HUBER, et al v. TAYLOR, et al
MEMORANDUM OPINION denying the 436 MOTION to Amend/Correct 435 Order filed by WILLIAM DEEM, JOHN BIDLENSCIK, TERRI LYNN LINK, ERNEST GISHNOCK, ANTHONY DEFABBO, WILLIAM J. AIRGOOD, RONALD L. HUBER, JOHN DINIO, HILMA MULLINS. Signed by Chief Magistrate Judge Lisa Pupo Lenihan on 12/05/2011. (jmb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
RONALD L. HUBER; WILLIAM J.
AIRGOOD; ANTHONY DeFABBO;
JOHN DINIO; ERNEST GISHNOCK;
JOHN BIDLENCSIK; HILMA MULLINS
and WILLIAM DEEM, individually and
on behalf of those similarly situated
ROBERT G. TAYLOR, II; ROBERT G.
TAYLOR, P.C.; R.G. TAYLOR II, P.C.;
ESTATE OF ROBERT A. PRITCHARD;
PRITCHARD LAW FIRM, PLLC;
JOSEPH B. COX, JR.; JOSEPH B. COX,
JR. LTD; and COX AND COX, LLP
Civil Action No. 002-304
Chief Magistrate Judge Lisa Pupo Lenihan
ECF No. 436
OPINION ON PLAINTIFFS’ MOTION TO AMEND THE JUDGMENT
I. HISTORY AND SCOPE OF CLAIM
As noted repeatedly in this Court‟s previous Opinions, the claims presently remaining in
this 2002 action relate to Defendants‟ representation of the eight (8) above-named Plaintiffs (the
“Named Plaintiffs”) in consolidated individual personal injury actions for exposure to asbestos, in
the State Court of Mississippi (the “Mississippi Asbestos Exposure Consolidated Litigation” or
“Mississippi AECL”). More specifically, “Plaintiffs maintain, under the express law of the case
as set forth by the Court of Appeals, a claim for breach of fiduciary duty under Texas law, by
which they may be entitled, despite having incurred no actual injury, to disgorgement of all or
some portion of the attorney fees paid by the Named Plaintiffs . . . . And with evidence sufficient to
raise a question of intentional breach of fiduciary duty, Plaintiffs might also be entitled to punitive
damages under Texas law.” See September 29, 2011 Opinion on Motions for Class Certification
and Partial Summary Judgment (denying Plaintiffs‟ Motion for Class Certification and granting
Defendant‟s Motion for Partial Summary Judgment) (the “September Opinion”).1 Plaintiffs‟
claims turn on allegations that Defendants breached their Texas law fiduciary duty (by failing to
adequately disclose material information, including, e.g., co-counsel arrangements and/or
settlement information, to Mississippi AECL participants residing in Pennsylvania, Ohio and
Indiana (the “Northern Clients”); allocating settlement funds disproportionately owing to
conflicting fee incentives; and/or failing a duty of candor/disclosure by imposing excessive
The Court‟s September Opinion explained at length its bases for granting partial summary
judgment. See September Opinion; see also Defendants‟ Joint Memorandum of Law in
Opposition to Plaintiffs‟ Motion to Amend (“Defendants‟ November Memorandum”).
Presently pending is Plaintiffs‟ October, 2011captioned “Motion to Amend the
Judgment”, which is essentially a Motion for Certification for Interlocutory Appeal of this Court‟s
The Third Circuit recently denied Plaintiffs‟ Petition for Leave to Appeal this Court‟s denial of
class certification. See November 17, 2011 Order, Case No. 11-8084.
grant of Defendants‟ Motion for Partial Summary Judgment, asserted under 28 U.S.C. ' 1292(b).2
Said Motion will, for reasons set forth below, be denied.
II. INTERLOCUTORY APPEAL
Under 28 U.S.C. ' 1292(b), the Court may certify an Order for interlocutory appeal where
it concludes that it Ainvolves a controlling question of law as to which there is substantial ground
for difference of opinion and that an immediate appeal from the order may materially advance the
ultimate termination of the litigation.@ The circumstances must meet each of these three (3)
And the party seeking certification has the burden of establishing that exceptional
circumstances warrant departure from the general policy against piecemeal litigation and in favor
of postponing appellate review until after the entry of final judgment. See, e.g., Vaughn v.
