The Business Litigation Blog

Judge Admonishes Attorney in Legal Fees Dispute

A Pennsylvania judge admonished a local attorney regarding legal fees earned by another law firm in a successful settlement with the University of Pittsburgh Medical Center (“UPMC”) following a tragic school shooting.

The Western Psychiatric Institute and Clinic shooting

On March 8, 2012, John Shick went on a shooting rampage in the Pittsburgh Western Psychiatric Institute and Clinic, leading to the death of Michael Schaab. Schaab’s parents hired the law firm of Farrell & Reisinger LLC to represent them in a case against UPMC for their son’s death.

As part of the contract the law firm signed with the Schaabs, the firm was entitled to 35 percent of any monetary recovery if the case was won at trial, or 33 percent if the matter was resolved before formal litigation began. The firm and UPMC went to mediation in mid-2012, and in July 2012, agreed to a settlement amount of $1.5 million. While the settlement was written down and a release of claims against UPMC was sent to the Schaabs, they never signed it.  

Additionally, in order to compensate the Schaabs for the cost of their deceased son’s tuition bills, the law firm forgave $150,000 of the 500,000 owed to them under their contract. So, the firm would be owed $350,000 out of the $1.5 million settlement.

Further Litigation

Before the Schaabs signed the settlement agreement and release, they were contacted by another attorney who was representing another victim in the shooting. That attorney asked if the Schaabs would be interested in pursuing a claim against the shooter’s parents. The Schaabs contacted Farrell & Reisinger, but the firm declined to pursue that claim for them. Instead, the firm recommended that the family request the services of attorney Michael O’Day. The couple then terminated their contract with Farrell & Reisinger and worked solely with
O’Day.

Mr. O’Day then initiated a breach of contract claim against Farrell & Reisinger apparently alleging that the release prepared for the Schaabs was too restrictive against potential future defendants.  

“Simply Absurd"

The judge in the Allegheny County case called the Schaabs’ claim against their original law firm “ simply absurd,” noting that the firm had won a $1.5 million settlement when UPMC potentially could have argued that the death of Michael Schaab, a UPMC employee, was covered by the workers’ compensation statute and was ineligible for further compensation. The judge found that Farrell & Reisinger’s work was essentially complete once the settlement was agreed upon, and the mere fact that the money had not yet been paid out or that the Schaabs had not signed the release did not negate the firm’s work and their performance under the contract.

The judge declared Farrell & Reisinger would receive the original amount owed under the contract -- $500,000.

 

Contact an Attorney with Questions

Legal malpractice can arise in many forms. If you have questions about legal malpractice or attorney ethics, call or email the attorneys at the Patterson Law Firm for guidance. 

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