No. 2076 Philadelphia 1981, Appeal from the Order of the Court of Common Pleas of Philadelphia County, Civil at No. 3529 June Term 1980.
Steve Alexander, Philadelphia, for appellants.
Richard M. Shusterman and Morris R. Brooke, Philadelphia, for appellees.
Spaeth, Rowley and Van der Voort, JJ.
[ 312 Pa. Super. Page 127]
This is an appeal from an order sustaining appellees' preliminary objections in the nature of a demurrer and dismissing appellants' complaint in trespass and assumpsit. Appellees were appellants' lawyers in a labor dispute. In proceedings before the National Labor Relations Board, the individual appellants committed perjury, falsified exhibits, and offered a potential witness against them a bribe not to testify. As a result they were convicted of a federal crime, and were fined and placed on probation. Appellants allege that they engaged in this criminal conduct on the advice and with the assistance of appellees, and they seek compensatory and punitive damages for professional malpractice (Count I), the infliction of emotional distress (Count II), and deceit (Count III), and compensatory damages for breach of contract (Count IV). The lower court held that appellants are entitled to no relief because they and appellees are in pari delicto. We agree with the lower court that appellants are entitled to no relief, except we think that if they can prove their allegations, they are entitled to recover the legal fees they paid appellees. We shall therefore modify the order of the lower court to provide that appellants'
[ 312 Pa. Super. Page 128]
complaint is dismissed, except as to so much of Count IV as seeks to recover legal fees paid appellees. As so modified, the order will be affirmed.
Since the case arises on appellees' demurrer to appellants' complaint, we shall assume that the facts pleaded in the complaint are true. Sinn v. Burd, 486 Pa. 146, 404 A.2d 672 (1979); Gekas v. Shapp, 469 Pa. 1, 364 A.2d 691 (1976); DeSantis v. Swigart, 296 Pa. Super. 283, 442 A.2d 770 (1982).*fn1 The complaint is detailed and diffuse, comprising one hundred and forty six paragraphs. R.R. 6a-55a. Its dispositive allegations may be summarized as follows.
Appellants are engaged in the retail men's clothing business. One of appellants is a corporation, trading as "Today's Man;" the other appellants are individuals who are officers or employees of the corporation. Appellees are a law firm, Pechner, Dorfman, Wolffe, Rounick & Cabot, and partners and associates of the firm. In June 1977 the corporation retained the Pechner firm as special labor counsel. The corporation wanted to prevent the Philadelphia Joint Board, Amalgamated Clothing and Textile Workers' Union, AFL-CIO, from organizing its warehouse employees. As the corporation's labor counsel, members of the labor section of the Pechner firm devised a plan to prevent unionization of the warehouse employees. Generally stated,
[ 312 Pa. Super. Page 129]
the plan was to ensure that a majority of the warehouse employees would vote against being represented by the union. To accomplish this, several warehouse employees suspected of being sympathetic to the union were fired, and certain management personnel, specifically, Larry Feld and appellants Klein and Jacobson, each a vice-president of the corporation, were falsely designated as warehouse employees.
In the ensuing dispute, the union filed a representation petition with the National Labor Relations Board, seeking an order fixing the membership of the warehouse employee bargaining unit. At the hearings on the petition, appellants lied under oath and submitted falsified time cards and payroll records in an effort to convince the hearing officer that the designated warehouse employees were in fact warehouse employees who should be permitted to participate in the union representation election. Appellants engaged in this criminal conduct on the advice and with the assistance of the Pechner firm labor lawyers.
The union also filed an unfair labor practice complaint with the National Labor Relations Board. A warehouse employee, one Tyrone Evans, was subpoenaed to testify at the hearing on the complaint. Evans knew that appellants had lied under oath and had submitted false documents at the hearing on the representation petition. In an attempt to keep him from testifying, several of the Pechner firm labor lawyers and Feld offered Evans a bribe to ignore the subpoena for his appearance.
As a result of their conduct at the representation hearing, the individual appellants were indicted for perjury and interference with an agent of the National Labor Relations Board. Each was convicted of a federal crime, and was fined and placed on probation.
Appellants allege that as a result of the Pechner firm's representation of them, they suffered various damages, including loss of business, emotional distress, and unnecessary legal expenses. Count I of the complaint seeks compensatory damages "in an amount exceeding $250,000" and
[ 312 Pa. Super. Page 130]
punitive damages for professional malpractice; Count II seeks the same damages for the infliction of emotional distress, and Count III, for deceit. Count IV seeks compensatory damages for breach of contract, "in an amount equal to the monies already paid" the Pechner firm, and "in an amount equal to the monies necessarily expended by [appellants] to correct the effects" of the Pechner firm's breach of contract to provide appellants "competent, professional advice of the quality reasonably to be expected from labor counsel." Complaint, paras. 145(b), 141.
The common law doctrine of in pari delicto ("in equal fault") is an application of the principle that "'no court will lend its aid to a man who grounds his action upon an immoral or illegal act.'" Fowler v. Scully, 72 Pa. 456, 467 (1872) (collecting authorities, and quoting YEATES, J., in Mitchell v. Smith, 1 Binn. 110, 121 (1804), who was in turn quoting Lord Mansfield in Holman v. Johnson, 98 Eng. Rep. 1120 (1775)).*fn2 When the doctrine is applied, the result is to render the transaction between the parties "absolutely without any force or effect whatever . . . . The law will leave the parties just in the condition in which it finds them." ...