NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 BOCHETTO & LENTZ, P.C. Appellant IN THE SUPERIOR COURT OF PENNSYLVANIA v. A. HAROLD DATZ, ESQUIRE AND A. HAROLD DATZ, P.C. Appellees No. 1503 EDA 2012 Appeal from the Order Entered April 27, 2012 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): September Term, 2010 No. 03044 BEFORE: PANELLA, J, OLSON, J., and STRASSBURGER, J. * MEMORANDUM BY STRASSBURGER, J.: FILED JULY 26, 2013 Appellant Bochetto & Lentz, P.C. (B&L) appeals the trial court s order granting summary judgment in favor of A. Harold Datz, Esquire (Datz) and A. Harold Datz, P.C. (Datz, P.C.) (collectively, Appellees). 1 For the reasons set forth herein, we reverse and remand for further proceedings consistent with this memorandum. * Retired Senior Judge assigned to the Superior Court. 1 Also pending before this Court is B&L s Application for Leave to File a Motion with Trial Court to Vacate Summary Judgment Based on After Discovered Perjured Testimony. Due to our disposition of B&L s appeal, we dismiss its application as moot.
B&L and Datz, P.C. are competing civil litigation firms located in Philadelphia, Pennsylvania. From July 2005 until his termination in February of 2009, Scott Sigman, Esquire (Sigman) was employed by B&L as an associate attorney. The following facts are undisputed. In June of 2007, while employed by B&L, Sigman was contacted by Jillene Pasternak regarding representation for her slip and fall personal injury claim. At some point thereafter Sigman referred the Pasternak case to Datz. No written agreement of this referral exists; however, the record shows that Pasternak retained Datz, and Datz later confirmed to Sigman that he was on the case. Trial Court Opinion, 4/26/2012, at 2; Deposition of Sigman, 5/5/2011, at 101-104. In February of 2009, Sigman was fired from B&L based on allegations that he was secretly engaging in client representations and referrals without notifying B&L or receiving B&L s consent. Shortly thereafter, on April 20, 2009, Pasternak s case was settled by Datz. Appellees received 40 percent of the settlement proceeds, amounting to a combined fee of $86,000.00, from which Datz then gave Sigman a referral fee in the amount of $28,800.00 in a check dated April 30, 2009. Id. at 3. This check was made - 2 -
out to Sigman at his home address. 2 Deposition of Sigman, 5/5/2011, at 112-113. On September 27, 2010, B&L initiated this action by filing a praecipe for writ of summons. 3 October 19, 2010, B&L filed a civil complaint against Appellees. 4 After two sets of preliminary objections and an amended complaint, the causes of action remaining were tortious interference with prospective contractual relations, civil conspiracy to commit fraud, conversion, unjust enrichment, constructive trust, and aiding and abetting breach of fiduciary duty. During the course of discovery, the following relevant deposition testimony was taken and affidavits were produced. Sigman testified that, following his June 2007 discussion with Pasternak, he asked B&L partner George Bochetto, Esquire (Bochetto) whether Sigman could keep Pasternak s 2 The record reveals that Appellees intended to mail the check to Sigman s home address, but Sigman picked it up in person. Deposition of Datz, 11/17/2010, at 102. In his deposition, Datz claimed that he had requested Sigman s home address for Datz, P.C. s Christmas card and announcement list. Id. at 118. However, Datz then admitted that the firm did not send out Christmas cards. Id. at 118-119. 3 B&L s initial complaint was filed against the firm of Seidel, Weitz, Garfinkle & Datz, LLC. (SWGD) On November 17, 2010, the parties agreed to substitute Datz, P.C. for SWGD. B&L then filed an amended complaint naming Datz and Datz, P.C. as defendants. 4 B&L is bound by an arbitration clause contained in Sigman s employment termination agreement and is pursuing its claims against Sigman in an arbitration proceeding. Accordingly, B&L has not named Sigman as a defendant herein. - 3 -
case because (pursuant to his employment agreement with B&L) he would be entitled to one-third of the attorney fee and would get to learn about personal injury cases. According to Sigman, Bochetto told him to get rid of the case because B&L did not want to handle slip and fall cases. Trial Court Opinion, 4/26/2012, at 2; Deposition of Sigman, 5/5/2011, at 52, 83. Datz testified that he asked Sigman why B&L was not keeping Pasternak s case, to which Sigman responded that Bochetto had told him B&L was not interested in handling slip and fall cases, and thus, to get rid of the case. Trial Court Opinion, 4/26/2012 at 3; Deposition of Datz, 11/17/2010, at 96, 97. Conversely, in his deposition, Bochetto adamantly denied knowledge of a potential client named Pasternak and further denied having any conversation with Sigman regarding referral of the Pasternak case. Deposition Of Bochetto, 3/31/2011, at 130-133. Bochetto further testified that Datz did not discuss the Pasternak referral with him. Id. On November 21, 2011, after the close of discovery, Appellees filed a motion for summary judgment. On April 27, 2012, the trial court issued an order granting summary judgment in favor of Appellees as to all six counts of B&L s complaint. This appeal followed. 5 On appeal, B&L challenges the trial court s grant of summary judgment as to each cause of action raised in its complaint. B&L s Brief at 4-6. 5 The trial court did not order B&L to file a Pa.R.A.P. 1925(b) statement of matters complained of on appeal and none was filed. - 4 -
