Est. of Theodore R. Flint v. Giansante, L.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ESTATE OF THEODORE R. FLINT, : IN THE SUPERIOR COURT OF
DEBORAH D. FLINT AND POLYMERIC : PENNSYLVANIA
SYSTEMS, INC.
v.
LOUIS GIANSANTE, ESQ., AND
GIANSANTE & COBB, LLC JOSEPH A. :
MCGINLEY, ESQUIRE AND JOSEPH A. :
MCGINLEY, ATTORNEY, LLC
APPEAL OF: JOSEPH A. MCGINLEY,
ESQUIRE No. 3340 EDA 2018
Appeal from the Order Dated October 22, 2018
In the Court of Common Pleas of Chester County
Civil Division at No(s): 04-09152
BEFORE: BENDER, P.J.E., GANTMAN, P.J.E., and COLINS*, J.
MEMORANDUM BY GANTMAN, P.J.E.: FILED AUGUST 02, 2019
Appellant, Joseph A. McGinley, appeals from the order entered in the
Chester County Court of Common Pleas, which granted the motion of
Appellees, Estate of Theodore R. Flint, Deborah D. Flint, and Polymeric
Systems, Inc., to enter judgment per the agreed -upon settlement and
conclude all causes of action. For the following reasons, we affirm.
The relevant facts and procedural history of this case are as follows. On
August 20, 1996, Mr. and Mrs. Flint retained Appellant and Louis Giansante to
represent them in litigation concerning asbestos and other contaminants on
their commercial property where they operated their business, Polymeric
Retired Senior Judge assigned to the Superior Court.
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Systems, Inc. ("PSI"). At that time, both attorneys worked for Lavin,
Coleman, Finarreli, & Gray ("Lavin"), but both attorneys later left and each
established his own separate practice. Following their departure from Lavin,
the attorneys agreed to continue representing the Flints under the same 1996
fee agreement. The fee agreement provided for a one-third contingent fee
for any monetary reward, and a $135.00 hourly fee for time spent seeking
non -monetary relief. Specifically, the agreement stated:
3. Clients agree to pay for Attorneys' services in connection
with this claim by payment of [one-third] of the net recovery
whether recovery is made by settlement, verdict or
judgment.
6. If it becomes necessary to enter into negotiations with
Insurance Companies or other entities to seek non -
monetary relief, such as indemnification, on the clients'
behalf our charges for services will be at the hourly Attorney
rate of $135.
(See Contingent Fee Agreement, dated 8/20/96, at 1; R.R. at R-84.)
The Flints' case soon disintegrated after they lost several pre-trial
motions. As a result, on June 24, 2004, the Flints settled for a cash amount
of $40,800.00, which was much lower than the multi -million dollars they had
originally sought. The settlement also provided that the defendants in the
contamination litigation would bear two-thirds of the cost of completing an
environmental assessment of the property. Following settlement, Appellant
and Attorney Giansante demanded one-third of the $40,800.00 (or
$13,600.00), plus they claimed they were additionally owed $135.00/hour for
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every hour spent working on the case from 2001 to 2004. The Flints refused
to pay, so Attorney Giansante sued the Flints in New Jersey; and Appellant
threatened to file a similar lawsuit against the Flints in Pennsylvania.
On November 8, 2004, Appellees (the Flints and PSI) filed a complaint
for (1) declaratory judgment regarding the amount of fees owed and (2)
attorney's fees and costs in defending against the demand for additional legal
fees. The court entered an order on August 4, 2006, in which the court
determined the fee agreement was clear on its face and the attorneys were
not entitled to payment of $135.00/hour for all hours spent on the case. The
court also decided the matter could proceed to trial on the question of how
many hours the attorneys had spent negotiating for non -monetary relief (for
which they would be entitled to $135.00/hour) and whether the attorneys
owed the Flints reimbursement for attorney's fees and the costs of litigating
the declaratory judgment action. Appellant and Attorney Giansante filed
separate appeals, which this Court consolidated.
On November 15, 2007, this Court quashed the appeals as interlocutory
and remanded for further proceedings, stating the August 4, 2006 order was
not a final order because it failed to resolve all outstanding claims; our
Supreme Court denied allowance of appeal on December 24, 2008. See Flint
v. Giansante, 944 A.2d 807 (Pa.Super. 2007), appeal denied, 599 Pa. 710,
962 A.2d 1197 (2008). The case remained dormant for several years due to
administrative orders and other delays. On August 22, 2013, Appellant and
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Attorney Giansante filed a joint motion to reconsider the August 4, 2006 order.
The court denied the motion on January 15, 2016.
On November 14, 2017, the date scheduled for trial, the parties agreed
on the record to a "stipulated verdict" of $6,750.00 (representing
$135.00/hour for 50 hours) to be paid by the Flints to Appellant and Attorney
Giansante. At the time of the agreement, Appellant stated:
This is [Appellant] and we have agreed to stipulate to a
number of hours, given the restriction of testimony that was
discussed for the hour[s] that [the court] referred to.
We believe that the testimony that was going to be
permitted was restricted to some time for federal mediation,
some time for the last day of-or the first day of trial, the
underlying case, and limited preparation time for the federal
mediation.
It is upon the restricted testimony that we have stipulated
to this amount.
(See Hearing, dated 11/14/17, at 3-4; R.R. at R-129-30.) All of the parties
agreed to prepare and file the stipulated judgment memorializing the verdict,
but Appellant subsequently refused to sign the proposed stipulated judgment.
As a result, Appellees filed a motion on September 21, 2018, to enter
"judgment per the agreed -upon settlement" and to mark the case settled,
discontinued, and ended. Attorney Giansante agreed with Appellees' motion.
Appellant did not respond or oppose the motion. On October 22, 2018, the
court granted Appellees' motion as unopposed, entered judgment on the
stipulated verdict, and marked the case as follows:
AND NOW, this 22nd day of October 2018, upon of the
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[Appellees'] Motion for Entry of Judgment per Agreed -Upon
Settlement, and no opposition thereto being filed, it is
hereby ORDERED that the motion is GRANTED.
It is FURTHER ORDERED that judgment isentered in the
amount of $6,750.00 to be paid (solely to the extent not
already paid), by [Appellees] to [Appellant and Attorney
Giansante], and that this judgment, in conjunction with the
partial declarations made previously by this [c]ourt, finally
declares the rights of the parties in this action and brings to
a conclusion all causes of action.
(See Trial Court Order, filed October 22, 2018; R.R. at R-1) (See also docket
entries).
Appellant filed a notice of appeal on November 13, 2018. On November
20, 2018, the court ordered Appellant to file a concise statement of errors
complained of on appeal, pursuant to Pa.R.A.P. 1925(b), and Appellant
complied on December 12, 2018. On January 28, 2019, Appellees filed in this
Court an application to dismiss or quash Appellant's appeal, claiming Appellant
had acquiesced in the "settlement" and did not oppose the motion to enforce
it, so he is no longer an aggrieved party. Appellant responded on February
19, 2019, claiming he only agreed to the "settlement" because a trial would
not have been "valuable" and an "agreed or stipulated verdict" would permit
this Court to review the court's interpretation of the parties' fee agreement.
On February 26, 2019, this Court denied Appellees' motion without prejudice
to raise the issue in their appellate brief.
