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Posted by on Dec 20, 2017 in Attorney Discipline, Civil, Contract | 0 comments

SCF Consulting, LLC v. Barrack, Rodos and Bacine: A contract action against a law firm alleging an unethical fee-sharing agreement should be allowed to proceed

A divided Supreme Court of Pennsylvania agreed that a lawsuit against a law firm based on a breach of a contract should be allowed to move forward, even though the alleged contract would have been in violation of the fee-sharing rules of professional conduct. The Court was divided on the reason, and remanded for further proceedings “without present guidance from this Court.”

SCF Consulting filed a civil complaint against Barrack, Rodos & Bacine, a law firm on Market Street in Philadelphia (where Benjamin Franklin performed many of his electricity experiments). SCF alleges that Barrack Rodos failed to make contracted for payments to a consulting firm based on a percentage contingent recovery. Barrack Rodos denied the existence of such a contract and filed preliminary objections arguing that, even if such a contract existed, it would be void under the Rules of Professional Conduct.

The trial court dismissed the complaint via preliminary objections.

Opinion by CJ Saylor: We don’t agree on this case, but it should be allowed to go forward

The Chief Justice, joined by Justice Dougherty, lays out the compelling arguments on both sides, and rules 4-3 for the whole Court that the breach of contract action must be allowed to go forward. The question presents a Scylla and Charybdis: a per se rule in favor of dismissal may put lay and legal parties on notice that fee-sharing contracts are unenforceable and thus discourage their formation, but it would also reward unscrupulous attorneys, who are already in a powerful bargaining position with non-lawyers, and result in a windfall to the unethical attorney.

The Rules of Professional Conduct purport not to affect any substantive law, but rather only govern the conduct of attorneys. Should the disciplinary board be a client’s only remedy when an attorney agrees to an illusory contract, or should the client be able to resort to the courts for a remedy?

Saylor and Dougherty “would hold only that the contract cause of action is not per se barred by the purported infraction on [the law firm’s] part and, accordingly, the county court’s bright-line approach to the unenforceability of the alleged consulting agreement should not be sustained.” However, the majority is only willing to agree “that the present contract action should not have been dismissed.” Accordingly, “the dismissal will be overturned” and remanded for further proceedings “without present guidance from this Court” as to the ultimate underlying issue.

Conclusion: A case to watch

The Court’s internal divisions on this matter give both parties a second bite at the apple, and the arguments developed before the Court of Common Pleas and in subsequent appeal will be interesting to watch. You can be almost certain that this will be back before the Court again soon.

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Posted by on Dec 5, 2017 in Civil, Constitutional Provisions | 0 comments

Scarnati v. Wolf: Press Releases aren’t “Proclamations”

In Scarnati v. Wolf, the Supreme Court of Pennsylvania rules 6-1 that a press release does not satisfy the Pennsylvania Constitution’s requirement of veto by proclamation under Article IV, Section 15.

In 2014, two appropriations bills passed the House and Senate, and were presented to the Governor for his signature. The House adjourned upon passing the bill, and the Governor vetoed the bill, returning it to the parliamentarian of the House. Unlike under the Federal Constitution, where the President’s veto back to the House would be the end of the matter if the House had adjourned, the Pennsylvania Constitution requires the Governor to issue a “proclamation” announcing his veto. The Governor, in this case, issued a press release announcing and explaining his veto. The House and Senate challenged the veto in court as invalid.

Two issues were presented in this appeal: first, what is an “adjournment” under this clause? Since the House adjourned, and the Senate did not, was the body adjourned such that the onus lay on the Governor to issue a proclamation, or on the House to re-consider the vetoed provisions of the two bills?

Majority by Wecht: The House was Adjourned, and Notice by Proclamation Was Required

The majority, speaking by Justice Wecht, held that the General Assembly did stand adjourned when the vetoed provisions of the bills were returned to the House parliamentarian, and that the Governor’s failure to publish a proclamation of his veto was fatal to the rejection of the bill. Discussing the overlap and distinctions of the Federal Government’s constitutionally prescribed procedure, the Court discussed the underlying goals of the “filing and proclamation” provisions of Article IV, Section 15. Paramount among these is public notice of the struggle between political branches, and the current status of a proposed bill.

