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[U] Buck Capital Management Corp. v. AF&L, Inc.

Superior Court of Pennsylvania

March 7, 2014



Appeal from the Order Entered January 17, 2013 in the Court of Common Pleas of Allegheny County Civil Division at No(s): GD No. 04-011408




In these consolidated appeals, Sikov and Love, P.A. (Law Firm) appeals, and Joyce A. Buck (Buck) cross appeals, from the order entered on January 17, 2013, but dated January 16, 2013. That order addressed Law Firm's "Motion To Impose an Attorney's Charging Lien." We affirm in part, vacate in part, and remand with instructions.

The trial court summarized the background underlying this matter as follows.

By [o]rder of [c]ourt dated December 16, 2013, [the trial court] … granted, in part, a "Motion to Impose an Attorney's Charging Lien" submitted on behalf of [Law Firm]. The motion arose as the result of an entry of a non-jury verdict and order of [c]ourt entered on December 18, 2009 in resolution of a claim brought by Buck Capital Management Corporation and Joyce Buck (hereinafter, "Buck") against AF&L, Inc. and AF&L Insurance Company [(]"AF&L"). In that underlying matter, Buck sought to enforce the terms of an insurance marketing agreement pursuant to which Buck, as a general agent for AF&L, would market long-term care insurance within the Commonwealth of Pennsylvania and engage in direct sales of that product. Premiums due periodically from the insureds in consideration for that product were paid either to AF&L directly or to AF&L through Buck. As premiums were received by AF&L, commissions were to be paid by AF&L to Buck. Although AF&L terminated the agency authority of Buck in or around June 2000, such that Buck could no longer generate commissions through new sales, Buck nonetheless remained entitled to commissions on premiums received by AF&L upon renewal of policies sold by Buck.
To a point, AF&L honored its continuing obligation to award commissions on the renewal of policies that Buck had originally secured. AF&L did not, however, increase the commissions paid to Buck proportionate with increases in premiums charged to renewing customers whom Buck had secured for AF&L. Accordingly, in or around September 2002, Buck retained legal counsel to pursue an increase in commissions. Original counsel filed a praecipe for writ of summons on Buck's behalf on or about June 2, 2004 and, in 2006, filed a complaint, and an amended complaint. There was some subsequent activity on the docket, but, becoming dissatisfied with original counsel, Buck disengaged from that counsel and retained the services of Attorney Seymour Sikov, a member of [Law Firm]. On June 11, 2008, original counsel entered a praecipe to withdraw his appearance and Sikov entered a praecipe for appearance.
Subsequent to Sikov's entry of appearance, Buck and Sikov each signed a six-page "Hourly Fee/Contingency Fee Agreement" that had been prepared by Attorney Sikov or [Law Firm]. The terms of that agreement explicitly addressed the fees, costs or reimbursements for which Buck would be responsible to Attorney Sikov. Those terms stated:
a. Attorney Sikov and Buck agree that the most equitable basis for a fee to be paid to Attorney Sikov and to his law firm in this particular matter will be, basically, on a contingency fee basis, Attorney Sikov to receive thirty-three and one-third (33 1/3%) percent of all monies which he recovers from the defendant, or either of them, in the action presently pending at No. G.D. 04-011408 in the Offices of the Prothonotary of Allegheny [County], Pennsylvania, Attorney Sikov, also to be reimbursed separately, and as billed to Buck, for any and all expenses and costs that Attorney Sikov incurs in the handling of the aforementioned law suit to include, but not limited to, costs of court reporters for transcribing the taking of depositions either for discovery purposes or for use at trial, the cost of obtaining expert witnesses, if necessary, to properly prosecute Buck's claim against AF&L, as well as any other expenses lawfully incurred by Attorney Sikov;