Flowserve Corp., 2006 WL 3231417 (D.N.J. Nov. 8, 2006); see also Harris v. Kellogg, Brown &
Root Services, Inc., 2009 WL 1248060 (W.D. Pa. Apr. 30, 2009) (“Certification pursuant to
section 1292(b) should be granted „sparingly‟ and only when [all] three conditions are met.”).
III. ISSUES AND ANALYSIS
Plaintiffs seek interlocutory appeal to the Third Circuit under 28 U.S.C. ' 1292(b), on what
they characterize as this Court‟s fundamental errors in the following “controlling questions of
law”: (A) whether the parole evidence rule applies to interpretation of a contract in the context of a
Plaintiffs suggest that they should obtain immediate appellate review “as either reversal or
affirmance would force [the parties] to consider seriously settlement.” Plaintiffs‟ Memorandum
of Law in Support at 1. If either party has not yet – in the nine (9) year course of this litigation
deemed it time to “consider seriously” their position under the law – a subject on which much
express guidance has been given by this Court and the Court of Appeals for the Third Circuit – it is
strongly suggested that they undertake that assessment prior to further pleading.
breach of fiduciary claim; (B) whether Defendant Pritchard was Plaintiffs‟ attorney; and (C)
whether there is sufficient evidence for a reasonable jury to conclude that Defendant Taylor
satisfied his fiduciary duties to Plaintiffs in attempting to withdraw from representation.”
Plaintiffs‟ Motion to Amend the Judgment at 2.3
A. Inapplicability of Parole Evidence Rule
The September Opinion granted partial summary judgment on Plaintiffs‟ claim that
Defendants breached a Texas law fiduciary duty because settlement funds were allocated on the
basis of conflicting fee incentives that disfavored Northern clients. In doing so, it set forth the
factual evidence identified by the parties.4 It then addressed Plaintiffs‟ assertion that under the
See also id. (asserting that “the Order conflicts with Third Circuit precedent as to all three
The facts in evidence are that:
(1) Defendant Taylor (a Texas lawyer) had a written co-counsel agreement with local counsel for
Northern clients in the Mississippi AECL that entitled him to between 95-97.5% of an underlying
40% contingency fee.
(2) Defendants Taylor and Pritchard (a Mississippi lawyer) had a written Agreement on Fees
with Walter Weathers (a Texas lawyer who is not a party to this action), pertaining to and applied
with regard to Southern clients in the Mississippi AECL, that entitled Taylor to 50%, and Pritchard
and Weathers to 25% each, of an underlying 40% contingency fee. See Defendants‟ Joint
Concise Statement of Undisputed Material Facts and Exhibits thereto. See also Defendants‟ Joint
Reply Brief in Further Support of MPSJ at 4-5 & n. 8 (citing testimony that Agreement pertained
to Southern clients in the Mississippi AECL (e.g., clients from Mississippi and neighboring states
such as Alabama and Louisiana), including both those with whom Pritchard had a direct client
relationship and those referred to him by other lawyers in Southern states).
This Agreement includes language, in its fourth paragraph, encompassing “all referral or other fees
collected from other attorneys on cases filed or to be filed in the State of Mississippi, to
specifically include, but not be limited to, all fees paid by William Roberts Wilson, Alwyn Luckey,
John Arthur Eaves, Maurice Campbell, Matt Dove, and Billy H. Davis, Jr. . . .” See Defs. Ex. E in
Support of Partial Summary Judgment Motion. Defendants have introduced testimony that this
language was intended and applied to additional Southern client cases, e.g., referrals from the
named counsel, all of whom resided/practiced in Mississippi, Texas and/or other Southern states.
