author: STRASSBURGER, J.,

text:
    Hunt v. State Farm Mutual Automobile Insurance Company

      Thomas J. Dempsey, for plaintiff.

      Joseph L. Luvara, for defendant.
    June 23, 2005
   STRASSBURGER, J.,

Plaintiff Stacey Edds Hunt filed a complaint on August 18,2004, against defendant State Farm Mutual Automobile Insurance Company seeking to recover under her underinsured motorist policy. The claim arises out of a motor vehicle accident that occurred on September 1, 2000, near mile marker 84.4 on the Pennsylvania Turnpike in Westmoreland County. Plaintiff was a passenger in a car that was rear-ended by a tractor-trailer, and she suffered severe injuries as a result.

The underlying tort action for this accident was ultimately mediated and settled. Plaintiff then filed the lawsuit at issue here. Defendant filed preliminary objections on October 6,2004, and the honorable Ronald W. Folino ruled that certain portions of plaintiff’s complaint should be stricken on October 26, 2004. Plaintiff filed an amended complaint in conformity with Judge Folino’s order on October 28, 2004, and defendant filed its answer and new matter on November 5,2004. Plaintiff filed her reply to new matter and placed this case at issue on November 9, 2004. On December 20, 2004, this case was placed on the trial list for May 5, 2005.

On January 12, 2005, State Farm presented a motion and this court heard argument on whether this case should be dismissed on the grounds of forum non conveniens pursuant to Pennsylvania Rule of Civil Procedure 1006(d)(1) and 42 Pa.C.S. §5322(e). This court issued a discovery and briefing schedule regarding the motion on January 18,2005, and continued the case to the September 2005 trial list. On May 5, 2005, this court granted defendant’s motion to dismiss this case on the grounds of forum non conveniens so long as defendant waived any statute of limitations defense and plaintiff refiled her case within 90 days in Maryland. Plaintiff appeals from that order.

State Farm asserts that venue in this action, although technically proper in Allegheny County, should be transferred to a court in Maryland. Conversely, plaintiff insists that her original choice of venue, Allegheny County, should be sustained. The applicable law in this case is 42 Pa.C.S. §5322(e), which provides that “[wjhen a tribunal finds that, in the interest of substantial justice, the matter should be heard in another forum, the tribunal may stay or dismiss the matter in whole or in part on any conditions that may be just.” The Pennsylvania Superior Court has held that any analysis of section 5322(e) also includes a discussion of Pennsylvania Rule of Civil Procedure 1006(d)(1) which provides that “for the convenience of parties and witnesses the court, upon petition of any party, may transfer an action to the appropriate court of any other county where the action could originally have been brought.” See Humes v. Eckerd Corp., 807 A.2d 290, 291 n.3 (Pa. Super. 2002).

The standard in this case of interstate forum non conveniens is different from the familiar standard for inter-county forum non conveniens. The intercounty standard, set forth in Cheeseman v. Lethal Exterminator Inc., 549 Pa. 200, 701 A.2d 156 (1997), requires a showing by the defendant that plaintiff’s chosen forum is “oppressive or vexatious.” The court in Cheeseman restated the test articulated in Scola v. AC & S Inc., 540 Pa. 353, 657 A.2d 1234 (1995), holding that “a petition to transfer venue should not be granted unless the defendant meets its burden of demonstrating, with detailed information on the record, that the plaintiff’s chosen forum is oppressive or vexatious to the defendant.” Cheeseman, 549 Pa. at 213, 701 A.2d at 162.

The Cheeseman standard, however, does not apply in this case because it arises under 42 Pa.C.S. §5322(e). In Poley v. Delmarva Power and Light Co., 779 A.2d 544, 546 (Pa. Super. 2001), the Superior Court declined to apply the Cheeseman “oppressive and vexatious” test, but instead decided that “[T]he two most important factors ... to consider... are (1) a plaintiff’s choice of the place of suit will not be disturbed except for weighty reasons, and (2) no action will be dismissed unless an alternative forum is available to the plaintiff.”

An examination of these “weighty reasons” involves assessing “private and public interest factors.” Engstrom v. Bayer Corp., 855 A.2d 52, 55 (Pa. Super. 2004). The following are a list of private and public factors a court must consider:

“[T]he relative ease of access to sources of proof; availability of compulsory process for attendance for unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of a view of the premises, if a view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.
“With regard to the public factors a court must consider, this court has recognized that
“administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community that has no relation to the litigation. There is an appropriateness, too, in having the trial in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.” Jessop v. ACF Industries LLC, 859 A.2d 801, 803-804 (Pa. Super. 2004).

An analysis of these public and private factors shows why this court properly dismissed this case on the grounds of forum non conveniens. In this case, the public factors strongly favor Maryland as a forum for this lawsuit. Plaintiff is a resident of Maryland. The insurance policy in this case was issued in Maryland and Maryland law governs the policy. It is undisputed that Maryland courts are better equipped to interpret Maryland law. Pennsylvania taxpayers should not have to bear the burden of having Pennsylvania courts hear a case where the issue is the alleged breach of a Maryland insurance policy governed by Maryland law for a plaintiff who resides in Maryland. The only connection that this case has to Allegheny County is that plaintiff’s counsel’s office is here. If it were proper for this case to be tried in Allegheny County, it would similarly be proper to try it in any county in Pennsylvania and probably the United States, as State Farm likely regularly does business in every county.

Plaintiff also argues that the litigation has progressed beyond a point where it would make sense to transfer the case to Maryland. Engstrom, supra, also addressed this issue. It found that, even though the consolidated cases had been pending in Philadelphia for up to 21 months, both the private and public factors outweighed any argument that the defendant waited too long to file its motion. It particularly looked to the facts that the plaintiffs resided in states other than Pennsylvania, and Philadelphia had absolutely no connection to the lawsuit.

In this case, State Farm properly presented this court with a motion to transfer venue on the grounds of forum non conveniens. The motion was filed less than five months after defendant was served with the complaint. After a discovery and briefing schedule, where two depositions were taken and briefs submitted by both sides, this court made its determination. Therefore, consistent with Engstrom, this court did not abuse its discretion by dismissing the case even though some discovery was taken and the case was on the trial list.

This court is cognizant of the unfairness that can occur when a late motion to transfer for forum non conveniens is filed. In Graham v. Laidlaw Transit Inc., GD 98-014720 (Feb. 7, 2000), I denied a petition to transfer venue for forum non conveniens, even though it was vexatious and oppressive to try the case in Allegheny County. The case was on the trial list when the petition was filed and I determined that was key to the “convenience of the parties” factor. There, however, the case had been pending for 16 months, as opposed to the five months here. Moreover, that case was not an interstate transfer and, thus, the public factors were not relevant.

For the foregoing reasons, the Superior Court should affirm the decision of this court to dismiss the case on the grounds of forum non conveniens.

      . Upon motion of the plaintiff, this court modified its order of May 5, 2005, to state that plaintiff must refile within 90 days of final appellate disposition.

      .42 Pa.C.S. §5322(e) is applicable to interstate transfers, whereas Pa.R.C.P. 1006(d)(1) is applicable to intrastate transfers, but both are derived from the doctrine of forum non conveniens. See Humes, 807 A.2d at 292.

      . Since neither party has raised the issue of the lack of availability of an alternative forum, this court will not address that issue.


source: Caselaw Access Project

author: ZITO, J.,

license: Public Domain

text:
    Koehler v. Koehler

      Martricia O ’Donnell McLaughlin, for plaintiff.

      Shannon Piergallini Smith, for defendant.
    June 17, 2005
   ZITO, J.,

STATEMENT OF REASONS

Findings of Fact

Plaintiff, Paul M. Koehler, and defendant, Lisa A. Koehler, divorced and entered into a property settlement agreement on September 5, 2001, under which Paul Koehler would pay Lisa Koehler $30,000 annually for five years, payable $2,500 monthly. Paragraph seven of the agreement states: “Wife’s remarriage or cohabitation shall terminate this alimony award.” (emphasis added) On November 30,2004, plaintiff filed a petition to terminate alimony, alleging that Lisa Koehler has cohabited with another man, thereby terminating alimony per the agreement. Non-jury trial was held on January 24, 2005.

The agreement was drafted by the special master in divorce, Ellen Kraft. (Tr. at 78-79.) The agreement states that the parties signed “after conference with the special master and after full opportunity for consult with independent legal counsel.” The court asked questions at the non-jury trial to elicit whether the parties had an understood intent on September 5, 2001, of “cohabitation” beyond the language in the agreement. (Tr. at 63-65,77-80.) Neither party introduced into the record an intended meaning extrinsic to the agreement that existed on or before September 5, 2001. Id. In response to the court’s inquiry, the parties offered conflicting present sense interpretations of “cohabitation.” Id. Lisa Koehler stated that to her, “Cohabitation would be if a gentleman would move in with me or I would move in with a gentleman for a long period of time or forever. Or if I would request I would get married to the man.” (Tr. at 64-65.) Paul Koehler stated that to him, “Cohabitation would be living with another man or man living with her or they get married,” that “it doesn’t matter if you live there a week, a year, or a month, or forever,” and that the evidence in this case would fit his definition. (Tr. at 77-78.) The court finds that the intent of the parties on September 5,2001, as to the meaning of “cohabitation” was to defer to the special master as having included an appropriate legal provision, and, therefore, intended a legal meaning consistent with the prior case law of this Commonwealth.

