J-A04039-24
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
ALLEN L. FEINGOLD : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
NATIONWIDE MUTUAL INSURANCE : No. 1433 EDA 2023
COMPANY :
Appeal from the Order Entered April 26, 2023
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2023-01526
BEFORE: STABILE, J., McLAUGHLIN, J., and COLINS, J.
MEMORANDUM BY COLINS, J.: FILED APRIL 3, 2024
Allen L. Feingold appeals from the order sustaining Nationwide Mutual
Insurance Company’s (“Nationwide”) preliminary objections to Feingold’s
amended complaint, resulting in its dismissal. On appeal, Feingold singularly
suggests that, given Nationwide’s alleged actions, the lower court abused its
discretion and erred as a matter of law in dismissing his complaint. We find
no merit to Feingold’s contention and therefore affirm.
Briefly, as recounted by the lower court:
This matter stems from a pre-disbarment agreement between
[Feingold] and a client.[1] [Feingold] in his [a]mended [c]omplaint
averred that sometime during 2006, he and the purported client
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Retired Senior Judge assigned to the Superior Court.
1 As discussed in greater detail infra, Feingold was suspended from the
practice of law in 2006 and disbarred in 2008.
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agreed that [Feingold] would represent the client in connection
with her claim to recover personal injury damages allegedly
sustained in a motor vehicle accident. The client supposedly
stipulated to a contingency fee agreement, in which [Feingold]
would receive thirty-five … percent of any settlement or verdict.
The client’s case proceeded with [Feingold’s] firm as counsel, but
prior to the disposition of the case, in 2009, the client obtained
new counsel. This [fact] is made clear by a review of the
underlying action, in which [Feingold’s] wife Dora Garcia, Esquire,
who was also affiliated with [Feingold’s] firm, withdrew her
appearance on behalf of the client on January 16, 2008. Ms. Garcia
was suspended from the Pennsylvania Bar for more than fifteen
months in 2007 and was specifically ordered to abstain from
facilitating or assisting [Feingold] in the unauthorized practice of
law. It is noteworthy that [Feingold] never entered his appearance
in this matter.
More than a decade later, [Feingold] reportedly became
aware that the client’s claims had been settled. Shortly thereafter,
on January 27, 2023, [Feingold] filed a complaint against
[Nationwide], stating four causes of action: (1) fraud, (2)
negligent misrepresentation, (3) breach of contract, and (4)
conversion. The crux of [Feingold’s] argument is that he has a lien
upon the settlement of the client’s claim based on the previously
mentioned contingency fee agreement and that [Nationwide] had
stated it would honor such lien when distributing the funds from
the settlement.
Trial Court Opinion, 7/17/23, at 1-2 (citations omitted).
After Feingold filed his complaint,
[Nationwide] filed [p]reliminary [o]bjections and on March 2,
2023, [Feingold] responded by filing an [a]mended [c]omplaint
almost identical to the original. In response, on March 7, 2023,
[Nationwide] once again filed [p]reliminary [o]bjections, arguing
among other things, that the [a]mended [c]omplaint should be
dismissed because [Feingold] lacked standing to sue [Nationwide]
as there is “no contractual, insurance, or legal relationship
between the parties” and that [Feingold] failed to join a necessary
party, the attorney who settled the client’s claim. On April 26,
2023, [the lower court] … sustained [Nationwide’s] [p]reliminary
[o]bjections and dismissed [Feingold’s] [a]mended [c]omplaint.
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Id., at 2.
Thereafter, Feingold filed a timely notice of appeal and complied with
his obligations under Pennsylvania Rule of Appellate Procedure 1925(b). As
such, we proceed to review the sole issue Feingold has raised in this appeal:
1. Did the trial court abuse its discretion/err as a matter of law in
dismissing his complaint where Nationwide voluntarily
assumed the duty to act as custodian of the lien-attached
settlement funds and distributed said funds in a negligent
fashion?
Appellant’s Brief, at 3.
The lower court found dismissal of Feingold’s amended complaint to be
warranted because Feingold lacked standing to sue Nationwide, the complaint
failed to join at least one necessary party, and the claims asserted therein
were legally insufficient. See Trial Court Opinion, 7/17/23, at 3-4 (invoking
Pa.R.Civ.P. 1028(a)(1) (lack of jurisdiction), (4) (legal insufficiency of a
pleading), and (5) (lack of capacity to sue/nonjoinder of a necessary party)
as bases for sustaining Nationwide’s preliminary objections). Specifically on
the question of standing, the court determined that Feingold “failed to
establish in any material aspects, that there exists any form of legal
relationship between [himself] and [Nationwide].” Trial Court Opinion,
7/17/23, at 3.