following. We address a review of a grant of summary judgment mindful of the [i]n reviewing an order granting summary judgment, our scope of review is plenary, and our standard of review is the same as that applied by the trial court. Our Supreme Court has stated the applicable standard of review as follows: an appellate court may reverse the entry of a summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to a judgment as a matter of law. In making this assessment, we view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. As our inquiry involves solely questions of law, our review is de novo. Thus, our responsibility as an appellate court is to determine whether the record either establishes that the material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact-finder. If there is evidence that would allow a fact-finder to render a verdict in favor of the non-moving party, then summary judgment should be denied. Catlin v. Hamburg, 56 A.3d 914, 919-20 (Pa. Super. 2012). B&L first argues that the trial court erred in granting summary judgment as to B&L s claim for tortious interference with prospective or existing contractual relations. 6 The trial court granted summary judgment 6 The tort of tortious interference with prospective or existing contractual relations consists of the following four elements. (1) the existence of a contractual, or prospective contractual relation between the complainant and a third party; (Footnote Continued Next Page) - 5 -
as to this count on the basis that B&L failed to offer evidence of requisite intent on the part of Datz to interfere with B&L s potential contractual relationship with Pasternak. 7 Trial Court Opinion, 4/26/2012, at 7. Specifically, the trial court determined that B&L failed to produce evidence which disputed (1) that Sigman referred the Pasternak case to Appellees and (2) the content of Sigman s conversations with Datz and Bochetto regarding the Pasternak referral. Id. at 7. In so holding, the trial court accepted as credible the affidavits of Sigman and Datz regarding Sigman s alleged conversation with Bochetto. Id. With respect to B&L s second issue regarding its allegations that Datz conspired 8 with Sigman to defraud B&L by engaging in a side agreement, (Footnote Continued) (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation, or to prevent a prospective relation from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Maverick Steel Co., L.L.C. v. Dick Corporation/Barton Malow, 54 A.3d 353, 354-55 (Pa. Super. 2012). 7 The trial court did not address the other three elements outlined in Maverick, supra. 8 The essential elements of a claim for civil conspiracy are as follows: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful (Footnote Continued Next Page) - 6 -
B&L presented evidence that Bochetto had no knowledge of the Pasternak referral, that the Sigman/Datz referral agreement violated the standard referral practice which required the referral to come directly from B&L and not an associate, and email discussions between Datz and Sigman (which occurred while Sigman was employed by B&L) revealed that Datz intended to provide the referral fee directly to Sigman and not B&L. Videotaped Deposition Of Bochetto, 3/31/2011, at 130-133. The trial court found that B&L failed to offer evidence regarding Datz s intent, and that B&L was not damaged because Pasternak was not its client before Datz was retained. Trial Court Opinion, 4/26/2012, at 9. The trial court held as follows. Specifically, [B&L] fails to indicate any fact, and our review of the record fails to evince any fact, which would substantiate the allegation [Appellees] conspired with Sigman with the unlawful intent to injure [B&L]. To the contrary, the evidentiary record demonstrates that Sigman advised Datz that [B&L] did not want to handle slip and fall cases and was told to get rid of Pasternak s claim. While an issue of material fact might exist as to whether [B&L] and Sigman engaged in any communication regarding the Pasternak claim, [B&L] proffers no evidence to dispute Sigman s representations to [Datz] regarding [B&L s] rejection of the matter. Id. Once more, the trial court s ruling relied upon the oral testimony of Datz and Sigman. (Footnote Continued) purpose, (2) an overt act done in pursuance of the common purpose, and (3) actual legal damage. Phillips v. Selig, 959 A.2d 420, 437 (Pa. Super. 2008) (quotations omitted). - 7 -
