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Dillon McCandless King Coulter & Graham, LLP v. Rupert

Superior Court of Pennsylvania

November 7, 2013


Appeal from the Order Entered September 25, 2012 In the Court of Common Pleas of Butler County Civil Division at No(s): G.D. 12-10019




Jacqueline C. Rupert ("Jacqueline") appeals from the September 25, 2012 order wherein a trial court in Butler County ordered that this Butler County action be coordinated with an action that Jacqueline filed in Allegheny County and ordered both actions to proceed in Butler County. We vacate the order and direct that the action filed in Court of Common Pleas of Allegheny County at GD 12-007664 proceed in that jurisdiction.

We first set forth the procedural posture of this matter. On November 16, 2011, Dillon McCandless King Coulter & Graham, LLP (the "law firm") and Thomas W. King, III, Esquire, an attorney who works for the law firm (collectively "Appellees"), received a letter from an Allegheny County attorney who represented Jacqueline. In the letter, Jacqueline's lawyer accused Appellees of committing malpractice in a personal injury action involving Jacqueline and her husband Michael T. Rupert. On January 6, 2012, Appellees instituted this action in declaratory judgment in Butler County. In their complaint, they alleged that, in the letter, Jacqueline's attorney indicated that she was going to seek to invalidate an agreement that she entered on November 4, 2010. That November 4, 2010 document was entitled a revised contingent fee agreement. In it, Appellees reduced their previously-entered contingent fee arrangement by .333%, and Jacqueline agreed that any proceeds of the personal injury action received by Michael would be considered his separate property and that her consortium claim was worth the amount of the fee reduction, i.e., .333% of any recovery in the personal injury action. In the present Butler County action, Appellees sought a declaration that the November 4, 2010 document was a valid, enforceable agreement.

On February 9, 2012, Jacqueline filed preliminary objections to the complaint. She alleged that there was no case or controversy in this litigation because she never took the position that the November 4, 2010 accord was invalid. She averred that the present declaratory judgment action was a sham designed to deprive her of her chosen forum in which to litigate her malpractice action against Appellees.

On February 28, 2012, Appellees filed an amended complaint reiterating the identical allegations as those contained in the first complaint and seeking the same relief. Michael was added as a plaintiff in the amended complaint. Jacqueline renewed her preliminary objections. On May 3, 2012, Jacqueline filed a legal malpractice action against Appellees in the Court of Common Pleas of Allegheny County at GD 12-007664. On May 11, 2012, Appellees filed a motion seeking coordination of this action pursuant to Pa.R.C.P. Rule 213.1 and a stay of the proceedings that were instituted in the Allegheny County Court of Common Pleas by Jacqueline. They attached a copy of the Allegheny County complaint to the motion for coordination.

The trial court first ruled upon the outstanding preliminary objections to the amended complaint. On May 15, 2012, the trial court entered a memorandum opinion and order that granted Jacqueline's preliminary objections filed to the first amended complaint. It premised that grant on the fact that the complaint failed to set forth that there was an actual controversy. In the May 15, 2012 order, the first amended complaint was dismissed, but Appellees were accorded the right to file a second amended complaint.

On May 27, 2012, Appellees filed their second amended complaint seeking a declaration as to the validity of documents executed by Jacqueline in connection with the personal injury case. The trial court in the present action then issued an order that stayed the Allegheny County proceedings. On August 13, 2012, Appellees filed an amended motion for coordination of action pursuant to Pa.R.C.P. 213.1. The parties filed briefs and argued their positions before the trial court on August 21, 2012. On September 25, 2012, the trial court entered an order granting coordination of the Allegheny County case with the present one:

1.) Coordination of the Butler County declaratory judgment action, at A.D. 12-10019, and the Allegheny County malpractice action, at G.D. 12-007664, is appropriate.
2.) Coordination of said actions to Butler County is appropriate.
3.) Pursuant to Pa.R.Civ.P. 213.1(d)(2), the lawsuit filed by Jacqueline C. Rupert in the Court of Common Pleas of Allegheny County, at G.D. 12-007664, is transferred to the Court of Common Pleas of Butler County.

Order of Court, 9/25/12. Jacqueline filed the present timely appeal from the September 25, 2011 order.

The pertinent facts, as contained in the documents of record, are as follows. On May 27, 2010, Michael was horrifically injured in an automobile accident. Immediately after the crash, Michael was in a coma, and, while Michael was incapacitated, Jacqueline retained Appellees to represent her and her husband to recover damages caused by the traffic accident. Potential defendants included the driver who caused the accident, that driver's employer, and Ford Motor Company, which was the manufacturer of the vehicle that Michael was driving when he was injured. On June 1, 2010, Jacqueline, individually and as court-appointed representative of Michael, signed a contingent fee agreement with the law firm that accorded it the right to receive thirty-three and one-third percent of any recovery obtained with respect to the May 27, 2010 accident.

Mr. King thereafter began to engage in actions designed to recover damages for both parties. Appellees averred in this declaratory judgment case that Mr. King encouraged the Ruperts to decide the amount that Jacqueline should receive for loss of consortium. They further averred that the Ruperts decided that her loss of consortium should be valued at .333% of any recovery against all the potential defendants, and Appellees, in an act of altruism, agreed to reduce their fee by .333% to fund Jacqueline's recovery. Jacqueline's malpractice case against Appellees, as discussed infra, contains materially different allegations regarding the reason for the fee reduction.

On November 4, 2010, the Ruperts and Mr. King executed a revised contingent fee agreement wherein 1) the contingent fee to be received by Appellees was reduced to thirty percent; 2) Jacqueline agreed that her "Loss of Consortium Claim in the settlement, verdict, or recovery concerning both of the underlying cases will be Three and One-Third Percent (3-1/3%)"; 3) Michael was to be distributed 66.66% of amounts received from tortfeasors; and 4) "Jacqueline C. Rupert and Michael T. Rupert agree[d] that the funds generated as set forth herein shall be the sole and independent property of each of them . . . notwithstanding any prior agreement to the contrary, and that each of them may independently deal with and dispose of any such recovery as they respectively deem appropriate." Complaint, 1/6/12, at Exhibit B.

Thereafter, Mr. King drafted an irrevocable trust for Michael into which part of the proceeds of his personal injury claims were to be deposited. In the event of divorce, Jacqueline would receive none of the proceeds of the trust. The claims against the driver and employer were subsequently settled for $19 million. From that settlement, Jacqueline received $632, 700 in payment for her loss of consortium.

On November 14, 2011, Jacqueline filed a divorce action against Michael. On November 16, 2011, Maurice A. Nernberg, Esquire, sent the aforementioned letter to Mr. King that delineated his accusations that Appellees engaged in malpractice and a conflict of interest when advising Jacqueline to enter the November 4, 2010 revised contingent fee agreement, wherein she assented to three and one-third percent of any recovery as the value of her consortium claim and waived her ...

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