The following facts set forth the court’s findings on the evidence relevant to whether Lisa Koehler cohabited with Todd Hahn during October 2004. In October 2004, Lisa Koehler was residing at 2121 Main Street, Northampton, Pennsylvania. (Tr. at 50.) During this month, Lisa Koehler was also in a dating relationship with Todd Hahn. Lisa Koehler and Todd Hahn were publicly affectionate toward each other, went out on dates and shared food while out to dinner and “once in awhile” at Lisa Koehler’s apartment. (Tr. at 18-19, 58-60.) Todd Hahn slept over eight to 10 times during October 2004. (Tr. at 52.) Todd Hahn kept cologne, a toothbrush, and one to two changes of clothing at Lisa Koehler’s apartment. (Tr. at 15-16,53-54). Lisa Koehler and Todd Hahn did not have any joint bank accounts or own anything together. (Tr. at 71.)

When Hahn began dating Lisa Koehler, he had an apartment in Bath, Pennsylvania. (Tr. at 50-51.) Hahn moved out of that apartment near the end of September or beginning of October and thereafter “resid[ed] with his grandmother during the month of October of2004.” (Tr. at 51-52, 66-67.) With the exceptions discussed above, Hahn’s belongings were kept at his grandmother’s home. (Tr. at 57, 68.) Hahn gave Lisa Koehler a dresser when he moved into his grandmother’s home because “the storage [he] had gotten was too small for all of [his] stuff to fit in” and because she “needed extra storage for [her] pillows, blankets and so forth.” (Tr. at 21, 54,68.) During October 2004, Todd Hahn worked Monday through Friday from 11 p.m. to 7 a.m. (Tr. 22, 54-55.)

Lisa Koehler does not pay any of Todd Hahn’s bills and Todd Hahn does not pay any of Lisa Koehler’s bills. (Tr. at 5 5.) Todd Hahn has loaned money to Lisa Koehler but “as soon as [she] would get [her] check from [Paul Koehler she] would have to pay [Hahn] back.” (Tr. at 58.) Lisa Koehler’s cable and phone bills were under Todd Hahn’s name but Lisa Koehler “always paid the cable and phone [bills].” (Tr. at 61.) Lisa Koehler had “an outstanding balance with the [provider of the cable and phone services] that precluded [her] from having [] service in [her] name.” (Tr. at 63.)

Conclusions of Law

(1) Inclusion of the term “cohabitation” within the property settlement agreement without definition or citation to an extrinsic source created an ambiguity inviting parole evidence as to meaning. Kripp v. Kripp, 578 Pa. 82, 849 A.2d 1159 (2004).

(2) The court’s inquiry of the parties on this issue led to the court’s finding that the parties deferred to the special master in divorce for the inclusion of an appropriate legal provision, and, therefore, intended “cohabitation” to be given its legal meaning.

(3) An appropriate legal definition of “cohabitation” consistent with the case law as of September 5, 2001, is “two persons of the opposite sex residing] together in the manner of husband and wife, mutually assuming those rights and duties usually attendant upon the marriage relationship.” Miller v. Miller, 352 Pa. Super. 432, 439, 508 A.2d 550, 554 (1986). “Cohabitation may be shown by evidence of financial, social, and sexual interdependence, by a sharing of the same residence, and by other means .... An occasional sexual liaison, however, does not constitute cohabitation.” Id.

(4) The evidence does not establish that Lisa Koehler and Todd Hahn resided together in the manner of husband and wife, mutually assuming the rights and duties usually attendant to a relationship between married persons. Rather, they maintained separate residences and paid their own bills. To the extent that Lisa Koehler was financially assisted by, and shared company with, Todd Hahn, their actions were consistent with a dating, non-cohabiting relationship.

(5) Alternatively, the court could view the parties as having intended a “common usage” definition of “cohabitation.” See Pines Plaza Bowling Inc. v. Rossview Inc., 394 Pa. 124, 145 A.2d 672 (1958) (where undefined, words of a contract are given their ordinary meaning). Dictionaries vary as to the ordinary meaning of “cohabitation”; however, consistent among them is a requirement of living together. See Kripp v. Kripp, 578 Pa. 82, 849 A.2d 1159 (2004) (discussing the various dictionary definitions).

(6) At no time did Lisa Koehler and Todd Hahn live together. Staying over eight to 10 times at a girlfriend’s apartment over the period of a month would give an unreasonable meaning to “living together” or “cohabitation” and was not intended by the parties on September 5, 2001.

ORDER

And now, June 17, 2005, plaintiff’s petition to terminate alimony is denied.


author: JOHNSON, J.,

text:
    Worman v. FedEx Ground Package System Inc.

      John J. Keller, for plaintiff.

      Ellen P. Milcic, for defendant.
    April 28, 2005
   JOHNSON, J.,

The plaintiff filed the within suit against the defendant for breach of contract and wrongful termination.

Before the court for consideration is the defendant’s motion to dismiss/motion to compel arbitration seeking an order dismissing the within civil action and compelling the parties to submit to arbitration according to the terms of the arbitration clause of a written employment contract between the parties on the bases that: (1) a valid agreement to arbitrate exists between the parties; and that (2) the dispute involved is within the scope of the arbitration provision. For the following reasons, the court will grant the defendant’s motion.

I. RELEVANT FACTUAL BACKGROUND

The parties agree that hearing exhibit P-1 is the subject written employment contract. It is an employment contract in which the plaintiff is the employee and is identified in the contract as “contractor,” and the defendant is the employer and is identified in the contract as “FHD” (agreement).

The agreement contains an arbitration clause, which reads as follows:

“P.5 Arbitration of asserted wrongful termination. In the event FHD acts to terminate this agreement (which acts shall include any claim by contractor of constructive termination) and contractor disagrees with such termination or asserts that the actions of FHD are not authorized under the terms of this agreement, then each such disagreement (but no others) shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (AAA) in accordance with the terms and conditions set forth in addendum 7 to this agreement.” (emphasis added)

Addendum 7 to the agreement as follows (section 9.3 and addendum 7 shall be referred to as the arbitration provision):

“FHD Standard Contractor Operating Agreement Arbitration
“The arbitration of contract termination shall be instituted and conducted in accordance with the following terms and conditions:
“(1) Contractor must mail written notice of a demand for arbitration to FHD and to the AAA by certified mail within 90 days of the occurrence of the claimed wrongful termination. Failure to mail written notice of a demand for arbitration within such 90-day period and comply with all procedural requirements set forth in the Commercial Arbitration Rules of the AAA shall constitute an absolute bar to the institution of any proceedings and a waiver of the claimed wrongful termination. The copy of the demand sent to the American Arbitration Association shall be addressed to Four Gateway Center, Suite 419, Pittsburgh, PA 15222-1207, with a request that the demand be forwarded to the appropriate AAA regional office.
“(2) The dispute shall be heard and determined by a single arbitrator, chosen pursuant to the procedures of the AAA.
“(3) The arbitrator shall set the date, time, and place for each hearing, and shall schedule the hearing and make his or her determination in an expeditious manner. Neither party shall be entitled to written or deposition discovery from the other, except with respect to damages.
“(4) As to any dispute or controversy which under the terms hereof is made subject to arbitration, no suit at law or in equity based on such dispute or controversy shall be instituted by either party hereto, other than a suit to confirm, enforce, vacate, modify or correct the award of the arbitrator as provided by law; ■ provided, however, that this clause shall not limit FHD’s right to obtain any provisional remedy including, without limitation, injunctive relief, writ for recovery or possession or similar relief from any court of competent jurisdiction, as may be necessary in FHD’s sole subjective judgment to protect its property rights, (emphasis added)
“(5) The arbitrator shall have the authority only to conclude whether the termination of contractor was within the terms of this agreement, to determine damages if required to do so under this subparagraph, and to provide for the division of the AAA fees and AAA assessed expenses of the arbitration between the parties; provided, however, each party shall bear the cost of attorneys, expert witnesses, or other expenses incurred by that party, and the arbitrator shall have no authority to allocate or apportion such costs. If the arbitrator con-eludes the termination was within the terms of this agreement, the termination shall be effective on the date specified in the notice of termination from FHD to contractor. If the arbitrator concludes the termination was not within the terms of this agreement, then, at the option ofFHD: (1) the contractor shall be reinstated within a reasonable period of time, not to exceed 90 days from the company’s receipt of the arbitrator’s decision, and in that event shall be entitled to damages equal to the arbitrator’s determination of what contractor’s net earnings (after payment of all expenses which are borne by contractor pursuant to this agreement) would have been during the period between the date of termination and the date of reinstatement; or (2) contractor shall nevertheless be terminated, and, in that event, shall be entitled to damages equal to the arbitrator’s determination of what contractor’s net earnings (after payment of all expenses which are borne by contractor pursuant to this agreement) would have been during the period between the date of termination to the last day of the term of this agreement (without any renewals). Contractor shall have no claim for damages in any other amount, and the arbitrator shall have no power to award punitive or any other damages, (emphasis added)
“(6) The arbitrator shall provide the parties with only a written determination of the outcome of the arbitration, without accompanying opinion, and shall have no authority to alter, amend or modify any of the terms and conditions of this agreement, and further, the arbitrator may not enter any award which alters, amends or modifies the terms of conditions of this agreement in any form or manner.
“(7) Judgment upon the award of the arbitrator may be rendered in any court having jurisdiction thereof.”

