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MACHESKA v. THOMSON LEARNING

December 7, 2004.

NADIA MACHESKA, Plaintiff,
v.
THOMSON LEARNING and HARCOURT LEARNING DIRECT, A Harcourt Higher Learning Co., Defendants.



The opinion of the court was delivered by: JOHN E. JONES, District Judge

MEMORANDUM AND ORDER

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

Following Nadia Macheska's ("Macheska" or "Plaintiff") voluntary dismissal of all claims against Thomson Learning and Harcourt Learning Direct ("Thomson" or "Defendants"), the Defendants filed this Motion for Fees and Costs (doc. 30) against Macheska's counsel of record, Paul M. Jennings, Esq., ("Jennings") pursuant to 28 U.S.C. § 1927.

  This case arose out of the termination of Plaintiff's employment at Thomson on September 17, 2001 and the legality of the Separation Agreement and General Release (the "Release") signed by the Plaintiff on November 5, 2001, and by Thomson's Vice President Steven A. Moll ("Moll") on December 1, 2001. On October 31, 2003, Macheska initiated this action, wherein she alleges that she lacked the capacity necessary to legally execute the Release. Following somewhat limited but costly and time-consuming discovery by Thomson, as well as an aborted attempt to appoint a guardian for Macheska in the Lackawanna County Court of Common Pleas, Macheska voluntarily withdrew all of her claims against Thomson. Subsequently, the instant motion seeking costs and fees was filed by Thomson. A timely response was filed by Jennings, and oral argument was conducted on October 25, 2004. At oral argument, certain additional exhibits were requested and received by the Court. Following these supplements to the record by both parties, the Motion is now ripe for our review.

  We will grant Thomson's Motion to the extent that we will consider an award of fees and costs incurred by Thomson between March 1, 2004 and July 7, 2004.

  STATEMENT OF FACTS:

  The facts relevant to our disposition of this Motion, and which we will review, commence with the Plaintiff's termination by Thomson and extend through July 2004, when the underlying suit was voluntarily withdrawn by her. Since, as noted, Thomson asserts this claim against Jennings, we will in particular emphasize his conduct as Macheska's counsel during the pendency of the lawsuit which gives rise to this action.

  A. Macheska's Separation Agreement with Thomson Learning

  Macheska was employed by Thomson Learning, and its corporate predecessors, for thirty-three years, until her employment was terminated on September 17, 2001. (doc. 1; Complaint ¶ 11). The exact circumstances of Macheska's termination are unclear. However, it appears that she was diagnosed as afflicted with adjustment disorder with depressive mood, and that she was terminated by the Defendants following many months of turmoil regarding her employment. Defendants then offered Macheska the Release, which included sixty-six (66) weeks of severance pay with benefits. The Release also included reimbursement for unused vacation days as well as job outplacement counseling. (Def. M. to Dismiss Ex. B; Release ¶ 3).

  Macheska then embarked on an extended odyssey during which she consulted with a number of attorneys regarding her termination and the proposed Release. Macheska first consulted with an employment law attorney, Joseph Sileo, Esq. Sileo met with Macheska on October 1, 2001 to discuss her termination from Thomson and to explain the various legal avenues she could pursue. Sileo spent four hours at Macheska's residence discussing the relevant aspects of her employment. Sileo stated in his deposition, "[t]here was nothing to me that would indicate that she was incapacitated or incompetent, if you will, for the purposes of what we were discussing [the Release]." (doc. 31; Def. Br. for Fees Ex. 4; Sileo Dep. at 38.). Sileo recommended that Macheska accept the severance offered by Thomson.

  Subsequent to her extended consultation with Sileo, Macheska sought the advice of another attorney, Doug Thomas, Esq., to whom she was directed to by her physician, Dr. Richard Martin.*fn1 Later in October 2001, she first spoke with Thomas, who is a trusts and estates lawyer and who then recommended to her an employment lawyer, Andrew Katsock, Esq. Both Thomas and Katsock met with Macheska at her home on October 8, 2001 for two to three hours. Both attorneys testified in their depositions that Macheska was entirely competent during both that meeting and in later conversations between Katsock and Macheska. (doc. 31; Def. Br. for Fees Ex. 6, Katsock Dep. at 20-24; Ex. 3, Thomas Dep. at 24-28.). Both attorneys strongly recommended to Macheska that the severance offered by Thompson represented a good deal for her. Because Macheska signed the Release during their representation of her, Thomas and Katsock also concluded that she did so knowingly and voluntarily, after the lengthy period within which she evaluated her options. (doc. 31; Thomas Dep. at 1, Katsock Dep. at 59-60).

  In addition to consulting the three previously noted attorneys, it is notable that Macheska was observed and treated by two physicians during the same period. First, Macheska met with her treating physician, the aforementioned Dr. Richard Martin, several times in the Fall of 2001. Macheska had been a patient of Dr. Martin since prior to 2000. On January 5, 2000, Dr. Martin diagnosed Macheska with "adjustment disorder with depressive mood." (doc. 31; Def. Br. for Fees Ex. 9; Martin Dep. at 7-8.). Dr. Martin also met with Macheska on the day she was terminated, (September 17, 2001), once during the period she was considering signing the Release, (October 8, 2001), and again three days after she signed the Release, on November 8, 2001. Dr. Martin, while agreeing that Macheska needed a leave of absence from her work, did not believe that she was incompetent or that she could not understand and voluntarily sign the Release. (doc. 31; Def. Br. for Fees Ex. 9; Martin Dep. at 71-74.). In fact and as noted, it was Dr. Martin who referred Macheska to attorney Thomas for further explanation of her legal rights.

  Macheska was also treated during the same period by Dr. Daniel de Soto, a psychiatrist who met with her on October 4, October 19, and November 12, 2001. After taking detailed background information on Macheska, Dr. de Soto evaluated her condition as "moderate," saying that she was alert, with coherent speech, relevant thoughts, and without any more severe symptoms such as suicidal tendencies, hallucinations, or delusions. Dr. de Soto concluded that Macheska was a future-oriented individual able to consent to treatment. (doc. 31; Def. Br. for Fees Ex. 13; Dr. de Soto Report at 2.). In his opinion, she was competent to both consider the severance offer and sign the Release. Id.

  In summary, the magnitude of the evidence demonstrating that Macheska was competent at all of the times during which she considered the severance and Release, as well as at the moment she signed the Release, is overwhelming. This evidence includes her consultation with no less than three attorneys (Sileo, Thomas, and Katsock) and two physicians (Drs. Martin and de Soto). Thomson also extended the statutory seven day waiting period three times, thus allowing Macheska more time to consider her options. In the face of this factual panoply, and after having signed the Release, Macheska presented herself to Jennings in March 2002. Sadly, and as noted below, we can only conclude that Jennings utterly failed to conduct an appropriate investigation into the circumstances surrounding Macheska's execution of the Release.*fn2

  It is relevant to our determination that both attorneys Katsock and Thomas provided sworn affidavits stating that:
[u]ntil ? deposed in this case, Mr. Jennings never asked me about the circumstances surrounding Ms. Macheska's execution of her severance agreement with Thomson, about my discussions with her concerning the severance agreement, or about my observations of her mental capacity at the time she executed the agreement or while I ...

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