Appellant raises the following issues on appeal:
WHETHER THE TRIAL COURT'S INTERPRETATION OF THE
FEE AGREEMENT MUST BE CONSISTENT WITH THE
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EXPRESSED UNDERSTANDINGS OF COUNSEL AND CLIENT,
AND INCORPORATE THE PURSUIT OF ALTERNATE
THEORIES SEEKING MONEY DAMAGES AND NON -
MONETARY RELIEF?
WHETHER THE COMPLAINT IN THE UNDERLYING ACTION,
WHOSE TERMS WERE VERIFIED BY THE FLINTS AND
POLYMERIC SYSTEMS, WHICH TERMS CONSTITUTE
JUDICIAL ADMISSIONS, DEMONSTRATES THAT "NON -
MONETARY RELIEF" UNDER PARAGRAPH 6 OF THE FEE
AGREEMENT WAS SOUGHT AFTER AND WORKED FOR FROM
THE BEGINNING OF THE CASE?
WHETHER THE TRIAL COURT WAS ENTITLED TO MAKE A
FACTUAL DETERMINATION THAT ALL ASPECTS OF THE
UNDERLYING LITIGATION WERE CONCLUDED PRIOR TO
COUNSEL'S TERMINATION WHERE THE RECORD REFLECTS
AN ORDER, AND ACTIVITY IN ACCORDANCE WITH THAT
ORDER, REQUIRING ALL PARTIES TO CONTINUE
GROUNDWATER TESTING AND FURTHER MOVEMENT
TOWARD REMEDIATION?
WHETHER PENNSYLVANIA LAW REQUIRES THE FEE
RESOLUTION FOR TERMINATED COUNSEL BE BY QUANTUM
MERUIT? ...
WHETHER THE TRIAL COURT ERRED IN BARRING ALL
EVIDENCE OF HOURS WORKED AND THE
REASONABLENESS OF THOSE HOURS FROM JURY
PRESENTATION AND WHETHER THE TRIAL COURT ERRED
IN LIMITING EVIDENCE OF HOURS WORKED TO TWO DAYS
OF FEDERAL COURT MEDIATION AND SOME PREPARATION
THEREFORE?
WHETHER THE TRIAL COURT ERRED IN DETERMINING IN
2006 THAT THE FEE AGREEMENT WAS A CONTINGENT FEE
AGREEMENT ONLY, WITH RARE EXCEPTION FOR DIRECT
NEGOTIATIONS WITH INSURERS, WHERE THE FINDING IS
UNDERCUT BY THE COMPLAINT THAT WAS VERIFIED BY
THE FLINTS AND POLYMERIC SYSTEMS?
WHETHER THE EXPECTATIONS OF THE FLINTS AND
COUNSEL AT THE TIME OF THE UNDERLYING SETTLEMENT
WAS TO MOVE FORWARD WITH CHARACTERIZATION OF
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THE SOIL; CONTINUED PURSUIT OF POLLUTERS; AND
ULTIMATELY TO ACHIEVE FULL REMEDIATION OF THE SOIL
TO ACT II PERMITTED LEVELS OF CONTAMINATION?
(Appellant's Brief at 2-4).
As a prefatory matter, Appellees have renewed their application to
quash or dismiss the Appellant's appeal. Specifically, Appellees argue
Appellant cannot appeal the entry of the final judgment in this case because
he acquiesced to the stipulated verdict and failed to oppose the motion to
enforce it. Given the parties' knowing and voluntary settlement of their
dispute before the trial court, Appellees contend an actual case or controversy
no longer exists. Appellees allege Appellant is not an "aggrieved" party for
purposes of appeal. Appellees further maintain Appellant did not include any
challenge to the parties' voluntary resolution in his Rule 1925(b) statement.
Appellees conclude Appellant failed to identify any issues for appeal to undo
the settlement or judgment.
Appellant responds he agreed to the stipulated verdict as an
"administrative gesture" so he could appeal the court's August 4, 2006 order,
which determined Appellant and Attorney Giansante were not entitled to an
hourly fee for all hours worked in the case. Appellant contends the record
shows he only acquiesced to the stipulated verdict because the court decided
to limit testimony, concerning the number of hours Appellant and Attorney
Giansante worked on Appellees' case, to the hours they had spent on the first
day of trial and in preparation for federal mediation. Appellant maintains he
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did not intend to enter into a "global settlement" with Appellees. Rather,
Appellant argues the only settlement that resulted from the agreed -upon
verdict was with Attorney Giansante alone, and Appellant was not a party to
that settlement. Appellant concludes his concise statement adequately
preserved the issues he now raises on appeal.
Pennsylvania Rule of Appellate Procedure 501 provides:
Rule 501. Any Aggrieved Party May Appeal
Except where the right of appeal is enlarged by statute, any
party who is aggrieved by an appealable order, or a fiduciary
whose estate or trust is so aggrieved, may appeal
therefrom.
Note: Whether or not a party is aggrieved by the
action below is a substantive question determined by the
effect of the action on the party, etc.
Pa.R.A.P. 501. "A party is 'aggrieved' when the party has been adversely
affected by the decision from which the appeal is taken." Ratti v. Wheeling
Pittsburgh Steel Corp., 758 A.2d 695, 700 (Pa.Super. 2000), appeal denied,
567 Pa. 715, 785 A.2d 90 (2001). Our Supreme Court has set forth the
following guidelines to meet this requirement:
[I]n Pennsylvania, party must be aggrieved in order to
a
possess standing to pursue litigation. Aggrievability is
obtained by having a substantial, direct, and immediate
interest in proceedings or litigation. When the standards for
substantiality, directness, and immediacy are readily met,
the inquiry into aggrievability, and therefore standing, ends.
Johnson v. American Standard, 607 Pa. 492, 516, 8 A.3d 318, 333 (2010).
"Ordinarily, a party who consents to, or acquiesces in, a judgment or
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order cannot appeal therefrom." Brown v. Com., Dept. of Health, 495 Pa.
456, 460, 434 A.2d 1179, 182 (1981). Where an order is entered pursuant
to a stipulated agreement, however, appellate review is permitted if the order
explicitly allows for an appeal or the record reveals the parties anticipated an
appeal. Laird v. Clearfield & Mahoning Ry. Co., 591 Pa. 322, 916 A.2d
1091 (2007) (holding appellate review of pre-trial rulings following entry of
stipulated order was not precluded where record revealed appellants
expressed desire to preserve their appeal rights, during course of stipulation
discussions). The conduct of the parties and the court, and the language of
the order are used to determine whether the stipulated agreement envisioned
further review. Id. See also Keystone Bldg. Corp. v. Lincoln Say. And
Loan Ass'n, 468 Pa. 85, 360 A.2d 191 (1976) (determining conduct of parties
and language of consent decree showed parties had agreed to resolve only
one issue in case and did not intend consent decree to be final determination
of entire claim; parties preserved their right to litigate other issues).
Additionally, "[i]ssues not raised in the [trial] court are waived and
cannot be raised for the first time on appeal." Pa.R.A.P. 302(a). "[I]ssues
are preserved when objections are made timely to the error or offense."