We apply a de novo standard of review when reviewing a ruling on
preliminary objections, and the question before this Court in such cases is
whether the trial court committed an error of law. See Godlove v. Humes,
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303 A.3d 477, 480 (Pa. Super. 2023); Fiedler v. Spencer, 231 A.3d 831,
835 (Pa. Super. 2020). “When considering preliminary objections, all material
facts set forth in the challenged pleadings are admitted as true, as well as all
inferences reasonably deducible therefrom.” Godlove, 303 A.3d at 481
(quoting Fiedler, 231 A.3d at 835). “When sustaining the preliminary
objections will result in the denial of claim or a dismissal of suit, the
preliminary objections may be sustained only where the case is free and clear
of doubt.” Godlove, 303 A.3d at 481; see also Hill v. Ofalt, 85 A.3d 540,
547-548 (Pa. Super. 2014).
It is well settled that “[a] party seeking judicial resolution of a
controversy in this Commonwealth must, as a prerequisite, establish that he
has standing to maintain the action.” Nye v. Erie Ins. Exchange, 470 A.2d
98, 100 (Pa. 1983).
[T]he doctrine of standing is a prudential, judicially[-]created
principle designed to winnow out litigants who have no direct
interest in a judicial matter. For standing to exist, the underlying
controversy must be real and concrete, such that the party
initiating the legal action has, in fact, been “aggrieved.” The core
concept of standing is that a person who is not adversely affected
in any way by the matter he seeks to challenge is not “aggrieved”
thereby and has no standing to obtain a judicial resolution to his
challenge. A party is aggrieved for purposes of establishing
standing when the party has a substantial, direct and immediate
interest in the outcome of litigation. A party’s interest is
substantial when it surpasses the interest of all citizens in
procuring obedience to the law; it is direct when the asserted
violation shares a causal connection with the alleged harm; finally,
a party's interest is immediate when the causal connection with
the alleged harm is neither remote nor speculative.
In re Nadzam, 203 A.3d 215, 220-21 (Pa. Super. 2019) (quoting Rellick-
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Smith v. Rellick, 147 A.3d 897, 901 (Pa. Super. 2016)) (emphasis omitted);
see also C.G. v. J.H., 172 A.3d 43, 54 (Pa. Super. 2017) (“Because standing
goes to a party’s capacity to sue, a standing objection is properly raised by an
objection under Rule 1028(a)(5).”) (citation omitted)).
Feingold’s amended complaint avers that he “notified Nationwide that
he had a lien on the proceeds of any settlement, verdict and/or award of [the
client’s] personal injury case and that no checks should be issued in payment
of her case without naming [Feingold] as a payee on said checks.” Amended
Complaint, ¶ 10. The complaint also indicates that “[Nationwide] pledged that
[Feingold] would be listed as a payee on any settlement check issued in
settlement, verdict and/or award of [the client’s] claim.” Id., ¶ 11. However,
“[i]n or about 2010, unbeknownst to [Feingold], and in violation of its
agreement and understanding with [Feingold], it is believed that …
[Nationwide] settled [the client’s] case and Nationwide issued a check in
settlement of the claim which did not recite [Feingold] as a payee.” Id., ¶ 12.
Feingold now seeks his “outstanding counsel fees[.]” Id., ¶ 15.2
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2 As further background, in his brief, Feingold asserts that “Nationwide was at
all times aware that [he] had been discharged by [the client] and that [he]
was looking to the proceeds of the settlement of their claim for payment of
his counsel fee and reimbursement of his costs.” Appellant’s Brief, at 12.
Feingold then reiterates that he “relied on Nationwide’s written agreement to
protect his fee from the proceeds of any settlement of the … claim and
refrained from further efforts to enforce his claim.” Id. In particular,
“Nationwide did agree, in writing, to protect [Feingold’s] fee. It took for itself
the obligation of fiduciary to act as distributor to the settlement funds and
protector of the competing interest.” Id.
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The amended complaint asserts four causes of action: fraud, negligent
misrepresentation, breach of contract, and conversion. See generally id. All
four counts are predicated on an alleged attorney’s lien that is attached to
Feingold’s former client’s settlement amount. See, e.g., id., ¶ 18 (“At all
times material hereto, [Nationwide] knew that [Feingold] had a lien upon the
settlement that [Nationwide] effected with regard to [the client’s] claim.”).
This Court has found that “an attorney is entitled to no compensation
whatever, if he is discharged because of his own wrongful acts.” Lampl v.
Latkanich, 231 A.2d 890, 891, 894 (Pa. Super. 1967) (citation omitted)
(affirming a judgment for “legal services rendered[]” where there was no
“sufficient credible testimony” that a “summarily discharged” attorney
engaged in misconduct). While “no Pennsylvania court has spoken directly on
whether a disbarred or suspended attorney is entitled to recover a portion of
a contingency fee from a former client for services rendered prior to
disbarment,” Pearson v. Tanner, 870 F.Supp.2d 380, 384 (E.D. Pa. 2012),
the United States District Court for the Eastern District of Pennsylvania has
held that “an attorney is not entitled to compensation from a former client in
a contingency-fee case in which he terminated his representation prematurely
due to disbarment or suspension from the practice of law.” Feingold v. Graff,
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2012 WL 2400998 at * 3 (E.D. Pa. June 26, 2012) (citations omitted).3
Specifically, “[t]he attorney’s disbarment constitutes a material breach of
contract with the client, and the attorney is not entitled to recovery for
services rendered.” Id. (citation omitted).
