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ADLER v. ALAN B. EPSTEIN (12/28/77)

decided: December 28, 1977.

ADLER, BARISH, DANIELS, LEVIN & CRESKOFF, A PARTNERSHIP, PLAINTIFF/APPELLEE,
v.
ALAN B. EPSTEIN, RICHARD A. WEISBORD, ARNOLD J. WOLF AND SANFORD I. JABLON, DEFENDANTS/APPELLANTS



No. 1478 October Term, 1977, Appeal from the Final Decree entered May 5, 1977 by the Court of Common Pleas of Philadelphia County, April Term, 1977, Trial Div., No. 195 in Equity.

COUNSEL

Alan M. Lerner, Philadelphia, for defendants/appellants.

Patrick T. Ryan, Philadelphia, for plaintiff/appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Spaeth, J., files a concurring opinion. Watkins, President Judge, and Price and Van der Voort, JJ., dissent.

Author: Hoffman

[ 252 Pa. Super. Page 556]

The instant case raises an issue important to the entire legal community. Appellants, salaried associates in appellee firm, notified approximately 400 of appellee's clients on whose cases appellants had worked that appellants were forming a partnership and that the clients were free to terminate their relationship with appellee and to be represented by appellants. Appellants contend that the lower court erred when it enjoined them from ". . . contacting and/or communicating with those persons who up to and including April 1, 1977, had active legal matters pending with and were represented by [appellee]." We agree and would dissolve the injunction entered by the court.

Prior to February 27, 1976, the partners of appellee firm were partners in the law firm of Freedman, Borowsky and Lorry, ("Freedman, Borowsky," herein) in Philadelphia. Appellants were salaried associates in the same firm. At that time, all of the attorneys involved in this action withdrew from Freedman, Borowsky and commenced practicing law under the name of Adler, Barish, Daniels, Levin & Creskoff. (Appellee to this action; "Adler, Barish," herein). Appellants continued as salaried associates in the new firm. The

[ 252 Pa. Super. Page 557]

    departing partners transferred 1300 case files from Freedman, Borowsky to Adler, Barish.*fn1

During the first year of the new partnership, the partners of appellee opened in excess of 600 new files. The partners assigned appellants to various cases primarily as litigation attorneys. Dissatisfied as associates with Adler, Barish, appellants began developing plans for their own partnership during the fall of 1976.

Prior to severing employment with Adler, Barish, appellants rented office space and obtained a line of credit with First Pennsylvania Bank. In their application for credit, appellants enumerated as prospective clients numerous clients of Adler, Barish on whose cases appellants were working. After announcing their intention to resign their positions, but before leaving appellee firm, appellants began contacting approximately 400 of appellee's clients. The correspondence included an explanation that appellants were terminating employment with Adler, Barish and a form letter addressed to Adler, Barish, to be signed by the client, discharging Adler, Barish as the client's attorney.*fn2

On April 4, 1977, the lower court granted appellee's application for a restraining order against appellants to prevent further contacts with appellee's clients and a rule to show cause why a preliminary injunction should not be issued. On April 11, the court commenced a hearing on appellee's request for a preliminary injunction. Subsequently, appellants asked that the matter be treated as a final hearing. On May 5, within 24 hours of the close of testimony,*fn3 the lower court entered the following final decree:

[ 252 Pa. Super. Page 558]

"AND NOW, to wit, this 5th day of May, 1977, it is hereby -- ORDERED and DECREED -- that the defendants, ALAN B. EPSTEIN, RICHARD A. WEISBROD, ARNOLD J. WOLF and SANFORD I. JABLON, and all persons acting in concert with them or otherwise participating with them or acting in their aid or behalf, are permanently enjoined and restrained from contacting and/or communicating with those persons who up to and including April 1, 1977, had active legal matters pending with and were represented by the law firm of ADLER, BARISH, DANIELS, LEVIN and CRESKOFF, except that:

"1. Nothing in this Final Decree shall be construed to preclude the defendants from announcing the formation of their new professional relationship in accordance with the requirements of DR 2-102 of the Code of Professional Responsibility.

"2. Nothing in this Final Decree shall preclude those persons who, up to and including April 1, 1977, had active legal matters pending with and had been represented by the law firm of ADLER, BARISH, DANIELS, LEVIN and CRESKOFF from voluntarily discharging their present attorney and selecting any of the defendants, or any other attorney, to represent them.

"It is further ORDERED and DECREED that the bonds now entered and to be entered shall be dissolved thirty-one (31) days from the date of this Final Decree unless an appeal has been taken."*fn4

The lower court based the decree on its conclusion that appellants' activity amounted to a tortious interference with appellee's business relations. See Restatement of Torts, § 766. The lower court also concluded that appellants' correspondence constituted solicitation in contravention of Canon 2 of the Code of Professional Responsibility. Therefore, neither § 767 of the Restatement of Torts nor the First Amendment to the United States Constitution conferred a

[ 252 Pa. Super. Page 559]

    privilege covering appellants' correspondence. This appeal immediately followed the entry of the lower court's order.

Appellants contend that the lower court erred when it determined that their activities constituted a tortious interference with appellee's business relations as defined by § 766 of the Restatement of Torts. Moreover, appellants assert that their actions did not constitute solicitation within the meaning of the Code of Professional Responsibility. Further, they claim that the First Amendment and a privilege recognized by § 767 of the Restatement of Torts sheltered their acts from injunctive relief. We hold that appellants enjoyed a privilege pursuant to §§ 766 and 767 of the Restatement of Torts to send their correspondence to appellee's clients.*fn5

Section 766 of the Restatement of Torts provides as follows:

"Except as stated in Section 698, one who, without a privilege to do so, induces or otherwise purposely causes a third person not to

(a) perform a contract with another, or

[ 252 Pa. Super. Page 560]

(b) enter into or continue a business relation with another is liable to the other for the harm caused thereby."*fn6 Our Supreme Court has interpreted § 766 as follows: "At least since Lumley v. Gye, (1853), 2 Ell. & Bl. 216, 1 Eng.Rul.Cas. 706, the common law has recognized an action in tort for an intentional, unprivileged interference with contractual relations. It is generally acknowledged that one has the right to pursue his business relations or employment free from interference on the part of other persons except where such interference is justified or constitutes an exercise of an Page 560} absolute right : Restatement, Torts, § 766." Birl v. Philadelphia Elec. Co., 402 ...


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