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Ignelzi v. Ogg, Cordes, Murphy and Ignelzi, LLP

Superior Court of Pennsylvania

October 7, 2013

PHILIP A. IGNELZI, INDIVIDUALLY, PHILIP A. IGNELZI AND MARIANNE IGNELZI, HUSBAND AND WIFE, Appellees
v.
OGG, CORDES, MURPHY AND IGNELZI, LLP; GARY J. OGG, SAMUEL J. CORDES; MICHAEL A. MURPHY, INDIVIDUALLY; MICHAEL A. MURPHY AND REBECCA MURPHY, HUSBAND AND WIFE; OGG, MURPHY AND PERKOSKY, LLP, JOHN D. PERKOSKY; AND ESQUIRE REALTY ASSOCIATES, Appellants

Appeal from the Order entered July 25, 2012, Court of Common Pleas, Allegheny County, Civil Division at No. GD 11-022449

BEFORE: BOWES, DONOHUE and MUNDY, JJ.

OPINION

DONOHUE, J.

Appellants, Ogg, Cordes, Murphy and Ignelzi, LLP ("OCMI"), Gary J. Ogg ("Ogg"), Samuel J. Cordes ("Cordes"), Michael A. Murphy ("Murphy") and Rebecca Murphy, husband and wife, Ogg Murphy and Perkosky, LLP ("OMP"), John D. Perkosky ("Perkosky") and Esquire Realty Associates ("Esquire") (collectively, "Appellants"), appeal from the trial court's July 25, 2012 order granting the petition of Appellees, Philip A. Ignelzi ("Ignelzi") and Marianne Ignelzi, to inspect the partnership books of OCMI. Also pending is Appellees' motion to quash. We deny the motion to quash, affirm in part, and vacate in part.

The record reveals that Ignelzi was a partner of OCMI until its dissolution on December 31, 2009. Ignelzi withdrew from OCMI to join the bench of the Allegheny County Court of Common Pleas. Ignelzi assumed his role as judge on January 4, 2010, and thus is no longer a practicing attorney. See Code of Judicial Conduct, Canon 5(F) ("Judges should not practice law."). Two former partners of OCMI, Ogg and Murphy, formed OMP along with Perkosky.

For several years after the dissolution of OCMI, the parties attempted to negotiate the valuation and distribution of OCMI's assets. Unable to come to agreement, Ignelzi filed this lawsuit on October 31, 2011, naming each of the Appellants as a defendant.[1] Ignelzi's complaint alleges causes of action for, among other things, breach of contract, breach of fiduciary duty, unjust enrichment, and conversion. The complaint also alleges breach of the Uniform Partnership Act ("UPA"), 15 Pa.C.S.A. § 8301, et seq., and demands an accounting of Ignelzi's interest in the OCMI partnership as of its dissolution.

Appellants filed preliminary objections on December 7, 2011, alleging failure to specify the nature of the agreements that underlie his complaint and improper pleading of Ignelzi's request for attorney's fees. The preliminary objections also demanded a more specific pleading. On July 16, 2012, the trial court granted the preliminary objections in part.

Ignelzi filed an amended complaint ten days later. While OCMI had no written partnership agreement, Ignelzi alleges that "each partner receives a minimum of $250, 000.00 annually, with bonuses for initiation and production, and divides equally the remaining profits amongst the four partners." Amended Complaint, 7/26/12, at ¶ 20. Further, Ignelzi alleges that

the OCMI partners had an agreement that a departing partner would be entitled to a withdrawal amount that is equal to the withdrawing partner's total interest in the firm, taking into account his capital contributions, his percentage of the advanced costs outstanding, and a proportional percentage of fees and revenues derived from pending cases at the time of the partner's withdrawal. The longstanding course of conduct of OCMI and its predecessor firms was that the value of the withdrawing partner's proportional share of the pending contingency fee matters was distributed 'in kind, ' by the withdrawing partner taking his/her proportional share of those cases with him/her to a new law firm.

Id. at ¶ 23. Ignelzi also alleges that he is "entitled to a 25% interest in the proceeds of all active cases of OCMI at the time of Ignelzi's departure, as well as a 25% interest in the proceeds of all cases which Cordes took with him in his departure." Id. at ¶ 28. According to the Amended Complaint, Ignelzi's requests are in accord with "the longstanding course of conduct of OCMI with regard to withdrawing partners." Id. Appellants have not filed an answer to Ignelzi's amended complaint.

The instant appeal resulted from the trial court's order granting Ignelzi's March 29, 2012 petition pursuant to the § 8332 of the UPA[2] for access to the books of OCMI and OMP. The petition alleges that an inspection of the partnership books is necessary to substantiate the recoveries Ignelzi seeks in his complaint.

Appellants opposed Ignelzi's petition, arguing that contingent fee matters that remained unresolved at the time of OCMI's dissolution had no value for purposes of Ignelzi's partnership interest. Appellants also argued that Ignelzi's proposed inspection of OMP's books would violate the confidentiality interests of OMP's current clients.

On July 25, 2012, the trial court issued a memorandum and order granting Ignelzi's petition in part.[3] The trial court ordered Appellants to comply with the following document requests:

8. Complete client list for all claims or cases that [OCMI], or any of its partners, had accepted, or had begun to review for acceptance, as of December 31, 2009.
9. All ledgers, books, records and client cards for any claims or cases that [OCMI], or any of its partners, had accepted, or had begun to review for acceptance, as of December 31, 2009, including but not limited to documentation of the present status of said claims or cases (whether settled, a verdict rendered, or representation was withdrawn).

Memorandum and Order, 7/25/12, at 3 (citing Exhibit A of Ignelzi's Petition for Access to Partnership Books and Records). Further, the trial court wrote:

The former OCMI files that have been transferred to OMP have become files of the successor partnership, OMP, and OMP's clients. Consequently, we will deny Ignelzi's request ...

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