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Wall v. Altium Group, LLC

United States District Court, W.D. Pennsylvania

May 10, 2017

ROBERT WALL and LINDA WALL
v.
ALTIUM GROUP, LLC

          MEMORANDUM

          KEARNEY, J.

         Contracts 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.

         Today, 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.

         I. Facts

         Robert 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."[1] The Walls are entitled to recover attorneys' fees for enforcing its Agreement with Altium.

         Due to 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.

         The 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' recovery.

         On 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.

         II. The Walls are entitled to recover reasonable attorneys' fees.

         The governing New Jersey law "disfavors the shifting of attorneys' fees."[2] New Jersey law does, however, allow a prevailing party to recover attorneys' fees if the fees are "expressly provided for" by the parties' contract.[3] In line with New Jersey law's disfavor of attorneys' fees, we "strictly construe" an agreement to pay opposing party's attorneys' fees.[4]

         Altium object to the Walls recovery of attorneys' fees because the Walls offer no evidence of "fees actually incurred."[5] 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.[6] 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' fees.[7]

         We 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.

         III. We award attorneys' fees under the retainer agreement.

         In the 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 ...


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