In its third issue, B&L claims that Datz committed the tort of conversion 9 by paying Sigman a referral fee directly, as opposed to paying B&L the fee for the Pasternak case. B&L Brief at 35. B&L contends that it had a constructive right to the fee for the Pasternak referral, but was cut out of its rightful payout by Sigman and Datz. Id. at 37. Acknowledging that conversion is a valid cause of action with respect to referral fees, the trial court nonetheless granted summary judgment with respect to this claim. The trial court reasoned that no attorney-client relationship existed between [B&L] and Pasternak at the time Sigman referred the matter to [Datz]. Rather, the record reflects Sigman told [Datz] that [B&L] was not interested in handling slip and fall cases and to get rid of Pasternak s case. Trial Court Opinion, 4/26/2012, at 11. Similarly, in evaluating B&L s claims of unjust enrichment 10 and aiding and abetting breach of fiduciary duty 11 the trial court solely relied upon the 9 Conversion is a tort by which the defendant deprives the plaintiff of his right to a chattel or interferes with the plaintiff s use or possession of a chattel without plaintiff s consent and without lawful justification. Pittsburgh Construction Co. v. Griffith, 834 A.2d 572, 581 (Pa. Super. 2003) (citation and quotation omitted). In order to maintain a cause of action in conversion, a plaintiff must establish that he or she had actual or constructive possession of a chattel or an immediate right to possession of a chattel at the time of the alleged conversion. Id. 10 The standard the trial court considers for proof of an unjust enrichment claim is as follows. (Footnote Continued Next Page) - 8 -
content and credibility of Sigman and Datz s affidavits. Trial Court Opinion, 4/26/2012, at 12-14. With respect to B&L s claim of unjust enrichment, the trial court s analysis focused exclusively on the alleged conversation between Sigman and Bochetto: (Footnote Continued) The elements of unjust enrichment are benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. The most significant element of the doctrine is whether the enrichment of the defendant is unjust; the doctrine does not apply simply because the defendant may have benefited as a result of the actions of the plaintiff. Where unjust enrichment is found, the law implies a quasi-contract which requires the defendant to pay to plaintiff the value of the benefit conferred. Ne. Fence & Iron Works, Inc. v. Murphy Quigley Co., Inc., 933 A.2d 664, 668-69 (Pa. Super. 2007) (internal quotation omitted). 11 The civil tort of aiding and abetting has the following elements: For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he (a) does a tortious act in concert with the other or pursuant to a common design with him, or (b) knows that the other s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, or (c) gives substantial assistance to the other in accomplishing a tortious result and his own conduct, separately considered, constitutes a breach of duty to the third person. Cummins v. Firestone Tire & Rubber Co., 495 A.2d 963, 969 (Pa. Super. 1985) (quoting Restatement (Second) of Torts 876); - 9 -
[B&L] has failed to produce evidence sufficient to suggest that [B&L] conferred a benefit upon [Appellees], which [Appellees] wrongfully received or which would be unconscionable for them to retain. As noted above, the record is devoid of any evidence to show [Appellees] wrongfully obtained the Pasternak case. Sigman contacted [Appellees] regarding the referral of the Pasternak case. In response to Datz s inquiry as to the reason [B&L] was not handling the matter, Sigman stated [B&L] did not want to handle slip and fall cases and told Sigman to get rid of the case. Trial Court Opinion, 4/26/2012, at 13. The trial court further credited Sigman s testimony that he was authorized to make the referral, stating assuming arguendo [Appellees] received a benefit from [B&L] in connection with the referral... [Appellees], upon settlement of the Pasternak case, timely sent the referral fee to Sigman pursuant to his instructions. Id. (underlining in original). Similarly, with respect to B&L s claim of aiding and abetting a breach of fiduciary duty, the trial court found that Sigman had a fiduciary duty to B&L. Nevertheless, the court granted summary judgment on the basis that B&L failed to disprove the statements of Sigman and Datz. Id. at 14. In each of its first five issues on appeal, B&L argues that the trial court s reliance on the oral testimony of Sigman and Datz is in error. We agree. It is well-settled that oral testimony alone, either through testimonial affidavits or depositions of the moving party or the moving party's witnesses, even if uncontradicted, is generally insufficient to establish the - 10 -
