United States District Court, W.D. Pennsylvania
signed by investors allowing a financial company to invest
their money often allow an investor winning a breach of
contract dispute to seek reimbursement for court costs and
reasonable attorney's fees incurred in enforcing the
contract. When they want to bring a breach of contract claim,
the same investors may then sign a contract hiring a lawyer
to bring the breach of contract claim against the money
management firm and agreeing to pay a contingency fee upon
recovery. As a matter of contract law, we strictly enforce
the investors' agreements with their money management
company and then their lawyers.
we address these two agreements signed by the investors:
first with their money management company and then a retainer
agreement with their lawyers. On March 28, 2017, we granted
summary judgment to the investors on their breach of contract
claim against their money managers on a restitution basis.
They now move for prejudgment interest on this restitution
award. They also seek an award of reasonable attorney's
fees and costs under their retainer agreement which provides
only one payment obligation: upon winning a recovery, the
attorneys' recovery is limited to one third of the
recovery. We affirm the right to attorney's fees and
prejudgment interest under the two agreements.
and Linda Wall purchased structured annuities from personal
injury victims as an investment strategy. On November 8,
2011, the Walls and Altium Group LLC signed a "Master
Structured Settlement Receivable Purchase and Sale Agreement
and Non-Circumvention Agreement" ("Agreement")
to purchase an annuity. The Agreement provides for
attorneys' fees. "In any action to enforce this
Agreement, the prevailing party shall be awarded all...court
costs and reasonable attorney's fees
incurred." The Walls are entitled to recover
attorneys' fees for enforcing its Agreement with Altium.
underlying fraud with the personal injury victim, Altium
could no longer provide the Walls' the annuity payment
streams. Altium did not pay back the money to the Walls.
Walls then retained the lawyers employed by The Chiacchio
Firm to represent them in their breach of contract claim
against Altium. Under their June 27, 2014 retainer agreement,
the Walls paid a $15, 000 non-refundable retainer and the
attorneys are thereafter entitled to 33% of the Walls'
March 28, 2017, we granted summary judgment to the Walls on
their breach of contract claim against Altium representing
the restitution amount of $152, 833.37. On April 18, 2017, we
amended judgment to $102, 833.37 to reflect amounts the Walls
received from other settling parties. The Walls now move for
an award of attorneys' fees, costs, and prejudgment
interest under the Agreement.
The Walls are entitled to recover reasonable attorneys'
governing New Jersey law "disfavors the shifting of
attorneys' fees." New Jersey law does, however, allow a
prevailing party to recover attorneys' fees if the fees
are "expressly provided for" by the parties'
contract. In line with New Jersey law's disfavor
of attorneys' fees, we "strictly construe" an
agreement to pay opposing party's attorneys'
object to the Walls recovery of attorneys' fees because
the Walls offer no evidence of "fees actually
incurred." In his reply, Attorney Chiacchio declares
the "fee agreement with [the Walls] consisted of a $15,
000 non-refundable payment, and that payment is credited
against a 33% contingency. New Jersey courts allow the prevailing
party to recover attorneys' fees where the prevailing
party has a contingency agreement and even where the
prevailing party is not obligated to pay its attorneys'
overrule Altium's objection. The Walls are entitled to
recover attorneys' fees incurred under the Agreement.
Their attorney's fees incurred are defined by the
retainer agreement with The Chiacchio Firm.
We award attorneys' fees under the retainer
retainer agreement, the Walls and their attorneys agreed to a
contingency fee arrangement. The Walls paid The Chiacchio
Firm a non-refundable $15, 000 retainer fee and the attorneys
are entitled to "33% of any recovery, less a credit,
against the contingent fee, of the initial $15, 000 retainer
advanced by you." The parties agreed The Chiacchio Firm
attorneys would recover 33% of the Walls' recovery. The