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Mychak v. Welker

May 10, 2010

SAMUEL MYCHAK, ET AL., PLAINTIFFS,
v.
MARLA WELKER, DEFENDANT.



The opinion of the court was delivered by: Sitarski, M.J.

MEMORANDUM

Currently pending before the Court is a motion for summary judgment filed by Defendant Marla Welker, Esquire. For the following reasons, the motion will be DENIED.

I. INTRODUCTION

Samuel Mychak and Samuel Mychak, P.C., ("Plaintiffs") initiated this lawsuit against a former employee, Marla Welker, Esquire ("Defendant"), in the Court of Common Pleas in Philadelphia County by filing a Complaint on April 15, 2009. Defendant filed a Notice of Removal on May 18, 2009. Plaintiffs allege wrongful use of civil proceedings in violation of the Dragonetti Act, 42 Pa.C.S.A. § 8351, et seq.*fn1

This matter initially was assigned to District Court Judge Juan R. Sanchez. On August 18, 2009, the parties consented to the exercise of jurisdiction by a United States Magistrate Judge under 28 U.S.C. 636(c) and Fed.R.Civ.P. 73, and the matter was referred to me. (Doc. No. 17). Thereafter, on April 9, 2010, following the completion of discovery, Defendant filed the instant Motion for Summary Judgment. (Doc. No. 38).

Defendant moves for summary judgment on the grounds that Plaintiffs' claims are barred by the applicable statutes of limitations, and on the grounds that Plaintiffs cannot establish the necessary elements for abuse of process or wrongful use of civil proceedings. See Def.'s Mot. for Sum. J. at vii. On April 26, 2010, Plaintiffs filed their Answer to Defendant's Motion. (Doc. No. 60). On April 30, 2010, Defendants filed a Reply Brief. (Doc. No.77). Accordingly, this matter is now ripe for disposition.

II. BACKGROUND

Plaintiff Samuel Mychak, an individual, was engaged in the practice of law until his retirement on August 31, 2003. Complaint ¶ 1. Prior to his retirement, Mr. Mychak was the sole shareholder of Plaintiff Samuel Mychak, P.C. ("the Firm"), a Pennsylvania professional corporation. Complaint ¶¶ 2, 5; Def.'s Mot. for Sum. J., Ex. D-29. The Firm was engaged in the practice of law under various designations, including the trade names of "Mychak, Geckle & Welker" and "Mychak, Geckle & Welker, P.C." Complaint ¶ 6; Def.'s Mot. for Sum. J., Ex. D-29. The Firm handled personal injury matters, including medical malpractice. Def.'s Mot. for Sum. J., Ex. D-8. From January 2003 through August 2003, Mr. Mychak entered into negotiations with Patrick G. Geckle, a former associate with the Firm, and Defendant Marla Welker regarding acquiring certain assets from Mr. Mychak and/or the Firm. Def.'s Mot. for Sum. J., Ex. D-29. At the end of August 2003, Mr. Mychak sold most of the assets of the Firm to Mr. Geckle, and the Firm ceased operations. Def.'s Mot. for Sum. J., Ex. D-29.

Ms. Welker, a member of the Bar of the Commonwealth of Pennsylvania, was hired by the Firm as a full time personal injury attorney beginning in 1984. Def.'s Mot. for Sum. J., Ex. D-29. Ms. Welker continued her employment with the Firm until on or about August 30, 2003, at which time the Firm ceased operations. Ms. Welker was terminated along with all of the employees of the Firm. Def.'s Mot. for Sum. J., Ex. D-29; Pltfs' Memo in Opp. at 3.

During its operation, the Firm had referred a number of significant medical malpractice matters to the law firm of Perry, Fialkowski & Perry ("Perry's"). Def.'s Mot. for Sum. J., Ex. D-24. At least eight matters referred to the Perry's achieved favorable settlements in June through August 2003, with final distribution of funds to occur in January 2004. Def.'s Mot. for Sum. J., Ex. D-24, D-29. The parties in the instant case understood that the Perry's owed the Firm referral fees in excess of 2.4 million dollars as of August 2003. Def.'s Mot. for Sum. J., Ex. D-24, D-29. On September 3, 2003, Ms. Welker informed the Perry's that she was a former partner of the Firm and had an interest in the referral fees. Def.'s Mot. for Sum. J., Ex. D-29. As a result, the Perry's declined to distribute the referrals fees, and the referral fees, which were placed in escrow, ultimately became the subject of a lawsuit filed in the Court of Common Pleas of Philadelphia County, Mychak, P.C. v. Perry. Def.'s Mot. for Sum. J., Ex. D-24.

