Ambeliotis, S. v. Ambeliotis, N.

J-S61033-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SANDRA E. AMBELIOTIS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
v. :
:
NICHOLAS M. AMBELIOTIS, :
:
APPEAL OF: BUNDE, GILLOTTI, :
MULROY & SCHULTZ, P.C. : No. 229 WDA 2016
Appeal from the Order January 22, 2016
in the Court of Common Pleas of Allegheny County,
Family Court Division, No(s): FD 13-003823-008
BEFORE: PANELLA, LAZARUS and MUSMANNO JJ.
MEMORANDUM BY MUSMANNO, J.: FILED AUGUST 31, 2016
Bunde, Gillotti, Mulroy & Shultz, P.C. (“BGMS”) appeals from the Order
granting Sandra E. Ambeliotis’s (“Ambeliotis”) Petition to Establish Payment
Plan on Charging Lien.1 We affirm.
In March 2013, Ambeliotis retained Hilary Bendik (“Bendik”), an
attorney for BGMS, to represent her during divorce proceedings. Ambeliotis
paid an initial retainer of $3,500 and signed an engagement agreement with
BGMS, which included BGMS’s right to assert a charging lien for any unpaid
fees against any fund Ambeliotis received as a result of the firm’s work.
Ambeliotis initially made regular payments for BGMS’s services. Once the
regular payments stopped, Ambeliotis assured BGMS she would pay the
1
BGMS purports to appeal from the denial of its Motion for Reconsideration.
It is well-settled that “an appeal will not lie from the denial of a motion for
reconsideration.” Karschner v. Karschner, 703 A.2d 61, 62 (Pa. Super.
1997). However, BGMS’s appeal was filed within 30 days of the January 22,
2016 Order granting Ambeliotis’s Petition. Thus, we will address the appeal.
J-S61033-16
fees. As a result, BGMS continued to represent her. At the time of the
equitable distribution trial in February 2015, Ambeliotis owed approximately
$60,000 in fees.
Following the equitable distribution trial, the Master released her
Report and Recommendation on May 18, 2015. According to the Master’s
Report, the marital estate would be divided 55/45 in Ambeliotis’s favor.
However, due to limited liquid assets available for distribution, the Master
recommended Ambeliotis receive her equitable distribution award through
84 monthly payments of $1,858.89. Additionally, Ambeliotis was to receive
$1,200 per month for 24 months, as rehabilitative alimony payments.
Thereafter, Ambeliotis and her ex-husband filed Exceptions.
In June 2015, Bendik left BGMS, and Ambeliotis transferred her case
with Bendik. Bendik argued Ambeliotis’s case on Exceptions, including an
argument for the equitable distribution to be allowed in one lump sum. On
November 15, 2015, after the Exceptions case was heard, the trial court
ordered the equitable distribution award to be paid through 84 monthly
payments of $2,283.15.2
While the Exceptions were still pending, BGMS filed a Petition to
Establish a Charging Lien. BGMS was seeking to recover Ambeliotis’s unpaid
balance for the services provided while Bendik was working at BGMS. In the
2
The trial court retained the 55/45 split in Ambeliotis’s favor. See Order,
11/15/15, at 1 (unnumbered); see also Trial Court Opinion, 4/6/16, at 2
n.1. The updated monthly distribution was higher due to some omitted
assets. See Trial Court Opinion, 4/6/16, at 2 n.1.
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October 21, 2015 Order, the trial court issued a charging lien against
Ambeliotis in the amount of $63,601.45. Any funds from an equitable
distribution award were to be placed in escrow “pending further agreement
of the parties or Order of Court.” Order, 10/21/15, at 2.
On January 22, 2016, Ambeliotis filed a Petition to Establish Payment
Plan on Charging Lien. Ambeliotis notified the trial court that she and BGMS
were unable to come to an agreement on how the charging lien should be
paid. On the same day, the trial court issued an Order for Ambeliotis to
make monthly payments of $1,200 to satisfy the charging lien. The trial
court directed Ambeliotis’s ex-husband to pay $1,200 of the monthly
equitable distribution award to BGMS, leaving Ambeliotis with $1,083.15 per
month from the award.3
Thereafter, BGMS filed a Motion to Reconsider, which the trial court
denied. BGMS filed a timely Notice of Appeal and a court-ordered Pa.R.A.P.
