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Gary P. Lightman, Esq., et al. v. Jerome M. Marcus

April 17, 2012


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


The plaintiffs filed this case in the Court of Common Pleas of Philadelphia County on December 9, 2011, seeking $926,000 and an accounting from Jerome Marcus, Jonathan Auerbach, their firm, Marcus & Auerbach, and their former firm, Berger & Montague, in connection with the allocation of attorney's fees in Multidistrict Litigation No. 1712, In re American Investors Life Insurance Company Annuities Litigation ("MDL"). The case was removed to this Court on January 9, 2012, as related to the Court's ongoing jurisdiction over the MDL and its Order approving its settlement. Berger and Montague were voluntarily dismissed from this suit and the remaining defendants have moved to dismiss (or in the alternative for summary judgment); the plaintiffs have cross-moved under Rule 56(d) for a stay or denial of the defendants' motion pending additional discovery. The Court will grant the defendants' motion and deny the plaintiffs' motion.

I. Allegations of the Plaintiffs

The plaintiffs contend that they are owed $926,000 in connection with their referral of class action cases that ultimately were incorporated into the MDL. Pursuant to two agreements between the plaintiffs and the defendants, the plaintiffs claim that they are owed a $926,000*fn1 "referral fee" of 22.5% of the total attorneys fees paid to a group referred to in the parties' agreements as the "Affiliated Counsel Group" (ACG) connected with the MDL. This figure was initially negotiated as part of an agreement first executed by the parties in 2004, Compl. Ex. A, and finalized in a later agreement in 2009, Compl. Ex. B.

The 2004 agreement defines the ACG as consisting of "Jonathan Auerbach and Jerome Marcus of Berger & Montague, P.C., David Senoff of Billet & Connor, P.C., and Jacob A. Goldberg, L.L.C." Compl. Ex. A at 1. That agreement later provides: Pursuant to this agreement the ACG retains the right to add members to the ACG, subject to consultation and approval by LMC [Lightman, Manochi & Christensen, the predecessor to the plaintiffs here], provided, however, that any such firm that we affiliate with will be bound by the terms of our affiliation agreement with you, and you will be paid from ACG's share of attorney's fees . . . .

Id. at 2 n.1.

The 2009 agreement is between "Lightman Manochi (formerly Lightman, Manochi & Christensen) (the 'LMC Group') and Jerome Marcus and Jonathan Auerbach, for themselves and for the 'Affiliated Counsel Group' (which Affiliated Counsel Group includes Berger & Montague, P.C., David Senoff, Billett & Connor, PC, and Jacob A. Goldberg, LLC) . . . ." It states that "[a]ll prior agreements among [the parties] and any other party relating to the conduct of litigation or the allocation of fees are superceded." The agreement contemplates the payment of 22.5% "of the gross fee left after all other attorneys in the case have been paid other than the LMC Group and the Affiliated Counsel Group." Compl. Ex. B. The plaintiffs acknowledge that at least the fee percentage to which they are entitled--which is addressed by both the 2004 and 2009 agreements--is governed by the 2009 agreement. Tr. Hr'g 3/21/2012 at 20.

However, the plaintiffs also argue that the 2009 agreement "purposefully was silent" as to whether John Hargrove was part of the ACG, that he in fact was made part of the ACG by the defendants, and that they are therefore entitled to 22.5% of the fees paid to him in connection with the MDL settlement, or $926,000. Id. at 21; Compl. ¶ 33. They acknowledge that they have received 22.5% of all fees paid to counsel other than Mr. Hargrove. Tr. Hr'g 21. The plaintiffs also claim that they have not been provided with an accounting of the payments related to the disbursement of fees. Id. ¶¶ 36, 44.

The complaint brings causes of action for Breach of Contract (Count I), Unjust Enrichment/quantum meruit (Count II), and for an accounting (Count III) detailing the disbursement of attorneys fees from the MDL.

II. Discussion

The defendants have moved to dismiss the plaintiffs' complaint, arguing that the plaintiffs have been paid in accordance with their contract that governs their fee allocation from the MDL, and that the accounting the plaintiffs seek has already been provided to them. The Court will grant that motion. The 2009 agreement--and to the extent it still governs the relationship between the parties, the 2004 agreement--is clear on which persons and organizations comprise the Affiliated Counsel Group and the process by which the composition of that group may be modified. John Hargrove is not a part of that group. As a result, the breach of contract claim must fail. Any claim for unjust enrichment fails because of the presence of a written agreement. Finally, the plaintiffs have not alleged facts demonstrating their entitlement to an accounting but nevertheless have received one.

Because the complaint will be dismissed, the Court will deny the plaintiffs' cross-motion under Rule 56(d).

A. Contract Claim

The defendants had initially maintained that the "supercedes all prior agreements" clause in the 2009 agreement foreclosed any use of the 2004 agreement in interpreting the relationship between the parties. However, at oral argument, counsel argued that the ...

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