II. DISCUSSION

Because arbitration is a matter of contract, the court must determine, as a matter of law, whether an express agreement exists between the parties to arbitrate their dispute. Smith v. Cumberland Group Ltd., 455 Pa. Super. 276, 284, 687 A.2d 1167, 1171 (1997). When a party to an agreement seeks to avoid arbitration, as the plaintiff does in the within case, judicial inquiry is limited to determining (1) whether a valid agreement to arbitrate exists between the parties and, if so, (2) whether the dispute involved is within the scope of the arbitration provision. Id. If a valid arbitration agreement exists between the parties and the plaintiff’s claims fall within the scope of the agreement, the controversy must be submitted to arbitration as a matter of law. Id.; see also, Circuit City Stores Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302(2001) (Court upheld arbitration provision contained in employment application/contract.). We will now address these two issues separately.

(A) Whether a Valid Agreement To Arbitrate Exists Between the Parties

The initial burden of proof to establish, by a preponderance of the evidence, the existence of a valid contract between the parties is on the party alleging the existence of the contract, which in this case is the defendant. The defendant has sustained that burden since the parties have agreed that exhibit P-1 is a true and correct copy of the agreement. On its face, this agreement appears valid — it has been signed by the parties and contains all of the necessary elements of a contract. The defendant has met its burden of proof.

Pennsylvania law on the enforceability of agreements to arbitrate is in accord with federal law and requires enforcement of arbitration provisions as written, permitting such provisions to be set aside only for generally recognized contract defenses such as duress, illegality, fraud or unconscionability. Lytle v. Citifinancial Services Inc., 810 A.2d 643 (Pa. Super. 2002).

Once the party alleging the existence of a contract has met its burden of proof, as the defendant has done here, the burden of proof shifts to the party alleging that the contract is invalid, which in this case is the plaintiff. The plaintiff’s threshold argument against enforcement of the arbitration provision of the agreement is that he is exempt from being required to go to arbitration, and that therefore, any agreement to do so is invalid. He argues, in his brief in opposition to defendant’s motion to dismiss, that his status as an employee of the defendant engaged in the business of transporting goods in interstate commerce places him within the exclusion provision of the Federal Arbitration Act (FAA) which exempts employment contracts of transportation workers from being required to go to arbitration. The plaintiff cites Circuit City Stores Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302 (2001), for this proposition. However, the U.S. Supreme Court, in the Circuit City case clarifies that section 1 of the FAA “precludes interpreting the exclusion provision to defeat the language of section 2 of the FAA (which ‘compels’ judicial enforcement of arbitration agreements ‘in any . . . contract evidencing a transaction involving commerce.’ ” Circuit City, 532 U.S. 105, 121 S.Ct. at 1304) as to all employment contracts. The court goes on to explain that the section 1 exclusion must be narrowly construed and must be read as exempting from the FAA only employment contracts of transportation workers. Circuit City, 532 U.S. 105, 121 S.Ct. at 1305, 1306. The plaintiff is not a transportation worker as anticipated by the FAA, and therefore is not exempt from the arbitration requirement under the agreement.

In further opposition to the defendant’s motion, the plaintiff argues that the arbitration provision is unconscionable because the agreement unreasonably favors the defendant and the plaintiff lacked meaningful choice in accepting it, and therefore it is invalid. The plaintiff bears the burden of proving this allegation of unconscionability, by a preponderance of the evidence. Unconscionability requires a two-fold determination: (1) that the contractual terms are unreasonably favorable to the drafter, and (2) that there is no meaningful choice on the part of the other party regarding the acceptance of the provisions. Lytle, 810 A.2d at 658-59; McNulty v. H&R Block Inc., 843 A.2d 1267, 1273 (Pa. Super. 2004). We will now analyze these two issues separately.

1. Contract Terms Unreasonably Favorable to the Drafter

The plaintiff alleges that the arbitration provision is “permeated beyond recovery with the infected brush of unconscionability” for several reasons, including: (a) the arbitration clause is oppressive; (b) 90 days to apply for arbitration is unreasonable; (c) defendant reserves access to the courts for itself, but precludes plaintiff from access; (d) defendant has the sole and exclusive right to determine the nature of remedies, including whether or not the employee shall be granted reinstatement; (e) plaintiff is prohibited from obtaining punitive, compensatory, or consequential damages; (f) plaintiff has no discovery rights except limited rights on damages; and (g) the arbitrator does not provide a written opinion. Each of these reasons will now be analyzed individually as follows:

(a) The arbitration clause is oppressive

(i) Each party must pay its own costs and 50 percent of the arbitration costs

The plaintiff first argues that the arbitration clause is oppressive because it requires each party to incur the costs of its own expenses, as well as for half of the fees and expenses due to the American Arbitration Association, making the arbitration cost prohibitive to him. The plaintiff quotes, “Lytle makes it clear that if the costs associated with arbitration of a single claim would operate to preclude a claimant from pursuing a remedy, then the enforcement of the provision would be unconscionable.” McNulty, 843 A.2d at 1273 (citing Lytle, 810 A.2d at 667-68); see also, Parilla v. IAP Worldwide Services VI Inc., 368 F.3d 269, 278-79 (2004) (striking down arbitration provisions similar to the one at bar that place economic burdens on the weaker party); Alexander v. Anthony Int’l L.P., 341 F.3d 256, 263 (2003) (finding that a clause that requires each party to assume its own legal fees is oppressive to the employee and unduly favorable to the employer, making it “substantially unconscionable”).

In Lytle, the court acknowledged that the plaintiff, in arguing that the cost of the arbitration process is unconscionable, may offer evidence that the costs associated with the arbitration of a claim would operate to preclude them from pursuing alleged wrongs by the defendant. The Lytle court adopts the reasoning of Mendez v. Palm Harbor Homes Inc., 111 Wash. App. 446, 45 P.3d 594 (2002). The Mendez court asserts that:

“Avoiding the public court system to save time and money is a laudable societal goal. But avoiding the public court system in a way that effectively denies citizens access to resolving everyday societal disputes is unconscionable. Goals favoring arbitration of civil disputes must not be used to work oppression. When the goals given in support of contract clauses like this are used as a sword to strike down access to justice instead of as a shield against prohibitive costs, we must defer to the overriding principle of access to justice.” Lytle, 810 A.2d at 667-68 (quoting Mendez, 111 Wash App. at 462-65, 45 P.3d at 603-605).

In Mendez, the plaintiff would have had to spend over $2,000 to attempt to exercise his rights under a contract to resolve a $1,500 dispute. This was deemed to be cost prohibitive and the court refused to enforce the arbitration provision. Mendez, 111 Wash App. at 465, 45 P.3d at 605. Based on Mendez, the court in Lytle vacated the lower court’s order dismissing the plaintiffs’ complaint and remanded the case to the trial court for the plaintiffs to present evidence on the issue of the cost of arbitration as contrasted to court proceedings, and the ability of consumers to obtain relief. See Lytle, 810 A.2d at 668; Parilla, 368 F.3d 269. Likewise, in Alexander, 341 F.3d 256, 269 (3d Cir. 2003), the court held that the “loser pays” arbitration provision was unconscionable as to the particular plaintiffs where the plaintiffs presented evidence of the cost of arbitration, and the court accepted the facts that they needed their employment and were supporting their children in college.