absence of a genuine issue of material fact. See Borough of Nanty-Glo v. American Surety Co., 163 A. 523 (Pa. 1932) (emphasis added); Penn Center House, Inc. v. Hoffman, 553 A.2d 900 (Pa. 1989); Comment to Pa.R.C.P. 1035.2. Specifically, our Supreme Court stated [h]owever clear and indisputable may be the proof when it depends on oral testimony, it is nevertheless the province of the jury to decide, under instructions from the court, as to the law applicable to the facts, and subject to the salutary power of the court to award a new trial if they should deem the verdict contrary to the weight of the evidence. Nanty-Glo, 163 A. at 524. As outlined above, affidavits of the moving party, or their witnesses, may not serve as a basis for entry of summary judgment as they violate the rule in Nanty-Glo. Because the credibility of Sigman and Datz is a question for a jury to consider, and their testimony may not form the basis for the grant of summary judgment, the trial court erred in granting summary judgment solely on the basis of the credibility of statements presented by Appellees. 12 12 Indeed, Sigman s credibility as to the facts of this case is highly questionable. On March 15, 2012, the Pennsylvania Office of Disciplinary Counsel (ODC) filed a petition for discipline against Sigman alleging a number of ethical violations, one of which concerned the Pasternak referral. After an investigation, Sigman admitted, inter alia, to engaging in misconduct in his handling of the Pasternak referral. See Sigman Verification, No. 43 DB 2012, 11/13/2012. Subsequently, the ODC and Sigman entered into a joint petition in support of discipline on consent pursuant to Pa.R.D.E. 215(d) ( At any stage of a disciplinary investigation or proceeding, a respondent-attorney and Disciplinary Counsel may file a joint (Footnote Continued Next Page) - 11 -
Our review of the record reveals that B&L pled and offered evidence that Datz knowingly entered into and maintained a personal referral relationship with Sigman, an associate Datz knew was employed by B&L, and resulting referral fee payments were addressed to Sigman at his home address. B&L s Brief at 26, 27. B&L offers as proof of its claims the fact that Datz did not contact Bochetto directly with respect to the referral, but instead accepted Sigman s illogical (and disputed) statement that B&L did not wish to handle slip and fall cases. Id. at 30. Viewing this evidence in the light most favorable to B&L, as we must, we find that a genuine issue of material fact exists which precluded the entry of summary judgment on B&L s complaint. A jury may reasonably infer wrongful intent, fraud, and conspiracy from the fact that Datz sent the referral fee directly to Sigman s home address and failed to discuss the referral with anyone other than Sigman, when Datz admitted to knowing that Sigman was an employee of (Footnote Continued) Petition in Support of Discipline on Consent. The Petition shall include the specific factual allegations that the attorney admits he or she committed, the specific Rules of Professional Conduct and Rules of Disciplinary Enforcement allegedly violated and a specific recommendation for discipline. ). On November 19, 2012, while the instant appeal was pending before this Court but prior to the scheduled oral argument, the ODC filed the joint petition with the Disciplinary Board. Office of Disciplinary Board v. Sigman, No. 43 DB 2012, at 27-34 (filed Nov. 19, 2012) (unpublished decision). On February 28, 2013, our Supreme Court accepted the recommendation of the ODC and Sigman, and suspended Sigman from the practice of law for 30 months. Order, 2/28/2013. As it related to this case, the question of whether, and to what extent, Appellees were aware of Sigman s dishonesty is a question for the jury. See Nanty-Glo, supra. - 12 -
B&L. For all of the foregoing reasons, we reverse the order granting summary judgment. In its sixth issue, B&L contends that the trial court s evidentiary rulings precluded it from conducting necessary discovery. B&L s brief at 45-50. During his deposition, Datz admitted that he had accepted at least nine other referrals from Sigman. Id. at 46. During discovery, B&L repeatedly sought documentation and testimony from Datz and his former colleague, Eric Weitz, Esquire (Weitz) regarding the identity of the referred clients. Id. at 45-46. Datz and Weitz refused these requests, claiming the information was privileged. Id. Ultimately, B&L filed a motion to compel this documentation, which was denied by the trial court on January 31, 2011. Id. Nonetheless, on March 21, 2011, B&L moved to compel Datz and Weitz to provide deposition testimony regarding the additional referrals. A hearing was held, and on April 4, 2011, the trial court denied B&L s second motion to compel. 13 B&L then filed an appeal from the April 4, 2011 order, which was quashed as interlocutory by a panel of this Court by order dated June 20, 2011. See Bochetto & Lentz, P.C. v. Datz, 1044 EDA 2011 (Pa Super. 13 In its order, the trial court did not set forth a reason for this denial. However, the Appellees note that B&L s motion was denied because the information [sought] was irrelevant and represented an obvious fishing expedition, not because it was protected by the attorney client privilege. Appellees Brief at 36. - 13 -
