Lawyers dispute fees after UPMC settlement

New firm hired before deal signed after 2012 killing at Western Psych

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A dispute between two law firms over who gets how much of a six-figure fee is overshadowing a $1.5 million settlement between UPMC and the parents of an employee killed last year during a mass shooting at Western Psychiatric Institute and Clinic.

On the one side is attorney Michael O'Day. He represents Harry and Mary Schaab of Greensburg, whose 25-year-old son, Michael, a milieu therapist, was fatally shot by schizophrenic gunman John Shick on March 8, 2012, at the psychiatric hospital in Oakland.

On the other is the Downtown Pittsburgh law firm Farrell & Reisinger LLC, whom the Schaabs fired. The Schaabs accused their old attorneys of lying to them and not fully explaining the settlement deal they worked out with the help of a mediator.

But Farrell & Reisinger claim they did the bulk of the work that led to the settlement with UPMC -- a deal whose bottom-dollar figure did not change after Mr. O'Day took over the case.

"We were given incorrect and improper legal advice from Farrell & Reisinger on repeated occasions that we believe would have adversely affected our claim," the Schaabs said in an affidavit signed last week.

"We also believe that Farrell & Reisinger were lying to us in order to collect quickly their fee of over $350,000. That is the reason we decided to terminate their representation."

The squabble over resolving a deal to compensate the parents of a victim in a high-profile death is getting ugly. Farrell & Reisinger accused Mr. O'Day of a "fee grab." Mr. O'Day accused Farrell & Reisinger of trying to "harass" his clients.

Stuck between the two sides are the Schaabs, who are awaiting a judge to sign off on the settlement.

"They're caught in the middle, there's no question," said attorney Ryan T. Smith, who represents Jay K. Reisinger, Thomas J. Farrell and Tina O. Miller, all prominent attorneys and the latter two former federal prosecutors.

"It's not my clients' intention to hurt them in any way. They would rather not pull them into court. But Mr. O'Day would not agree to settle or to a division of the fee. ... We tried. You can only do so much."

Mr. O'Day sees things differently.

"It looks like I'm squabbling with these lawyers about this. That's really not the case. I've been trying to resolve whatever their rights were the minute that the Schaabs fired them."

As for his clients, "This is the last thing the Schaabs want, to be dealing with two lawyers who won't go away," Mr. O'Day said. "They are beside themselves."

John Burkoff, a law professor at the University of Pittsburgh, said it was a "shame" that the dispute could not be worked out amicably, but the best thing might be for a judge to resolve the matter.

"The family is entitled to change attorneys. That's their right. The attorneys should take this situation as they find it. They should try and also work out the fee split amicably. And sometimes they can and sometimes they can't," Mr. Burkoff said. "It is a shame because to some extent it adds to the emotional distress of the family, not the monetary worth of the case, and that's a shame because they've already suffered enough."

The issues come down to whether Farrell & Reisinger did the bulk of the work that led to the settlement and should be paid for it, whether the only work that matters is that done by Mr. O'Day, and whether the Schaabs fired their original attorneys for cause.

"Apparently [Mr. O'Day] believes that my clients are not entitled to be compensated for the work that they did up to the time where they were terminated and then Mr. O'Day was hired," Mr. Smith said.

"They'd like to be paid for the work they did. They got the ball to the goal line, essentially. The case settled for the same amount. And they're legally entitled to their work, their time and their hours."

In July 2012, Farrell & Reisinger met with UPMC officials and a mediator. The case was settled.

But the Schaabs did not return a key form -- drafted by UPMC -- to their attorneys that was necessary for the settlement to go forward.

According to Mr. O'Day and a top UPMC executive and attorney present at the mediation, the language of the "Full and Final Release" would have prevented the Schaabs from suing UPMC and its affiliates -- and anyone else, including the Shick estate, Shick's mother and Allegheny County, all of whom could be defendants.

But Farrell & Reisinger said the opposite, the Schaabs claim.

"For the next six months, we were repeatedly told at meetings and during phone conversations by Farrell & Reisinger that we should simply execute and return the Full and Final Release and that we would still be able to pursue other potential defendants in this claim," according to the Schaabs' affidavit.

Mr. Smith declined comment on this issue.

Although Mr. O'Day could not work out a better deal for his clients with UPMC in terms of the settlement amount -- "$1.5 million was the number they established, that UPMC had established they would pay" -- he said he added value to the deal by getting UPMC to allow the Schaabs to sue others.

Mr. O'Day said he is in settlement negotiations with other entities.

Mr. Smith allowed for the possibility that there might have been some "innocent miscommunication" between his clients and the Schaabs. He said that four months after the shooting was too soon for the Schaabs to negotiate a settlement.

Typically, Mr. Smith said, such settlements could take 18 months to several years because of the emotional toll for the family of trying to reach an agreement.

"I think they emotionally were not ready to settle this case even though they did. It happened too quickly. That's no one's fault," Mr. Smith said.

Mr. O'Day agrees only with the sentiment that the deal happened too swiftly.


Jonathan D. Silver:, 412-263-1962 or on Twitter @jsilverpg.


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