HARRISBURG – For jurisdictional reasons, judges from the Superior Court of Pennsylvania have thrown out appeals from one partner of the former Philadelphia law firm Golomb & Honik relating to escrow account contributions, ruling it did not have cause to compel the firm’s other former partner to make those contributions, as the firm continues to dissolve.
In a five-page opinion reached on March 16, Superior Court judges Carolyn H. Nichols, Maria McLaughlin and Daniel D. McCaffery reasoned that it could not allow an appeal of a non-final order in this case.
The story began with the dissolution of the Golomb & Honik law firm in August 2020, leading its once-partners Richard Golomb and Ruben Honik to file litigation against one another over the events leading to their firm coming to an end.
On June 9, 2021, Philadelphia County Court of Common Pleas Judge Gary Glazer entered an order which placed conditions around the dissolution of the Golomb & Honik firm – however, just days before Glazer issued his ruling, Honik’s counsel filed a separate complaint against Fulton Financial Corp. on June 3.
This complaint claimed Fulton Financial, the bank for the former Golomb & Honik firm, prevented Honik from accessing the firm’s bank accounts as a result of “false information” given to it by Golomb – and in the process, committed both breach of contract and fraud.
An amended version of the complaint against Fulton Financial was filed on Aug. 2, which added the now-dissolved Golomb & Honik firm alongside Honik himself. Golomb was never named as a party in the action.
“As a result of defendant Fulton’s failure to comply with the terms of the depository agreements with the firm, defendant Fulton knowingly permitted Golomb to wrongfully and unlawfully lock Mr. Honik out of the firm, terminate his salary and benefits, and harm Mr. Honik financially and professionally,” Honik’s amended complaint stated.
However, an Oct. 18 order from Philadelphia County Court of Common Pleas Judge Nina Wright Padilla dismissed Honik’s claims of being forbidden to access his former firm’s bank accounts.
“Such a mandated demand is only excused if the plaintiff demonstrates immediate and irreparable harm to the corporation. Here, Honik failed to make a demand on the firm or its board of directors to bring this action against defendant bank and has failed to allege that demand is excused,” Wright Padilla said.
Wright Padilla cited state law which dictates “a shareholder does not have standing to institute a direct suit for a harm to the corporation that is only indirectly injurious to the shareholder.”
Honik now works at a firm bearing only his name and finds himself a partner at Golomb Spirt Grunfeld, both in Philadelphia.
Back to the instant case, the instant appeals resulted from the trial court’s June 9 ruling governing the dissolution of the firm, made to the Superior Court on Nov. 17 – where Nichols authored the appellate court’s opinion in these matters.
“After the trial court filed the June 9, 2021 order, Honik appealed and Golomb cross-appealed to this Court. Subsequently, Honik filed a motion to compel Golomb’s compliance with the June 9, 2021 order on Aug. 21, 2021. On Aug. 23, 2021, the trial court denied Honik’s motion, and the instant appeals followed,” Nichols said.
“On Oct. 26, 2021, this Court issued a rule to show cause why the appeals should not be quashed as interlocutory. Honik responded that the appeals are proper under Pennsylvania Rule of Appellate Procedure 311(a)(2) and asserted, ‘The Superior Court has not had the opportunity to clearly define what type of judicial orders fall within Rule 311(a)(2)’s catchall provision.’ Golomb filed a response, and this Court discharged the rule and referred the issue to our panel. Upon review, we disagree with Honik’s position, and we quash the appeals.”
Nichols explained that the Aug. 23, 2021 order incorporated the June 9, 2021 ruling, which partially directed the payment of money into an escrow account during the pendency of appeals in the underlying matter.
“However, the Aug. 23, 2021 order did not confirm, modify, dissolve or refuse to confirm, modify or dissolve an attachment, custodianship, receivership or similar matter affecting the possession or control of property. Rather, the Aug. 23, 2021 order is interlocutory and merely denies Honik’s motion to compel,” Nichols said.
“The Aug. 23, 2021 order does not fall within any of the narrowly confined categories enumerated in Rule 311(a)(2). Accordingly, we quash the appeals. We further direct the trial court to enforce compliance with its June 9, 2021 order, to the extent of preserving the status quo in the process of dissolving the firm.”
Superior Court of Pennsylvania case 1876 EDA 2021
Philadelphia County Court of Common Pleas cases 200701918 & 200702033
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com