In the case at bar, the arbitration provision is similar to those of the above cases in that it provides that each party incur its own expenses for “attorneys, expert witnesses, or other expenses incurred by that party,” as well as for the arbitrator to “provide for the division of the AAA fees and AAA assessed expenses of the arbitration,” without “authority to allocate or apportion such costs.” See plaintiff’s exhibit 1, FHD Standard Contractor Operating Agreement, addendum 7, paragraph 5. Plaintiff estimated that the arbitration procedure’s cost to him will be approximately $5,000. See plaintiff’s supplemental memorandum of law in opposition to preliminaiy objections of FedEx Home Delivery, pp. 6-7. Plaintiff’s supplemental memorandum of law also points to the fact that plaintiff was unemployed in 2004 and his wife worked as a paralegal “for a modest income.” See plaintiff’s supplemental memorandum in opposition to preliminary objections of FedEx Home Delivery, p. 7.

However, in one important respect, the case at bar is distinguishable from each of the above cases: the plaintiffs in the above cases each provided some measure of evidence to support their claims that the respective arbitration provisions, as applied to their particular circumstances, were oppressive. The courts made their decisions on the basis of evidence presented by the plaintiffs, as the plaintiffs bore the burden of proving their claims challenging the respective arbitration provisions, just as the plaintiff does here. For example, in Mendez, the court found that it was cost prohibitive for a plaintiff to pay $2,000 for only a $1,500 recovery after receiving prima facie proof of the costs of arbitration. Mendez, 111 Wash. App. at 462-65, 45 P.3d at 603-605. In Lytle, although the court did not make a final determination as to the merits of the plaintiff’s claim that the cost of arbitration was prohibitive, it remanded the case, asserting that the plaintiffs were “to be afforded an opportunity to present evidence on the issue of the cost of arbitration as contrasted to court proceedings.” Lytle, 810 A.2d at 668. (emphasis added) Finally, although the Alexander court acknowledged that the court is not required “to undertake detailed analyses of the household budgets of low-level employees to conclude that arbitration costs in the thousands of dollars deter the vindication of employees’ claims in arbitral fora,” the plaintiffs had presented, at the very least, evidence of the rates of the prospective arbitrators, thereby allowing the court to consider the evidence of specific costs and apply it to the plaintiffs’ accepted circumstances. Alexander, 341 F.3d 256, 269 (quoting Giordano v. Pep Boys — Manny, Moe & Jack Inc., 2001 WL 484360 at *6 (E.D. Pa. 2001)).

Here, the plaintiff has provided no evidence that the cost of arbitration will outweigh the plaintiff’s potential recovery or that the cost of arbitration is unconscionable as applied to the plaintiff’s circumstances, in spite of having an opportunity to present such evidence at the January 14, 2005 hearing for that purpose. The court is satisfied, therefore, based on the evidence presented, that plaintiff has not met his burden of proof for his argument that the arbitration provision is oppressive because arbitration would be cost prohibitive.

(ii) The arbitration provision is an exculpatory clause

The plaintiff argues that the arbitration provision is so oppressive, it can be called an exculpatory clause. Under Pennsylvania law: “a generally valid exculpatory clause must meet the following standards before it will be interpreted so as to relieve a person of a liability that the law would otherwise impose:

“(1) contracts providing for immunity from liability for negligence must be construed strictly since they are not favorites of the law . . . ; (2) such contracts ‘must spell out the intention of the parties with the greatest of particularity’ . . . and show the intent to release from liability ‘beyond doubt by express stipulation’ and ‘[n]o inference from words of general import can establish it’ . . . ; (3) such contracts must be construed with every intendment against the party who seeks the immunity from liability ...; (4) the burden to establish immunity is upon the party who asserts such immunity . . . .” Princeton Sportswear Corp. v. H & M Associates, 335 Pa. Super. 381, 386, 484 A.2d 185, 187-88 (1984) (quoting Employers Liability Assurance Corp. Ltd. v. Greenville Business Men’s Association, 423 Pa. 288, 292-93, 224 A.2d 620, 623 (1966)).

The plaintiff, in applying Princeton, makes the argument that the language that precludes the plaintiff from bringing a civil action for wrongful termination against the defendant, while allowing the defendant to seek a provisional remedy in civil court, is exculpatory.

The court is not convinced by this argument. The language in the agreement does not shield the defendant from liability, which is the segment of an exculpatory clause that is unfavorable under the law, but only defines the forum in which a wrongful termination claim must be brought. Therefore, this argument is without merit.

(b) Ninety days to apply for arbitration is unreasonable

The plaintiff also alleges that the 90-day filing period with the AAA is unreasonable, relying on Alexander v. Anthony Int’l L.P., 41 F.3d 256 (3d Cir. 2003), for this proposition. The court, however, does not find any basis for this assertion. The Alexander court recognized that a provision limiting the time in which a plaintiff must bring a claim is not necessarily unfair or unconscionable, as long as the period provided is reasonable. See Alexander, 41 F.3d at 266. The Alexander court held the 30-day notice obligation to be unreasonable because “in addition to proving an apparently insufficient time to bring a well-supported claim, such an obligation prevents an employee from invoking the continuing violation and tolling doctrines.” Id., 41 F.3d at 267.

Such is not the situation in the case at bar, however. Under the subject arbitration provision, “contractor must mail written notice of a demand for arbitration to defendant and to the AAA by certified mail within 90 days of the occurrence of the claimed wrongful termination.” See plaintiff’s exhibit 1, addendum 7, paragraph 1. The plaintiff has failed to convince the court that a 90-day time limit for bringing notice of a claim for wrongful termination is unreasonable. Certainly 90 days is sufficient time for a potential plaintiff to determine whether he intends to bring a claim for wrongful termination. In addition, there would be no continuing violation as his contact with the employer presumably would have ended at the time of the termination of his employment. For these reasons, the plaintiff has failed to convince the court that 90 days to apply for arbitration is unreasonable.

(c) Defendant reserves access to the courts for itself but precludes plaintiff from access

The plaintiff next argues that the subject arbitration provision is unreasonably favorable to the defendant, because the defendant has reserved the right to seek any provisional remedy from the courts, while the plaintiff is denied the same access. According to the plaintiff, this is unreasonable because he might have just as much need for provisional remedies as the defendant, in order to protect his property rights. The court is not convinced that, under the circumstances, this section of the arbitration provision is unreasonable.

The relevant sections of plaintiff’s exhibit 1, the FHD Standard Contractor Operating Agreement, are section 9.3 and paragraph 4 of addendum 7. Section 9.3 reads in relevant part that:

“In the event FHD acts to terminate this agreement ... and contractor disagrees with such termination or asserts that the actions of FHD are not authorized under the terms of this agreement, then each such disagreement (but no others) shall be settled by arbitration... in accordance with the terms and conditions set forth in addendum 7 to this agreement.” Plaintiff’s exhibit 1, section 9.3.

Paragraph 4 of addendum 7 reads in relevant part that:

“As to any dispute or controversy which under the terms hereof is made subject to arbitration, no suit at law or in equity based on such dispute or controversy shall be instituted by any party hereto, other than a suit to confirm, enforce, vacate, modify or correct the award of the arbitrator as provided by law; provided, however, that this clause shall not limit FHD’s right to obtain any provisional remedy including, without limitation, injunctive relief, writ for recovery or possession or similar relief, from any court of competent jurisdiction, as may be necessary in FHD’s sole subjective judgment to protect its property rights.” Plaintiff’s exhibit 1, addendum 7, paragraph 4.

Under Lytle, unconscionability is presumed where an arbitration clause reserves the right to access the courts in a lender, while restricting a consumer’s claims exclusively to arbitration, unless business realities compel such a restriction. Lytle, 810 A.2d at 665. The arbitration provision sections above state that only if an employee brings an action for wrongful termination, is he limited to doing so in an arbitration setting. Once the plaintiff pursued such an action, the defendant had the right to seek provisional relief to protect its property rights. The need to maintain the company’s status quo, during an ongoing wrongful termination suit, is a business reality. The com! is satisfied that the reservation to the defendant only of access to the courts is, under these circumstances, in response to a necessary business reality. Therefore, plaintiff has not met his burden of proving that this section of the arbitration provision unreasonably favors defendant.

(d) Defendant has the sole and exclusive right to determine the nature of remedies, including whether or not the employee shall be granted reinstatement

The plaintiff argues next that the arbitration provision unreasonably favors the defendant because the defendant has the sole discretion to choose between two possible remedies if an arbitrator determines that a termination was outside the terms of the agreement, including whether the employee should be reinstated. Specifically, under paragraph 5 of addendum 7, if the arbitrator determines that a termination was not within the terms of the agreement, then, at the option of defendant: “(1) the contractor shall be reinstated... or (2) contractor shall nevertheless be terminated . . . .” See plaintiff’s exhibit 1, addendum 7, paragraph 5.

It is clear to the court that the plaintiff has not met his burden of proving that this section of paragraph 5 unreasonably favors the defendant. He has provided no law directly on point to support his position and the facts fail to do so, also. If it is determined that the defendant has wrongfully terminated an employee, the company is in a better position to determine the proper relief, both in the interests of both an employee and the company, as only it can say whether a position is still available and if the company would be able to reinstate the employee, or whether, in the alternative, it would be in the best interest of all involved to pay the employee the money due him. Therefore, the plaintiff has not met his burden of proving why this section of the arbitration provision is unreasonable, as alleged.