The Court had little trouble dispensing with the “ambiguity” about when the legislature actually adjourned. There had been some discussion that the House had impermissibly adjourned without the Senate’s approval, but given that both houses had entered their adjournments upon their journals without any note of objection, the Court concluded that the presumption was in favor of constitutionality.

Given, then, that the House prevented the return of the Governor’s veto by its adjournment, the Court noted that the
The Court acknowledged that the parliamentarian is charged with receiving vetoes from the Governor during the regular session, but went on to reject the Governor’s argument that the parliamentarian was an “agent” of the House designated to accept “service” of vetoes. “We reject the Governor’s argument that the procedure utilized for the return of a bill during a legislative session somehow dictates the procedure to be used during an adjournment of the General Assembly.” The Court goes on to note that, even if the parliamentarian could be designated an agent for the House, there is no evidence that he was ever so designated.

Thus, the Court was constrained to consider whether the Governor appropriately followed the “filing and proclamation” protocol to finalize his veto. Although the Governor appropriately filed his objections with the Secretary of State, his issuance of a press release did not satisfy the requirements of the Constitution. The Supreme Court of Pennsylvania rejected Governor Wolf’s argument that changing technology made the press release or even a tweet a sufficient form of notice to all citizens. “Formality is a critical tool in distinguishing political rhetoric and advocacy in its myriad forms from public notice of a constitutionally or legally significant declaration. Such formality cannot be abandoned.”

Historically, proclamations in Pennsylvania have followed a very precise format. While that format need not be followed precisely, at least some of the “indicia” or “hallmarks” of formality needed to be included. These included the Governor’s seal, and most importantly, the proclamation had to include explicit language demonstrating that the Governor was following the “filing and proclamation” procedure under the Constitution. Thus, his “informal communication to the public via mass media” was insufficient to sustain a veto.

Conclusion: Budget Finality…For the 2014 Budget

This case demonstrates the importance of having constitutional scholars on staff in political offices. It is fairly important that the Governor’s staff gave little or no thought to the procedure for properly vetoing a bill under the circumstances, and only after the fact did they give thought to how to spin the situation to show that they had complied with the rules. As the old saying goes, it’s best to measure twice so you have to cut only once.
The precise definition of a “proclamation” may now come under fire in future cases. The Court offers a general form that has sufficed in the past, and the Governor’s office would be wise to use that form in future cases.
It is unfortunate that a case like this takes three years to reach a final ruling at SCOPA. Meanwhile, provisions of the budget laws have been under fire and in limbo. Now, at least, there is finality on the budget from three years ago.

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Posted by on Dec 1, 2017 in Civil, Justiciability | 0 comments

In re 2014 Allegheny County Grand Jury: Mootness ruling must be based on facts

In an unusually brief, unanimous opinion, Chief Justice Saylor ruled that the Superior Court erred in finding a dispute between two parties moot where the facts of record did not clearly demonstrate mootness.

WPXI, a television station, sought access to certain sealed grand jury documents about a sex scandal at a local school on the basis of Pennsylvania’s common law right of public access to judicial documents. The Commonwealth fought the disclosure of the documents based on the need for privacy in grand jury proceedings. The trial court ruled the documents could not be disclosed, and the Superior Court dismissed the matter completely on WPXI’s admission that the documents had been leaked by another juror and were available on the internet. Both parties agreed the dispute was live, but the Superior Court did not.

The Supreme Court of Pennsylvania reversed. A court should not make a mootness determination unless the facts make clear that the controversy is in fact of no effect. In this case, a news agency has a stronger interest in obtaining documents “from the source” than other litigants might, and it is not clear that its concerns are satisfied by the disclosure of the documents from a third party.

