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HAYMOND v. LUNDY

March 18, 2002

JOHN HAYMOND, HAYMOND NAPOLI DIAMOND, P.C.,
V.
MARVIN LUNDY, V. JOHN HAYMOND, ROBERT HOCHBERG, HAYMOND NAPOLI DIAMOND, P.C.



The opinion of the court was delivered by: Shapiro, Senior District Judge.

  MEMORANDUM AND ORDER

Marvin Lundy ("Lundy"), bringing a counterclaim against Robert Hochberg ("Hochberg"), alleged that Hochberg had engaged in the unauthorized practice of law. On August 31, 2001, Hochberg was permanently enjoined from practicing law, or holding himself out to practice law, in this Commonwealth. Haymond v. Lundy, 174 F. Supp.2d 269 (E.D.Pa. 2001) ("Injunction Opinion"). Hochberg's motion for post-trial relief was denied. Haymond v. Lundy, 2002 WL 7927, 2002 U.S. Dist. LEXIS 4 (E.D.Pa. Jan.2, 2002) ("Post Trial Opinion").

Lundy has filed an amended petition for "Costs and Expenses Incurred, Including Reasonable Attorneys' Fees."*fn1 This memorandum addresses the fee petition.

The facts and procedural history of this action may be found in previous opinions: Haymond v. Lundy, 177 F. Supp.2d 371, 373-77 (E.D.Pa. 2001); Injunction Opinion, 1-13; and Haymond v. Lundy, No. 99-5015 & 99-5048, 2000 WL 804432, *1-4, 2000 U.S. Dist. LEXIS 8585, *2-12 (E.D.Pa. June 22, 2000).

I. Discussion

A. Award of Attorney's Fees under 42 Pa.C.S.A. § 2524(c)*fn2

42 Pa.C.S.A. § 2524(c) provides:

Injunction — In addition to criminal prosecution, unauthorized practice of law may be enjoined in any county court of common pleas having jurisdiction over the defendant. The party obtaining such an injunction may be awarded costs incurred, including reasonable attorney fees, against the enjoined party. A violation of subsection (a) is also a violation of the act of December 17, 1968 known as the Unfair Trade Practices and Consumer Protection Act.

Lundy contends that "may" award fees means "shall" award fees because 42 Pa.C.S.A. § 2524(c) "expressly incorporates" the Unfair Trade Practices and Consumer Protection Act, 73 P.S. § 201-9.2 (1996) ("UTP"). That act, he argues, has been interpreted to require fees. However, the UTP was not incorporated into 42 Pa.C.S.A. § 2524(c): rather, violation of 42 Pa.C.S.A. § 2524(c) is also a violation of the UTP. This does not mean that a claim brought under 42 Pa.C.S.A. § 2524 is a claim brought under the UTP. The unauthorized practice of law statute authorizes the discretionary award of costs, including attorney's fees to a plaintiff successful in obtaining an injunction.

Hochberg argues that Lundy should be denied attorney's fees because: (1) no plaintiff has been awarded attorney's fees under the statute; (2) Lundy does not fall within the class the statute was designed to protect; and (3) Lundy's hands are unclean.

Hochberg claims Lundy would be the first plaintiff to receive attorney's fees under the 42 C.S.A. § 2524(c). But he has not demonstrated that anyone has petitioned for attorney's fees, or been denied them. The absence of previous attorney's fees awards does not preclude Lundy's petition.

The purpose of 42 Pa.C.S.A. § 2524 is to protect the public interest in competent legal representation. See Stone v. Kasuba (In re Stone), 166 B.R. 269, 274 (Bankr.W.D.Pa. 1994) In 1996, the legislature created a private right of action to allow consumers to enforce the statute directly. See Pa. Legis. J. — House, June 26, 1996, at 1798 (statement of Representative Feese analogizing the bill to the UPT); 42 Pa.C.S.A. § 2524(c). The fee shifting portion of the amendment encourages citizens to enforce the statute by adding financial incentives for doing so.

Hochberg argues that the statute may to be used only by government officials and innocent lay-people, not lawyers. The statutory text and the case authority do not provide any support for this argument.*fn3 The plain language of the statute permits any party obtaining an injunction to seek attorney's fees.

Second, Hochberg argues that because Lundy knew of his unauthorized practice, and permitted the unauthorized practice of other associates of Haymond and Lundy prior to the law firm's dissolution, he should be prevented from recovering attorney's fees by the equitable doctrine of "unclean hands". The court has already declined to apply "unclean hands" to prevent Lundy from bringing this action. See, e.g., Post-Trial Opinion, at 11-12. However, Lundy had constructive knowledge of Hochberg's disbarment, and his unauthorized practice, from the very beginning of the law partnership. See Haymond v. Lundy, 2000 WL 804432, *3 n. 2, 2000 U.S. Dist. LEXIS 8585, *8 n. 2 (E.D.Pa. June 22, 2000) (knowledge imputed to Lundy from his attorney). Hochberg should not benefit by Lundy's sanction of unauthorized practice: he must be enjoined from practice in this Commonwealth. But neither should Lundy receive a reward for aiding and abetting in the unauthorized practice of law. The court will discount Lundy's fee by an appropriate amount for his unclean hands when awarding "reasonable" attorney's fees. But Lundy, as a prevailing party, is entitled to some attorney's fees under 42 Pa. C.S.A. § 2524(c).

B. Amount of Award

Since Lundy is entitled to fees under 42 Pa.C.S.A. § 2524, the court must determine a reasonable award. Although the award is authorized by a state law rather than federal statute, the court, although not obliged to do so, will follow the methodology approved by the Supreme Court for awards of attorney's fees in federal civil rights actions. See Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). "The district court retains a great deal of discretion" in determining the award. Bell v. United Princeton Properties, Inc., 884 F.2d 713, 721 (3d Cir. 1989). For example, the court may exclude hours not reasonably expended, that is, hours that are excessive, redundant, or otherwise unnecessary. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933; Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). If only partial success has been achieved, the fee request should be ...


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