(e) Plaintiff is prohibited from obtaining punitive, compensatory, or consequential damages

The plaintiff further argues that paragraph 5 of addendum 7 is unreasonable because it limits the available damages, by preventing an employee in a wrongful termination lawsuit, from recovering punitive, compensatory or consequential damages. The plaintiff relies on Carll v. Terminex International Co. L.P., 793 A.2d 921 (Pa. Super. 2002), for this proposition. The court, however, believes such reliance is misplaced and it does not find, therefore, that the arbitration provision is unreasonably favorable for this reason.

In Carll, the Superior Court held that an arbitration clause between homeowners and a pest control company that limited the company’s liability for personal injury and precluded the arbitrator from awarding, among other things, “special, incidental, consequential, exemplary or punitive damages,” was unconscionable as against public policy. Carll, 793 A.2d at 924. The circumstances of Carll, however, involved an arbitration provision that left an arbitrator without authority to award damages for physical injuries due to the defendant’s negligence in the application of “ultrahazardous pesticides in a residential setting.” Id. It was this “absence of the authority to afford relief for personal injury in this consumer contract that [the court found] contrary to public policy.” Id. The Carll court further explained that only a limitation of available damages for injury to the person creates a presumption of unconscionability. Id. at 925. In fact, the Card court recognized that, in a commercial setting, a provision that establishes repair and replacement as the exclusive remedy, and excludes special, indirect and consequential damages, is generally valid and enforceable. Id. at 924.

Applying the reasoning of Card, the court is satisfied that, because the limiting language of addendum 7, paragraph 5 does not restrict recovery for personal injuries, it is not presumed to be unconscionable as against public policy. Rather, under the circumstances, the type of recovery permitted by paragraph 5 is appropriate. Therefore, plaintiff has failed to prove that the limiting section of addendum 7, paragraph 5 is unreasonably favorable to defendant and unconscionable.

(f) Plaintiff has no discovery rights except limited rights on damages

The plaintiff enumerates the fact that he has no discovery rights except limited rights on damages as a reason why the arbitration provision is “fatally flawed,” however, he fails to explain this assertion or provide any legal support for it. See plaintiff’s brief in opposition to defendant’s motion to dismiss, pp. 13-14, item (7). Therefore, the plaintiff has failed to meet his burden of proof and the court finds that this enumerated reason for finding the arbitration provision unreasonable is without merit.

(g) The arbitrator does not provide a written opinion

Finally, the plaintiff asserts that the fact that the arbitrator is not required to provide a written opinion “makes it more difficult to file a corrective action or other action with the court” and also makes it “impossible to say whether plaintiff’s misrepresentation claims were considered . . . .” See plaintiff’s brief in opposition to defendant’s motion to dismiss, p. 14, items (8) and (9). Again, the court is not persuaded that the plaintiff has met his burden of proving why this is unreasonable, as he only lists this reason once and without any legal support or explanation. Further, it would appear that this section of the arbitration provision affects both parties equally, and therefore does not favor either side. Therefore, the court finds that this assertion of the plaintiff is without merit.

We now move to the second prong of the unconscionability test. .

(2) Whether Plaintiff Lacked Meaningful Choice in Accepting the Arbitration Provision

The plaintiff argues that the agreement is one of adhesion because he lacked meaningful choice in accepting the agreement as a whole, including the arbitration provision, specifically. Under Pennsylvania law, an adhesion contract is a standard form contract prepared by one party, to be signed by the other party in a weaker position, usually a consumer, who has little choice about the terms. Lytle, 810 A.2d at 658; McNulty, 843 A.2d at 1273. However, a finding that a contract is one of adhesion does not require that the court find the contract unconscionable. Lytle, 810 A.2d at 658.

The court is not convinced, however, that the agreement is a contract of adhesion. Under Pennsylvania law, “an employment contract is not a contract of adhesion, even when an employee is told to ‘sign or be terminated’ ” or merely because a party alleges that he entered into an agreement “which he would not have entered if his financial circumstances were more secure.” Swisher v. Caterpillar Incorporated, 65 D.&C.4th 32, 42 (2003) (quoting Stebok v. American General Life and Accident Insurance Company, 715 F. Supp. 711 (2003)). In Swisher, as in the case at bar, the plaintiff argued that his employment contract was one of adhesion because his employer occupied a better bargaining position. Id. The Swisher plaintiff admitted, however, “that he voluntarily decided to work for [his employer], that he was pleased to be offered the job, that he was happy with [his employer] and was treated fairly by the company.” Id. at 43. The court concluded that such facts do not support an accusation that the plaintiff lacked a meaningful choice in signing his employment agreement.

Likewise, in the case at bar, the plaintiff had a choice in whether to secure the employment and he admitted, under oath, that “he knew the arbitration provisions existed,” regardless of whether he fully appreciated the rights allegedly relinquished within. While there may not have been discussions or negotiations regarding the agreement, neither was the plaintiff precluded from seeking advice, refusing to sign the agreement or declining to accept the position. As set forth in Swisher, the circumstances under which the plaintiff agreed to the subject employment agreement do not support an allegation that it is a contract of adhesion. Because the plaintiff fails to support his allegation that he lacked a meaningful choice in signing the agreement because it is a contract of adhesion, he has failed to meet his burden of proving the second prong of the test for unconscionability. The court finds, therefore, that the agreement, and specifically the arbitration provision that is a part thereof, are not unconscionable as a matter of law and the agreement is valid.

(B) Whether the Dispute Involved Is Within the Scope of the Arbitration Provision

Count II of the plaintiff’s complaint asserts a cause of action for wrongful termination against the defendant. The within case is the type specifically anticipated by the agreement as being subject to arbitration, and is therefore clearly addressed in the arbitration provision. See plaintiff’s exhibit 1, FedEx Home Delivery Standard Contractor Operating Agreement, section 9.3 and addendum 7. Therefore, this dispute is within the scope of the arbitration provision and the second of the two requirements to establish the existence of an express agreement between the parties is met.

III. CONCLUSION

Based on the foregoing discussion, the court finds that (1) a valid agreement to arbitrate exists between the parties; and that (2) the dispute involved is within the scope of the arbitration provision. Therefore, defendant’s motion to dismiss/motion to compel arbitration is granted and the within civil action is dismissed and the parties are compelled to submit to arbitration according to the terms of the arbitration provisions in the employment agreement.

ORDER

And now, April 28, 2005, upon consideration of defendant’s motion to dismiss/motion to compel arbitration, after hearing thereon and for the reasons set forth in the accompanying opinion, it is ordered that defendant’s motion is granted and the within civil action is dismissed and the parties are compelled to submit to arbitration according to the terms of the arbitration provisions in the employment agreement.


author: GEPHART, Member,

text:
    Office of Disciplinary Counsel v. Hollinger

      Disciplinary Board Docket no. 19 D.B. 2004.
    March 21, 2005
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

GEPHART, Member,

Pursuant to Rule 208(d)(2)(iii) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania herewith submits its findings and recommendations to your honorable court with respect to the above-captioned petition for discipline.

I. HISTORY OF PROCEEDINGS

On February 6, 2004, Office of Disciplinary Counsel filed a petition for discipline against respondent, Michael K. Holiinger. The petition charged respondent with violations of Rules of Professional Conduct 1.5(a) and 8.4(c) arising out of allegations that respondent engaged in a pattern of improper billing of clients. Respondent filed an answer to petition for discipline on April 5, 2004.

A disciplinary hearing was held on June 30, 2004, before Hearing Committee 3.02 comprised of Chair Karen M. Balaban, Esquire, and Members Samuel Leach Andes, Esquire, and Thomas C. Clark, Esquire. Respondent was represented by Richard F. Maffett Jr., Esquire.

Following the submission of briefs by the parties, the committee filed a report on November 22,2004, finding that respondent engaged in violations of the Rules of Professional Conduct as charged in the petition for discipline and recommending that respondent be suspended for one year and one day retroactive to July 20, 2004.

Respondent filed a brief on exceptions on December 10,2004. Petitioner filed a brief opposing exceptions on December 28,2004.

This matter was adjudicated by the Disciplinary Board at the meeting on January 19,2005.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner, whose principal office is located at 200 North Third Street, Suite 1400, Harrisburg, Pennsylvania 17101, is invested, pursuant to the Rules of Disciplinary Enforcement, with the power and the duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania, and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid rules.

(2) Respondent, Michael K. Hollinger, was born in 1971 and was admitted to the practice of law in the Commonwealth in 1996. His address is 1810 Southwest 31st Street, Allentown, PA 18103. He is subject to the disciplinary jurisdiction of the Disciplinary Board of the Supreme Court.

