A. Lundy's Omnibus Post-Trial Motions #310-1, -2, and -3
Lundy cites to neither authority nor federal rule in his Omnibus
Post Trial Motions.*fn4 The court has construed these motions as
having two grounds. First, Lundy seeks a new trial under F.R.C.P.
59(a).*fn5 Second, Lundy seeks a modification of judgment under
1. F.R.C.P. 59(a) Motion for a New Trial
Lundy's F.R.C.P. 59(a) motion argues the trial was flawed because
Haymond's counsel argued to the jury that his client wished to enforce
the Partnership Agreement ("Agreement"), but after trial argued to the
court that the firm's resources should be distributed under the Uniform
Partnership Act ("UPA") instead. Lundy alleges that had his counsel known
of Haymond's real demand, the trial strategy and the outcome would have
been different, because Haymond concealed this strategic decision to
portray himself to the jury in a more favorable light than was warranted
by the facts.
Lundy does not attack the sufficiency of the evidence. Cf. Blum v.
Witco Chemical Corp., 829 F.2d 367, 372 (3d Cir. 1987) (jury verdict
upheld when reasonable basis exists for verdict). Rather, he cites to what
he perceives to be misconduct by Haymond and his counsel. In these
circumstances, a new trial is warranted under F.R.C.P. 59 only when
"improper assertions have made it `reasonably probable' that the verdict
was influenced by prejudicial statements." Fineman v. Armstrong Indus.,
Inc., 980 F.2d 171, 207 (3d Cir. 1992) (citations omitted), cert.
denied, 507 U.S. 921 (1993). Lundy has the burden of meeting this test.
Here, Lundy can establish neither misconduct nor prejudice. The
purported misconduct was Haymond's argument to the jury that the
partnership should be dissolved according to the Agreement, but later
arguing to the court that dissolution should occur under the UPA.
Utilizing the UPA would have provided Haymond with a significantly
greater share of partnership assets than he will receive under the
Lundy's argument that had the jury known of Haymond's later contention
it would not rendered judgment against Lundy is frivolous. First, the
jury was exposed to Lundy's argument that Haymond wanted more than his
share of the partnership assets, even though this argument was irrelevant
to the issues before the jury. See Tr., January 25, 2001, at 164, 175
(Lundy's closing argument to the jury). Second, the court bifurcated the
liability and damage phases of the action: at no time was the jury
deciding to award damages for any party. It was contemplated that after
the jury verdict the parties would argue to the court its effect on
damages. Third, Haymond did argue to the court that Lundy's material
breach made the Agreement a nullity, see Tr.,
January 25, 2001, at
192-194, so Lundy did have notice of Haymond's intention to seek an
equitable division of the partnership assets among the parties. Lundy has
cited no authority in his post-judgment motions, and no relevant
authority in the earlier Motion for Mistrial,*fn6 to establish
misconduct in these circumstances.
Even if there were misconduct, Lundy suffered no prejudice. In the
Judgment Opinion, the court rejected Haymond's argument that the
partnership should be liquidated according to the UPA. See Judgment, at
9-15. The relief awarded was then "determined by examining dissolution
under the Partnership Agreement and addressing each breach found by the
jury and how it effects those terms." Judgment at 14-15.
Because Haymond's post-trial strategy won him nothing, Lundy suffered
no prejudice under F.R.C.P 59(a). See F.R.C.P. 61 ("The court at every
stage of the proceeding must disregard any error or defect in the
proceeding which does not affect the substantial rights of the
parties."); see also 11 Charles Alan Wright & Arthur R. Miller et al.,
Federal Practice and Procedure 2d § 2805 ("[I]t is only those errors
that have caused substantial harm to the losing party that justify a new
trial. Those errors that are not prejudicial do not call for relief under
Rule 59"). This is a case of, at best, harmless error. See McQueeney v.
Wilmington Trust Co., 779 F.2d 916, 917 (3d Cir. 1985) (holding error is
harmless when there is a "high probability" it did not affect the outcome
of the action).
Finally, it is not "reasonably probable" Haymond's allegedly
duplicitous trial strategy led to the jury's verdict in his favor.
Lundy's claim the jury would have found for him had it known of Haymond's
true demands is fanciful speculation in view of the evidence at trial.
There was substantial evidence, credited by the jury, supporting
Haymond's assertion Lundy was the first to breach the Agreement. See,
e.g., Judgment, at 6-8, 19-23. To the extent there was a "reasonable
basis" for the jury verdict, it must be upheld. See Blum, 829 F.2d at
372. The verdict does not shock the conscience of the court and a new
trial on liability will not be granted.
2. Rule 59(e) Reconsideration
Lundy petitions the court, in the alternative, to amend the judgment
to: (1) require Haymond to "zero out" his Capital Account; and (2)
transfer to Lundy all fees from ML&L cases handled by Haymond
Because Lundy asks the court to amend its judgment, in part, see
Judgment, at 18, 30-35, F.R.C.P. 59(e), and not F.R.C.P. 59(a), applies.
A motion for reconsideration will be granted if: (1) new evidence becomes
available; (2) there has been an intervening change in controlling law;
or (3) a clear error of law or manifest injustice must be corrected. See
NL Indus. v. Commercial Union Ins. Co., 65 F.3d 314, 324 n. 8 (3d Cir.
1995); Jubilee v. Horn, 959 F. Supp. 276, 278 (E.D.Pa. 1997; Smith v.