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Posted by on Nov 23, 2017 in Civil, Right to Know | 0 comments

Miller v. County of Centre: District Attorneys are not “Judicial Agencies” exempt from Right to Know disclosure requirements

Right to Know (RTK) requests by several defense attorneys in Centre County (home of Mount Nittany) revealed communications between DA Stacy Parks Miller and judges on CCP and MDC, which the defense attorneys used to demonstrate ex parte communications in various cases. The County handed over all documents requested without consulting with Parks Miller or the judicial staffs. Parks Miller sued for an injunction prohibiting future disclosures on the basis that she is not subject to the general disclosure requirements of the Right to Know Law (RTKL) because she is part of a “judicial agency” as defined in the statute.

The Supreme Court of Pennsylvania ruled in Miller v. County of Centre that DAs are not “judicial agencies” for purposes of the RTKL, and are subject to the general disclosure of requested documents unless they can show another valid privilege or exemption.

Majority by Wecht: Plain text of RTKL includes DAs in disclosure requirements

Justice Wecht, writing for the 5 members of the unanimous Court, says that an “examination of the RTKL, the definitional section of the Judicial Code, 42 Pa.C.S. § 102, and the definitions provided in our Rules of Judicial Administration, demonstrate that a district attorney’s office is not a ‘judicial agency’ for purposes of the RTKL,” and thus, is subject to the general disclosure rules of the statute.

Determining how the DAs of Pennsylvania are classified is a crucial step in the fight over disclosure of their records. This is because there is a presumption that “All records in the possession of Commonwealth and local agencies are presumed to be public records subject to disclosure” unless a specific exemption, privilege or statute can be shown to exempt them. The common law right to access public documents that precedes Pennsylvania’s first RTK statute. The public policy of Pennsylvania strongly supports disclosure of government documents upon request of private parties.

However, this broad duty to disclose does not apply to “judicial agencies” under the RTKL. The DA’s argument “relies entirely upon the facially curious inclusion of district attorneys within the definition of ‘system and related personnel’ set forth in the Judicial Code and the Rules of Judicial Administration.” But a quick review of the Judicial Code and the RTKL reveals that DAs are defined as “related staff,” and not “personnel of the system.” Thus, they are not shielded as “judicial agencies” under the RTKL.

This reading is consistent with the objective of the RTKL, which “‘is to empower citizens by affording them access to information concerning the activities of their government,’ to promote openness to official government information in order to prohibit secrets, scrutinize the actions of public officials, and to make public officials accountable for their actions.” The RTKL and its predecessor, RTKA were designed to increase accountability for unelected agencies, and to ensure the public’s right to access information remains unfettered by red tape.

Concurrence by Donohue: We’re borrowing definitions from other statutes

Justice Donohue, joined by Justice Dougherty, concurs in the result that DAs are not judicial agencies, but chides the majority for borrowing too liberally from the judicial code in making its determination in the present case. The definitions of the respective statutes “are intended to apply only to the defined terms contained in those statutes and rules.”

Conclusion: So…about those ex parte communications…

Perhaps I’m just amped up from reading about judges being dismissed over ex parte communications, but I’m extremely curious to know more about the underlying facts in this case. The Court makes no comment on the scandalous allegations—and perhaps because they’re either pending as formal charges, or because the charges went nowhere already—but I can’t contain my own curiosity as to the nature of these communications and the results of them.

Our Supreme Court continues to chart a bold and broad reading of the RTK’s disclosure requirements—consistent, I believe, with the text and purpose of the RTKL. In PSP v. Grove, decided earlier this year, the Court did not shy away from making the State Police offer up their motor vehicle recordings in a broad ruling; now the Court makes clear that DAs are required to give up information upon request, as well.

