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ELMORE v. MONTGOMERY

December 12, 1967

Jacobo Rey ELMORE, Plaintiff,
v.
Charles B. MONTGOMERY and Charles B. Montgomery, Jr., Individually and trading as Montgomery Construction Company, Defendants



The opinion of the court was delivered by: DUMBAULD

 A Peruvian lawyer sues here for a fee for services rendered to a Pennsylvania partnership which obtained a contract to construct an extensive irrigation project in Peru. The contractor's performance was unsatisfactory to the Peruvian government, which cancelled the contract, seized the partnership's assets in Peru, and finished the job through the sub-contractors. There were large claims against the partnership on the part of creditors, and a real possibility that these claims constituted a personal liability which might be asserted against defendants in Pennsylvania.

 The Gibson bank in Peru was itself a creditor, and suggested that defendants employ plaintiff as attorney in negotiations for a settlement. The plan adopted was for the Peruvian government (which had seized valuable equipment and property of defendants) to settle with the creditors, giving defendants what was in effect a complete release from further liability.

 Defendants paid a large "finder's fee" or "kick-back" in connection with obtaining the construction contract, including inter alia a large fee to Dr. Yrigoyen, a prominent Peruvian lawyer. Yrigoyen brought suit to recover an unpaid balance of $70,000.00. Defendants, who believed Yrigoyen had been paid enough, employed plaintiff (over his own advice to employ another lawyer) in this suit, in which he had some success though defendants did not answer his letters or otherwise cooperate with him after he had rendered a bill for services.

 Defendants' contention is that they believed that the Gibson bank would pay for plaintiff's services to defendants. No such arrangement was ever reduced to writing, but it is very plain that defendants did give plaintiff a written power or powers of attorney, and in the precise form he required, in order to avail themselves of his services.

 We are satisfied, and find as a fact, that plaintiff did in fact perform valuable services for defendants in the negotiations regarding the settlement with creditors, and release of defendants from further liability on claims which conceivably might have been asserted in Pennsylvania against defendants for approximately $1,200,000.00, as well as in handling the Yrigoyen suit involving a claim for $70,000.00.

 The work performed by plaintiff in the settlement involved repeated negotiations with government departments, on account of political changes in personnel, in order to convince the government to assume the claims of creditors and to release defendants. The Yrigoyen case involved trial and appellate work of the usual forensic character.

 We are therefore satisfied that plaintiff is entitled to a reasonable fee, and find that $12,500.00 would be appropriate compensation.

 We find no merit in the other defenses of statute of limitations or conflict of interests.

 Accordingly judgment is entered for plaintiff in the amount of $12,500.00.

 In accordance with the foregoing opinion, the Court makes the following findings of fact and conclusions of law.

 FINDINGS OF FACT

 1. Plaintiff Jacobo Rey Elmore is a citizen of the Republic of Peru, with mailing address at A. Miro Quesada 376, Office 309, Casilla No. 1106, Lima, Peru. He is a lawyer.

 2. Defendants Charles B. Montgomery and Charles B. Montgomery, Jr., are partners trading as Montgomery Construction Company. They are in the general construction business and their principal place of business is located within the jurisdiction of the District Court of the United States for the Western District of Pennsylvania, at 803 W. Main Street, Grove City, Pennsylvania.

 3. The amount in controversy in each count of the complaint exclusive of costs and interest, exceeds the sum of $10,000.00.

 4. On July 6, 1955, the government of the Republic of Peru entered into a contract with defendant Montgomery Construction Company for the construction of what was known as Choclococha Project. It was the purpose of this massive irrigation project to divert the waters of Lake Choclococha in the highlands of Peru to the Ica River below. The project contemplated open canals, tunneling and a great deal of excavation and construction. The total contract was in the approximate amount of $10,000,000.00.

 The Parties to the contract were Montgomery Construction Company of Grove City, Pennsylvania, U.S., and Republic of Peru.


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