1925(b) Concise Statement.
On appeal, BGMS presents five questions for our review:
1. Did the trial court commit an error of law and abuse its
discretion in modifying the terms of an Order of Court entered
on October 21, 2015[,] for which no motion for
reconsideration or appeal had been filed?
2. Did the trial court commit an error of law and abuse its
discretion in acting outside of its authority and interfering
with contractual obligations entered into by BGMS and their
prior client?
3
It appears the trial court incorrectly stated that Ambeliotis would only
receive $1,038.15 after the payment to BGMS.
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3. Did the trial court commit an error of law and abuse its
discretion in deferring payments that were due BGMS
consistent with an attorney charging lien?
4. Did the trial court commit an error of law and abuse its
discretion in failing to follow established Pennsylvania law
relating to attorney charging liens?
5. Did the trial court commit an error of law, act outside of its
authority and abuse its discretion in entering an Order of
Court essentially modifying the terms of a fee agreement
between BGMS and their former client?
Brief for Appellant at 4 (issues renumbered for ease of disposition).
Initially, courts must consider five factors before issuing a charging
lien:
(1) [] there is a fund in court or otherwise applicable for
distribution on equitable principles, (2) [] the services of the
attorney operated substantially or primarily to secure the fund
out of which he seeks to be paid, (3) [] it was agreed that
counsel look to the fund rather than the client for his
compensation, (4) [] the lien claimed is limited to costs, fees or
other disbursements incurred in the litigation by which the fund
was raised and (5) [] there are equitable considerations which
necessitate the recognition and application of the charging lien.
Shenango Sys. Solutions, Inc. v. Micros-Systems, Inc., 887 A.2d 772,
774 (Pa. Super. 2005) (quoting Recht v. Urban Redevelopment Auth.,
168 A.2d 134, 138-39 (Pa. 1961)).
In BGMS’s first claim, it contends that the trial court abused its
discretion in modifying the terms of the October 21, 2015 Order. See Brief
for Appellant at 10-11. BGMS claims that because the Order granting the
Petition to Establish Payment Plan was filed three months after the Order
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J-S61033-16
granting the charging lien, the trial court acted outside of its jurisdiction
under 42 Pa.C.S.A. § 5505.4 Id.
In its October 21, 2015 Order, the trial court stated that any funds
Ambeliotis received through equitable distribution were to go into an escrow
account “pending further agreement of the parties or Order of Court.”
Order, 10/21/15, at 1-2. The trial court noted that the January 22, 2016
Order granting of the payment plan “did not modify the October 21, 2015
Order at all; it was contemplated by it.” Trial Court Opinion, 4/6/16, at 5.
Here, the trial court granted the charging lien against Ambeliotis while
the Exceptions on the equitable distribution were still being decided. Due to
the language of the original Order, and the fact that pertinent terms of the
equitable distribution award were still being determined at the time the
charging lien was issued, the October 21, 2015 Order was not a final order.
See Pa.R.A.P. 341(b)(1) (noting that a final order disposes of all claims and
parties); see also G.B. v. M.M.B., 670 A.2d 714, 717 (Pa. Super. 1996)
(stating that an order is final if it resolves all pending issues and constitutes
a complete disposition of the claims). Rather, the potential for further
judicial action was contemplated, and the trial court acted within its
4
Section 5505 states that “[e]xcept as otherwise provided or prescribed by
law, a court upon notice to the parties may modify or rescind any order
within 30 days after its entry, notwithstanding the prior termination of any
term of court, if no appeal from such order has been taken or allowed.” 42
Pa.C.S.A. § 5505.
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jurisdiction once such action was necessitated. Thus, BGMS’s first claim is
without merit.