Commonwealth v. Baumhammers, 599 Pa. 1, 23, 960 A.2d 59, 73 (2008),
cert. denied, 558 U.S. 821, 130 S. Ct. 104, 175 L. Ed. 2d 31 (2009). "[A] party
may not remain silent and afterwards complain of matters which, if erroneous,
the court would have corrected." Commonwealth v. Strunk, 953 A.2d 577,
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579 (Pa.Super. 2008) (quoting Commonwealth v. Clair, 458 Pa. 418, 423,
326 A.2d 272, 274 (1974)). See e.g. Commonwealth v. Burns, 765 A.2d
1144 (Pa.Super. 2000), appeal denied, 566 Pa. 657, 782 A.2d 542 (2001)
(holding appellant waived his argument regarding trial court's decision to
strike prospective juror because appellant failed to object on record).
Furthermore, Rule 1925(b) requires that statements "concisely identify
each ruling or error that the appellant intends to challenge with sufficient
detail to identify all pertinent issues for the judge." Pa.R.A.P. 1925(b)(4)(ii).
"[I]ssues not included in the Statement and/or not raised in accordance with
the provisions of [Rule 1925(b)(4)] are waived." Pa.R.A.P. 1925(b)(4)(vii);
Majorsky v. Douglas, 58 A.3d 1250 (Pa.Super. 2012), appeal denied, 620
Pa. 732, 70 A.3d 811 (2013), cert. denied, 571 U.S. 1127, 134 S. Ct. 910, 187
L. Ed. 2d 780 (2014).
Instantly, on November 14, 2017, the parties agreed on the record to a
stipulated verdict of $6,750.00, to be paid by Appellees to Appellant and
Attorney Giansante. All of the parties agreed to the preparation and filing of
the stipulated judgment memorializing the verdict. Appellant, however,
subsequently refused to sign the proposed stipulated judgment. As a result,
Appellees filed a motion on September 21, 2018, to enter "judgment per the
agreed -upon settlement" and to mark the case settled, discontinued, and
ended. Attorney Giansante filed a memorandum in support of Appellees'
motion, whereas Appellant did not respond or oppose the motion. On October
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22, 2018, the court granted Appellees' motion as unopposed, entered
judgment on the stipulated verdict, declared the respective rights of the
parties to the action, and brought to a conclusion all causes of action.
Notwithstanding that final judgment, on November 13, 2018, Appellant filed
this appeal.
Initially, Appellant agreed on the record to the stipulated verdict. But
when Appellees sought to reduce the stipulated verdict to judgment, Appellant
refused to sign the stipulation. After Appellees filed a motion to enforce the
stipulated or agreed -upon verdict, Appellant failed to object or oppose it.
Neither the record nor the language of the order expressed Appellant's intent
to appeal. To the contrary, the conduct of the parties and the court as well
as the language of the court's order make clear the stipulated verdict and
judgment contemplated no further review. Thus, Appellant's position fails the
Laird rule and, under Pennsylvania law, he arguably is not an aggrieved party
with standing to appeal that judgment. See Pa.R.A.P. 501; Laird, supra;
Brown, supra.
Additionally, Appellant arguably waived his right to appeal from the
stipulated verdict/judgment because Appellant failed to put on the record any
reservations about the verdict or his intent to appeal the judgment entered on
the agreed -upon verdict. See Pa.R.A.P. 302(a); Strunk, supra. Appellant
had the opportunity to object explicitly to the creation, content, and entry of
the stipulated verdict; but he failed to do so. Appellant directs our attention
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to his statement on the record (see N.T. Hearing, 11/14/17, at 3-4; R.R. at
R. 129-30), but that statement is insufficient to show his agreement was
qualified, his intent was to challenge the court's prior order of August 4, 2006,
in an appeal, or his wish to preserve his appellate rights in any other respect.
Thus, Appellant cannot now justifiably assert that he had agreed to the
stipulated verdict as an "administrative gesture," solely for the purposes of a
later appeal. See id.
Furthermore, Appellant failed to raise any challenge in his Rule 1925(b)
statement to the parties' voluntary resolution of the case or to the court's
October 22, 2018 order entering judgment per the agreed -upon verdict and
concluding all causes of action. Instead, Appellant confines his dispute to the
court's interpretation of the fee agreement.' Appellant has therefore possibly
1- In Appellant's issues combined, he challenges the court's interpretation of
the parties' 1996 fee agreement. According to Appellant, the fee agreement
provided for Appellant and Attorney Giansante to recover both the one-third
contingent fee based on the $40,800.00 monetary reward plus an hourly fee
of $135.00/hour for every hour spent on the case between 2001 and 2004.
Appellant maintains the attorneys were entitled to the hourly fees because
their legal work done in preparation for trial, between 2001 and 2004, laid the
foundation for Appellees to negotiate the non -monetary aspects of the
settlement including sharing the costs of remediation. Appellant contends the
trial court misinterpreted the fee agreement to allow only the one-third
contingent fee of the $40,800.00 monetary reward, and a $135.00 hourly fee
based on a limited number of hours spent working on mediation and the first
day of trial. In doing so, Appellant avers the court failed to consider specific
language contained in the verified complaint, as well as testimony regarding
mediation discussions between Appellant and Mr. Flint, that showed the
attorneys and Appellees sought both monetary and non -monetary relief from
the beginning of the case. Alternatively, Appellant claims he has the right to
quantum meruit.
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waived any challenge related to the parties' stipulated verdict and the
judgment entered on it. See Pa.R.A.P. 1925(b)(4)(vii); Majorsky, supra.
Finally, assuming without deciding Appellant qualifies as an aggrieved
party and properly preserved his issues per Rules 302 and 1925(b), we would
affirm based on the trial court opinions. (See Trial Court Opinion, filed August
7, 2006, at 17-29) (finding: 1996 fee agreement made clear Appellees owed
Appellant and Attorney Giansante one-third of net recovery from damages
action; if Appellant and Attorney Giansante failed to obtain monetary
recovery, Appellees would not owe them any fees for services rendered in
attempting to recover damages associated with property's contamination and
its remediation, or for any other recovery sought in damages action; fee
agreement plainly restricts hourly fees to time spent securing non -monetary
relief; sole non -monetary relief obtained in this case was recovery from
asbestos -litigation defendants some limited contributions to costs incurred
going forward in completing environmental assessment; hourly legal fees
attributable to other services provided by Appellant and Attorney Giansante
are not compensable under paragraph 6 of fee agreement; Appellees paid
their attorneys required contingent fee based upon settlement recovery of
$40,800 as mandated by fee agreement; Appellant and Attorney Giansante
are entitled to be paid for their legal services in securing asbestos -litigation
defendants' indemnity payments in accordance with paragraph 6 of fee
agreement). (See also Supplemental Trial Court Opinion, filed January 10,
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2019, at 2-5) (finding: on 11/14/17, parties agreed to settlement in form of
stipulated judgment for $6,750.00, to be paid by Appellees to Appellant and
Attorney Giansante; settlement was placed on record before court, and parties
agreed to prepare and file stipulated judgment memorializing agreed -upon
settlement; court subsequently entered judgment in sum of $6,750.00, based
on settlement agreement of parties and ordered discontinuance of action as
to all parties; notably, Appellant's Rule 1925(b) statement does not challenge
trial court's entry of latter order). Accordingly, we affirm.
Order affirmed.
Judgment Entered.
Jseph Seletyn,
D.