On September 26, 2003, Ms. Welker filed suit ("underlying litigation") against the Firm, Samuel Mychak, Patrick G. Geckle, and Mychak & Geckle, LLC, the trade name of an entity formed by Mr. Geckle on or about August 29, 2003. Pltfs' Memo in Opp., Exs. 1 & 9. Ms. Welker's complaint alleged fifteen (15) causes of action related to her alleged forced departure from the Firm. Pltfs' Memo in Opp., Ex. 1. Ms. Welker sought damages for outstanding wages and the equitable division of past, present and future legal fees, as well as injunctive relief to reclaim her clients' files and to end the alleged misappropriation of her name. Pltfs' Memo in Opp., Ex. 1. Ms. Welker's complaint asserted that while she was an employee of the Firm, she and Messrs. Mychak and Geckle had an oral agreement to hold themselves out as partners. Pltfs' Memo in Opp., Ex. 1, ¶¶ 5, 11. Ms. Welker further asserted that she assumed the responsibilities of a partner and was publically touted as a partner of the Firm. Pltfs' Memo in Opp., Ex. 1, ¶¶ 11-13.

The underlying litigation continued for several years, with numerous discovery disputes and motions. Pltfs' Memo in Opp., Ex. 4. In September 2003, Ms. Welker filed a petition for a preliminary injunction seeking an order requiring Mr. Geckle's new firm Mychak, Geckle P.C., to provide Ms. Welker communication with her clients and access to her files, which the parties ultimately worked out. Def.'s Mot. for Sum. J., Ex. D-12, D-13. On November 22, 2004, the Honorable Gene D. Cohen granted partial summary judgment in favor of the Firm and against Ms. Welker, and Judge Cohen determined as a matter of law that Ms. Welker was an employee and not a partner of the Firm. Pltfs' Memo in Opp., Ex. 4; Def.'s Mot. for Sum. J., Ex. D-16. Ms. Welker's claims for breach of contract, violations of Pennsylvania Wage Payment and Collection Law ("WPCL"), fraudulent misrepresentation, and negligent misrepresentation, as well as the defendants' counterclaims remained viable claims in the underlying litigation. Pltfs' Memo in Opp., Ex. 4; Def.'s Mot. for Sum. J., Ex. D-16. On December 30, 2004, the Perry's filed a motion to intervene, which the Honorable Howland Abramson granted for the purpose of interpleading funds in the underlying litigation. Pltfs' Memo in Opp., Ex. 4. On March 16, 2005, the Perry's filed an emergency petition for interpleader, and on March 28, 2005, Judge Abramson ordered that the related action, Mychak, P.C. v. Perry, be consolidated with the underlying litigation. Pltfs' Memo in Opp., Ex. 4. The Perrys' emergency petition for interpleader was subsequently denied as moot. Pltfs' Memo in Opp., Ex. 4.

The matter was ultimately tried before Judge Abramson in December 2005. Pltfs' Memo in Opp., Ex. 4. At the time of trial, the underlying litigation involved at least three sets of claims: (1) the claims involving Ms. Welker, Mr. Mychak, and the Firm, (2) Mr. Geckle's counterclaims against Ms. Welker, and (3) the claims involving the Perry's and the Firm. Def.'s Mot. for Sum. J., Ex. D-29. During the course of trial, the parties reached agreements regarding some of the issues between the parties. For example, the parties amicably resolved the issue of a check that Ms. Welker misplaced. Pltfs' Memo in Opp. at 13. The check covered $20,000.00 of compensation owed to Ms. Welker that had been withheld by agreement of the parties during the negotiations for the Firm's assets. Pltfs' Memo in Opp. at 13, Exs. 21, 22. At the close of trial, Ms. Welker requested that the missing check be replaced, which Mr. Mychak agreed to do. Pltfs' Memo in Opp. at 14.

Prior to the close of trial, Judge Abramson entered non-suit as to Ms. Welker's claims against the Firm for negligent misrepresentation and fraud. Def.'s Mot. for Sum. J., Ex. D-29. On September 14, 2006,*fn2 Judge Abramson issued Findings of Facts and Conclusions of Law.*fn3

Def.'s Mot. for Sum. J., Ex. D-29. In addition to issuing his Findings of Fact and Conclusions of Law, Judge Abramson ordered that the Firm and the Perry's submit additional briefs on issues pertaining to attorney's fees and costs. Pltfs' Memo in Opp., Ex. 4. Motions for post-trial relief and motions pertaining to attorneys fees and the escrow funds were decided in late 2006 and early 2007. Pltfs' Memo in Opp., Ex. 4. Finally, on April 23, 2007,*fn4 Judge Abramson entered judgment consistent with the Findings of Fact and Conclusions of Law.*fn5 Pltfs' Memo in Opp., Ex. 5. On May 18, 2007, the court docketed the Firm's notice of appeal. Pltfs' Memo in Opp., Ex. 4. On May 18, 2007, Judge Abramson additionally entered judgment in favor of Mr. Mychak and against Ms. Welker on the claim for violation of WPCL, which was also consistent with his Findings of Fact and Conclusions of Law.*fn6 Pltfs' Memo in Opp., Ex. 4.

The Firm's appeal only pertained to claims involving the Perry's and the Firm. Def.'s Mot. for Sum. J., Ex. D-31. On appeal, the Superior Court affirmed Judge Abramson's April 23, 2007, order requiring the Firm to pay attorney's fees ...


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