Although it is not controlling, we find that Feingold v. Graff is
persuasive and adopt the rule stated therein as our own. Here, as explained
by this Court in a prior case,
In 2006, [Feingold] was suspended from the practice of law for
five years for several acts of misconduct which included: allowing
a client to give false testimony, filing frivolous claims of fraud and
civil conspiracy against opposing counsel, and assaulting a judge
who ruled against [Feingold’s] client in an arbitration hearing.
After [Feingold] failed to notify his clients of this disciplinary action
and continued practicing law while suspended, [he] was disbarred
by our Supreme Court on August 22, 2008. See Office of
Disciplinary Counsel v. Feingold, 93 DB 2003; 92 DB 2005;
Nos. 1093 and 1161 Disciplinary Docket No. 3.
Feingold v. Hendrzak, 15 A.3d 937, 939 n.1 (Pa. Super. 2011).
Based on the documents attached to the amended complaint, Feingold’s
former client’s “date of loss” occurred on January 2, 2006, and she signed the
contingency-fee agreement on January 4, 2006. See generally Amended
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3 Feingold was also the plaintiff in this federal case as well as in Pearson. In
Feingold v. Graff, Feingold sought “legal fees” from a former client, alleging
that he had performed workers’ compensation work on the former client’s
behalf. 2012 WL 2400998 at * 1. Ultimately, in adopting the underpinnings of
Pearson, the court found Feingold entitled to no compensation from a former
client, as Feingold materially breached the contingency-fee agreement simply
by becoming disbarred. See id., at * 3.
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Complaint, Unnumbered Exhibits. The client appears to have settled her case
in or around September 2009. See id. (letter from Nationwide to “David
Sherman, Esquire[,]” which states that the client’s release had been
executed); see also Trial Court Opinion, 7/23/23, at 1 (following its “review
of the underlying action,” the court noted that “[t]he client’s case proceeded
with [Feingold’s] firm as counsel, but prior to the disposition of the case, in
2009, the client obtained new counsel[]”)
When Feingold was disbarred in 2008, he committed a “wrongful act”
and materially breached his contract with the plaintiff in the underlying
matter. See Lampl, 231 A.2d at 894.4 In effect, he relinquished all rights that
he may have had stemming from that contingency-fee agreement, and in
particular, he was no longer able to collect any compensation under that
agreement. Notwithstanding the fact that Feingold has filed the present action
against Nationwide, the entity purported to have distributed the client’s
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4 In In re Thorpe, 755 Fed. Appx. 177 (3rd. Cir. 2018), the United States
Court of the Appeals for the Third Circuit questioned whether under
Pennsylvania law an attorney who negotiated a settlement for his clients while
administratively suspended for failing to comply with continuing legal
education requirements could recover in quantum meruit from his clients for
a portion of the settlement amount. See id., at 180 (“But is missing one CLE
credit a ‘wrongful act’ for equitable purposes? Is that focus too rigid or can it
be more practical?”). The court in that matter ultimately concluded that the
suspended attorney could bring such a claim. See id., at 183. We need not
answer the question posed in Thorpe and simply hold, based upon the facts
of the present case, that an attorney who is disbarred as a result of his
misconduct prior to a settlement in favor of one of his former clients may not
recover any portion of the settlement proceeds based upon the contingency-
fee agreement with that client.
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settlement instead of him directly suing a former client, all of his claims require
that a valid fee agreement was in effect at the time of settlement to provide
him with any basis for relief. As Feingold is foreclosed from obtaining
compensation pursuant to a contingency-fee agreement where he was
disbarred prior to the settlement of the claim in the underlying litigation, he
has not been “aggrieved” for standing purposes and therefore did not have
the ability to bring the present action in the lower court. See Pa.R.Civ.P.
1028(a)(5).
Consequently, although our rationale is distinct from that of the trial
court, we conclude that the court correctly sustained Nationwide’s preliminary
objection to standing and dismissed Feingold’s amended complaint. See
Generation Mortgage Co. v. Nguyen, 138 A.3d 646, 651 n.4 (Pa. Super.
2016) (holding that we may affirm a lower court’s decision if there exists any
proper basis to do so on the record); accord In re Estate of Rood, 121 A.3d
1104, 1105 n.1 (Pa. Super. 2015). We therefore affirm the lower court’s order.
Order affirmed.
Date: 4/03/2024
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