Nicholas Malfitano Jan. 27, 2016, 8:52am


PHILADELPHIA – Per a local federal court decision, a negligence and professional liability case is being transferred to the U.S. District Court for the Central District of California.

Judge Juan R. Sanchez of the U.S. District Court for the Eastern District of Pennsylvania made the ruling on Jan. 20, in the case brought by plaintiff Lawyers Funding Group (LFG) against defendants Alan Harris, Harris & Ruble and Ernest Straughter.

LFG, based in Philadelphia, provides cash advances to plaintiffs with pending litigation in exchange for an interest in the plaintiffs’ recovery. In September 2011, LFG entered into a purchase agreement with Straughter, a California resident, in connection with a 2008 copyright infringement action Straughter filed against Sony Entertainment and recording artist Usher Raymond IV in the Central District of California.

Under the purchase agreement, amended in December 2011, LFG advanced a total of $27,500 to Straughter in exchange for a $100,000 interest in the proceeds of the copyright action, in which Straughter sought more than $10 million. The purchase agreement includes choice of law and forum selection clauses which provide for the application of Pennsylvania law and a Philadelphia County forum, respectively.

Over the following two years, a dispute took shape between the parties over a proposed settlement in the copyright infringement case and LFG’s related share therein, in addition to Straughter’s legal debts to LFG in the amount of $102,500. To date, LFG has not received the disputed funds in question.

In March 2014, Straughter settled the copyright action and received an unknown sum. In November of that same year, LFG filed the instant litigation in asserting breach of contract against Straughter and the Harris defendants for professional negligence and vicarious liability.

In May 2015, having been unable to make service on any of the defendants in this action and to ensure compliance with the statute of limitations, LFG filed a second, substantially similar action against Straughter, Harris, and Harris & Ruble in the Central District of California – which all of the defendants sought to dismiss.

The Harris Defendants asked for transfer to the Central District of California, while LFG argued they were either bound by the forum selection clause of the agreement between LFG and Straughter (which provided for a Philadelphia forum) or subject to specific jurisdiction in Pennsylvania.

However, Sanchez did not find the case’s location to be appropriate in Pennsylvania or the Harris Defendants to be bound by the aforementioned forum selection clause.

“Here, according to LFG’s own complaint, all three defendants are residents of California. Hence, venue would be proper only in that state,” Sanchez said.

Sanchez added transfer would be the preferable remedy in this case.

“Because venue is not proper in this district, the Harris Defendants’ motion to dismiss will be granted in part. In lieu of dismissal, however, the Court will transfer the case to the Central District of California,” Sanchez said.

Sanchez said the related action Lawyers Funding Group v. Harris, Et.Al. is currently pending there.

The plaintiff is represented by Alan Zibelman of Zibelman Legal Associates plus Samuel S. Dalke and Samuel H. Israel of Fox Rothschild, all in Philadelphia.

The defendants are represented by Terence B. Ruf Jr. in West Chester and David C. Garrett of Harris & Ruble, in Glendale, Calif.

U.S. District Court for the Eastern District of Pennsylvania case 2:13-cv-02057

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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