In its second claim, BGMS contends that the trial court went beyond its
subject matter jurisdiction by interfering with the contractual obligations of
the fee agreement between BGMS and Ambeliotis. See Brief for Appellant at
12-14. In its third claim, BGMS argues that the trial court abused its
discretion by effectively deferring payments. Id. at 17-18.
“Whether a court has subject matter jurisdiction presents a question of
law, making our standard of review de novo and the scope of our review
plenary.” Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015).
In its Opinion, the trial court addressed BGMS’s claims and determined
they are without merit. See Trial Court Opinion, 4/6/16, at 6-8. Because
the foundation of the Petition to Establish Charging Lien was the language of
the fee agreement, it was within the trial court’s jurisdiction, and necessary
after failed payment negotiations, to examine the language of this fee
agreement and determine a reasonable interpretation under which to
enforce the charging lien. Further, notwithstanding the longer payment
schedule, the decision to grant the established payment plan does not
jeopardize BGMS’s interest in full payment of the unpaid fees. Thus, we
adopt the sound reasoning of the trial court for the purpose of this appeal.
See Trial Court Opinion, 4/6/16, at 9-10.
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In BGMS’s fourth claim, it avers that the trial court abused its
discretion by failing to follow Pennsylvania law relating to charging liens.
See Brief for Appellant at 15-16. BGMS asserts that the charging lien must
be satisfied before Ambeliotis is to receive any portion of the equitable
distribution award. Id.The trial court addressed BGMS’s fourth claim and determined that it is
without merit. See Trial Court Opinion, 4/6/16, at 8-9; see also 23
Pa.C.S.A. § 3323(f) (stating that the trial court may act with “full equity
power and jurisdiction[,] and may grant such other relief or remedy as
equity and justice require against either party or against any third person
over whom the court has jurisdiction and who is involved in or concerned
with the disposition of the cause.”); Shenango, 887 A.2d at 774 (stating
that a trial court may account for equitable considerations regarding the
issuance of the charging lien). We affirm with regard to this issue based on
the trial court’s sound rationale. See Trial Court Opinion, 4/6/16, at 8-9.
In its fifth claim, BGMS argues that the trial court acted outside its
authority by modifying the fee agreement. See Brief for Appellant at 19-20.
The trial court addressed BGMS’s claim and determined it is without
merit, and we incorporate such rationale herein. See Trial Court Opinion,
4/6/16, at 9-10. The fee agreement’s purpose of ensuring full compensation
for services provided by BGMS was not modified. Thus, the trial court’s
analysis of the fee agreement was reasonable, and we adopt its sound
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reasoning for the purpose of this appeal. See Trial Court Opinion, 4/6/16, at
9-10.
Based on the foregoing, the trial court acted within its jurisdiction, and
did not abuse its discretion. Thus, we affirm the Order granting the
payment plan.5
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/31/2016
5
Additionally, Ambeliotis seeks enforcement of an arbitration clause in the
fee agreement, and she requests an award of attorney’s fees related to this
appeal based on a frivolous appeal or vexatious conduct. See Brief for
Appellee at 8-9; see also Pa.R.A.P. 2744; Fee Agreement, 3/5/13, at 3-4.
However, Ambeliotis filed the Petition to Establish Payment Plan in the Court
of Common Pleas, and did not seek the assistance of the Allegheny County
Bar Association’s Special Fee Dispute Committee when BGMS would not
negotiate a reasonable payment plan. See Stanley-Laman Group v.
Hyldahl, 939 A.2d 378, 382-83 (Pa. Super. 2007) (stating that “[a] party’s
acceptance of the regular channels of the judicial process can demonstrate
its waiver of arbitration.”); see also Smay v. E.R. Stuebner, Inc., 864
A.2d 1266, 1278 (Pa. Super. 2004) (stating that acceptance of the judicial
process includes a party’s failure to raise the arbitration issue promptly).
Thus, Ambeliotis’s arbitration claim is waived. Further, the appeal was not
frivolous as it was reasonable for BGMS to appeal any decision through the
judiciary. Accordingly, Ambeliotis is not entitled to attorney’s fees.
