A Pennsylvania judge admonished a local attorney regarding legal fees. Another law firm earned the fees in a successful settlement with the University of Pittsburgh Medical Center (UPMC) following a tragic 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. Michael Schaab was among the victims. Schaab’s parents hired the law firm of Farrell & Reisinger LLC to represent them in a case against UPMC for their son’s death. The contract entitled the firm to 35 percent of any monetary recovery if they won the case at trial. If they resolved the matter before formal litigation began, the law firm would receive 33 percent. The firm and UPMC went to mediation in mid-2012. On July 2012, they agreed to a settlement amount of $1.5 million. While UPMC’s attorneys wrote a settlement down and sent a release of claims to the Schaabs, they never signed it.
To compensate the Schaabs for their son’s tuition bills, the law firm forgave $150,000 of the $500,000 bill. So, the Schaabs would owe the firm $350,000 out of the $1.5 million settlement.
Before the Schaabs signed the settlement agreement and release, another attorney contacted them. The attorney 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. He alleged that the release the firm prepared for the Schaabs was too restrictive against potential future defendants.
The judge in the Allegheny County case called the Schaabs’ claim against their original law firm “ simply absurd”. The judge noted that the firm won a $1.5 million settlement when UMPC could have argued that the workers’ compensations statue covered Schaab’s death. Therefore, the family would not have been eligible 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.
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