Gresh, D. v. Conemaugh Health System

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DENNIS GRESH, PERSONAL : IN THE SUPERIOR COURT OF
REPRESENTATIVE AND/OR GUARDIAN : PENNSYLVANIA
AD LITEM OF THE ESTATE OF :
CATHERINE GRESH, :
:
v. :
:
CONEMAUGH HEALTH SYSTEM, INC., :
CONEMAUGH VALLEY MEMORIAL :
HOSPITAL, INC. AND PHILLIP :
GVOZDEN, M.D., :
:
:
APPEAL OF: DENNIS GRESH, :
:
Appellant : No. 1261 WDA 2014
Appeal from the Order entered on June 23, 2014
in the Court of Common Pleas of Cambria County,
Civil Division, No. 2004-1741
BEFORE: BENDER, P.J.E., JENKINS and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED September 1, 2015
Dennis Gresh (“Gresh”) appeals from the Order directing Conemaugh
Health Systems, Inc., Conemaugh Valley Memorial Hospital, Inc., and Phillip
Gvozden, M.D. (collectively “Defendants”) to pay the amount specified in the
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settlement agreement.1 We affirm.
Gresh is the guardian of the estate of his mother, Catherine Gresh
(“Catherine”). Gresh retained Victor Pribanic (“Attorney Pribanic”) of
Pribanic & Pribanic to file a medical malpractice lawsuit against Defendants.
Gresh subsequently filed a Complaint, alleging that Defendants committed
malpractice, which resulted in Catherine’s death.
In November 2012, Attorney Pribanic settled the lawsuit against
Defendants for $800,000. Attorney Pribanic prepared a Petition to Approve
Settlement. Gresh, however, refused to sign the verification to the Petition
because it stated that counsel fees were to be 40% of the settlement
amount. Gresh stated that Attorney Pribanic had agreed to be paid $175 an
hour, and there was no evidence of a written contingent fee agreement.
On April 30, 2014, the Defendants filed a Motion to Enforce
Settlement. In response, Attorney Pribanic filed the earlier prepared Petition
to Approve Settlement on May 20, 2014. The trial court approved the
settlement on May 27, 2014.
1
The Order is in the form of a final judgment. See Ruspi v. Glatz, 69 A.3d
680, 682 n.1 (Pa. Super. 2013) (stating that “[a]ppeals to this Court are
usually permitted only after entry of a final judgment[.]”) (citation omitted).
Moreover, the Order was the final pronouncement in the case. See
Johnston the Florist, Inc. v. Tedco Constr. Corp., 657 A.2d 511, 513
(Pa. Super. 1995) (stating that “[a]s long as the order from which a party
appeals was clearly intended to be a final pronouncement on the matters
discussed . . . the appeal is properly before us and . . . we have jurisdiction
to address the parties’ claims.”) (citation omitted). Thus, we will address
Gresh’s appeal.
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Gresh expressed concerns about the contingent fee agreement, so the
trial court scheduled a hearing for June 14, 2014.2 On June 23, 2014, the
trial court entered an Order confirming its prior Order approving the
settlement. That same day, the trial court entered a separate Order
directing the Defendants to pay $800,000 to Gresh, and for Gresh to pay
Pribanic & Pribanic $320,000. Gresh filed a Notice of Appeal.
On appeal, Gresh raises the following questions for our review:
1. Did [Gresh] consent to the payment of $320,000.00 to
[Attorney Pribanic]?
2. May a lawyer collect a contingent fee without producing a
copy of a written contingent fee agreement?
3. Did the lower court abuse its discretion in approving the
distribution of $320,000.00 to [Attorney Pribanic]?
Brief for Appellant at 6.3
In his first claim, Gresh contends that his appeal should not be
quashed, as he did not consent to the payment of $320,000.00 to Pribanic &
Pribanic. Id. at 13.
Here, the Order dated June 23, 2014 states “AND NOW, this 23rd day
of June, 2014, with the consent of all parties, [the Defendant’s insurer]
is directed to pay the settlement. . . .” Order, 6/23/14, at 1 (emphasis
added); see also Karkaria v. Karkaria, 592 A.2d 64, 71 (Pa. Super. 1991)
2
Gresh did not file a Motion or Petition. Nevertheless, based on Gresh’s
concerns, the trial court held a hearing.
3
We will address Gresh’s second and third claims together as both relate to
the existence of an oral contingent fee agreement.
