United States District Court, W.D. Pennsylvania
J. SCHWAB UNITED STATES DISTRICT COURT JUDGE.
the Court is Defendants' Motion to Dismiss
Plaintiffs' Amended Complaint (ECF 15) and Brief in
Support of same. ECF 17 and ECF 18. Plaintiffs filed a
Response and Defendants filed a Reply, making the matter ripe
for adjudication. The Court will grant in part and deny in
part the Motion to Dismiss for the reasons set forth below.
the Court writes primarily for the Parties, the facts of this
case, as pled in the Amended Complaint, will be truncated and
accepted as true solely for the purposes of deciding the
had experience in class action litigation and paired with the
Defendants on certain class action cases. ECF 15, ¶
12-14. Although both Defendants and Plaintiffs were lawyers,
the Parties failed to reduce their working relationship, and
most importantly, the remuneration between them for cases
they worked together, to a written contract. ECF 15, ¶
17. However, the Parties agreed either orally (and/or by
their conduct) that Plaintiffs would be paid for their work
by Defendants. ECF 15, ¶ 18.
case before this Court arises out of the work the Parties
performed on a class action case they reference as
“Maszgay.” Plaintiffs in this case
attached a written brief in support of an uncontested motion
for the approval of the Maszgay settlement agreement
to their Amended Complaint. ECF 15-1. That brief, which was
submitted to the Pennsylvania Court of Common Pleas for
Jefferson County, indicates that both Plaintiffs and
Defendants (and a third attorney) contributed their legal
expertise to resolving the Maszgay matter, and
asserts that the combined attorneys' fees (using the
aggregate lodestar) totaled $1, 270, 237.50. Id.
Amended Complaint in the instant case matter avers that the
Court of Common Pleas granted final approval of the
Maszgay settlement, and using a 2.3 multiplier to
create an “enhanced lodestar, ” awarded $2.92
million in attorney's fees. ECF 15, ¶ 35-36.
According to the Amended Complaint in this case, Defendants
were paid $2.92 million in attorneys' fees in the
Maszgay matter in September of 2018, and Plaintiffs
essentially claim they have received their fair share of the
$2.92 million attorneys' fees.
of Plaintiffs' Amended Complaint seeks a declaration from
this Court that Defendants are judicially estopped from
assuming any position in the instant case contrary to their
prior representation before the Pennsylvania Court of Common
Pleas concerning the attorneys' fees paid in the
Marszgay matter. Count II of Plaintiffs' Amended
Complaint seeks damages in the amount of $1, 334, 522.75,
which represents the amount set forth in the written brief in
support of an uncontested motion for the approval of the
Maszgay settlement agreement submitted to the Court
of Common Pleas (less $45, 000 which Defendants received, to
date, from Plaintiffs). Count II is predicated upon a theory
of quantum meruit.
their Brief in Support of their Motion to Dismiss this case,
Defendants argue that Count II of the Complaint must be
dismissed because a there was an express agreement
between the Parties. Defendants contend that because an
express agreement exists, Plaintiffs are not entitled to the
equitable relief they demand in Count II. Defendants equate
the quantum meruit claim with a claim for unjust
enrichment, and thus label Plaintiffs' quantum
meruit claim one seeking equitable relief.
no such express agreement was attached to the Amended
Compliant, and Defendants failed to attach any such express
agreement to their Motion, Brief in Support, or Reply Brief.
Rather, Defendants argue in both of their Briefs that
Plaintiffs conceded that an express agreement existed, in
their Amended Complaint at paragraph 18 which reads,
“[Plaintiffs] and [Defendants] did agree that in
addition to making regular payments to [Plaintiffs],
[Defendants] would pay to [Plaintiffs] a portion of the fees
received when a case settled . . . .”. ECF 15 and ECF
22. Defendants also note that the Amended Complaint avers
that Defendants made periodic payments to Plaintiffs for four
Pennsylvania law, a contract may be manifested orally, in
writing, or as an inference from the acts and conduct of the
parties. Under Pennsylvania law, the doctrine of unjust
enrichment is inapplicable when the relationship between the
parties is founded upon a written agreement or express
contract. . . . Grudkowski v. Foremost Ins. Co., 556
F. App'x, 165, 169-170 (3d Cir. 2014), quoting Wilson
Area Sch. Dist. v. Skepton, 895 A.2d 1250 (2006).
stated, if an express or written contract exists then an
unjust enrichment claim will fail as a matter of law. Because
Plaintiffs will be required to prove the same elements for
their quantum meruit claim as they would for an
unjust enrichment claim (see Allegheny Gen. Hosp. v.
Philip Morris, Inc., 228 F.3d 429, 447 (3d Cir.
2000)), then Plaintiffs' quantum
meruit claim would be barred if an express contract
between Plaintiffs and Defendants in this case existed.
juncture of the legal proceedings pending before this Court,
no Party has produced any evidence of an express or written
agreement. In addition, the Amended Complaint does not offer
any facts to support a finding that an express or written
agreement exists between the Parties. To the contrary, the
facts as pled by Plaintiffs in the Amended Complaint suggest
that the agreement at issue in this case was an implied
and/or oral. For this reasons, Defendants' argument for
dismissal of Count II of the Amended Complaint fails and
their Motion to Dismiss will be denied as to Count II.
Defendants argue that Count I of the Amended Complaint, which
seeks a declaration that Defendants are judicially estopped
from assuming any position contrary to the position set forth
in the Pennsylvania Court of Common Pleas submission for fees
in the Maszgay matter, should be dismissed.
Defendants contend that the doctrine of judicial estoppel is
a rule of evidence and not a cause of action. Plaintiffs, in
response to Defendants, state “so what?” and
contend that they are entitled to a federal declaration
preventing Defendants from stating that Plaintiffs are
entitled to receive less in fees than what was set forth in
the state court submission.
Supreme Court of Pennsylvania has defined judicial estoppel
and its appropriate application “[a]s a general rule, a
party to an action is estopped from assuming a position
inconsistent with his or her assertion in a previous action,
if his or her contention was successfully maintained.”
Trowbridge v. Scranton Artificial Limb Company, 560
Pa. 640, 747 A.2d 862, 864 (2000). The purpose of judicial
estoppel is “to uphold the integrity of the courts by
‘preventing parties from abusing the judicial process
by changing positions as the moment requires.'”
Id., at 865. Judicial estoppel may be imposed only
if: “(1) the party to be estopped is asserting a
position that is irreconcilably inconsistent with one he or
she asserted in a prior proceeding; (2) the party changed his
or her position in bad faith, i.e., in a culpable
manner threatening to the ...