(3) Respondent has no prior history of discipline. He is currently on inactive status, having filed a notice of voluntary assumption of inactive status on July 20, 2004.

(4) From June 1998 to December 2001, respondent was an associate attorney with the law firm of Farrell and Ricci P.C., 4423 North Front Street, Harrisburg, PA 17110. His legal work was concentrated in defending workers’ compensation matters on behalf of insurance companies and self-insured companies.

(5) From January 2001 to December 2001, respondent engaged in a pattern of conduct which included billing clients for work he had not actually performed and sending clients correspondence including false reports of services performed, claims that he had attended matters which he had not attended, and significant exaggerations of the amount of services performed or time expended in matters he did actually perform.

(6) Respondent’s law firm identified the following 24 specific incidents of over billing.

Travelers Property Casualty Matters

(7) Respondent represented the employer in the matter of Lesley Dawson v. Coca-Cola:

(a) On March 15, 2001, respondent submitted a bill for 1.8 hours amounting to $171 for a review and summary of records of Dr. Rajjoub. However, the firm found that there was no summary by respondent in the file or on the computer records, and that the records were only four pages in length. The firm returned the entire amount billed of $171 to the client.

(b) On March 15, 2001, respondent submitted a bill for 2.4 hours amounting to $228 for a summary of records of Dr. John. However, the firm found no summary by respondent in the file or on the computer records, and that the records were only 20 pages in length. Respondent did not perform the services for which he billed the client. The firm returned the entire amount billed of $228 to the client.

(c) On March 19, 2001, respondent submitted a bill for 1.9 hours amounting to $180.50 for a summary of records of Dr. Pagana. However, the firm found no summary by respondent in the file or on the computer records, and returned the entire amount billed of $180.50 to the client. Respondent billed for a summary which he failed to prepare.

(d) On September 19, 2001, respondent submitted a bill for 4.2 hours for attendance at a hearing in Blooms-burg. Respondent also billed the firm for travel expenses of $60.38 for this hearing.

(e) On September 25,2001, respondent sent a letter to Jennifer C. Wallach, claims representative, stating:

“Enclosed please find the notice of hearing cancellation indicating that the hearing that was originally scheduled for September 19, 2001, has been cancelled due to our attempt at settlement. As you may recall, I contacted you after returning from Bloomsburg and advised you that the parties advised Judge Rapkin that no hearing would need to be held, but that we would request that a future hearing be set to possibly continue or resolve this matter.”

(f) Upon review of the file, the firm found a letter from claimant’s counsel, Bart E. Ecker, dated September 18, 2001, to Judge Rapkin stating:

“Please be advised that I am requesting a continuance of the hearing scheduled in the above matter for September 19,2001, at 12:30 p.m. in Bloomsburg, Pennsylvania. This request is based upon settlement of this case by compromise and release agreement. Michael K. Hollinger, Esquire, defense counsel, consents to this continuance.”

(g) The alleged hearing on September 19,2001, never took place, and respondent was not in Bloomsburg on that day. Respondent did not perform the services for which he billed the client. The firm returned the entire amount billed of $399 to the client.

(8) Respondent represented the employer in the matter of Jerry Cobb v. Wagman Metal Products.

(a) On March 27,2001, respondent submitted billings of 3.8 hours in the amount of $361 for summary of insurance company file.

(b) The firm reviewed the file and found that the records were one and a half inch thick and that the claimed time was not a reasonable expenditure of time for reviewing such a quantity of records. The firm reduced the bill down to 1.5 hours and sent the client a refund for 2.3 hours in the amount of $218.50. Respondent did summarize the insurance company file, but billed for more time than he spent doing the work.

(c) On September 6,2001, respondent submitted a bill for 3.2 hours in the amount of $304 for a hearing in York. Respondent did attend the hearing on September 6,2001, but overstated the time required.

(d) On September 10,2001, respondent sent a letter to Jodie Cleveland, claims representative, stating:

“Please be advised that I attended the hearing in the above referenced matter on September 6,2001, in York, Pennsylvania. Please be advised that this hearing was delayed nearly 45 minutes due to the judge’s schedule.”

(e) The firm determined that the hearing which was scheduled for 11 a.m. was held from 11:16 a.m. to 11:20 a.m. Respondent did attend the hearing but overstated the time. The firm reduced the bill to 2.0 hours and refunded the amount of $114 to the client.

(f) On October 11, 2001, respondent submitted a bill for 4.2 hours in the amount of $399 for attendance at a hearing in York. Respondent attended the hearing but overstated the time spent in representation in his correspondence and billing to the client.

(g) On October 17, 2001, respondent sent a letter to Jodie Cleveland, claims representative, in which he stated:

“Please be advised that I attended the hearing to approve the compromise and release agreement on October 11,2001. Please be advised that Judge Hetrick indicated that he would issue a decision on the following day, October 12,2001, approving said agreement. After a rather lengthy delay due to the judge’s schedule, the parties entered the hearing room nearly one hour after the scheduled start time.”

(h) The firm determined that the transcript for this hearing was only 16 pages in length and that there was no lengthy delay and that the time stated was excessive. The firm reduced the bill to 3.0 hours and sent the client a refund for 1.2 hours in the amount of $ 114.

(9) Respondent represented the employer in the matter of Melissa Cline v. Decorator Industries.

(a) On April 17, 2001, respondent submitted billings for 5.3 hours for attendance at an April 17,2001 hearing in Bloomsburg. Respondent also billed 0.1 hours for a report to the company regarding the hearing together with travel reimbursement of $60.03.

(b) On April 17, 2001, respondent sent a fax to Tracy Faller, claims representative, stating:

“Please allow this to confirm our conversation yesterday concerning the Melissa Cline matter in which we discussed that a notice of postponement was received at the last minute (the judge’s office mailed it on Thursday) but efforts were made to see the WCJ earlier in the day in order to have the C & R taken care of. As I stated in your voice mail, the secretary advised us to come to the hearing at 10 a.m. Around 10:30 a.m., Judge Rapkin came out of the hearing room and left the building. We assumed he was taking an a.m. break.
“About 10:45 a.m. his secretary came out and advised us (and the four other attorneys waiting for him) that he would not be back the rest of the day. Rather than continue to bill this file, I have asked claimant’s counsel to check with the WCJ to see if we can get in earlier. If not, then we will get this finalized on May 23.”

(c) In December 2001 when the firm audited its files, they discovered that the hearing scheduled for April 17, 2001, had been postponed by the judge from a notice that was received by the firm on April 16, 2001. Both respondent’s billing and the fax to Tracy Faller were false. The firm returned the entire amount of $513 billed to the client.

(d) On May 23,2001, respondent submitted a bill for 5.3 hours amounting to $503.50 for attendance at a hearing in Bloomsburg. Respondent also billed the firm for travel reimbursement for $60.03 for this hearing. The firm determined that this hearing never took place, as a notice of postponement had been received at the firm on May 22, 2001 from the claimant’s counsel because the claimant’s plane had been delayed from Tennessee. The firm returned the entire amount billed of $503.50 to the client.

(10) Respondent represented the employer in the matter of Dianna Schneider v. Borders Books and Music.

(a) On May 2, 2001, respondent submitted a bill of 2.6 hours in the amount of $247 for attendance at a hearing in Harrisburg.

(b) On May 4, 2001, respondent sent a letter to Tara Dibilio, claims representative, in which he stated:

“After a rather lengthy delay due to Judge Clark’s schedule, the parties proceeded into the hearing room, whereupon claimant’s attorney spent approximately 10 minutes inquiring of his client... ‘On cross-examination, I cleared up some administrative matters with the claimant...’.”

(c) The firm determined from the transcript for the hearing that there was not a lengthy delay, as the hearing was scheduled for 2:20 p.m. and it began at 2:43 p.m. The transcript also showed that the hearing only lasted nine minutes. The firm reduced the amount of respondent’s bill to the client down to 1.5 hours from the 2.6 hours billed by respondent and returned the amount of $104.50 to the client. Respondent attended the hearing on May 2, 2001, but overstated the time spent in representation in his correspondence and billing to the client.

(11) Respondent represented the employer in the matter of John Borkenhaven v. John W. Gleim Jr. Inc.

(a) On May 21, 2001, respondent submitted a bill of 2.3 hours in the amount of $218.50 for attendance at a hearing in Harrisburg.

(b) On May 25, 2001, respondent sent a letter to Michele L. Pohl, claims representative, in which he stated, “The hearing, which was delayed nearly one hour due to the typical delay at the judge’s office ...

(c) The firm determined from the transcript for this hearing that there was not an hour delay, as the hearing was scheduled for 9:45 a.m. and it began at 10:15 a.m. The transcript showed that the hearing lasted for eight minutes. The firm reduced the amount of the bill to the client down to 1.6 hours from the 2.3 hours billed by respondent and returned the amount of $66.50 to the client. Respondent attended the hearing but misrepresented in correspondence and billing the amount of time required for representation.