Prothonotary
Date: 8/2/19
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Circulated 07/26/2019 01:17 PM
RCN\mfd\S:\Admln\Nagle\1.,t,11nions\McGlnley_Fllnt_Glansa:nte Declaratory Judgmt. ... oc
THEODORE R. FLINT, IN THE COURT OF COMMON PLEAS
DEBORAH D. FLINT, and CHESTER COUNTY, PENNSYLVANIA
POLYMERIC SYSTEMS, INC.
Plaintiffs SENT
v. NO. 04-09152 AUG D 9 2006
c»
t:.. \.,/'J
LOUIS· GIANSANTE, ESQUIRE .. . . :t:a,
et. al.
Defendants CIVIL ACTION - LAW
... ... - ..,..,
Andrew P. Foster, Esquire, Megan Chemer-Ranft, Esquire, Attorne}f{fqr PMlntifft .
Louis Giansante, Esquire, Attorney for Defendants Louis Giansante·; "Es'qulr.e- and:"
· Giansante & Cobb, LLC. · � ·
. John Brian Frock, Esquire, Attorney for Defendants Joseph A. McGinley, Esq.
and Joseph A. McGinley Attorney LLC
OPINION and ORDER
Before me for decision is Defendant, Joseph A. McGinley Esquire's
"Motlon for Declaratory Judgm_ent and for Oversight" in which he seeks
.,
an order pursuant to the Declaratory Judgments Act, 42 Pa. C.S.A ..
§7531 et seq construing a Contingent Fee Agreement dated August-20,
· 1996 (the Fee Agreement") and his rights thereunder. The- Act provdes
11
that a court may construe the terms of a wrltten contract and declare·
_disputed rights of the parties in a declaratory judgment action, and a
contract may be construed either before or after a· breach has occurred.
42 Pa. C.S.A. §§7531 & 7534. Some explanation of the events leading
· to the inception of this litigation Is necessary to an understanding of the
divergent positions advanced by the parties, fueled by their differing
APPENDIX "A 11
historical perspectives which, in turn, have generated a barrage of facts
and counter-facts, prolix arguments and counter-arguments, and multiple
and shifting legal theories that tend to cloud the Fee Agreement under
scrutiny.
Factual Background:
Both McGinley and fellow attorney, Louis Giansante, Esquire were
with the Philadelphia law firm of Lavin, Coleman, Finarelli and Gray
("Lavin Firm"), with whom the Flints, on behalf of themselves and their
corporation, Polymeric Systems, Inc., (collectively, the "Flints")
contracted under the terms of the Fee Agreement to represent them in a
lawsuit they brought in Chester County against various defendants,
among whom were A.P. DeSanno Company and its affiliates, Textron,
Inc., and Radiac Abrasives, Inc. ("DeSanno Defendants"), prior owners
of the Flints' Phoenixville, Chester County real estate, which those
defendants had previously used for the manufacture of grinding wheels
(the "Phoenlxvllle Property"). Specialty Chemicals, a former leasee, was
also sued. The lawsuit was premised upon contamination of the
Property by asbestos and by prior owners-industrial operations occurring
there. It appears that the Flints purchased the Property without the
benefit of a pre-settlement environmental assessment. Giansante and
2
McGinley separately left the Lavin Flrm subsequent to that Firm
undertaking the Flints' representation, but were later contacted by the
Flints and requested to take over their representation, since Giansante
had expertise in environmental litigation. Both attorneys agreed to
represent the Flints under the terms of the Fee Agreement, and both
were actively engaged in their representation during the DeSanno
lawsuit.
Several years following their purchase of the Phoenixville Property
in 1983, the Flints commissioned environmental assessments of the
Property, including Phase I and Phase II environmental studies, which
revealed the presence of metal contaminants, including lead in various
locations on the Property, and the presence of asbestos insulating
materials in one or more of the buildings, all requiring remediation of
. certain buildings, soil and ground water. During the Flints' ownership, a
third defendant, Specialty Chemicals, Inc., leased a portion of the
Phoenixville Property for the purpose of manufacturing lead-based and
tin-based acids. Finding that site assessments and anticipated
remediation costs approached Three Million Dollars, the Flints instituted
suit against the DeSanno Defendants, seeking the recovery of past and
anticipated environmental remediation costs, substantlally predicated on
3
the Pennsylvania's Hazardous Sites Cleanup Act, 35 P.S. §§6020.101 et
seq, public nuisance, negligence, breach of contract and fraudulent
misrepresentation. They also sought damages for diminution of the
Property's value.
In their lawsuit against the DeSanno Defendants and Specialty
Chemicals, the Flints essentially sought some $3,000,000 in remediation
costs, and their lawyers, Giansante and McGinley, each devoted literally
hundreds of hours to preparing the case for trial, anticipating that their
work would eventually be rewarded with a substantial recovery, from
which their contingent fee of thirty-three and one third percent (33.;.1 /3 % )
provided for in the Fee Agreement would be paid. However, during the
week before trial was to begin, the trial judge eviscerated the Flints' case
following a plethora of pre-trial motions filed by the DeSanno
Defendants, including, significantly, partial summary judgment in those
defendants' favor with respect to various counts of the Flints' complaint,
and; significantly, the judge's determination that the Flints' private right of
action seeking recovery of remediation costs under the Pennsylvania's
Hazardous Sites Cleanup Act limited the Flints' recovery to incurred or
past remediation costs only. Stripped of various claims and left with no
ability to recover the future costs of remediation at trial, the Flints settled
4
the case for a cash payment of $20,400 from Textron and $20,400 from
Radiac and M&R Industries. Approved by the DeSanno trial court's June
24, 2004 Order, the settlement agreement also included Textron" and
Radiac's agreement to each pay one-third of "the costs to be incurred
from this date forward for the completion. of the environmental ..
assessment of the subject property by the selected qualified expert". The.
Flints agreed to pay the remaining one-third of those costs. Attribution of
responsibility for the actual remediation costs identified by the
. environmental assessment w� not resolved in ,the court-ordered
settlement. In this respect the Agreement'stated
. .
that the parties had "not
· agreed to any sharing or allocation of costs for ariy remediation or ·
I
proposed remediation o.r for any other 'response costs' under" .... the
Hazardous Sites Cleanup Act. ("DeSanno Settlement Agreement").'
Subsequently, Textron and Radlac each paid $20,000 towards the costs
of the environmental assessment, as agreed.· .
The Settlement Agreement approved by the trial court explicitly
stated that in exchange for the recited consideration· of $40,800 the· Flints
agreed "to release
.
and dismiss with prejudice all claims they have
.
against Textron, Radiac and Special�y Chemical Systems, Inc.II ... for an
claims or costs incurred for asbestos abatement and for the investigation
5
and remediation of hazardous substances on Plaintiff's real property .... "
and, further "to dismiss with prejudice the instant action" and a
concurrent federal action filed by the Flints against defendants.
After the DeSanno litigation was settled, and following some
· negotiations during which McGinley and Giansante sought to be paid on
· an hourly basis for their legal services in the DeSanno litigation,
discussions broke down. The attorneys believed that they were due
hourly fees for their work on the case in addition to the one-third
· contingent fee they were paid following the court's approval of the
Settlement Agr�ement. Those discussions were terminated without
resolution of the fee dispute. Glansante maintains that he remained .