-8-
Circulated 08/12/2016 03:00 PM
IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
FAMILY DIVISION
Sandra E. Ambeliotis,
Plaintiff, No.: FD- 13-003823
Superior Court No.: 229WDA 2016
v.
Nicholas M. Ambeliotis,
Defendant,
OPINION
April 6, 2016 Judge Cathleen Bubash
The law firm of Bunde Gillotti Mulroy & Schultz, (hereinafter "BGMS") which
represented Plaintiff, Sandra E. Ambeliotis (hereinafter "Wife") in her divorce
action, appeals my January 22, 2016 Order regarding a charging lien. In that
Order, I established a payment plan under which Wife would satisfy her
obligation to BGMS under the lien. For the reasons set forth below. my Order
should be affirmed.
Background
In March of 2013, Wife retained BGMS attorney Hilary Bendik to represent
her in a divorce action, paying an initial $3,500.00 retainer. The engagement
agreement between Wife and BGMS set forth the rights and obligations of each,
including BGMS's right to assert a charging lien for unpaid fees against any fund
received by Wife as a result of the firm's efforts.
Initially, Wife made. regular payments during the course of BGMS's
representation. Those. regular payments then stopped. Wife asserted .she
intended to pay and BGMS continued its representation. By the time of the
equitable distribution trial, Wife owed close to $60,000.00 in fees to BGMS.
1
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The equitable distribution case was heard by a special master in February
of 2015. In her May 18, 2015 Report and Recommendation, the Master divided
the marital estate 55/45 in Wife's favor. Although the parties had built a
successful business during their marriage, most of the substantial marital assets
were encumbered by substantial marital liabilities. Due to the scant liquid assets
available for distribution, and in order not to negatively affect the viability of the
marital business,the Master recommended that Husband pay Wife $1,858.89per
month for 84 months until she received $156, 146.65 to complete the 55/45
distribution scheme. She further recommended Wife receive $1200.00 in
monthly rehabilitative alimony payments for 24 months. Both parties filed
exceptions.
In June of 2015, just after the trial, attorney Bendik left BGMS, taking Wife's
case with her to her new firm. Bendik argued Wife's case on exceptions. While I
would have preferred to provide Wife with a lump sum from the marital estate, I
found, as did the Master, that doing so was essentially impossible because of the
way the parties had leveraged their assets. Accordingly, it was necessary for
Wife to receive her portion of equitable distribution over time. My November 15,
2015 Order partially sustaining Wife's exceptions provided, inter alia, that
Husband pay Wife $161,537.00, with interest, at the rate of $2283.15 per month
for 84 months to accomplish the equitable distribution award. 1
After my Order on exceptions, BGMS filed a Petition to Establish a
Charging Lien to recoup their unpaid fees. I granted BGMS's petition for a lien
by Order of October 21, 2015, which reads as follows:
"1. A charging lien is issued against Sandra E. Ambeliotis, and all assets
which she is entitled to pursuant to her rights and claims for equitable
distribution. The charging lien issued hereby is issued in favor of the Law
Firm of Bunde Gillotti Mulroy & Schultz, PC in the amount of $63,60I .45
pending further Order of Court.
11
I retained the 55/45 distribution scheme, added in some inadvertently omitted assets, affirmed the award of
alimony, and ordered Husband to refinance the marital home. None of these aspects of the underlying ruling are
relevant to the instant appeal.
2
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2. Any funds payable to Wife as a result of any equitable distribution
award shall be placed into an escrow account at Dollar Bank with
counsel from Bunde Gillotti Mulroy & Schultz, PC and counsel or Sandra E.
Ambeliotis serving as escrow agents.
3. Escrow shall be maintained pending further agreement of the
parties or Order of Court."
On January 22, 2016, Wife, through attorney Bendik, filed a Petition to
Establish Payment Plan on Charging Lien, asking that I enter a further Order of
Court, establishing a payment plan because the parties could not reach
agreement on how she should pay BGMS out of the monthly payments from
Husband. Wife proposed monthly payments of $1200.00 per month, which
would result in full payment of the $63,601.45 in 3.7 veors.? Wife represented,
and BGMS did not dispute, that the firm was unwilling to take any payment plan,
and was, instead, requiring the entire $2,283.00 received monthly by Wife be
held in escrow. This would leave Wife with only her $1,200.00 monthly alimony as
income.