(12) Respondent represented the employer in the matter of Alison Sunderland v. Electronic Data Systems.

(a) On June 19, 2001, respondent submitted billing for 1.3 hours amounting to $123.50 for attendance at a June 19, 2001 hearing in Harrisburg.

(b) On June 26, 2001, respondent sent a letter to Theresa Link, claims representative, stating:

“Please be advised that I attended the hearing with regard to the above-referenced matter in Harrisburg, Pennsylvania. At the hearing, which was delayed nearly 30 minutes due to the judge’s schedule, claimant’s counsel indicated that he was satisfied that all payments had been made and would, therefore, be withdrawing the petitions. I anticipate that the workers’ compensation judge will issue a decision shortly, officially withdrawing the petition.”

(c) In December 2001, when the law firm audited its files relative to respondent, they discovered a letter dated June 18, 2001, from Attorney Thomas S. Cook, on behalf of the claimant, to Judge Karl H. Peckman that was sent by fax on that date to the judge with copies to respondent and the claimant in which he stated, “We respectfully request that the claim/reinstatement petitions in the above-referenced matter be marked as withdrawn. It is our understanding that the hearing scheduled for June 19, 2001, at 11:30 a.m. will be cancelled.”

(d) No hearing took place on June 19, 2001, and the billing of that date and the representations in respondent’s letter of June 26, 2001, were false.

(13) Respondent represented the employer in the matter of Mark Hollingshead v. Genlyte.

(a) On August 15, 2001, respondent submitted billings for 3.2 hours amounting to $304 for attendance at an August 15, 2001 hearing in Chambersburg. Respondent also billed 0.2 hours amounting to $19 for correspondence to the carrier regarding the hearing. Respondent also billed the firm for travel reimbursement in the amount of $37.95 for going to the hearing.

(b) On August 21, 2001, respondent sent a letter to Linera Burke, claims representative, stating:

“Please be advised that I attended the initial hearing in the above-referenced matter on August 15, 2001, in Chambersburg, Pennsylvania. Unfortunately, despite attempts to resolve this matter prior to the hearing, claimant’s counsel was somewhat reluctant to return my phone calls and accept ourNCP and supplemental agreements in full resolution of this case. Regardless, the parties entered the hearing room after a brief delay and discussed the instant matter at hand. Apparently, claimant’s counsel was still confused as to the exact nature of the injury and, upon being provided with additional records on my behalf, claimant’s counsel was able to verify before the judge that our description of injury (amended) was correct in the nature of a right elbow strain and a left shoulder strain. With regard to the supplemental agreements, claimant’s counsel indicated that he would have his client sign the supplemental agreements, and that once they are received, he would request that the instant petition be withdrawn. At this time, I anticipate that we will be in receipt of the supplemental agreements, whereupon a decision will be issued by the judge indicating that the matter has been withdrawn. Once I receive these documents, I will contact you to further discuss this matter 55

(c) In December 2001, the law firm discovered a letter dated August 14,2001, from Attorney Thomas A. Wilken, on behalf of the claimant, to Judge James P. Deeley that stated:

“Please be advised that counsel have resolved this matter by means of a supplemental agreement. We have corrected this supplemental agreement to indicate that the claimant’s right elbow and left shoulder are properly listed on the identification of injury section of the supplemental. I have spoken with the claimant and he is in agreement with signing the supplemental agreements. I anticipate receiving the agreements within the next two weeks. I ask that the August 15, 2001 hearing be postponed and listed for a 30-day status hearing. Defense counsel, Mike Hollinger, is in agreement with the same.”

(d) No hearing took place on August 15, 2001.

(14) Respondent represented the employer in the matter of Duane Plever v. Seifert Limited. On August 29, 2001, respondent submitted billings of 1.2 hours for the summary of records of claimant’s counsel. The firm determined that a review of the file revealed no summary by respondent. The firm sent the client a refund of the entire amount billed of $ 114 respondent billed for a summary that he did not prepare.

(15) Respondent represented the employer in the matter of Shirley Wert v. Altrista Corporation.

(a) On October 10, 2001, respondent submitted to the firm’s billing department a bill for 5.0 hours for attendance at a hearing in Lewistown and a report to the company. Respondent also billed the firm for travel expenses in the amount of $39.33 for attending this hearing.

(b) On October 17, 2001, respondent sent a letter to Sandy Hill, claims representative, stating:

“Please be advised that I attended the hearing on October 10,2001, in Lewistown, Pennsylvania, with regard to the above-referenced matter. As you may recall, the claimant contacted me the day before the hearing and advised that she terminated the attorney-client relationship with Attorney Thomas Torquato. Despite that, the claimant indicated that she wanted to attend the hearing to advise the judge of the same. Despite the scheduling of the hearing early in the afternoon on the 10th, Judge Mullen requested that we possibly move the hearing up to earlier in the day to accommodate her schedule. Once we arrived at the hearing, Judge Mullen’s schedule was extremely overloaded, and we did not enter the hearing room until nearly 10:30 a.m. She originally requested that we be there at 9 a.m. Regardless, Judge Mullen heard from the claimant with regard to some of the injury complaints and, more importantly, discussed the attorney situation. Specifically, the claimant indicated that a difference of opinion was occurring between her and her attorney, and she wanted the opportunity to seek additional counsel. Operating off this fact, the claimant then went into a 10-minute discussion about her injury, to which Judge Mullen advised her that it would be best if she left some things unsaid until she had the opportunity to seek the advice of counsel. Therefore, after nearly a 15- to 20-minute hearing, the judge indicated that she would reschedule a first hearing for a later date, whereupon she was giving the claimant an opportunity to seek the advice of additional counsel. The claimant indicated on the record that she would have her attorney contact me and Judge Mullen once they have entered into an attomey/client relationship.”

(c) No hearing in this case took place on October 10, 2001. The improper billings by respondent appeared on a draft invoice and were identified and removed by the firm before the final invoice was sent to the client. Respondent’s letter of October 17,2001, contained misrepresentations concerning legal activity on the file.

(16) Respondent represented the employer in the matter of Joseph Razzano v. PA Pubs.

(a) On October 16, 2001, respondent submitted billings of 2.4 hours for receipt, review and summarization of medical records of Dr. Ponnanbalam. The firm determined that a review of the file revealed no summary by respondent of the doctor’s records.

(b) The firm also determined that respondent had given this case to someone else in the law firm to handle as of September 27,2001, which was prior to this billing. The firm sent the client a refund of the entire amount billed of $228.

(17) Respondent represented the employer in the matter of Douglas Pasarro v. The Stanley Works.

(a) On October 25, 2001, respondent sent a letter to Donna Frey, case manager, stating, “Please be advised that I attended the hearing with regard to the above-referenced matter on October 22,2001...,” and providing an extensive description of events at the hearing.

(b) On October 26, 2001, respondent submitted a bill for 1.4 hours for preparation of motion to allow rebuttal in the amount of $147.

(c) No hearing took place on October 22, 2001, and there was no testimony as indicated in respondent’s October 25,2001 letter. The improper billing appeared on a draft invoice, and the firm removed the charges prior to final billing. The firm determined that the billing by respondent on October 26,2001, was improper and returned the entire amount billed of $147 to the client. Respondent prepared correspondence to the adjuster which discussed a hearing on October 22, 2001, which did not take place. Respondent did travel to Allentown on October 22, 2001, where he spoke informally, and at length, with claimant’s attorney, Michael Usher. Respondent’s misrepresentations in the October 25, 2001 letter were based on conversations he had with claimant’s counsel and claimant before and after the scheduled hearing time. The improper billing was discovered by the firm and not sent to the client, with assistance and cooperation of respondent.

(18) Respondent represented the employer in the matter of James Yeager v. The Stanley Works.

(a) On October 31, 2001, respondent submitted a bill to the firm for travel expenses in the amount of $64.17 for attendance at a hearing in Allentown relating to this case.

(b) On November 1, 2001, respondent sent a letter to Donna Frey, case manager, in which he stated, “Please be advised that I attended the hearing to approve the compromise and release agreement on October 31,2001.”

(c) No hearing took place on October 31,2001, as reported by respondent. The firm discovered that a hearing had taken place the day before, on October 30,2001, on the same date as a hearing in the case involving Douglas Pasarro. The firm discovered this on the draft invoice and the bill did not go to the client, at least in part due to respondent’s cooperation with the firm.

Cincinnati Insurance Companies

(19) Respondent represented the employer in the matter of Deborah South v. Blockhouse Company.

(a) On February 2, 2001, respondent submitted billings of 1.8 hours for the review and summarization of medical records. The firm determined that a review of the file revealed no summary by respondent and records that consisted of only seven pages. The firm sent the client a refund of the entire amount billed of $ 189 by letter dated January 16, 2002.