City of Chester, 155 F.R.D. 95, 96-97 (E.D.Pa. 1994). Motions for
reconsideration are not to be used to reargue or relitigate matters
already decided. See Waye v. First Citizen's Nat'l Bank, 846 F. Supp. 310,
314 n. 3 (M.D.Pa.), aff'd, 31 F.3d 1175 (3d Cir. 1994). Lundy does not
meet this burden.
Lundy first argues that Haymond must "zero out" his Capital Account
rather than have its balance credited to him. Cf. Judgment, at 18
(requiring Haymond to be paid the balance of his account, if any, at
liquidation). Whether Haymond's Capital Account contains a positive
balance, requiring repayment under the Judgment, or a negative one, as
presumed by Lundy, is yet to be determined by the Receiver and approved by
the court on a final accounting of former partnership debts and
liabilities. This issue is not ripe until the Receiver presents a
supplemental report, objections have been heard and ruled on, and a final
Second, Lundy reargues a matter decided by the court in paragraph
3[F] of its order, and in its Judgment at page 30-32. There, the
court held that:
Net fees received by Haymond, or his new firm, from
ML&L [Manchel, Levin and Lundy] cases settled or
litigated to verdict shall be placed in escrow. These
fees shall be distributed 80% to Haymond, or his new
law firm, and 20% to Lundy, or his new law firm . . ..
Lundy believes that this ruling transfers to Haymond fees the Agreement
reserves for Lundy. However, he provides no new evidence for
interpretation of the Agreement or new authority resulting in a
conclusion different from that reached by the court: he articulates no
reason why the court's judgment results in manifest injustice. Lundy's
position, if accepted, would allow him to recover all fees from cases
litigated by Haymond after dissolution, even though former H&L clients
chose Haymond personnel as their lawyers. Cf. Kenis v. Perini Corp.,
682 A.2d 845, 849 (Pa.Super.Ct. 1996) (clients have absolute right to
terminate attorney-client relationship in Pennsylvania).
Lundy also argues that because Haymond is not now practicing law in
Pennsylvania, he is prohibited under § 9.02(e)(I)(B) of the Agreement
from recovering fees on the ML&L cases. This argument was not made during
or after the trial, and may not be raised on post-trial motions. See
Federal Deposit Ins. Corp. v. World University, Inc., 978 F.2d 10, 16
(1st Cir. 1992) ("Rule 59(e) motions are `aimed at reconsideration, not
initial consideration'")(citations omitted)(emphasis in original).
The Motion for Reconsideration will be denied.
B. Hochberg's Motion for Post-Trial Relief (#308)
Hochberg moves for a new trial under F.R.C.P. 59(a) of the decision
enjoining him from practicing law in Pennsylvania, or holding himself out
as a lawyer here. The standard for granting a F.R.C.P. 59(a) motion is
the same whether applied to a bench or jury trial. See Compass Tech. v.
Tseng Labs., 71 F.3d 1125, 1131 (3d Cir. 1995). The court should grant a
new trial if the verdict is so clearly contrary to the weight of the
evidence to create a "miscarriage of justice" if the verdict is allowed
to stand. Williamson v. Conrail, 926 F.2d 1344, 1346 (3d Cir. 1991).
Hochberg argues that this standard is satisfied in three ways: (1) the
court lacked subject matter jurisdiction; (2) there was insufficient
evidence of future harm to justify a permanent injunction; and (3)
Lundy's hands were unclean.
1. Subject Matter Jurisdiction
Hochberg argues that this court should not have exercised supplemental
jurisdiction under 28 U.S.C. § 1367 over the unauthorized practice
cause of action. Shortly before the non-jury trial on this issue began,
Haymond withdrew the Lanham Act claim creating federal question
jurisdiction in the underlying action: the court
over the underlying action, and over the state law unauthorized practice
claim, under 28 U.S.C. § 1367. Hochberg renews his argument that the
court should have declined to exercise supplemental jurisdiction.*fn7
When Haymond's Lanham Act claim was withdrawn, the court still had
discretion to exercise jurisdiction over the remaining part of the
action. See 28 U.S.C. § 1367(c) (the district courts "may decline" to
exercise jurisdiction for the reasons stated therein but is not required
to do so). Hochberg's principal claim is that the state law issues raised
were novel and complex, and therefore inappropriate subjects for
supplemental jurisdiction. See 28 U.S.C. § 1367(c)(1) (novelty and
complexity of state law claim are factors permitting a court to refrain
from exercising jurisdiction).
Hochberg claims the court made a novel ruling on state law when it held
that being a managing partner of a Pennsylvania lawfirm is equivalent to
practicing law here, in violation of 42 Pa. Cons. Stat. Ann. § 2524.
He cites to the court's opinion:
The question of the rights and responsibilities of
an attorney operating in a jurisdiction in which he or
she is not licensed to practice is the subject of
national debate. The heightened attention stems from
the perception that it is now increasingly common for
an attorney to practice law in jurisdictions in which
he or she is not a member of the Bar, despite rules
prohibiting such practice. Injunction, at 24.
The court did not suggest the issues implicated in this action were
novel ones in Pennsylvania. To the contrary, the court explicitly applied
the well established precedent of Ginsburg v. Kovrak,
11 Pa. D. & C. 2d 615, 617 (Phila. Cty. Ct. 1957), aff'd, 139 A.2d 889
(Pa. 1958), in finding Hochberg unlawfully held himself out as licensed
to practice in the Commonwealth. See Injunction, at 26. The court's
discussion of the ferment about legal practice was meant to explain to
members of the bar, and the public at large, how adhering to the
principals of Ginsburg and like authority relates to the ongoing national
debate about multi-disciplinary practice. The court made no new state
law: it enforced the current law of the relevant jurisdiction.