ultimately settled the case for $20,000. Prior to distribution of the funds, the Commonwealth intervened and demanded reimbursement of the medical expenses paid on Tracy’s behalf. The trial court awarded $1,118.31 to the Commonwealth, reducing its recovery by a proportionate share of Tracy’s attorney’s fees and costs. On appeal, the Superior Court noted that the Commonwealth had not intervened until after Tracy’s attorney created a fund by settling the case. The court explained:

In effect, the Commonwealth became subrogated to the rights of [Tracy] to the extent of $1,703.

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874 A.2d 1 (Supreme Court of Pennsylvania, 2005)
LJL Transportation, Inc. v. Pilot Air Freight Corp.
962 A.2d 639 (Supreme Court of Pennsylvania, 2009)
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544 A.2d 1318 (Supreme Court of Pennsylvania, 1988)
Shearer v. Moore
419 A.2d 665 (Superior Court of Pennsylvania, 1980)
401 Fourth Street, Inc. v. Investors Insurance Group
879 A.2d 166 (Supreme Court of Pennsylvania, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
107 A.3d 269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underground-storage-tank-indemnification-fund-v-morris-clemm-pc-pacommwct-2014.