Judge scolds attorney in dispute over $500,000 in legal fees

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An Allegheny County judge in a recent opinion called “absurd” the allegations that one attorney made against a law firm over legal fees from the Western Psychiatric Institute and Clinic shooting.

Judge Lawrence J. O’Toole on Friday posted an opinion in favor of the law firm of Farrell & Reisinger LLC, awarding it more than $500,000 in attorney’‍s fees stemming from a $1.5 million settlement between UPMC and the parents of Michael Schaab, who was killed in the March 8, 2012, shooting by John Shick.

William Pietragallo, who represents the firm, praised the judge’‍s decision.

“I think the court correctly validated the quality, care and effectiveness of the work of Farrell & Reisinger in achieving for the family an outstanding settlement in the face of a worker’s compensation defense,” Mr. Pietragallo said. “The issues presented against us were not valid. I wish we didn’‍t have to deal with this litigation, but when confronted with [attorney Michael] O’Day and his position, we had no choice.”

Harry and Mary Schaab retained attorneys from the firm, including Thomas J. Farrell, Jay K. Reisinger and Tina O. Miller, on March 29, 2012. As part of their agreement, the couple agreed to pay 35 percent of any recovery to the firm, or 33 percent if the case against UPMC was resolved without formal litigation.

They went to mediation, and on July 20, 2012, both sides agreed to a sum of $1.5 million, documenting it in handwriting. Shortly thereafter, according to Judge O’Toole’‍s eight-page opinion, Farrell & Reisinger agreed to reduce its $500,000 fee to $350,000, to allow the Schaabs to pay off their son’s fiancee’s student loans.

The formal release was sent to the Schaabs in September 2012, but they failed to sign it. In the ensuing weeks, they received a letter from attorney Mark Homyak, who represented another victim from the shooting, who was planning to sue Shick’s parents.

Farrell & Reisinger told the Schaabs they were not interested in pursuing such a claim, so they referred the couple to Mr. O’Day.

According to filings in the case, the Schaabs expressed concerns to Mr. O’Day about who or what entities were being released from liability under the settlement agreement, and while Farrell & Reisinger assured them that it was only UPMC and its affiliates, they terminated the services of the firm and opted to have Mr. O’Day represent them.

“Rather than turn the Schaabs against Farrell & Reisinger, current counsel for the Schaabs, to whom Farrell & Reisinger referred the Schaabs, could have made a telephone call to Farrell & Reisinger and suggested a wording change to the release,” Judge O’‍Toole wrote. “He chose not to do so, and this unnecessary litigation resulted.”

What ensued was a dispute over attorney fees, including Farrell & Reisinger filing a petition to collect and the Schaabs filing a lawsuit against the firm for breach of contract.

Judge O’‍Toole conducted a three-day hearing on the matter in March. In his opinion, he found that Farrell & Reisinger “substantially performed the contract between the firm and the Schaabs.”

“The Schaabs’ argument that no recovery was made because the settlement funds were not paid until after the Schaabs terminated Farrell & Reisnger's representation, and therefore Farrell & Reisinger is not entitled to a fee is simply absurd,” the judge wrote.

Instead, the right to the fund arose on July 20, 2012, when the settlement was reached, Judge O’Toole continued. All that was left was “merely wrap-up paperwork.”

The judge also found that the $1.5 million settlement was substantial and “demonstrates professional expertise on their part,” given that Michael Schaab’s death would have been covered under the worker’‍s compensation statute.

Mr. O’Day said the verdict disappointed his clients and that he would file an immediate appeal to the state Superior Court.

“They would like for this to be over, but this decision doesn’‍t end it, unfortunately.”

Paula Reed Ward: pward@post-gazette.com, 412-263-2620 or on Twitter @PaulaReedWard.

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