. . 1 . .
ready, willing and able to continue his representation of the Flints on an
hourly basis, but insisted upon the· Flints signing a new fee agreement
. and a conflict of interest waiver in light of possible litigation over the
· meaning of the Fee Agreement. He now argues that the Flints refusal to
sign the waiver, which he sent to the Flints on July 6, 2004, constituted
his de facto discharge as the Flints' attorney. \
Subsequently, attorney Michael Olley was consulted by the Flin.ts
.concerning the fee dispute. (Deposition Exhibit P-28). Olley opined that
. . .
Giansante and McGiriley were not entitled to additional fees under the
6
Fee Agreement, and advised Giansante that the Flints declined to pay
his "compromise" fee of $100,000. Giansante thereafter submitted a
detailed statement to the Flints for $200,503.42 calculated on an hourly
basis for his services rendered in the DeSanno litigation. Giansante also
claims that he wasdischarqed as the Flints attorney by Olley, with their
'
permission. McGinley, who had been willi_ng to compromise his separate
fees. also submitted his statement for legal services calculated on an
hourly basis from the inception of the DeSanno litigation for the amounts
stated in his counterclaim.
The Flints captioned lawsuit was instituted by them and their
corporation, Polymeric, in a two-count complaint seeking a declaratory
judgment pursuant to 42 Pa. C.S.A. §7531 to determine their liability for
legal fees that are due and owing, if any, under the terms of the Fee
Agreement arising out of the DeSanno litigation, and, in addition,
compensatory damages, incl.uding attorneys' fees and related legal costs
they have incurred in defending Giansante's and McGinley's claims for
additional legal fees. Giansante and his law firm, Giansante and Cobb,
LLC has sued the Flints in New Jersey seeking compensatory, civil RICO
damages, punitive damages, legal fees and courts costs arising out of
the latter's representation of the Flints in connection with the DeSanno
7
litigation. Glansante filed an answer· and new matter to the Flints
captioned lawsuit, but not a counterclaim given his New Jersey lawsuit. .
McGinley has filed a counterclaim in the captioned action seeking the
. .
payment
. of hourly
. legal fees he contends to be due him under the terms ·
of the Fee Agreement.
· In the .i:i�m liti9ation before me, Giansante and McGinley
advance the contentions that the ·significance of the court's pre-trial
. .
decisions that forced the .DeSanno Settlement Agr�ement was to
postpone the determination of both the .award of future costs assoctated ·
with .remediation of the Flints' Phoenixvilfe Property and the ..
determination of the .dtrnlnutlon in itsvalue arising as a result of its
contamlnatlon. And, they argue, it was their legal work in preparation for
the DeSanno defendants' lawsuit and trial that provided the framework
upon which the Flints could later negotiate with the DeSanno defendants
for a sharing of the costs of remediation and diminution in their
. Phoenixville Property's value. 'Through their legal efforts from the
inception of their representation in readying the DeSahno case for tnal ·
and securing its settlement, Giansante and McGinley argue that their
efforts have provided the Flints with leverage in their future negotiation_s
with Textron, Radiac and others for future remediation contributions,
8
even though the DeSanno court's Order approving the Settlement
Agreement ended the DeSanno defendants' liability for such
contributions. They thus contend that under the Settlement Agreement's
terms, they are entitled to be paid the hourly fees they have billed to the
Flints in addition to the contingent fee attributable to the recovery of
damages due under the terms of the Fee Agreement. They thus contend
that their engagement as the Flints' attorneys and their entitlement to
legal fees under the Fee Agreement were not terminated by the Textron
Settlement Agreement because their representation was understood by
the parties to encompass any future recovery the Flints are able to
negotiate with the DeSanno defendants, which they argue would be
attributable to their legal work preceding the Settlement_ Agreement.
These alleged entitlements are what I shall refer to as "Ascribed· Legal
Benefits": In advancing these contentions, they view their essential task
under the Fee Agreement as the protection of the Flints from future
remediation costs and recovery of the diminished value of the
Phoenixville Property, neither of which is now recoverable from the
DeSanno defendants.
Admittedly, they have not been paid a fee for the $40,000 paid by
Textron and Radiac toward the further cost of the environmental
9
assessment of the Flints' Property required by the Settlement
Agreement. Giansante also claims the Flints owe $1,036.75 in
unreimbursed court costs under the Fee Agreement.
McGinley's Declaratory Judgment Motion:
. McGinley's instant Motion .is confusing. While it is stated as his
Motion, both the proposed order that accompanies it, as well as the
praecipe for determination state that it is also filed on behalf of
Giansante. In view of the Order I am entering in conjunction with this
Opinion, I will treat the Motion as a joint one. It should be noted that by
Order dated June 30, 2006 I denied Giansante's Motion seeking
summary judgment in the Flint's captioned lawsuit.
McGinley has asserted a three-count counterclaim against the
Flints. He seeks $105,367.50 for his services at the hourly rate of
$135.00 specified in the Fee Agreement as applicable to "non-monetary
relief', $136,587.50 premised on a quantum meruit claim at an hourly
rate of $175.00, and $50;000.00 he claims attributable to the Flints' bad
faith in not paying his fees.
The first leg of McGinley's Motion asserts that the focus of the
Textron and Radiac litigation was to insulate the Flints and their
corporation from remediation costs of some $3,000,000, not simply to
10
recover money to pay those costs. He asserts that the DeSanno
Settlement. Agreement was the culmination of substantial legal efforts on .
his part, the value of which is properly measured by the number of hours ·
he spent in preparing the litigatio·n to achieve the settlement. and the
Ascribed· Legal Benefits, the so-called "conferred benefits" as he puts it, ··
forwhich he is entitled to recovery in the alternative, for reimbursement
at the rate of $135.00 per hour, stated in the Fee Agreement as
. .
attributable to "non-monetary relief', or $175.00 per hour on a quantum
meruit basis. The second le.t:t of McGinley's Motion seeks a court- .
. .
. ordered 'protection" at McGinley's and Giansante's entitlement to future
. .
legal fees by requiring the Flints to provide Giansante with
. all' · .
investigative environmental assessment and remediation· data· collected
by or on behalf of the Flints with.respect to their Phoenixville Property to
insure that they do not short-cut the assessment and remediation
process, which obviously would have the effect of reducing their legal
fees under fhelr "conferred benefits" entitlement theory .. McGinley points
to deposition testimony of Plaintiff, Theodore Flint, suggesting to ·
McGinley that the on-going remedial assessment of the Flints' property,
now under the Flints' control, has been curtailed and is not being
vigorously pursued, which he contends is fraudulent as to hlrn and
11
Giansante, as well as the Pennsylvania Department of Environmental
Protection, an entity not involved in the captioned litigation.
The Flints vigorously oppose McGinley1s declaratory judgment
motion and have filed their own counter- motion for declaratory
judgment, which their Complaint also seeks, based upon their
interpretation of the Contingent Fee Agreement. The Flints' counter ·
motion contends that their liability for the Ascribed Legal Benefits
asserted by McGinley and Giansante is fixed by the contingency
provision of the Fee Agreement, that their damages claim was resolved
by the DeSanno Settlement Agreement, which in turn fixed tnelr liability
for legal fees arising from the DeSanno litigation, that they paid McGinley
and Giansante the agreed-upon contingent. fee calculated on the
$40,880 settlement recovery established in the Fee Agreement, (which is
not denied), and that the Settlement Agreement ended the DeSanno
litigation and McGinley's and Giansante's engagement as their attorneys.