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Posted by on Nov 23, 2017 in Civil, Insurance, Statutes of Limitations | 0 comments

Erie Ins. Exchange v. Bristol: SOL on UM claims begins to run at refusal to arbitrate

On July 22, 2005, Mr. Bristol was injured when he was struck in a hit and run accident within the scope of his employment in Upper Dublin Township (childhood home of Josh Singer, an Emmy-nominee and Oscar winner). Two years later, Bristol’s attorney put Erie on notice of the uninsured motorist (UM) claim, and Erie responded with a “reservation of rights” letter. Both parties agreed to several of the arbitrators and engaged in negotiation. Bristol had to put the matter on hold for a few years when he was incarcerated on unrelated matters. But negotiations stalled, and in May 2013, Erie filed a declaratory judgment action seeking a ruling that Bristol’s 4-year breach of contract statute of limitations (SOL) had run pursuant to 42 Pa.C.S. § 5525.

This is an issue of first impression for SCOPA, although the Superior Court has a long line of precedents on the matter.

Majority by Mundy: Clock starts ticking on breach

Justice Mundy, speaking for the 6-1 majority, rules that a UM claim’s SOL begins to run at the date of the insurer’s breach, which could be at the date of the denial of coverage to the insured, or the date of some other breach of a contractual obligation, such as the date that the insurer refused to arbitrate. This ruling is based on the principle that it is “the accrual of the right of action that starts a limitations period to run.” This accords with the majority of jurisdictions.

There are essentially three ways to determine when the SOL for a UM claim begins to run: at the denial of coverage, as argued by Bristol, at the time the injured party knows the tortfeasor was uninsured (or underinsured), which is what Erie urged, or in a more absolute sense, at the date of the accident. The Court denies Erie’s argument that insurance contracts are different from other contracts subject to the general four-year SOL, and finds that Bristol had no need to file in court to preserve his claim until his contractual rights were denied—in this case, when Erie refused to move forward with arbitration on the basis that the SOL had run.

The majority attempts to quell the concerns of the insurance industry that there will now be no clear cut-off for UM claims by suggesting that cases of extraordinary delay may be solved by “equitable principles.” Usually, claimants will gain nothing by delay, and if they do stall unreasonably, the courts can bar their claims on other grounds.

Dissent: I’m fine with the ruling, but this argument was forfeited below

Justice Wecht may be the only dissenter, but he writes with enough fury for the whole Court. A little background: back in May, after oral argument, the Court re-phrased the grant of allocator, with the practical effect of expanding the issue it had originally granted for briefing and argument. It did so over Wecht’s vehement dissent (the Chief Justice’s explanation is here). Justice Wecht argued the matter had been forfeited by Bristol at both the trial court and the Superior Court, where Bristol’s only arguments were that he notified Erie of his intent to pursue a UM claim within the applicable four year time period, and in the alternative, that the four-year SOL was tolled by the filing for arbitration. In other words, he never suggested that the time period had not even begun to run, which was his argument before the Supreme Court.

“I refuse to endorse Bristol’s choose-your-own-adventure litigation strategy,” Wecht explains, arguing it is time “either by rule or by decision—to commit to clear standards for determining whether a particular case warrants departure from our ordinary issue preservation doctrines. Absent such standards, the unpreserved issues that the Court regularly declines to consider will continue to be indistinguishable from those that we idiosyncratically agree to resolve. In my view, such arbitrary and selective enforcement of our Rules of Appellate Procedure is ill-advised.”

Conclusion: Perhaps there’s a corresponding duty of good faith on the part of the insured

The Court’s opinion appears to be correct on the substance, as even the vehement dissent points out. Your SOL begins to run on a breach of contract when the contract has been breached. But unlike most contractual situations, the insured has no real obligations to the insurer after the date of the accident. His obligations are done. He paid his premiums, and the contract was valid on that date.

So how can an insurance company know that the insured is abandoning his UM claim, or is simply sitting on it? Can the insurance company force his hand in any way? Perhaps there is a corresponding duty of good faith and fair dealing owed by the insured to his insurance company that forces him to communicate if asked what he intends to do. Realistically, this opinion leaves the ball in the insured’s court to wait to file or move forward on a claim until he’s ready.