On January 22, 2016, despite extremely vigorous argument from BGMS, I
entered an Order for Wife to make monthly payments of $1,200.00 to satisfy the
charging lien. That Order reads as follows:
" ... It is hereby ordered adjudged and decreed that BGMS to be
repaid under the charging lien at the rate of $1200.00/month until paid in
full, with $1038.15 paid directly to Wife. Husband shall direct the $1200.00
per month to {BGMS} until they have been repaid the $63,401.45 under
the charging lien. BGMS shall promptly notify counsel for Husband and
counsel for Wife once the balance has been paid in full."
BGMS promptly filed a Motion for Reconsideration which I denied on
February 2, 2016. On February 12, 2016, BGMS appealed, making good on a
promise made repeatedly during its very animated argument on the Motion for
Reconsideration. In response to my l 925(b} Order, the firm timely filed its
2
BGMS had received $10,000.00 directly from Husband
3
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Concise Statement of Matters Complained of on Appeal, which states, in
relevant part, as follows:
"a. The trial court committed an error of law and abused its
discretion in modifying the terms of an Order entered on October 21, 2015
for which no motion for reconsiderationor appeal had been filed.
b. The trial court committed an error of law and abused its
discretion in acting outside of its authority and interfering with contractual
obligations entered into by BGMS and their prior client. ·
c. The trial court committed an error of law and abused its
discretion in failing to follow established Pennsylvania law relating to
attorney°charging liens.
d. The trial court committed an error of law and abused its
discretion in deferring payments that were due BGMS consistent with an
attorney charging lien.
e. The trial court committed an errorof law, acted outside of its
authority, and abused its discretion in entering an Order of Court
essentiallymodifying the terms of a fee agreement between BGMS and
their former client."
Discussion
Initially, I note that I found it appropriate to issue a charging lien in favor of
BGMS in this matter. Under the law, five conditions must be met before a
charging lien is recognized and applied: l. There must be a fund applicable for
distribution on equitable principles; 2. services of the attorney must have
operated substantially or primarily to secure the fund; 3. It was agreed that
counsel look to the fund rather than the client for compensation; 4. the lien is
limited to fees incurred in the litigation by which the fund was raised; and 5.
There are other equitable considerations which necessitate recognition of the
lien. See, Shenango Systems Solutions, Inc. v Micros-Systems, Inc., 887 A.2d 772(Pa.Super. 2006).
I found the Agreement between BGMSand Wife clearly established that
BGMS could look to what fund it created for payment of its fees. I found Wife's
equitable distribution award was secured through BGMS's efforts in the litigation
4
Sa
for which she retained them. I also found that, since Wife was no longer a client
of BGMS,it was equitable that a lien be established.
The fact remains, however, that the "fund" which BGMS established for
Wife was to be paid out to her slowly over a number of years. I, accordingly,
found it equitable and reasonable that the amounts of that fund subject to the
charging lien would also have to be paid out to BGMSin installments.
My October 21, 2015 Order establishing the lien provided the funds
payable to Wife in equitable distribution be placed in escrow. Unlike a typical
equitable distribution award, Wife's payments were received monthly, and
could only be placed into the escrow account monthly. Pursuant to the Order,
that escrow was then to be maintained "pending further agreement of the
parties or Order of Court." When the parties were apparently unable to reach a
further agreement, Wife returned to Court.
A. Modification of my October 21, 2015 Order
In its first matter complained of, BGMS argues that I erred by "modifying
the terms" of my October 21, 2015 Order. The Order, itself, provided for
subsequent modification, either by agreement of the parties or by further Court
Order. My January 22, 2016 Order, filed in response to Wife's Motion to Establish
a Payment Plan, did not modify the October 21, 2015 Order at all; it was
contemplated by it.