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(stating that a party who has acquiesced to an order or judgment will not
later be heard to challenge it). As a result, this Court issued a rule to
demonstrate why the appeal should not be quashed. Gresh filed a timely
response, stating that he did not agree to pay the contingent fee. This Court
discharged the rule to show cause because Gresh disputed the amount of
fees awarded to Pribanic & Pribanic. Pribanic & Pribanic does not seek to
quash the appeal in its appellate brief. Thus, we will address Gresh’s
remaining claims.
In his second claim, Gresh argues that Pribanic & Pribanic cannot
collect a contingent fee without having a contingent fee agreement in
writing, as required by the Pennsylvania Rule of Professional Conduct
1.5(c).4 Brief for Appellant at 15-18. Since Pribanic & Pribanic cannot
produce the written contingent fee agreement, Gresh asserts that Pribanic &
Pribanic cannot collect their contingent fee, but instead can file a claim for
legal fees based upon quantum meruit. Id. at 19.
4
Pennsylvania Rule of Professional Conduct Rule 1.5(c) states the following:
A fee may be contingent on the outcome of the matter for which
the service is rendered, except in a matter in which a contingent
fee is prohibited by paragraph (d) or other law. A contingent fee
agreement shall be in writing and shall state the method by
which the fee is to be determined, including the percentage or
percentages that shall accrue to the lawyer in the event of
settlement, trial or appeal, litigation and other expenses to be
deducted from recovery, and whether such expenses are to be
deducted from the recovery or after the contingent fee is
calculated.
Pa.R.P.C. 1.5(c).
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In his third claim, Gresh argues that the trial court abused its
discretion by confirming the settlement distribution. Brief for Appellant at
20. Gresh asserts that the trial court conducted “a sham hearing,” during
which Pribanic & Pribanic failed to produce the written contingent fee
agreement or the lawyer who obtained the agreement. Id. at 23-25. Gresh
contends that the trial court credited the testimony of Attorney Pribanic
solely because of Attorney Prianic’s profession and the judge’s experience
handling medical malpractice cases. Id. at 24-25. Because Gresh believes
the trial court abused its discretion and showed partiality toward Attorney
Pribanic, Gresh asserts that he should be given a new hearing in front of a
different judge. Id. at 25-26.
“An agreement between an attorney and a client on a contingent fee
basis is a legal and valid contract and as such is entitled to the protection of
the law.” Richette v. Pa.R.R., 187 A.2d 910, 912 (Pa. 1963). Contract
interpretation is a question of law, and thus, our standard of review is
plenary. Krasinger v. Krasinger, 928 A.2d 333, 339 (Pa. Super. 2007).
The cardinal rule in the interpretation of contracts is to ascertain
the intention of the parties and to give effect to that intention if
it can be done consistently with legal principles. In construing a
contract the intention of the parties must be ascertained from
the entire instrument and each and every part of it must be
taken into consideration and given effect if reasonably
possible.... Moreover, in order to ascertain that intention, the
court may take into consideration the surrounding
circumstances, the situation of the parties, the objects they
apparently have in view, and the nature of the subject-matter
agreement.
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Int’l Org. Master, Mates etc. v. Int’l Org. Masters, Mates & Pilots,
Inc., 439 A.2d 621, 624 (Pa. 1981) (citations and quotation marks omitted).
At the hearing, Attorney Pribanic testified that on May 21, 2013, at
11:56 a.m., he spoke with Gresh over the phone, and Gresh indicated that
he knew he had signed a contingent fee agreement and confirmed that the
fee would be 40% of the settlement amount. N.T., 6/23/14, at 6. Attorney
Pribanic further testified that he has never, in his career, agreed to try a
medical malpractice case on an hourly rate, and even if he had, it would
have been at a much higher rate than $175 an hour. Id. at 11.
Gresh countered, testifying that he and Attorney Pribanic agreed that
the case would be charged on an hourly basis, plus expenses. Id. Gresh
asserts that he did not sign a contingent fee agreement, was never aware
that such an agreement existed, and that he never subsequently confirmed
that he had signed an agreement. Id. 10-11.
Judge Patrick T. Kiniry (“Judge Kiniry”) noted his reasoning for
confirming the existence of an oral contingent fee agreement as follows:
“[W]hen I was in private practice[,] I did personal injury cases.