filed June 20, 2011) (per curiam). B&L now raises the discovery issues in the instant appeal. 14 Generally, in reviewing the propriety of a discovery order, our standard of review is whether the trial court committed an abuse of discretion. However, to the extent that we are faced with questions of law, our scope of review is plenary. Gormley v. Edgar, 995 A.2d 1197, 1202 (Pa. Super. 2010). The trial court is responsible for [overseeing] discovery between the parties and therefore it is within that court's discretion to determine the appropriate measure necessary to insure adequate and prompt discovering of matters allowed by the Rules of Civil Procedure. PECO Energy Co. v. Insurance Co. of North America, 852 A.2d 1230, 1233 (Pa. Super. 2004) (quotation omitted). The Rules of Civil Procedure govern discoverable materials as follows: 14 Appellees argue that B&L failed to preserve this claim in the court below and urge this Court to find waiver. Appellees Brief at 36. Given the procedural history in this case, we are disinclined to do so. As stated above, B&L attempted to appeal the trial court s January 31, 2011 and April 4, 2011 discovery orders in its first appeal to this Court. While we denied that appeal on the basis that the orders were interlocutory, this disposition does not preclude B&L from seeking relief herein. Moreover, as the trial court did not order a 1925(b) statement, and there is no requirement to list out matters complained of on appeal in a notice of appeal, we are not persuaded by Appellees assertion that B&L failed to preserve its challenge to the subject discovery orders in its notice of appeal or docketing statement. Appellees Brief at 36. Based on our review of the record, both the trial court and Appellees were on notice that B&L disputed the trial court s denial of its requests of discovery. Accordingly, we address this issue. - 14 -
Rule 4003.1. Scope of Discovery Generally. Opinions and Contentions (a) Subject to the provisions of Rules 4003.2 to 4003.5 inclusive and Rule 4011, a party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, content, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. (b) It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. (c) Except as otherwise provided by these rules, it is not ground for objection that the information sought involves an opinion or contention that relates to a fact or the application of law to fact. Pa.R.C.P. 4003.1. Rule 4011 limits the scope of discovery. Rule 4011. Limitation of Scope of Discovery and Deposition No discovery or deposition shall be permitted which (a) is sought in bad faith; (b) would cause unreasonable annoyance, embarrassment, oppression, burden or expense to the deponent or any person or party; (c) is beyond the scope of discovery as set forth in Rules 4003.1 through 4003.6; (d) is prohibited by any law barring disclosure of mediation communications and mediation documents; or - 15 -
(e) would require the making of an unreasonable investigation by the deponent or any party or witness. Pa.R.C.P. 4011. Instantly, based on our review of the record we conclude that the trial court erred in denying B&L s motions to compel. Because Datz admitted that he took at least nine other referrals from Sigman, see Appellees Objections to Notice of Deposition Direct to [Datz], the discovery sought by B&L is relevant to the instant complaint and not merely a fishing expedition for irrelevant material. Nor is there evidence that this investigation is being conducted in bad faith. Moreover, as Appellees concede, B&L s motion was denied on the basis of relevance, not privilege. Appellees Brief at 36-37. Thus, that the information may be inadmissible at trial is immaterial to whether it is discoverable. Pa.R.C.P. 4003.1(b). Accordingly, in light of our disposition of B&L s substantive issues, we conclude that the trial court abused its discretion in denying B&L s requests for additional discovery. Orders reversed. Case remanded for further proceedings consistent with this memorandum. Jurisdiction relinquished. Judge Panella files a dissenting statement. - 16 -
Judgment Entered. Prothonotary Date: 7/26/2013-17 -