PITTSBURGH – The way his former firm sees it, prominent Western Pennsylvania plaintiffs attorney R. Bruce Carlson has essentially been working for it for the past 13 years as he litigated a long-running class action – even though he resigned in 2004.
On June 5, the Pittsburgh law firm Specter Specter Evans & Manogue filed a lawsuit against Carlson, who left the firm long ago to create Carlson Lynch in 2004. The Specter firm alleges Carlson owes it nearly all of his $2.45 million in fees gained in a recent $24 million settlement regarding fees imposed on those who took out second mortgages from Community Bank of Northern Virginia.
Carlson’s lawsuits began in 2001 when he was employed by the Specter firm, which now says it is owed more than $1.9 million of Carlson’s fees, per a separation agreement reached when he left the firm.
“The Separation Agreement also provided that it would remain intact irrespective of Carlson’s ongoing responsibilities in the matter and any time that Carlson may devote to the appeal of the settlement’s approval and thereafter,” the Specter firm’s complaint says.
The Specter firm’s actions disregard the language of its arrangements with him, Carlson counters. That’s because the Specter firm was only entitled to a percentage of his fees if the original 2003 settlement was approved, he says.
That settlement was shot down by the U.S. Court of Appeals for the Third Circuit in 2005, and the case went on for another 11 years. Final approval was granted to the new settlement in December.
He calls the Specter firm’s position “legally untenable” and says he never agreed to extend his work on the case to an unlimited amount of time while paying all costs incurred only to turn over 80 percent of any fees.
“Such an ‘interpretation’ of the Separation Agreement is not only absurd but also legally impermissible,” Carlson’s attorney wrote.
The Specter firm is basing its figures on documents available to it. An arbitration panel decided the amount of fees in the case in question, awarding $8.4 million. The firm does not know with certainty what type of fee-sharing agreement Carlson had with other attorneys in the case.
But when attorneys submitted their request, what Carlson asked for would have amounted to 29 percent. And 29 percent of what was actually awarded amounts to $2.4 million.
The Specter firm’s math would leave Carlson with $557,639 for his 15 years working the case.
The complaint gives insight into Carlson’s years at the firm. He did not work the firm’s existing cases, instead originating or continuing his own.
He filed lawsuits on behalf of 14 individuals in the CBNV case. When he left in 2004, he took 59 active cases with him.
In Carlson’s lawsuit against Abercrombie & Fitch, the Specter firm recovered more than $350,000. In a lawsuit against The Limited, the firm recovered $236,000.
In the CBNV case, his original agreement had him receiving one-fifth of the fees, with the rest going to the Specter firm. Carlson received a salary plus referral fees while at the Specter firm.
“Indeed, and, first, the Specter firm’s contractual ‘interpretation’ wholly ignores what actually transpired in the litigation: Mr. Carlson expended 13 years of additional time, effort and expense to bring the litigation to a successful conclusion,” his attorney wrote.
It is unclear which judge will decide the issue. U.S. District Judge Arthur Schwab asserted his court’s jurisdiction on June 29 after the Specter firm filed its complaint in the Allegheny County Court of Common Pleas.
Schwab oversaw the CBNV case, which continued against PNC Bank after PNC purchased Mercantile-Safe Deposit and Trust Company in 2007. That company bought CBNV in 2005.
An order was entered staying any proceedings in the Allegheny County Court of Common Pleas on June 30.
“The effect of the two orders staying the state law suit and asserting ancillary jurisdiction over the fee dispute resolution is, among other things, to deprive (the Specter firm) of its constitutional right under Pennsylvania law to a jury trial in a proper forum of its choosing without giving (the Specter firm) the slightest opportunity to be heard,” attorneys for the Specter firm wrote on July 3 in federal court.
“The grant of an ex parte special injunction is a procedure which is frowned upon except in the most dire of emergencies when irreparable harm might occur before an opposing party is able to respond.”
Carlson asked Schwab on July 7 to confirm the costs and fees awarded to him.
From the Pennsylvania Record: Reach editor John O'Brien at jobrienwv@gmail.com.