Paddick v. Butt, CIVIL ACTION NO.: 09-4285

• Decision Date: 27 April 2018
• Docket Number: CIVIL ACTION NO.: 13-374,CIVIL ACTION NO.: 09-4285
• Parties: RYAN M. PADDICK Movant v. SHENECQUA BUTT; THERESA HOWARD; and. ELLEN BRONSON, a/k/a ELLEN BROWN Respondents RYAN M. PADDICK Movant v. THERESA HOWARD Respondent
• Court: U.S. District Court — Eastern District of Pennsylvania

RYAN M. PADDICK Movant v. SHENECQUA BUTT; THERESA HOWARD;

and. ELLEN BRONSON, a/k/a ELLEN BROWN RespondentsRYAN M. PADDICK Movant v. THERESA HOWARD Respondent

CIVIL ACTION NO.: 09-4285

CIVIL ACTION NO.: 13-374

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

April 27, 2018

MEMORANDUM AND OPINION

DAVID R. STRAWBRIDGE UNITED STATES MAGISTRATE JUDGE

Presently before the Court is a discharged attorney's motion to enforce a charging lien against the settlement fund ultimately obtained by his former clients. Following upon reports that all claims in the related cases (09-4285 and 13-374) had been settled, attorney Ryan Paddick Esq. ("Paddick"), former counsel for Plaintiffs Shenecqua Butt ("Butt"), Theresa Howard ("Howard"), and Ellen Brown ("Brown") (formerly Bronson) (hereinafter collectively "Former Clients"), filed two motions—a "Motion for Leave to Intervene for Recognition and Enforcement of Lien" (Doc. 305) and with it his companion "Motion for Recognition and Enforcement of Lien." ("Enforcement Motion") (Doc 306.)¹ On November 14, 2017, we ordered Sandra Thompson, Esq. ("Thompson"), current counsel for the Former Clients to file aresponse to both of the Paddick motions, and that he reply. (Doc. 309.) Upon receipt of these briefings, we entered an Order granting Paddick's motion for leave to intervene. In the same order, we set a hearing date and granted leave to the Former Clients to file a surreply to Paddick's reply. (Doc. 327.) On January 13, 2018 Butt filed a "Motion for Recognition and Enforcement of Lien" against Tanya Mitchell, a former plaintiff, and Paddick. (Doc. 329.) Paddick responded to that motion on January 24, 2018. (Doc. 333.)

During the interim, and having a strong belief that this dispute cried out for a negotiated resolution, we consulted with counsel and recommended that they explore settlement discussions with the assistance of my colleague, United States Magistrate Judge Timothy R. Rice, who agreed to preside over such a conference. (Doc. 324.)² That effort was unavailing.

We then proceeded to an evidentiary hearing which began on February 2, 2018 and was continued on February 7 and 12, 2018. Testimony was taken from Marc Gelman, Esq., who represented the Carpenters Union and Edward Coryell and Mark Durkalec (collectively "Union Defendants") in both underlying cases, Catherine Straggas, Esq., who represented the Philadelphia Housing Authority ("PHA") in the 13-374 case, Mitchell, the one underlyingplaintiff who did not terminate Paddick, Paddick himself, Anthony Jackson, a disbarred attorney who assisted Paddick as a legal assistant in his representation of the Former Clients, each of the Former Clients, and Thompson. Both parties were instructed to file post-hearing briefs and have now done so. (Doc. 349, Doc. 351.)³

On the morning of February 12, 2018, as we convened for the last day of the hearing, the Former Clients filed a "Motion for Recusal [of me] filed by Ellen Brown, Shenecqua Butt, and Theresa Howard." ("Recusal Motion") (Doc. 343.) The motion was supplemented on February 13, 2018 with an affidavit from Butt. (Doc. 345.) I deferred ruling on that motion subject to the completion of the hearing, and in order to give Paddick an opportunity to respond. He did so on February 14, 2018. (Doc. 348.) These motions are all ripe for resolution.

By our accompanying order, we (1) grant with limitation Paddick's Enforcement Motion; (2) deny Butt's "Motion for Recognition and Enforcement of Lien" against Mitchell and Paddick; and (3) deny the Recusal Motion. We set out our reasoning below.

I. Enforcement Motion

A. Jurisdiction

Paddick asserts that we have subject matter jurisdiction over his enforcement lien by way of ancillary jurisdiction. (Doc. 306-3 at 1.) His Former Clients respond that we lack jurisdiction over this fee dispute "as the underlying case was dismissed a month before Paddick filed a motion to assert a lien and the asserted claims have no nexus to the underlying claims filed against the Union or PHA." (Doc. 328-1 at 2-3.) As to Butt's assertion of the lien againstPaddick and Mitchell, she asserts that "There is ancillary jurisdiction to hear instant Movant's claims, because the Court is exercising jurisdiction of Ryan Paddick's claims." (Doc. 329-3 at 2.)

