Federal court considering settlement proceedings and enforcement between UPS and legal, insurance officials

By Nicholas Malfitano | Oct 18, 2016

PHILADELPHIA – The enforcement of a settlement between United Parcel Service (UPS) and a number of legal and insurance industry defendants, tied to an underlying malpractice action, is now under consideration in a Philadelphia federal court.

On Oct. 5, UPS initiated action to enforce settlement in a legal proceeding between itself and the law firm of Salmon Ricchezza Singer & Turchi, John E. Salmon, Zachary J. Ballard, Philip J. Meyer, Clyde Haig and Atlantic Specialty Insurance Company (ASPIC), in regards to an oral settlement agreement which it says had been reached and agreed upon back in June for $500,000.

“The action that gave rise to the settlement is a legal malpractice action that UPS brought against the Salmon Ricchezza law firm and several of its attorneys (UPS v. Salmon, Ricchezza, Singer & Turchi, LLP, et al., No. 140801892, Philadelphia County Court of Common Pleas),” UPS’s attorney Clifford Cohn said in the filing.

According to the malpractice lawsuit, Salmon Ricchezza was chosen to provide defense counsel for UPS in a related personal injury case, per an indemnification agreement signed by Air Transport International (ATI). ATI, a UPS contractor, conducted maintenance on airplanes and employed the injured party, a maintenance supervisor named Gary DeVaco.

DeVaco filed suit against UPS in the Philadelphia County Court of Common Pleas in December 2008, subsequent to receiving a number of injuries at Philadelphia International Airport. DeVaco was injured by an unsecured nitrogen bottle, when a truck he was driving was knocked over by jet propulsion from a UPS plane in the vicinity. At that time of the accident, the bottle fell on DeVaco.

Despite a clause mandating ATI would indemnify UPS from any injuries or damages resulting ATI’s employees, Salmon Ricchezza first recommended that ATI decline a letter in which UPS tendered its defense to ATI. But, six months later, according to the malpractice suit, Salmon Ricchezza reversed course and chose to begin defending UPS from DeVaco’s suit.

Though evidence was gathered showing DeVaco was allegedly driving his truck outside its specific area and violated Occupational Safety and Health Administration (OSHA) rules in doing so, the filing said Salmon Ricchezza told ATI’s insurer UPS did not have a strong case.

As a result, the insurer would not continue to pay legal fees to continue to pursue the case and the firm exited the suit as representation for UPS. Later, UPS settled the suit with DeVaco in September 2012 for $5.5 million.

According to the filing, in the midst of the settlement discussions between the negotiators in the instant malpractice litigation, there was a miscommunication as to whether the settlement was in the amount of $550,000 (the malpractice defendants’ contention) or $500,000 (UPS’s contention).

“One day later, however, before malpractice defendants prepared the agreement for plaintiffs’ review, the court granted malpractice defendants’ summary judgment motion. Through a series of steps over the following weeks, malpractice defendants proceeded to renege on the settlement into which they entered,” Cohn said in the filing.

Cohn explained the plaintiffs previously attempted to enforce the settlement in the courts adjudicating the malpractice action, but the Philadelphia County Court of Common Pleas held it did not have jurisdiction to rule on the motion.

The plaintiffs then moved the Superior Court of Pennsylvania to remand to the trial court to evaluate the motion to enforce the settlement, but the Court denied the motion to remand “without explanation”, according to Cohn.

“The Superior Court subsequently denied an unopposed motion to reconsider. This complaint follows,” the filing read.

UPS requests that if the Court holds the settlement enforceable against Haig and ASPIC, that it enters judgment in its favor against Haig and ASPIC in an amount of $550,000, plus “interest, costs, and such other relief as the Court deems just, including interest and appropriate attorneys’ fees”, as well as a jury trial.

The plaintiffs are represented by Cohn of Cohn & Associates, in Philadelphia.

The defendants are represented by Ronald P. Schiller and Daniel J. Layden of Hangley Aronchick Segal Pudlin & Schiller, also in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-05265

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

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