Agreement on Fees, Taylor‟s 95-97% fee in the Northern clients‟ cases, like his fee in the Southern
clients‟ cases, was subject to a 50% fee share to Pritchard and Weathers. After observing that
“the question raised by Plaintiffs is whether Defendant counsel allocating settlement funds had an
expectation of retaining a greater portion of the underlying fee in Southern cases”, the Opinion
concluded that “the understanding of the parties to the fee-sharing agreements and the parties’
practice pursuant to those agreements is certainly material to determining that expectation” and
“a contested interpretation of the language that runs contrary to all evidence of the parties’
understandings and course of performance is insufficient to raise a triable issue as to any
purported conflicting interest.” September Opinion at 19 (emphasis added).
As noted in the September Opinion and canvassed in Defendants‟ Joint Reply Brief in
Further Support at 11-13, the cases cited by Plaintiffs in their supportive Memoranda were and
remain factually and legally inapposite. Plaintiffs‟ assertion, in their Memorandum of Law in
Support of Motion to Amend at 2, that this Court “[held] that the parole evidence rule does not
apply when interpreting an unambiguous contract unless the plaintiff asserts a breach of contract
See Defendants‟ Joint Reply Brief in Further Support of MPSJ at 5, 7-8 & n. 12 (citing deposition
testimony of parties to Agreement).
(3) The four (4%) percent fee received by Defendant Cox (a North Carolina lawyer) for work in
negotiating certain related settlements did not vary by class member‟s state of residence. See
January 25, 2010 Opinion at 17; Third Amended Complaint at Paragraph 17; Plaintiffs‟
Memorandum of Law in Opposition at 18.
(4) Cox and Taylor were responsible for allocating the settlement funds among the Mississippi
AECL plaintiffs . See Plaintiffs‟ Memorandum of Law In Opposition to Defendants‟ MPSJ at 6
(citing Plaintiffs‟ Statement of Facts at paragraph 22 and Exhibits thereto); id. at 19.
September Opinion at 16-19. (The Court further observes that there is no evidence of record that
Taylor‟s fee on the Northern Clients was ever reduced by any amount under his Agreement on
Fees with the Southern lawyers set forth in (2) above.)
claim”5 is, in light of the actual language of the Opinion, simply incorrect. To the contrary, the
Court rejected Plaintiffs‟ contention that the parole evidence rule could be invoked (a) by a third
party with neither contractual nor beneficiary relationship to the contract to (b) preclude the
contracting parties‟ evidence of mutually-agreed intent and course of conduct over several years
where (c) that third-party wished the Court to interpret the contract to have had some other
meaning and (d) said party had introduced, despite nine (9) years of litigation, not one iota of
evidence that the contract had been interpreted or implemented in a manner potentially giving rise
to the improper settlement allocations alleged. See September Opinion. As the September
Opinion indicates, interpretation of the Fee Agreement is simply not at issue. Rather, the
allegation of conflicting incentives raised by Plaintiffs turns on the expectation of receipt of fees –
an issue as to which the Defendants‟ actual conduct is clearly more relevant than a theoretical
interpretation of contract language. The Court, accordingly, looked to evidence of the contracting
parties‟ intent and practices. 6 Compare In re Unisys Corp. Retiree Med. Benfit ERISA Litig., 57
F.3d 1255 (3d Cir. 1995) (interpretation of contract where breach of fiduciary duty claim turned on
employer‟s failure to apply terms of ERISA benefit plan).7
Plaintiffs‟ Memorandum of Law in Support at 2 (also asserting that such holding was “directly
contrary to Third Circuit precedent applying the parole evidence rule . . . in the context of a breach
of fiduciary claim”).
Even assuming the parole evidence rule were applicable to evidence of the parties‟ intent at the
time of drafting, Plaintiffs have not demonstrated that it would bar evidence of their course of
performance. Application vel non of the parole evidence rule does not significantly affect the
outcome, since most evidence at issue would remain admissible. Compare Plaintiffs‟
Memorandum of Law in Support at 7; cf. Defendants‟ November Memorandum at 14.