They believe that any remaining liability they may have to McGinley and
Giansante is limited by the "non-monetary relief' provision of the Fee
Agreement for the time spent by them in negotiating Textron's and
Radlac's contributions toward the cost of the environmental assessment
of the Flints' Property, provided for in the Settlement Agreement.
12
The Contingent Fee Agreement:
The Contingent Fee Agreement provides in pertinent part, as follows:
"1. Clients hereby appoint, retain and authorize Attorneys
to bring suit or to settle and compromise before or after suit all· claims on
behalf of the Clients arising out of damages sustained by the clients as a
result of purchasing a property located at 723 Wheatland Street,
Phoenlxvllle, PA on which are located buildings with asbestos-containing
materials.
2. Clients agree not to settle or adjust this claim or any
proceedings based thereon without written consent of Attorneys, nor to
terminate the employment of Attorneys without consent of Attorneys and·
payment for services rendered. ·
3. Clients· agree to pay for Attorneys' services in
connection with this claim by. payment of 3.31/3% of the net recovery.
whether recovery is made by settlement; verdict or judgment.
. 4. Attorneys agre_e to use. their best efforts to settle or
·, . prosecute this daim. If no recovery is obtained, Attorneys shall have no
claim for attorneys; fees against CHents for services rendered.
. . .
5. Attorneys are authorized to pay from Clients' share of
any recovery all expenses, repair bills, subrogation claims, witnessfees,
expert witness fees, costs of consulting experts, court costs and any
other out-of-pocket expenses which constitute any part of Clients' claim
or which are necessary to the recovery of the clalm.' ·
6. If it becomes necessary_to enter into negotiations with
lnsurance Companies or other entities to seek non-monetary relief, such
as indemnification, on theclients' behalfourcharqes for-services will be·
at the hourly'Attorney rate of $135.� · ·
· . The Fee Agreement was preceded by discussion among the Flints
and their attorneys concerning·the basis uponwhlch the latter would ·
13
undertake the Flints' representation, the history of which is instructive to
a determination of the instant Motions. Giansante had been provided
with information about contamination of the Flints' Phoenixville Property
by an environmental consulting firm, which did not at that time disclose
the entire scope of the environmental contamination, as it predated the
Phase I and II studies. Giansante then prepared an interoffice
memorandum for the Lavin Firm, of which he was then a member,
suggesting that the case be taken on a contingent fee basis, with a flat
monthly fee added, for which credit would be given to the clients upon
recovery and payment of the contingent fee. Exhibits P- 3 thru P-7.
Members of the Lavin Firm, including Giansante, conducted a meeting
on July 30, 1996 with the environmental consultant, memorialized in
writing, to discuss the particulars of the remediation to the extent it was
then understood, legal requirements respecting removal of the asbestos
contamination, potential future claims resulting from employees'
exposure to asbestos, evaluation of insurance issues and potential
liability of unidentified insurance companies in sharing liability for the
remediation, liability of prior owners of the Property and, importantly,
structuring the Lavin Firm's legal fees. Shortly after this meeting,
Clinton, on behalf of the Lavin Firm, prepared and sent the Fee
14
Agreement to the Flints, which they promptly signed, engaging the Firm
to handle the contamination lawsuit. Exhibit P-8 & P-9.
The July 30, 1996 meeting memorandum contains the following
description of the proposed fee structure:
"Henry (Clinton, a principal of the Lavin Firm) explained that it is
not unusual for a law firm to charge 40% of the total recovery; the client
is typically responsible for costs. However, in this instance, they are
proposing a 33 1/3 contingency fee arrangement, i.e., if any recovery is
made, they would get 1/3."
"If carriers would need to be pursued, Lou (Giansante) thought that
could be fit in under the contingency. Lou's time for negotiations would ·
be at the rate of $135/hour'. Exhibit P-8 & P-9.
In his executed verification dated February 24, 2006, Henry
Clinton, states that on August 1, 1996, he forwarded the Fee Agreement
to Plaintiff, Theodore Flint by FAX, together with a cover letter in which
he explained the non-monetary relief provision governing
indemnification, also described in his verification, as follows:
"Paragraph 6 of the contingency agreement addresses non-
monetary relief. As we discussed, if we negotiate with insurance carriers
to obtain indemnification from them in the event of any future litigation,
15
by for instance, former or current employees as a result of any alleged
exposure to asbestos, those negotiations with your carriers .will be
performed at an hourly Attorney rate of $135."
"As stated in this quoted paragraph, the attorney rate of$135
applied only to time spent negotiating on behalf of the clients to seek
non-monetary relief, such as indemnification from insurance carriers or
other entities." Exhibit P-10 & P-11.
Giansante maintains that in discussing with Clinton what should be
included in the Fee Agreement, he explained to Clinton that
"environmental plaintiff's agreements have to be drafted to protect the
firm if relief is accepted by a client that is not readily reducible to a
monetary amount". In such cases, "it is appropriate to negotiate a fixed
hourly rate that would attach for all work done so that the client would be
billed on an hourly basis related to the relief that they have taken".
Exhibit P-14, pp. 46-47. Indeed, Giansante's Answer to the Flints'
Complaint avers that "the parties to the agreement [the Fee Agreement]
included a provision that allowed for the payment of all time applied to
the case by the attorneys at a reduced hourly rate" that induced the
Lavin Firm to undertake the Flints' case. However, that is not precisely
the case, as Paragraph 6 of the Fee Agreement prepared by Clinton did
16
not embody the language specified in Glansante's Answer. It does not
· include "a provision that allowed for the payment of all time applied to the
case by the attorneys at a reduced hourly rate". Rather, the Fee
Agreement sent by Clinton to the Flints addressed the hourly rate only in
relation to negotiations with insurance companies or other entities to
seek "non-monetary relief, such as indemnification", as reinforced in his
transmittal letter to the Flints. The engagement identified in the Fee
Agreement to which the contingent fee applied clearly refers to the
damages claim. Contrary to Giansante's and McGinley's interpretations,
the Fee Agreement does not say that they are also entitled to their hourly·
fees in preparation for and resolution of the damages claim.
· The Flints· promptly signed the Fee Agreement for themselves
and Polymeric on August 20, 1996. For reasons that need not detain us,
suit was not instituted against the DeSanno defendants until March 2001.
Discussion: ·
"[nhe purpose of the Declaratory Judgments Act is to afford relief
from uncertainty and insecurity with respect to legal rights, status and
other relations." Juban v. Schermer, 751 A.2d 1190, 1193
(Pa.Super.2000). Under the Declaratory Judgments Act, the trial court is
empowered to declare the rights and obligations of the parties, even if no
17
other relief is sought. Id. Ordinary summary judgment procedures are
applicable to declaratory judgment actions. Lititz Mutual. Insurance. Co.
v. Steely, 746 A.2d 607, 609 (Pa.Super.1999); Keystone Aerial Surveys,
Inc. v, Pennsylvania Property & Casualty Insurance Guaranty
Assoctetion, 777 A.2d 84,88 (Pa. Super. 2001 ).
