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HomeMy WebLinkAbout2009-1518 (2) LAURA TOBIN DONLEY, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : : : v. : CIVIL ACTION - LAW : PAUL FORSYTHE d/b/a/ PROFORMA : No. 09-1518 - Law FORSYTHE MARKETING, : Defendant. : JURY TRIAL DEMANDED IN RE: PLAINTIFF’S MOTION FOR AWARD OF COUNSEL FEES OPINION and ORDER HESS, P.J., April 28, 2011. For consideration at this time is Plaintiff Maura Tobin Donley’s Motion for Award of Counsel Fees. (Plaintiff’s Motion for Award of Counsel Fees From and Against Defendant and Defendant’s Counsel, Jointly and Severally, Pursuant to Section 2503 of the Pennsylvania Judicial Code (hereinafter “Plaintiff’s Motion for Award of Counsel Fees”), filed Jan. 7, 2011). Following the entry of a directed verdict at trial, Plaintiff filed the motion sub judice. (Plaintiff’s Motion for Award of Counsel Fees, filed Jan. 7, 2011). The facts of this case may be summarized as follows. Plaintiff filed an action alleging the breach of an oral contract for media and public relations services. (Plaintiff’s Complaint, filed Apr. 2, 2009). Plaintiff alleged that Defendant failed to fully pay her for the work she performed for Defendant in connection with the Gettysburg Championship, a professional golf tournament held in August 2008. In February 2009, Plaintiff’s complaint was resolved in her favor in Magisterial Court 09-1-02. On April 2, 2009, following Defendant’s appeal and rule to file complaint, Plaintiff filed a complaint with the Cumberland County Court of Common Pleas. As a result of Plaintiff’s personal knowledge regarding the facts of her contract, Plaintiff named Paul Forsythe d/b/a Proforma Forsythe Marketing as the defendant in the complaint. She did not name the Gettysburg Championship as a defendant because she did not believe that she had entered into a contract with that entity. Plaintiff believed that she had entered into a contract with Defendant and Defendant’s marketing business to provide public relations services for the golf tournament, and she alleged that she was unaware that Defendant had also incorporated a non-profit 501(c)(3) corporation under the same name until she was informed by Defendant’s counsel in a letter dated January 20, 2009. Defendant Forsythe’s defense was simply that he did not enter into a contract with Plaintiff, either as an individual or on a sole proprietorship basis. Rather, Defendant asserted from the beginning of the litigation, and throughout the litigation, that the contract was entered into on behalf of the Gettysburg Championship. (See Defendant’s Answer and New Matter, ¶¶ 41-43, filed Apr. 20, 2009, alleging that “At all time relevant to Plaintiff’s Complaint, Forsythe was acting as the Executive Director of a non-profit corporation known as the Gettysburg Championship. At no time relevant to Plaintiff’s Complaint was Forsythe acting individually or as a representative of Proforma Forsythe Marketing. At all time relevant to Plaintiff’s Complaint, Defendant was an independent contractor of the Gettysburg Championship.”). During preparation for trial, throughout discovery, and during the pendency of the matter in general, Defendant maintained that Plaintiff’s contract was with the Gettysburg Championship, and, as a result, that Plaintiff had named the wrong party in her complaint. Plaintiff attached to her Motion for Award of Counsel Fees letters from Defendant’s counsel stating just that; an example is as follows: “Accordingly, your suing [Mr. Forsythe] personally is 2 out of line. You certainly have every right to sue Gettysburg Championship who I believe may have entered into this contract with you relative to the payment of your services. However, Duff Forsythe, individually has no obligation to pay and you should not be suing him personally.” (Plaintiff’s Motion for Award of Counsel Fees, Ex. A, Letter of N. Christopher Menges, dated Jan. 20, 2009). Prior to trial, Defendant filed a Motion for Summary Judgment asserting that Plaintiff’s contract was not with Defendant Forsythe, but rather the contract was between Plaintiff and the Gettysburg Championship. (Defendant Paul Forsythe’s Motion for Summary Judgment, filed Aug. 8, 2009, denied Oct. 14, 2009). It is clear that the central tenet of the defense in this case was that Defendant Forsythe was not a party to the contract, and, furthermore, that it was actually the Gettysburg Championship who, according to the defendant, had entered into a contact with Plaintiff. For these reasons, we were mystified at the testimony of the Defendant at trial wherein he disavowed any involvement with the Gettysburg Championship as a 501(c)(3) corporation. During his testimony, Defendant Forsythe admitted that the contract was not with the Gettysburg Championship; rather it was with him and his company. In direct contradiction of the defense he had taken for the past year, Defendant admitted on the stand almost all of the assertions Plaintiff had claimed in litigating her case. As a result of Defendant’s testimony, we directed a verdict in favor of Plaintiff and against Defendant in the amount of $7,100.00 together with interest at the legal rate from and after August 30, 2008. (Order of Court, Dec. 6, 2010). Pennsylvania law provides that, in certain situations, litigants shall be entitled to reasonable counsel fees as part of the taxable costs of the matter. 