Plaintiffs refer to Third Circuit ERISA case law and make no attempt to demonstrate the answer
to this question under Texas law. Compare Defendants‟ November Memorandum at 6, 11. No
further holding is necessary to the Court‟s Opinion and Order, but the Court observes that
Plaintiffs make no showing contrary to Defendants‟ recitation of Texas decisions (and citations to
hornbook law) indicating that the parole evidence rule may not be invoked by strangers to the
B. Absence of Evidence of Discriminatory Settlement Allocations Owing to Conflict
As reiterated above, the grant of partial summary judgment on Plaintiffs‟ “conflicting fee
incentive” theory was premised on Plaintiffs‟ failure to make out evidence of discriminatory
settlement allocations owing to/attributable to a conflict of interest. The Court made no holding
as to “whether Defendant Pritchard was Plaintiffs‟ attorney” nor was any such holding requisite to
the Court‟s Opinion, for reasons self-evident therein. See September Opinion at 17-19 and nn.
22-23. As Defendants observe, Plaintiffs appear to have made this question up out of whole cloth.
The Court further notes that:
(1) On its face, whether or not Pritchard was Plaintiffs‟ attorney is not a question of law.
The existence of an attorney-client relationship is at best a mixed question of law and fact, and
normally would be predominantly a factual question.
(2) Plaintiffs‟ status as clients of Pritchard would not be controlling, as grant of summary
judgment on their claim for disgorgement for breach of fiduciary duty arising from
disproportionate settlement allocations attributable to conflicting fee incentives, as against
Pritchard, would remain appropriate in view of Pritchard‟s non-determination of settlement
allocations and non-receipt of fees, rendering any disgorgement claim nugatory.
(3) Rather than pointing to any evidence suggesting that Plaintiffs were Pritchard‟s
clients, Plaintiffs‟ attempt to make much of the Third Circuit‟s general observations, in Huber I
that there was “no question that defendant attorneys owed Plaintiffs fiduciary duty” as “all
attorneys in a co-counsel relationship individually owe each . . . client the duty of loyalty”. See
contract. Nor do Plaintiffs cite any authority in any jurisdiction that applies the parole evidence
rule to circumstances that involve the parties‟ expectations rather than contractual interpretation.
Plaintiffs‟ Memorandum of Law in Support at 2 (quoting Huber v. Taylor, 469 F.3d 67, 82 (3d Cir.
2006). But that statement, properly considered in context, clearly does not address the factual
issues regarding Pritchard in particular, and the Circuit did not have before it, e.g., the undisputed
testimony that Pritchard never expected nor received any funds from Plaintiffs‟ cases. The
Circuit‟s generic statement cannot, therefore, be transmuted into a declaration of a rule of law.
In that the September Opinion premised its conclusions on the factual evidence before it,
and on relevant precedent and holdings, Plaintiffs‟ mischaracterizations and/or misunderstandings
of those facts and that case law do not alter this Court=s analysis.
There remains, therefore, only
Plaintiffs‟ third asserted error of law:
C. Adequacy of Notice of Withdrawal by Local and Affiliated Counsel Following
Suit by Plaintiffs
Finally, as to this issue, the September Opinion concluded that Local Counsels‟
correspondence adequately and appropriately provided notice to their Plaintiff clients of their
withdrawal, and that of affiliated counsel, from representation in the asbestos litigation. As the
Opinion observes, Plaintiffs had elected, through other counsel, to initiate litigation against
Defendants alleging various misconduct (including professional malpractice, breach of fiduciary
duty, fraud, and conversion) in such representation. As Plaintiffs, and not Defendants, initiated
termination of any attorney-client relationship, the cases cited in Plaintiffs‟ supporting memoranda
are again largely inapposite.
