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HomeMy WebLinkAbout94-907 CivilDAUPHIN DEPOSIT BANK AND TRUST COMPANY, Plaintiff VS. RALPH W. HESS, JOAN B. PATTISON and JERED L. HOCK, individually and on behalf of all others similarly situated, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 907 CIVIL 1994 ACTION FOR DECLARATORY JUDGMENT CLASS ACTION IN RE: OPINION PURSUANT TO RULE 1925 In this case, the plaintiff, Dauphin Deposit Bank and Trust Company, has filed a class action lawsuit against almost five thousand of its IRA account holders. By agreement of the parties, the court issued an order requiring the bank to pay all reasonable counsel fees and expenses of the defendants. Following some dispute concerning the amount of counsel fees, we issued an order dated February 1, 1995, granting the defendant's motion to compel reasonable counsel fees and costs, disavowing any requirement that the defendant's counsel fees not exceed $100,000. Following commencement of trial in this case, the parties reached a settlement. The proposed class action settlement was, however, rejected. The plaintiff then filed a notice of appeal to the Superior Court. On July 10, 1997, the Superior Court issued an order reversing this court's order rejecting the proposed class settlement. The matter continues on appeal, the defendants having sought re-argument before the Superior Court en banc and/or review of the matter by the Supreme Court. In July of 1997, counsel for the defendant class received correspondence from counsel for Dauphin Deposit to the effect that the bank would not pay counsel fees should the class 907 CIVIL 1994 representatives seek re-argument before the Superior Court or allocatur before the Supreme Court of Pennsylvania. On August 15, 1997, the defendant class representatives filed a petition requesting an order compelling the bank to pay all reasonable attorney's fees and expenses while this case is on appeal. This motion was granted on September 5, 1997. The plaintiff bank thereafter filed an application for a supersedeas and a request for expedited review. Both requests were denied. Plaintiff has now appealed our order requiring them to continue to pay counsel fees. The bank has taken the position that, while they are responsible for all reasonable counsel fees, requiring them to pay counsel fees with the case in its current procedural posture is manifestly unreasonable. In this attempt to avoid payment despite an agreement to the contrary, there are striking resemblances to the underlying litigation. The plaintiff has caused a class of its own account holders to be certified for the privilege of suing them. Clearly, whether counsel fees are reasonable has much more to do with the amount of the fee than the course taken by the defendants during the litigation. While it is always possible that opposing counsel could undertake a course of action which is patently ridiculous, this is clearly not the case here. By undertaking to pay counsel fees for one's opponent, a party must accept any course of litigation which is reasonably foreseeable. There is no question that settlement of class action cases requires court approval. Pa.R.C.P. 1714. Implicit in this requirement is the possibility that the court will not agree with the proposed settlement. The parties then have the option of resorting to further trial of the case or to 2 907 CIVIL 1994 appealing the court's refusal of the settlement. Once appealed, a case can take any one of several courses and the potential outcomes are well understood. In the meantime, to permit the plaintiff to withhold counsel fees would, in essence, permit them to determine the course of the litigation. In other words, by determining what course is and is not "unreasonable," the plaintiff assumes control of the defense. This would be an obviously untenable result. January/$f1998 Leroy Zimmerman, Esquire Stephen Shibla, Esquire For the Plaintiff Christopher Conner, Esquire For the Defendants :rim Kevin A. Hess, J.