42 Pa.C.S. §2503. Such litigants include “(7) [a]ny participant who is awarded counsel fees as a sanction against another 3 participant for dilatory, obdurate or vexatious conduct during the pendency of a matter.” 42 Pa.C.S. §2503(7). Also included is “(9) [a]ny participant who is awarded counsel fees because the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith.” 42 Pa.C.S. §2503(9). The award of counsel fees “is intended to reimburse an innocent litigant for expenses made necessary by the conduct of an opponent.” Am. Mut. Liab. Ins. Co. v. Zion & Klein, P.A., 339 Pa. Super. 475, 480, 489 A.2d 259, 262 (1985). “The intent of the rule permitting the recovery of counsel fees is not to punish all of those who initiate actions which ultimately fail, as such a course of action would have a chilling effect upon the right to raise a claim.” Dooley v. Rubin, 422 Pa. Super. 57, 64, 618 A.2d 1014, 1018 (1993) (citing Santilo v. Robinson, 383 Pa.Super. 604, 557 A.2d 416 (1989)). Instead, the statute is directed at sanctioning those “who knowingly raise, in bad faith, frivolous claims which have no reasonable possibility of success, for the purpose of harassing, obstructing or delaying the opposing party.” In re Estate of Liscio, 432 Pa. Super. 440, 446, 638 A.2d 1019, 1022 (1994) (citing Dooley v. Rubin, 422 Pa. Super. at 57). The trial court may, therefore, require another participant to the litigation to pay the counsel fees of the other party if the participant’s conduct in commencing the action, or otherwise, was “arbitrary, vexatious, or in bad faith,” or if the party’s conduct during the pendency of the matter was “dilatory, obdurate or vexatious.” 42 Pa.C.S. §2503(7), (9) (emphasis added). A participant’s conduct has been in bad faith if he “files a lawsuit for purposes of fraud, dishonesty or corruption.” Scalia v. Erie Ins. Exchange, 2005 Pa. Super. 223, ¶ 6, 878 A.2d 114, 116 (citing Berg v. Georgetown Builders, Inc., 822 A.2d 810, 816 (Pa. Super. 2003)). A participant’s conduct has been vexatious if “he brought or continued a lawsuit without 4 legal or factual grounds and if the suit served only to cause annoyance.” Id. (citing Miller v. Nelson, 768 A.2d 858, 862 (Pa. Super. 2001), appeal denied, 566 Pa. 665, 782 A.2d 547 (2001)). Furthermore, obdurate conduct is defined, inter alia, as “unyielding; stubborn.” Id. Where attorney’s fees are authorized by statute to promote the purposes of a particular legislative scheme, “the trial court should not determine the appropriateness of counsel fees under the general standards applicable in all litigation. Rather, it should consider whether an award of fees would, in the circumstances of the particular case under consideration, promote the purposes of the specific statute involved.” Krassnoski v. Rosey, 454 Pa. Super. 78, 85, 684 A.2d 635, 639 (1996) (emphasis added). As a result, the amount of counsel fees awarded in such situations is vested within the sound discretion of the trial court. Am. Mut. Liab. Ins. Co. v. Zion & Klein, P.A., 339 Pa. Super. at 477. In order to award attorney’s fees, the trial court must make specific findings of the proscribed conduct. Scalia, 2005 Pa. Super. 223, ¶ 7 (citing Township of Strabane v. Piecknick, 546 Pa. 551, 559, 686 A.2d 1297, 1301 (1996)). The trial court “has great latitude and discretion with respect to an award of attorneys’ fees pursuant to statute . . . If there is support in the record for the trial court’s findings of fact that the conduct of the party was obdurate, vexatious or in bad faith, we will not disturb the trial court’s decision.” Id. at ¶ 8 (internal citations omitted). The trial court’s finding of obdurate, vexatious or bad faith conduct will not be reversed absent an abuse of discretion. Lucchino v. Commonwealth, 570 Pa. 277, 284, 809 A.2d 264, 269-70 (2002). It is clear that the statute does not limit its applicability to only the conduct of the parties; rather, a court may sanction a party and his counsel, jointly and severally, under Section 2503 if 5 the conduct of the attorney is found to be within the ambit of the statute in either the commencing of the action or during the pendency of the matter. In re Estate of Liscio, 432 Pa. Super. at 448 (finding that, in the facts of that case, counsel fees were properly awarded against the party and her counsel, jointly and severally); see also 42 Pa.C.S. § 102 (defining “Participant” as “Litigants, witnesses and their counsel” for purposes of Title 42). Applying the forgoing, it is clear that the conduct of Defendant Forsythe was in bad faith, dilatory, obdurate and vexatious within the meaning of Section 2503. Defendant Forsythe, by and through his counsel, asserted from the beginning of this litigation that a contract existed, if at all, between Plaintiff and the Gettysburg Championship, as a 501(c)(3) corporation. Plaintiff’s complaint was filed April 2, 2009, and it was not until December 6, 2010, during trial, that Defendant Forsythe disavowed any involvement with the Gettysburg Championship as a 501(c)(3) corporation. During his testimony, Defendant Forsythe admitted that the contract was not with the Gettysburg Championship; rather it was with him and his company. The length of time it took for this to come out, the promotion of an out-of-thin-air defense, and the bad faith with which this defense was promulgated all warrant an award of counsel fees against Defendant Forsythe. Certainly, his conduct was vexatious as his entire defense was “without legal or factual grounds. . . .” Scalia, 2005 Pa. Super. 