Macurdy v. SIKOV AND LOVE, PA, C82-3811Y.
| Decision Date | 20 September 1988 |
| Docket Number | No. C82-3811Y.,C82-3811Y. |
| Parties | Tom E. MACURDY, Plaintiff, v. SIKOV AND LOVE, P.A., et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
John Ruffalo, Dudley B. Ruffalo, Hilton Head Island, S.C., for plaintiff.
Seymour A. Sikov, Pittsburgh, Pa., and Jack R. Baker, Baker, Meekison & Dablikar, Canton, Ohio, for defendants.
Before this Court is Defendant's motion for summary judgment. This motion turns on the law concerning attorney fee arrangements but a review of the facts of the case at bar is required.
Plaintiff Macurdy lived in Ohio, but close to the border of Pennsylvania. He was licensed to practice law in both states and, in fact, had client matters in each jurisdiction. The genesis of the instant case is traceable to his disbarment from practice in Pennsylvania.1 When Macurdy could no longer represent clients in Pennsylvania, he approached the firm of Sikov & Love and made arrangement for them to handle his cases. Taking Plaintiff's assertions as true for the sake of the instant dispositive motion, Plaintiff Macurdy and Defendant Evans, an attorney with Defendant firm Sikov & Love, met and agreed that Defendant firm would take over Plaintiff's Pennsylvania cases and, further, that any fees generated from these matters would be split equally.2 Over time, Sikov & Love worked on, and resolved, all of the Macurdy matters. During the pendency of some of these matters, specifically on June 14, 1979, Plaintiff was advised by Sikov & Love that fees could only be paid to him on the basis of quantum meruit since Macurdy was no longer licensed to practice law in Pennsylvania and, inter alia, the Code of Ethics prohibited the arbitrary 50-50 split of the fees. Checks based on a quantum meruit calculation were tendered in partial satisfaction of the fees owed Macurdy. Initially these were returned by Plaintiff but ultimately he accepted and cashed a check in the sum of $26,643.99, which was accompanied by a letter through which Defendants sought to effectuate an accord.3 Despite receipt and endorsement of this payment, the instant action was filed in state court and later removed to this Court.
In reviewing and determining a motion for summary judgment, the facts must be construed in a light most favorable to the non-moving party. Only through such a perspective may the court reach the determination that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56. In this matter summary judgment is warranted both substantively and procedurally.
Plaintiff alleges in his complaint that Defendant fraudulently induced him into this fee splitting arrangement in order to intentionally deprive him of monies rightfully his.4 The gist of his complaint, therefore, sounds in fraud. In passing, however, breach of the oral fee-splitting contract is also asserted. Thus both claims of fraud and breach of contract must be addressed in order for the granting of summary judgment to be appropriate.
The point of departure for any analysis of a case which comes to this court via removal from the state court is to determine the operative body of substantive law. The transaction at issue involves two states, both of which have a relationship to the parties and the contract. Ohio was the locus of execution and payment, whereas Pennsylvania was the locus of performance. As a diversity action removed to federal court in Ohio, Ohio choice of law rules must govern determination of which state's substantive law applies. Consideration and careful balancing of the respective interests in applying Ohio or Pennsylvania law leads to the conclusion that the law of the State of Pennsylvania must be controlling.
Ohio conflict of law rules consider the place of making a contract, the place of performance of a contract, the intention of the parties as well as, of recent, substantial contacts with the respective states. The fee splitting arrangement in this matter was admittedly struck in an Ohio restaurant and it is undisputed that payments were made to Macurdy in Ohio. Thus the "place of making" analysis would encourage selection of Ohio law. However, the agreement at issue was designed to secure Sikov & Love's performance of legal services exclusively in Pennsylvania — where Plaintiff was now unauthorized to practice law. Therefore, "place of performance" analysis leads to selection of Pennsylvania law. No expression whatsoever of the parties' intentions as to choice of law is presented, and equally compelling arguments appear initially for the selection of either state. Dictating this issue, therefore, must be the substantial contacts with Pennsylvania which arise because that forum is also the state with a much greater interest in protecting the public from inappropriate actions by lawyers with respect to legal representation within its borders. As a result, Ohio conflict law results in the selection of Pennsylvania law as controlling.
Having determined the operative substantive body of law, both the fraud and contract claims must be analyzed pursuant to it, as must any defenses thereto. Claims of fraud and breach of contract, because of their inherently different natures, will be addressed separately. The fraud claim, premier in the complaint, will be considered first and the breach of contract issue will follow.
Initially, Plaintiff's assertion of fraud should be viewed independently of the ethical canons and the policy surrounding arbitrary fee splitting arrangements. The basis for this is straightforward — a person may not fraudulently induce another and then academically hide behind the statement that the fraudulent contract is unenforceable.5 A review of the progress of their dispute prior to the filing of a complaint, however, renders unnecessary resolution of the fraud claim since this one of Plaintiff's claims suffers a fundamental flaw: it is barred by the statute of limitations.
The actions which Plaintiff alleges constituted fraud began on September 15, 1978 when Macurdy and Evans met to discuss the transfer of cases. The allegedly fraudulent deal was struck at that moment and the files were...
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Macurdy v. Sikov & Love, P.A.
...on the fraud claim because "if fraud was in fact present, it was clearly discernable by June 14, 1979." Macurdy v. Sikov and Love, P.A., 701 F.Supp. 134, 136 (N.D. Ohio 1988). Since Macurdy's lawsuit was filed over two years after the fraud, Pennsylvania's two-year statute of limitations ba......