In a declaratory judgment action, just as in civil actions generally,
"[sjurnmary judgment may be granted only in those cases in which the
record clearly shows that there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law."
Harleysville Insurance Companies v. Aetna Casualty and Surety
Insurance Company, 795 A.2d 383, 385 {Pa. 2002) (citing P.J.S. v.
Pennsylvania State Ethics Commission, 555 Pa. 149 723 A.2d 174, 176
1
(1999); Hydropress Environmental Services, Inc. v. Township of Upper
Mount Bethel, 836 A.2d 912, 918 (Pa. 2003).
Declaratory judgment relief may not be secured as a matter of
right. Rather, its exercise is a matter of sound judicial discretion. There
is no requirement that the court define the rights of the parties before
conducting a trial, but such declaration is appropriate if it can be made
on the facts educed before trial, and such declaration will be of material
benefit in resolving the dispute. Consolidated Coal Company et al v.
18
White et al, 875 A.2d 318 (Pa. Super. 2005); Osram Sylvania Products,
Inc. v. Comsup Commodities, Inc., 845 A.2d 846 (Pa. Super. 2004 );
William A. Warner, Jr. v. Continental/CNA Insurance Companies, 688
A.2d 177 (Pa. Super. 1996). The declaration made by the trial court
"may be either affirmative or negative in form and effect, and such
declaration shall have the force and effect of a final judgment or decree".
42 Pa. C.S.A. §7532. Declaratory relief is "cumulative and additional, not
in place of, other forms of relief. Therefore, it is clear that an action for
declaratory judgment is designed to operate with, not instead of, any
underlying dispute." Bottomer v. Progressive Casualty Insurance
Company, 816 A.2d 1172, 1176 (Pa. Super. 2003).
The interpretation of a contract is a matter of law to be decided by
the court. Roman Mosaic and Tile Company v. Carney, 729 A.2d 73, 77
(Pa. Super. 1999); Madison Construction Company v. Har/eysville
Mutual Insurance Company, 735 A.2d 100, 1·06 (Pa. 1999).· When the
contract is clear and unambiguous, the court examines the writing itself
to give effect to the parties' understanding. Creeks v. Creeks, 619 A.2d
754, 756 (Pa.Super 1993); Lange v, Meske, 850 A.2d 737 (pa. Super.
2004). When construing agreements involving clear and unambiguous
terms, the court need only examine the writing itself to give effect to the
19
parties' understanding as the contract is written. It may not modify the
plain meaning of the words under the guise of interpretation, or stretch its
meaning by attributing to it an unintended construction not supported by
the contract language. Vaccarello v. Vaccarello, 757 A.2d 909 (Pa.
2000). Conversely, when the language is ambiguous and the intentions
of the parties cannot be reasonably ascertained from the lj3.nguage of the
writing alone, the parol evidence is admissible to resolve the ambiguity.
A contract is ambiguous if it is reasonably susceptible of different·
constructions and capable of being understood in more than one sense.
Walton v. Philadelphia National Bank, 545 A.2d 1383, 1389
(Pa.Super.1988). The court must determine as a question of law whether
the contract terms are clear or ambiguous. Id .
.. Contractual language is ambiguous if it is reasonably susceptible
of different constructions and capable of being understood in more than
one sense. This is not a question to be resolved in a vacuum. Rather,
contractual terms are ambiguous if they are subject to more than one
reasonable interpretation when applied to a particular set of facts. We
will not however, distort the meaning of the language or resort to a
strained contrivance in order to find an ambiguity." Madison
Construction Company v. Harleysville Mutual Insurance Company,
20
'''7
JP
.,•
.,
·;
supra; Wi/cha v. Nationwide Mutual Insurance Company, 887 A.2d 1254
(Pa. 1999).
After reviewing literally hundreds of pages of materials submitted
by the parties in support of their respective positions, including lengthy
legal memorandums, the most striking aspect to me is the parties'
concentration on their individual historical interpretations of the facts
leading to this dispute, rather than a critical exegesis of the contract.
One could argue that such diversity of opinion is, itself, support for a
conclusion that the governing contract is ambiguous. However, I do not
find that to be the case. Regardless of what. the attorneys in this case
would earnestly like the court to interpret the Fee Agreement to say or to
mean, it is, in reality, a simple and straightforward document, perhaps
too much so as attested by the litigation it has spawned. · In any event. it
is apparent from the already extensive record that there is nothing more
the parties could produce by way of evidence at trial that would change
my understanding of the contractual arrangement embodied in the Fee
Agreement.
It anticipated the Lavin Firm's representation of the Flints in an
action "arising out of damages sustained by the clients" in purchasing the
Phoenixville Property on which were located buildings with "asbestos-
21
containing materials". Giansante and McGinley agreed to be bound by
the terms of the Fee Agreement in their representation of the Flints. After
the Fee Agreement was reached, in-ground contamination from another
pollutant, lead, was found, and the focus of the litigation was expanded
to include such contamination as an element of the damages sought.
The complaint filed against the DeSanno defendants advanced various
legal theories supporting recovery. However, the Fee Agreement was not
revised to address any change in the terms and conditions of Giansante
and McGinley's legal representation of the Flints arising after its
execution, including discovery of additional contaminants. Rather, the
Flints' liability remained to pay their attorneys one-third of the "net
recovery" from the damages action. If no such recovery were obtained,
the Flints would not owe their lawyers any attorneys' fees for their
services rendered in attempting to recover damages associated with
their Property's contamination and its remediation or for any other
recovery sought in the damages action. The Flints agreed not to settle
the damages case or any proceedings based thereon without their
lawyers' consent, and, further, not to terminate their lawyers'
employment 'without consent of Attorneys and payment for services
rendered". Obviously, this latter provision was intended to protect the
22
lawyers' fees by precluding their termination before they were paid for
their legal work, as the quoted language is written in the conjunctive and
not the disjunctive. Finally, the intent of the language of the Fee
Agreement as it pertains to "non-monetary relief, such as
indemnification" is clearly expressed, and is confirmed by the meetings
and memorandums that preceded its execution, described above.
An examination of the legal nature of "lndemnlflcatlon" is also
instructive in reaching my decision that the damages claim is not linked ·
to the Agreement's provision governing non-monetary relief.
Indemnification is defined as "[t]he action of compensating for loss or
darnaqe sustained." Black's Law Dictionary 772 (7th Ed.1999). The
term "indemnity" is defined as: 1. A duty to make good any loss, damage,
or liability incurred by another. 2. The right of an injured party to claim
reimbursement for its loss, damage, or liability from a person who has
such a duty. 3. Reimbursement or compensation for loss, damage, or
liability in tort; [especially], the right of a party who is secondarily liable to
recover from the party who is primarily liable for reimbursement of
expenditures paid to a third party for injuries resulting from a violation of
a common-law duty. Id
23
Various examples can be cited, but two are pertinent here. '1n the
tort context, the right of indemnity rests upon a difference between the
primary and the secondary liability of two persons, each of whom is
made responsible by the law to an injured party. It is a right which inures
to a person who, without active fault on his own part, has been
compelled, by reason of some legal obligation, to pay damages
occasioned by the initial negligence of another, and for which he himself
is only secondarily liable." Builders Supply Co. v. McCabe, 77 A.2d 368
(Pa. 1951 ).