The normal way to handle a personal injury case was on a
percentage basis, although there were times when someone
would request an hourly rate. Since I have been a judge now for
4½ years[,] I have handled exclusively all of the medical
malpractice cases, and all of them have been handled on a
contingent fee basis, not an hourly basis. I am also familiar with
[Attorney] Pribanic having been in front of me a number of
times. He is an officer of the [c]ourt. He is guided by the rules
of professional responsibility. I have no reason to disbelieve
[Attorney] Pribanic on the way that he and his firm handled this
case.
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Id. at 12-13.
Here, the trial court determined that the testimony of Attorney
Pribanic was more credible then the testimony of Gresh. See Thomson v.
Thomson, 519 A.2d 483, 487 (Pa. Super. 1986) (stating that “credibility of
witnesses is for the factfinder to determine as [the factfinder] has the
parties before [it] and can observe their demeanor and attitude and can
make a more reasonable assessment of where the truth lies than can the
reviewing court.”). Based upon the record, we conclude that the trial court
did not abuse its discretion in requiring Gresh to pay Pribanic & Pribanic a
40% contingent fee agreement despite the absence of a written agreement.
See Silverstein v. Hornick, 103 A.2d 734, 737 (Pa. 1954) (stating that
“[w]here the existence of a contract for a [contingent fee] is established,
and the testimony establishes that it is reasonable, it will be upheld, even
though verbal.”); see also Novinger v. E.I. Du Pont de Nemours & Co.,
809 F.2d 212, 218 (3d Cir. 1987) (stating that “[a]lthough Pennsylvania Civil
Procedure Rule 202[5] requires that contingent fee agreements be in writing,
the absence of such a writing does not make oral contingent fee agreements
unenforceable”) (footnote added); Int’l Org. Master, Mates, etc., 439
A.2d at 624 (stating that when determining the validity of an oral
agreement, the trial court can consider “the surrounding circumstances, the
5
Pa.R.P.C. 202 was repealed and replaced by Pa.R.P.C. 1.5(c).
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situation of the parties, the objects they apparently have in view, and the
nature of the subject-matter agreement.”).6
Further, the Rules of Professional Conduct do not prescribe substantive
duties on attorneys to have a written contingent fee agreement. See In re
Adoption of M.M.H., 981 A.2d 261, 272 (Pa. 2009) (stating that “[t]he
Rules of Professional Conduct do not have the effect of substantive law but,
instead, are to be employed in disciplinary proceedings.”); see also
Pa.R.P.C., Preamble (stating that a “violation of a Rule should not give rise
to a cause of action nor should it create any presumption that a legal duty
has been breached.”). Therefore, the trial court did not abuse its discretion
6
We note that Gresh relies upon Judge Gwilym A. Price’s opinion in reversal
in Frank v. Peckich, 391 A.2d 624, 638-41 (Pa. Super. 1978), to support
his claim that lawyers should not be allowed to collect a contingent fee if it is
not in writing. Brief for Appellant at 16-17. In Frank, because the judges
were equally divided, the judgment of the trial court was affirmed. Thus,
Gresh’s reliance on the opinion in reversal, which is not precedential, does
not entitle Gresh to relief. Further, in his reply brief, Gresh cites to Pa.R.C.P.
2206, Settlement, Compromise, Discontinuance, and Judgment, to support
his claim. Reply Brief for Appellant at 2, 4. However, an appellant cannot
raise a new issue in a reply brief. See Pa.R.A.P 2113(a) (stating that a reply
brief is limited to the issues raised in appellee’s brief); see also
Commonwealth v. Ly, 980 A.2d 61, 91 (Pa. 2009) (stating that the reply
brief is an inappropriate means for presenting a new issue). Nevertheless,
Gresh has not demonstrated that Rule 2206 requires a written contingent
fee agreement.
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and properly entered the Order directing payment of the settlement.7
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/1/2015
7
Gresh also argues that the trial court abused its discretion by failing to
notify his siblings about the hearing because they both had an interest in the
outcome of the proceedings, and Gresh, as a non-attorney, could not
represent their interests. Brief for Appellant at 24. While it is true that
Gresh could not represent his siblings’ interests, their presence at the
hearing would not have changed the outcome of the proceedings and holding
another hearing would be a useless gesture. See id. (wherein Gresh does
not present an argument regarding what testimony or evidence his siblings
would have presented at the hearing to contradict the existence of an oral
contingent fee agreement).
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