b. Inasmuch as Attorney Silvestri[1] has indicated in correspondence to Attorney Sikov, once Attorney Sikov took over the handling of the claims of Buck, that he, Attorney Silvestri, may be claiming fees for work allegedly performed by him on matters of Buck, Buck will initially deposit a retainer fee with Attorney Sikov in the amount of $2, 500.00 with Attorney Sikov to be paid for his time spent particularly and directly in opposing the claims of Attorney Silvestri for the reasons set forth in a letter sent to Attorney Silvestri by Attorney Sikov dated June 12, 2008, at Attorney Sikov's hourly rate of $250.00. Of course, reimbursement of all expenses incurred by Attorney Sikov in defending against any claims of Attorney Silvestri are the obligation of Buck and will be paid by Buck;
c. Should Attorney Sikov not be successful in obtaining payment of any sums of money due Buck from AF&L, whether because of an unfavorable result in the law suit, or because AF&L goes into bankruptcy and has no funds to pay the claims of Buck, Attorney Sikov would not be entitled to any fees other than those to be paid to him upon sums of money being actually received from AF&L either prior to going into bankruptcy or from assets in the bankrupt estate of AF&L.
The matter proceeded to a bench trial before the Honorable Judith F. Olson, and yielded a November 25, 2009 non-jury verdict in favor of Buck and against AF&L in the amount of $73, 325.56 for renewal commissions together with interest on that sum in the amount of $16, 093.10 for the period of December 2001 through December 2008, for a total of $89, 418.66. Judge Olson additionally awarded Buck $2, 548.96 for commissions that had been charged back to Buck, together with interest on that principal amount for the period of January 2001 through December 2008, for a total of $3, 734.24. The full amount awarded to Buck was $93, 152.91.
In response to a motion for post-trial relief filed by Buck, Judge Olson issued an amended non-jury verdict and order of court on December 18, 2009, which was docketed on December 21, 2009. The amended verdict and order preserved the calculation of damages set forth in the original verdict[, ] $93, 152.91, [and] clarified the rationale of the [c]ourt's decision. In that same order, Judge Olson denied the motion for post-trial relief that AF&L had presented.
Buck subsequently entered judgment on the $93, 152.91 non-jury verdict. A timely appeal by AF&L followed. In a memorandum opinion issued on November 22, 2011, the Pennsylvania Superior Court affirmed the verdict and order of the lower court.[2] AF&L applied unsuccessfully to the Superior Court for reconsideration and thereafter petitioned the Pennsylvania Supreme Court for allowance of appeal. That [] petition was denied by order dated July 18, 2012.[3] The order denying the petition for allowance of appeal was docketed with the Allegheny County Department of Court Records on August 13, 2012. On that same date, the Department of Court Records received the record that had been returned from the Superior Court. Also on that date, Sikov filed the Motion to Impose an Attorney's Charging Lien. Sikov's motion was heard by Judge Timothy Patrick O'Reilly, sitting as the Motion[s] Judge. Following argument, Judge O'Reilly issued a rule to show cause why a charging lien should not be imposed, directed that an answer be filed, and further directed that the parties engage in discovery through depositions and thereafter submit briefs in support of their respective positions.
A date for argument before the Motions Judge was set for January 4, 2013. On that date, the matter came before [Judge McCarthy]. Following argument, each party provided the [c]ourt, and exchanged with one another, proposed findings of fact and conclusions of law. At argument, in addition to the charging lien as set forth in the August 2012 motion, Sikov requested leave to file a claim against Buck for attorney's fees incurred in the course of preparing, filing, presenting and arguing the claim for the imposition of an attorney's charging lien, as well as a claim for punitive damages.
By Order dated January 16, 2013, [the trial court] denied the request to file for additional fees and damages. The underlying Motion to Impose an Attorney's Charging Lien was, however, granted in part. The payments in question were to be made proportionately to Sikov and Buck based upon an attorney fee of thirty-three and one-third (33 1/3%) percent of the total of the commissions due Buck for each of the years from October 1, 2009 through August 13, 2012. It was further ordered that an affidavit in support of the calculation of commissions and interest would be supplied to the respective counsel for the parties under the signature of John J. Hare, Esquire, counsel ...

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