Indemnity is a common law equitable remedy that shifts the entire
responsibility for damages from a party who, without fault, has been
required to pay because of a legal relationship to the party at fault. In the
context of tort indemnity, the liability of the indemnitor to the tort victim is
primary and that of the indemnitee is secondary. City of Wilkes-Barre v.
Kaminski Brothers, 804 A.2d 89 (Pa. Cmwlth. 2002). Before
indemnification rights accrue, the party seeking indemnification must pay
the claim or verdict damages before obtaining any rights to pursue
indemnification. Chester Carriers, Inc. v. National Union Fire Ins. Co. of
Pittsburgh, 767 A.2d 555, 563 (Pa.Super.2001 ). In the context of the
Flint damages action, a settlement agreement could have been reached
24
in which the DeSanno defendants agreed to indemnify the Flints against
statutory or common law liabilities they might incur in the future simply as
owners of the Phoenixville Property, including required remediation, but
that was not provided for in the DeSanno Settlement Agreement.
Rather, the only unresolved monetary contributions arising under the .
Settlement Agreement were Textron's and Radiac's agreements to
contribute two-thirds of "the costs to be incurred from this date forward
for the completion of the environmental assessment of the subject
property". (June 24, 2004 Court Order, para. 6).
Indemnification also typically arises in connection with an insured's
claim under his insurance policy requiring his liability carrier to provide
him with a defense and indemnify him against various types of loss. 401
Fourth Street, Inc. v. Investors Insurance Group, 879 A.2d 166, 171 (Pa.
2005). That is obviously one of the circumstances contemplated by
paragraph 6 in the Flints' Fee Agreement as described by Attorney
Clinton in his August 1, 1996 letter to Theodore Flint.
The very nature of indemnification lends additional credence to the
Flints' contention that the Fee Agreement was intended to draw a
distinction between the direct claim for monetary damages brought by
McGinley and Giansante on behalf of the Flints against the DeSanno
25
defendants, and claims seeking non-monetary relief, such as
indemnification, in which the Flints could advance their right to seek
Iiabllity protection from one or more of their insurance companies against
third party claims asserted against them or, indemnification from prior
owners of their Property. For the reasons discussed above, neither·
McGinley nor Giansante are entitled by the Fee Agreement to the
additional hourly fees to which they claim entitlement attributable to their
preparation of the damages claims asserted in the Flints' lawsuit against
the DeSanno defendants and resolved by the DeSanno Settlement
Agreement. Neither are they entitled to hourly fees under paragraph 6 of
the Fee Agreement under the guise of preserving the Flints ability to
secure the Ascribed Legal Benefits to the Flints. That paragraph clearly
restricts hourly fees to time successfully spent securing non-monetary
relief. On the record before me, the only such relief was Textron's and
Radiac's limited contributions to the "costs" incurred going forward in
completing the environmental assessment. Hourly legal fees attributable
to other services provided by Giansante and McGinley are not
compensable under paragraph 6 of the Fee Agreement.
The Supreme Court's decision in Capek v. De Vito, 767 A.2d 1047
(Pa. 2001 ), iri conjunction with paragraph 2 of the Fee Agreement, adds
26
a legal wrinkle. In Capek, the question was whether! under the terms of
a contingency fee agreement, an attorney discharged before resolution
of a personal injury case retains a quantum meruit claim where the
agreement so provided in the event of his termination by the client before
the case was resolved. There, the discharged attorney had achieved a
modest recovery before his termination that paled in contrast to the
ultimate verdict. The court reversed summary judgment in the client's
favor because disputed issues remained undecided relative to the
quantum meruit claim. Instantly, however, theDefsanno defendants'
litigation was settled while McGinley and Giansante remained the Flints'
attorneys, the settlement was embodied in the terms of this court's June
24, 2004 Order, and the Flints paid their attorneys the required
contingent fee based upon the settlement recovery of $40,800, all as
mandated by the Fee Agreement. Once the Settlement Agreement was
consummated by Court Order, their entitlement to legal fees was
restricted by the recovery they actually achieved in that case, as
provided for in paragraph 3 of Fee Agreement.
Capek does preserve McGinley's and Giansante's claim for
payment of their legal fees arising from Textron's and Radiac's payments
toward further environmental assessment of the Flint's Property,
27
described in paragraph 6 of the Court's June 24, 2004 Order approving .
the settlement Aqrsement. However, while those fee entitlements flow
directly out of the settlement of the damages action, the liability of
Textron and Radiac is stated in the Settlement Agreement in terms of
"allocation" or the assignment of liability among the Flints and those
defendants. Therefore, Giansarite arid McGinley are entitled to be paid·
for their lega!"services in securing those indemnity payments in
accordance with paragraph 6 of theFee Agreement.
. The second aspect of McGinley's Motion, that is, requiring the
. .
Flints to provide Giansantewith all investigative data arising from the on-
going environmental assessment of their Property is resolved by my
disposition of the first leg of McGin.ely's Motion. Neither of these
Defendants has the right to oversight or direction of the Flints' affairs to
protect fees to which it has been determined they are not entitled· under
the Fee Agreement. Defendants express the fear that the Flints will
abbreviate completion of the environmental assessment. That concern is ·
unavailing, however, since their fees under paragraph 6 of the Fee
Agreement are already established by the time they spent in negotiating.
Textron's and Radiac's payments towards those costs. Even had my
decision been otherwise, McGinley's brief cites no legal authority
28
supporting the relief sought ln this respect, candidly admitting that the
relief is sought to protect his and Giansante's fees. (McGinley's Brief, p.
14). In Pennsylvania, a client has the absolute right to choose his
attorney, and I have no authority to force legal representation upon the
Flints. Hiscott and Robinson v. King, 626 A.2d 1235 (Pa. Super. 1993).
As instructed by Bottomer v. Progressive Casualty Insurance
Company, declaratory relief granted in this decision does not necessarily
resolve the remaining, underlying dispute. Such is the case here.
Resolution of the parties' remaining claims will be resolved at trial, unless
settlement can be achieved with the court's assistance.
Accordingly, I enter the following:
29
)I ORDER
AND NOW, August�, 2006 McGinley's Motion For
Declaratory Judgment is DENIED.
se�f
AUG 09 2006
Plaintiffs' Cross Motion For Declaratory Judgment is GRANTED to
the following extent. Neither McGinley nor Giansante are entitled by the ·
,:::,
·:J'>
• ( .•... ··· "'N
August 20, 1996 Fee Agreement to hourly ·fees to which �9.�y·cl�J?l , .
..•. --·- .
......... ·, I
entitlement in connection with the DeSanno litigation, the,:$�rn'.e QeinQ:···;
•
,-
.:�: .::·.
. ::.. ··
• . �;:�
. . ... �
• !.
... ..
';
no'r
•"'
wholly governed by paragraphs 1 through 3 of the Fee Ag're�meffl;
w
are they entitled under that Fee Agreement to hourly fees attributable to
their legal work in providing the Ascribed Legal Benefits described in the
foregoing Opinion. Their entitlement to legal fees in negotiating indemnity
payments by Textron and Radiac is governed by paragraph 6 of the Fee
Agreement.
The remaining claims of the parties not resolved by this Opinion
and Order shall be resolved at trial or by agreement of the parties, if any. ·
SO ORDERED.
Ronald C. Nagle J.
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