In her Response to BGMS's Motion for Reconsideration and at argument
thereon, Wife demonstrated that BGMS was not willing to negotiate at all
toward an agreement. Essentially,BGMS demanded that the funds be held in
escrow for the two years it would take for the full balance to be reached.
Based on the facts of the case, I found this result would be inequitable.
Had BGMS been able to secure a lump sum payment for Wife to which they
could have looked for their fees, paying them in full prior to Wife receiving the
remainder of the fund would have been appropriate. Instead, . BGMS
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6a
miscalculated the outcome of the underlying case and allowed Wife's fees to
balloon to an unreasonable level rather than demand contemporaneous
payment. I found BGMSentitled to their fees, but not entitled to impoverish their
former client.
B. Interference with Contractual Obligations
BGMS next argues that I erred and abused my discretion by acting
"outside of {my} authority and interfering with contractual obligations entered
into by BGMSand their prior client."
The fee agreement between BGMSand Wife provided at Paragraph 6:
"By signing this retainer agreement, you agree that any check for final payment
of settlement of your case shall be made out to {BGMS}.You also hereby agree
that any outstanding fees ... with our firm may be taken directly out of the final
settlement of your case prior to the remaining funds being released to you." My
Order does not modify or reduce the amount which Wife owes to BGMS, nor
alter her obligation to her former firm. It provides only that BGMS be paid over
time, as is Wife.
Under Pennsylvania law, the Court must construe a contract only as
written and may not modify the plain meaning of the words under the guise of
interpretation. Trumpp v. Trumpp, 505 A.2d 601, 603 (Pa. Super. 1985); McMahon
v. McMahon, 612 A.2d 1360, 1364 (Pa. Super. 1992). Accordingly, it would
appear, at first review, that my Order modified the meaning of the party's
contract by not requiring the monthly payments be escrowed for two years and
paid out to BGMS prior to Wife receiving the remaining funds of her equitable
distribution award.
Contracts, however, are also to be interpreted by ascertaining the
intention of the parties. "Contracts must receive a reasonable interpretation.
according to the intention of the parties .. . the court may take into
consideration the surrounding circumstances, the situation of the parties, the
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objects they apparently have in view, and the nature of th? subject-matter of
the agreement." Silverstein v Hornick, 103 A.2d 734 (Pa. 1953).
The court is to give effect to those intentions of the parties if the same
can be done consistently with legal principles. I sit as a court of equity and
BGMS has asked me to exercise my equitable powers to assistthem in collecting
their fees. In this case, I found it was inequitable to impoverish Wife when the
intention of the parties and the object they had in view when contracting - that
BGMS receive all of its fees - can still be met without substantially prejudicing
BGMS or by placing Wife in what would be a precarious financial position.
The Master found, and I agreed, that Wife was in need of transitional
alimony in addition to her equitable distribution award. To limit Wife to receipt of
only the $ l ,200.00 in alimony on which to live for time it would take to satisfy
BGMS's lien would be unconscionable under the circumstances.
Pennsylvania follows the Restatement (Second) of Contracts. Section 261
of Chapter 11 of the Restatement reads: "Where, after a contract is made, a
party's performance is made impracticable without his fault by the occurrence
of an event the non-occurrence of which was a basic assumption on which the
contract was made, his duty to render that performance is discharged, unless
the language or the circumstances indicate the contrary." Under this standard,
a party's performance under a contract need not be strictly impossible, simply
impracticable.
I found establishing a payment plan to be necessary due to
impossibility of performance on Wife's part as originally contemplated by the
parties. Wife did not receive a "final settlement" as anticipated, but a final
payment plan. When Wife retained BGMS to represent her and when BGMS
agreed to forgo ongoing payment of its fees during that representation, both
parties anticipated a "fund" from which those accumulating fees would be
paid. This basic assumption on which the contract was made and on which the
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parties relied did not come about. Strict performance under the contract,
therefore, became impracticable. BGMS can only look to the fund it helped
create and that fund is being created over time.
In this case, I took each of these aspects into consideration in setting
up an appropriate, equitable, and reasonable payment plan.