223 at ¶ 6. Furthermore, the support and continuance of a false defense is obdurate conduct, as defined as “unyielding; stubborn.” Id. Defendant Forsythe’s conduct prolonged the litigation; increased expenses, both individually and judicially; and had “no reasonable possibility of success.” In re Estate of Liscio, 432 Pa. Super. at 446. Lastly, his conduct was simply “for the purpose of harassing, obstructing or delaying the 6 opposing party.” Id. For these reasons, an award of counsel fees against Defendant Forsythe is proper. With regard to counsel for Defendant Forsythe, after review of the record and case law, we find that his conduct, while straddling the line, does not cross into the realm of arbitrary, vexatious, or bad faith conduct. We are constrained to accept his word at the hearing on the motion sub judice, wherein he represented to this court that he “was as surprised by Mr. Forsythe’s testimony at trial as plaintiff’s counsel was.” (N.T. 14, Hearing, In Re: Plaintiff’s Motion for Award of Counsel Fees, March 17, 2011, (hereinafter N.T. __ (March 17, 2011))). Attorney Menges stated, further, that “Mr. Forsythe and I spent quite a bit of time discussing this case and preparing for the case at the various stages. Never had he at any time made any indication that his testimony would be different than the defense that we presented.” (N.T. 14 (March 17, 2011)). Accepting these assertions as true, we decline to hold Attorney Menges jointly and severally liable for the bad faith conduct of Defendant Forsythe. Certainly, some of the motions filed by Attorney Menges in this case have left us perplexed. Plaintiff makes much of the Defendant’s Motion in Limine, filed Oct. 28, 2010, wherein Defendant sought, in part, to keep out evidence regarding the Gettysburg Championship. We previously described this portion of the motion as “baffling” in light of the defense that was being advanced. The motion, however, also contained other issues, at least one of which we found to be of merit. (The portion of the Motion in Limine pertaining to Defendant Forsythe’s criminal history was properly sought by Attorney Menges, and, ultimately, granted.) Defense counsel, in this case, has clearly made the mistake of equating a vigorous motions practice with effective representation. He is not, however, the first practitioner to do so. 7 For today, we will give him the benefit of the doubt on the question of whether the motions filed in this case were “for the purpose of harassing, obstructing or delaying the opposing party.” In re Estate of Liscio, 432 Pa.Super. at 446. For the foregoing reasons, the following order will be entered. ORDER AND NOW, this day of April, 2011, upon consideration of Plaintiff’s Motion for Award of Counsel Fees From and Against Defendant and Defendant’s Counsel, Jointly and Severally, Pursuant to Section 2503 of the Pennsylvania Judicial Code, filed January 7, 2011, and Plaintiff’s Amendment to her Motion for Award of Counsel Fees, filed January 11, 2011, and Defendant’s Answer to Plaintiff’s Motion for Award of Counsel Fees, filed January 13, 2011, and following argument held on March 17, 2011, Plaintiff’s Motion for Award of Counsel Fees is GRANTED IN PART and DENIED IN PART. Judgment for attorney’s fees of $13,256.00 plus costs in the amount of $303.02 is hereby entered against Defendant Paul Forsythe d/b/a Proforma Forsythe Marketing. No judgment is entered against Defendant’s counsel, Attorney Matthew D. Menges. BY THE COURT, __________________ Kevin A. Hess, P.J. Carol Steinour Young, Esquire For the Plaintiff Matthew Menges, Esquire For the Defendant :rlm 8 MAURA TOBIN DONLEY, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : : : v. : CIVIL ACTION - LAW : PAUL FORSYTHE d/b/a/ PROFORMA : No. 09-1518 - Law FORSYTHE MARKETING, : Defendant. : JURY TRIAL DEMANDED IN RE: PLAINTIFF’S MOTION FOR AWARD OF COUNSEL FEES ORDER OF COURT th AND NOW, this 28 day of April, 2011, upon consideration of Plaintiff’s Motion for Award of Counsel Fees From and Against Defendant and Defendant’s Counsel, Jointly and Severally, Pursuant to Section 2503 of the Pennsylvania Judicial Code, filed January 7, 2011, and Plaintiff’s Amendment to her Motion for Award of Counsel Fees, filed January 11, 2011, and Defendant’s Answer to Plaintiff’s Motion for Award of Counsel Fees, filed January 13, 2011, and following argument held on March 17, 2011, Plaintiff’s Motion for Award of Counsel Fees is GRANTED IN PART and DENIED IN PART. Judgment for attorney’s fees of $13,256.00 plus costs in the amount of $303.02 is hereby entered against Defendant Paul Forsythe d/b/a Proforma Forsythe Marketing. No judgment is entered against Defendant’s counsel, Attorney Matthew D. Menges. BY THE COURT, __________________ Kevin A. Hess, P.J.