In addition, the existence of a triable question as to whether Taylor
See September Opinion at 21-24 (“Plaintiffs fail to adduce evidence substantiating that,
following Plaintiffs’ filing suit against Defendant counsel, they lacked access to legal advice
through their counsel in this case, or that Taylor failed in any way to comply with applicable codes
of professional conduct, failed to cooperate in the transfer of representation, or by his improper
satisfied his notification duties clearly turns on an evidentiary analysis – indeed, Plaintiffs phrase it
as such – and is, therefore, quintessentially not a question of law potentially appropriate for
The Court reiterates that Plaintiffs must have been well aware that their decision to bring
suit against Taylor made his continued representation of them untenable. They were then given
express, unambiguous, facially-intelligible notice of withdrawal by their local counsel - i.e., by
their principal contact counsel and direct-relationship counsel - on behalf of all co-counsel.9
Plaintiffs‟ present protestation that they did not understand this communication (curiously
couched as an “admission”) is belied by the fact that they were represented by counsel who were
intimately involved in questions concerning Plaintiffs‟ attorney-client relationship with
Defendants.10 In any event, there is no authority suggesting that Taylor had an obligation to
conduct prejudiced the Named Plaintiffs‟ interests. The Court moreover observes that Named
Plaintiffs‟ filing of a lawsuit clearly asserting that Defendants breached their duties toward
Plaintiffs with every settlement amounted to a repudiation of authority to enter into such
settlements on their behalf, if not a repudiation of the attorney-client relationship in its entirety.”);
Defendants‟ Joint Reply in Further Support at 13-14. Cf. Janury 25, 2010 Memorandum Opinion
at 12 (noting that Plaintiffs “certainly have effectively terminated their attorney-client relationship,
i.e., their relationship of trust is irretrievably broken”); CP Solutions PTE, Ltd. v. Gen. Elec. Co.,
550 F.Supp.2d 298, 302 (D. Conn. 2008) (“[I]t is hard to imagine a situation presenting a greater
conflict of interest than an attorney‟s being sued by his client for malpractice while still serving as
counsel of record in the underlying action . . . . Clearly, under the circumstances . . ., withdrawal
of representation is not only warranted but required.”).
While counsel‟s duty of loyalty is non-delegable (i.e., that counsel retains liability for any
breach), it is an absurdity to suggest that tasks/generation of work product/communications
associated with legal representation are also non-delegable, i.e., that counsel must perform each
associated task him/herself. Compare Plaintiffs‟ Memorandum of Law in Support at 2 (asserting
that Taylor‟s responsibility to communicate his withdrawal from representation” was
non-delegable under the Third Circuit‟s holding as to the duty of loyalty). Cf. Defendants‟
November Memorandum at 8 (discussing governing Texas law); id. at 17 (distinguishing
delegation of duties of, e.g., disclosure and communication).
Plaintiffs have not indicated to the Court any delay in their provision of the withdrawal notices
convey any particular subjective understanding on the part of Plaintiffs. The Court found that
reasonable minds could not differ as to the legal sufficiency of Taylor‟s notice, and Plaintiffs‟
avowed failure to understand what was plainly conveyed does not alter that determination.
D. Improbability of Material Advancement of Ultimate Resolution
As Plaintiffs have not met the first two prongs of the three conditions precedent to
cert9ifying an order for interlocutory appear, it will not go into depth on the third condition. The
Court does observe, however, that Plaintiffs‟ contention that resolution of any of the above
asserted issues would materially advance the ultimate resolution of their action is speculative at
best. The questions to be tried in the remaining claims differ from those dismissed. And in view
of the contentious history of this litigation, it is reasonably likely that – absent newly “serious”
consideration of their positions11 and a change in conduct – the disappointed party will seek
appeal after trial even if these issues were reviewed. Accordingly, Plaintiffs‟ request would give
rise to precisely the sort of piecemeal appeal that the final judgment rule is designed to guard
to their current counsel.
See supra note 3.
Plaintiffs‟ contend that, as their “claims are small and [they] are of little means, they “should not
be forced to incur the expense of two trials”. Plaintiffs‟ Memorandum of Law In Support at 3; id.
13 (“Plaintiffs are former steelworkers of modest means” and “[t]heir individual claims for
disgorgement are . . . in many cases, less than $1000”). But neither the costs which Plaintiffs have
incurred/will occur, nor their agreements with current counsel (nor, indeed, whether any portion of
associated costs are being paid by others), is of record. The Court therefore declines to give
weight to a paupers‟ argument absent further record showing. It is, of course, appropriate that any
understandings regarding litigation expense or fee arrangements be of record as they become
relevant to a federal law suit.
As Plaintiffs present no “controlling question of law” as to which there is “substantial
ground for difference of opinion”, it will be ordered that Plaintiffs‟ Motion to Amend the
Judgment be denied.
Lisa Pupo Lenihan
United States Chief Magistrate Judge
Date: December 5, 2011
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?