We begin by noting that under 28 U.S.C. § 1367, ancillary, or supplemental jurisdiction may be exercised "over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." In Novinger v. E.I. DuPont de Nemours & Co., the Third Circuit cited a commentator who noted that "[a]ncillary jurisdiction exists because without it the federal court neither could dispose of the principal case effectively nor do complete justice in the dispute that is before the tribunal." 809 F.2d 212, 217 (3d Cir. 1987) (citing 13 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE, § 3523, at 85 (1984). The Court continued to explain that

This description of the purpose of ancillary jurisdiction suggests that it is particularly necessary for disputes such as this one. Attorneys' fee arrangements in diversity cases, and in most federal question cases as well, are matters primarily of state contract law. Nevertheless the federal forum has a vital interest in those arrangements because they bear directly upon the ability of the court to dispose of cases before it in a fair manner.

Id.

Thus, we conclude that this Court has ancillary jurisdiction over Paddick's claims under 28 U.S.C. § 1367 as the claims form part of the same case or controversy to the underlying suit. Without our exercising ancillary jurisdiction over these claims, the principal case could not be disposed of efficiently; nor could we do complete justice without deciding this dispute. Novinger, 809 F.2d at 217-18.

With regard to Butt's motion, however, we are not convinced that our jurisdiction over Paddick's claims compels us to exercise jurisdiction over that claim. These claims arefundamentally different: Paddick's claim pertains directly to his efforts leading (or not) to the creation of the settlement fund; Butt's claims have nothing to do with creating the fund but rather are based upon an apparent separate agreement between her and co-plaintiff Mitchell where one (Butt) allegedly advanced money for counsel fees for the benefit of the other (Mitchell). We also observe that, unlike Paddick's enforcement claim, which requires extensive knowledge of the underlying litigation and the activities of the lawyers involved over several years, Butt's motion concerns a simple claim to enforce an asserted debt which Mitchell has stated in open court that she would pay. We decline to exercise jurisdiction over this claim.

B. Parties Contentions

Paddick contends that he is entitled to recover from his Former Clients based upon the terms of two separate contracts: (1) the agreement to represent them in the Court of Appeals as they sought to overturn Judge Baylson's initial dismissal of the case ("Appellate Agreement") and (2) the agreement to represent them upon remand ("Contingency Fee Agreement" or "CFA"). Paddick's argument on the Appellate Agreement is simply that he is owed an outstanding balance to be paid under that agreement. With regard to the CFA, he argues that he has acquired an interest in the Respondent's settlement award through a charging lien. He then seeks damages on one of three bases: as a percentage of the fund; his lodestar for his time spent prior to his termination; or quantum meruit based on equitable principles. (Doc. 306-3.)

The Former Clients disagree. They assert that they paid the full amount Paddick was owed under the Appellate Agreement; that the CFA is void as it was signed under duress, and that even if it was not, Paddick breached the agreement and has "unclean hands" leaving him unable to recover in equity.

C. Discussion

We examine these arguments as we recount the chronological history of the case and what we see as the relevant events to take into account. We then apply these considerations in the context of the law governing each particular issue. Ultimately, we conclude that Paddick's claims for his entitlement to fees under the Appellate Agreement are dependent upon the interpretation of the CFA. Accordingly, we discuss the CFA and the work completed by Paddick throughout his representation of his Former Clients.

1. Litigation leading to first Motion for Summary Judgment

This litigation began on September 21, 2009, when Butt, represented by counsel not involved in this current dispute, filed a complaint against the United Brotherhood of Carpenters & Joiners of America, Carpenter Health & Welfare Fund of Philadelphia & Vicinity ("Union"), Edward Coryell and Mark Durkalec asserting gender and race based discrimination and retaliation. (Doc. 1.) By amended complaint filed November 5, 2009, Mitchell and Allegra King⁴ joined Butt as plaintiffs. (Doc. 6.) On June 2, 2010 and July 6, 2010, Howard and Brown respectively filed a complaint against the Union Defendants, asserting essentially the same claims as Butt and Mitchell. (10-2633, Doc. 1; 10-3269, Doc. 1.) On May 25, 2011, Judge Baylson ordered the cases consolidated for all discovery. (Doc. 38.) Discovery was undertaken between March and June 2011. The Union Defendants then filed a Motion for Summary Judgment which Judge Baylson granted on January 26, 2012. (Docs. 40, 55.) While not necessary for consideration of our case, it appears that the Karpf, Karpf & Cerutti, P.C. firm which had been representing all plaintiffs withdrew after the adverse ruling from Judge Baylson, leaving the plaintiffs to file a pro se Notice of Appeal to the Court of Appeals. (Doc. 56.) Thishistory, which predates Howard's 13-374 suit against PHA and the Union for unrelated conduct concerning Howard's employment relationship with PHA, leads us to the first fee...