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Posted by on Nov 23, 2017 in Attorney Discipline, Civil, Constitutional Provisions | 0 comments

In re Roca, In re Segal: No, we can’t just ignore the Constitution

The Supreme Court of Pennsylvania is, perhaps, the most powerful state Supreme Court within its own jurisdiction. Given comprehensive power over all attorney discipline matters by the state Constitution, our Supreme Court has struck down validly-passed statutes that transgress this judicial power. Pennsylvania’s Supreme Court also maintains “King’s Bench” authority to step into any case at any time and render a decision on any matter, great or small, within a case. Other jurisdictions limit their high courts by practice or rule.

These cases call on the Pennsylvania Supreme Court to determine whether the Commonwealth’s Constitution limits SCOPA’s power to re-consider the punishments handed down by the Court of Judicial Discipline (CJD), and whether its common law King’s Bench power gives the Court power to intervene where the Constitution says it cannot.

Three judges were caught up in various schemes involving phone calls to one another and receiving phone calls from government officials asking for special favors in various cases, including entering continuances, re-opening cases closed by default, and granting or denying motions. The calls were recorded by the FBI pursuant to criminal investigations and then turned over to the CJD.

One judge resigned amidst the scandal; the remaining judges were removed from the bench and barred from holding future judicial office. Judge Segal’s offenses seem to be much more serious, involving an ongoing and persistent pattern of ex parte phone calls, favors and other judicial misconduct. Judge Roca’s conduct was limited to one instance in which she requested a favor from another judge for a family member. Roca argued that her conduct did not warrant the harsh penalties imposed on her, and that the Court should moderate her punishment in consideration of the punishment imposed for past crimes.

These cases were argued together, but ruled on separately. I will focus on In re Roca because its legal argument is much more interesting, and because the ruling in In re Segal follows a fortiore.

Majority by CJ Saylor: King’s Bench power does not override the Constitution

Pennsylvania’s Chief Justice, speaking for the 4-3 majority, makes the final ruling on this judicial misconduct. The Chief Justice rejects the notion that the Court’s common law King’s Bench power allows it to step into a proceeding for which the Commonwealth’s Constitution strictly limits review. The Court is limited to reviewing the record to ensure the facts found were not erroneous and that the punishment inflicted is not unlawful. It is not the place of the Court to trample the prerogative of the people or override the Constitution.

Relying on the plain language of Article V, § 18(c)(2), the Court declares that its standard of review is limited to overturning a judgment which is clearly contrary to law. The Court may not second-guess the punishment prescribed by the CJD, nor may it replace CJD’s judgment with its own. The Court may not ignore the Constitution in favor of its common law King’s Bench power.

In response to the claim that the CJD exceeded its authority in removing the Judge, the Supreme Court rules, “The CJD has wide discretion to fashion the appropriate penalty once it finds a predicate violation.” The Court opens the door to the idea that a punishment could be so beyond the pale of appropriateness, but does not make clear what that punishment would be.

Finally, the Court rejects Roca’s claim that she should not face such a severe punishment because it is unfair to her. The primary purpose of Judicial Discipline is to maintain the public’s confidence in the judiciary and to repair the public’s perceptions where misbehavior has brought the courts into disrepute. Thus, Roca’s claims of a personal right to more merciful consideration fall against the public concern.

Segal’s situation is far more serious, and Segal’s arguments are not as well developed. The Court’s majority affirmed the convictions of both judges.

Dissent by Donohue

Justice Donohue dissents, appalled at the “breathtakingly narrow definition of our standard of review,” which is “patently violative of the United States Constitution,” argues that the Court should engage a much broader inquiry into the conviction, and consider these appeals like any other. She urges that the Court should ensure the equal administration of justice for every citizen—including disgraced former judges.

Conclusion

The Pennsylvania Constitution made the CJD an independent body capable of exercising its discretion in determining what to do with judges who had violated the public trust. SCOPA’s power to review these decisions is accordingly limited. This is one of the few places where our Supreme Court’s power is limited.

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