C. Failure to Follow Law Regarding Charging Liens
BGMS next claims that I failed "to follow established Pennsylvania law
relating to attorney charging liens." The right of an attorney to a priority
charging lien has long been recognized and enforced in Pennsylvania. See,
Smyth v. Fid. & Deposit Co. of Maryland, 190 A. 398, 402, opinion adopted; 192 A.
640 (Pa. 1937).
Attorney charging liens have long been issued by the courts of
Pennsylvania to protect attorneys. As the Pennsylvania Supreme Court stated in
Harris's Appeal, 323 Pa. 124, 130-131 (Pa.1936):
"The charging lien, originally, was defined to be the right of an attorney
at law to recover compensation for his services from a fund recovered by
his aid, and also the right to be protected by the court to the end that
such recovery might be effected. Unlike the retaining lien, the charging
lien does not depend upon possession, but upon the favor of the court in
protecting attorneys, as its own officers, by taking care, ex oequo et
bono, [according to the right and good] that a party should not run away
with the fruits of the cause without satisfying the legal demands of the
attorney by whose industry those fruits were obtained."
My Order does nothing which jeopardizes BGMS from being paid for its
industry. Wife cannot "run away with the fruits of the cause" as she is not
receiving them all at once and BGMS's payments are sent to it directly.
Under Pennsylvania law, an attorney's equitable charging lien is
superior to that of other creditors. My Order does nothing to disturb the priority of
BGMS's lien. The issuing of the lien and the requirement that the funds be paid
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to BGMS directly prevent any of Wife's other creditors from depleting the fund.
BGMS simply has to receive its fees in the same manner as Wife receives her
award.
In this case, as a court sitting in equity, I had the responsibility both to
protect BGMS's right to be paid for services provided and to effectuate
economic justice between Husband and Wife, the litigants before me. My
decision was not based on partiality or malice, but was based on the factual
circumstances of the case.
Escrowing all of the funds received by Wife would satisfy the lien in a bit
over two years. Under the payment plan established, it will take 3.7 years.
Without the established payment plan, Wife would not have adequate income
to support herself for two years, negating the purpose of her alimony award.
Balancing all of the issues before me, a payment plan was the most just and
equitable alternative.
D. Modification of Fee Agreement
Lastly, BGMS argues that I acted outside of my authority and abused
my discretion by "entering an Order of Court essentially modifying the terms of a
fee agreement between ·BGMS and their former client." This argument is
basically identical to its second argument at (b). As noted above, my Order did
not modify the most essential elements of the fee Agreement - namely. that
BGMS be paid for its efforts in achieving an award for Wife.
BGMS's Agreement states at Paragraph 4: "This office expects you to
keep your account current by paying in full all balances due by the date
specified on your monthly invoice.' Notwithstanding this expectation, BGMS
allowed Wife's outstanding bill to grow to over $63,000.00.
The practice of law is a learned profession which is regulated by the
Pennsylvania Rules of Professional Conduct. These rules present ethical and
contractual issues for the lawyer and client that do not exist between people
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engaged in ordinary sales or service businesses. Hence, the attorney-client
relationship is treated differently by the Courts than the relationship between, for
instance, a property owner and a construction contractor. Business dealings by
lawyers with their clients must be "fair and reasonable to the client" pursuant to
Rule of Professional Conduct 1.8(a.)(1.).
In this case, I found that BGMSwas not being fair and reasonable when it
flatly refused to accept any sort of payment plan proposed in good faith by
Wife. The predicament in which BGMS finds itself was, to a great degree, of its
own making. First, it allowed Wife's balance to grow without demanding
payment when due and second, it miscalculated the likelihood of a single fund
being created sufficient to pay off the bolonce. I found that, under those
circumstances, since Wife was receiving her award over time, it was only .fair,
equitable, and reasonable to allow Wife time to satisfy her obligation to BGMS.
Conclusion
Because my February 2, 2016 Order was reasonably fashioned to protect
all BGMS and Wife, and is consistent with the laws of this Commonwealth, it
should be affirmed.
BY THE COURT:
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