(b) Respondent reviewed the medical records found in the file but failed to prepare a summary for which he billed, and he billed for more time than he spent reviewing the records.

School Claims Services, L.L. C.

(20) Respondent represented the employer in the matter of Linda M. Hoover v. Midd West School District.

(a) On March 23,2001, respondent submitted billings of 1.8 hours for the review and summarization of medical records of Dr. Krishnan. The firm determined that a review of the file revealed no summary by respondent and records that consisted of only one page. The firm sent the client a refund of the entire amount billed of $189 by letter dated January 16,2002.

(b) Respondent reviewed the medical records found in the file, but billed for a summary he did not prepare, and billed for time in excess of that spent reviewing the medical records.

Circuit City Stores

(21) Respondent represented the employer in the matter of Christopher Rivera v. Circuit City Stores.

(a) On March 6, 2001, respondent submitted billings of 3.2 hours for the review of the insurance company file. The firm determined that a review of the file revealed that the file was less than 50 pages. The firm reduced the bill down to 1.5 hours and sent the client a refund of $178.50.

(b) Respondent reviewed the insurance company file, but submitted a bill for more time than he spent reviewing the file.

Presque Isle Insurance Company

(22) Respondent represented the employer in the matter of Michael Stambaugh v. Woodmasters Company.

(a) On August 30, 2001, respondent sent a letter to Lisa Johnson, claims representative, stating:

“Please be advised that I attended the hearing in the above matter on August 29, 2001, in York, PA. Prior to the hearing, I did not receive any confirmation that claimant had agreed to sign the appropriate documents. As such, I went to the hearing to ensure the proper suspension. After a rather lengthy delay (today was Judge Tarentelli’s status day where a ton of hearings were scheduled at the same time), Judge Tarentelli inquired as to whether the claimant would show up. I indicated that he was not present but that I was under the impression that the reason he was not here was because he was probably working. She asked that we wait an additional 15 minutes and further asked me to try to verify that he was at work. Obviously, I called the employer and verified that he was there. When she was finally ready for our case, I advised her of the facts and that claimant was at work. As a result, she indicated she would grant our petition. She further indicated that our petition was well-founded because the notice of suspension (which was in the file) was late and, therefore, not official. Anyway, I will await the official decision from Judge Tarentelli, whereupon I will close this file.”

(b) When the firm looked into this case, they determined that the hearing that was scheduled in the case was not delayed as respondent had reported to the client. It was scheduled for 9:30 a.m. on August 29, 2001 and the transcript of the hearing showed that it started at 9:35 a.m. and ended one minute later. The firm reduced the client’s bill from 3.6 hours that respondent had billed to 1.7 hours. The refund to the client was in the amount of $199.50.

Kemper Insurance Company

(23) Respondent represented the employer in the matter of Owen Owens v. Acme Markets.

(a) On March 21, 2001, respondent submitted billing of 1.8 hours for summary of records of Dr. Haas. The firm found no summary by respondent either in the file or on their computer records. The firm returned the entire amount of $153 for the time billed by respondent. Respondent reviewed the medical records, which were found in the file, but failed to prepare a summary.

(b) On June 13, 2001, respondent sent a letter to Tiffany Holland, claims representative stating:

“Please be advised that I attended the hearing with regard to the above-referenced matter on June 6, 2001. Prior to the hearing, the current petition to review benefits was amended to a petition to seek approval of a compromise and release agreement. I am pleased to report that, after the hearing, Judge Baker approved the agreement, as evidenced by the attached interim order. After a nearly 45-minute delay due to the judge’s schedule, the parties entered the hearing room .... At that point, Judge Baker engaged in a somewhat lengthy discussion with claimant to ensure that he understood the full legal significance and the entire legal ramifications stemming from the claimant’s signing of this agreement. One of the questions that Judge Baker asked was whether the claimant read the entire agreement. The claimant responded by saying that he read the ‘relevant provisions’ as outlined by his attorney. At this point, Judge Baker decided to take an additional 10 minutes to ensure that the claimant read every portion of the agreement. After the 10 minutes had passed, Judge Baker re-entered the hearing room and finalized the fact that the claimant had read the agreement and understood all of its provisions.”

(c) The transcript for this hearing shows that there was no significant delay because the hearing was scheduled for 9 a.m. and started at 9:07 a.m. The hearing lasted 21 minutes. The firm reduced the bill to the client by 2.1 hours from the 4.6 hours that had been billed by respondent and returned the amount of $178.50 to the client.

Fort James Corporation

(24) Respondent represented the employer in the matter of James Wood v. Fort James.

(a) On June 13, 2001, respondent submitted a billing for 4.2 hours for a 9 a.m. hearing in Chambersburg. The firm found from the transcript that the hearing lasted two minutes. The firm reduced the respondent’s bill by 1.7 hours and returned the amount of $187 to the client for the time billed by respondent.

(b)Respondent did travel to Chambersburg for a hearing, but he submitted a bill for time in excess of that required for the hearing.

(25) Respondent represented the employer in the matter of Tina Jones v. Fort James.

(a) On August 14, 2001, respondent submitted a bill for 1.8 hours for summary of records of Redi-Care Medical Center. The firm could not find any summary by respondent in the file and returned the entire amount billed of $198 to the client.

(b) On September 10, 2001, respondent submitted a bill for 1.2 hours for summary of records. The firm could find no summary in the file and the records consisted of only four pages. The firm returned the entire amount billed of $132 to the client.

(c) On September 25, 2001, respondent submitted a bill for 1.8 hours for summary of records of Valley Anesthesia. The firm could not find any summary by respondent and determined that the records consisted of only eight pages. The firm returned the entire amount billed of $198 to the client.

(d) On October 10,2001, respondent submitted a bill for 1.4 hours for summary of records of Valley Anesthesia. The firm could not find any summary by respondent and determined that this had previously been billed for by respondent on September 25, 2001, and returned the entire amount billed of $154 to the client.

(e) On October 22, 2001, respondent submitted a bill for 2.2 hours for receipt and review of an entire file from claimant’s counsel including disability statements and a summary of the same. The firm could not find any summary by respondent and determined that there were 14 pages of documents attached to a letter from plaintiff’s counsel. The file had been given to LAM by respondent to prepare a stipulation. The firm reduced the bill to the client by 1.4 hours and returned the amount of $154 to the client.

(26) Respondent represented the employer in the matter of Joanne Forrer v. Fort James.

(a) On September 13, 2001, respondent submitted a bill for 1.8 hours for summary of medical bills, physical therapy records and MRI reports. The firm could not find any records of a summary by respondent and reduced the bill to the client by the entire amount billed of $198.

(b) Respondent reviewed the medical bills, physical therapy records and MRI reports, but did not prepare summaries, despite billing for preparation of a summary.

PMA Insurance Group

(27) Respondent represented the employer in the matter of David Bell v. Snyder’s of Hanover Inc.

(a) On November 6,2001, respondent submitted a billing of 3.2 hours for attendance at a deposition in Camp Hill. The firm determined that the deposition took place from 7:11 a.m. to 7:58 a.m. The firm reduced the bill down to 2.0 hours and sent the client a refund of $126.

(b) Respondent billed for more time than the deposition required.

Berkley MidAtlantic Group

(28) Respondent represented the employer in the matter of Jason O ’Donnell v. Perry Pallet.

(a) On October 17, 2001, respondent submitted a bill for 4.2 hours for attendance at an appeal board argument scheduled for 2:30 p.m.

(b) On October 25, 2001, respondent sent a letter to Ann M. Artz, claims representative, stating:

“Please be advised that I attended the oral argument at the Workers’ Compensation Appeal Board in Harrisburg, Pennsylvania, with regard to the above-referenced matter. Please be advised that this hearing was delayed for an extensive period of time due to the excessive amount of hearings that were being held in all three courtrooms on this date.”

(c) The oral argument in this case was not extensively delayed. The firm reduced the amount of time billed by respondent from 4.2 hours to 1.5 hours, showing a refund to the client of $283. The improper billings by respondent had only appeared on a draft invoice and had been identified and removed by the firm before the final invoice had been sent to the client.

(d) Respondent attended the appeal board argument, but misrepresented an extensive delay and submitted an inflated bill.

Princeton Insurance Company

(29) Respondent represented the employer in the matter of William Sherrill v. JPB/McClay Street Associates.

(a) On January 23, 2001, respondent submitted a bill for 2.2 hours for attendance at a hearing scheduled for 9:05 a.m. The firm determined that the hearing lasted for six minutes. The firm reduced the client’s bill from 2.2 hours to .08 hours and returned the amount of $147 to the client.

(b) Respondent attended the hearing on January 23, 2001, but over-billed for the time required.

(30) Respondent represented the employer in the matter of Cooks v. St. Luke’s Miners. ’

(a) On August 30, 2001, respondent submitted a bill for 4.2 hours for attendance at a hearing in Pottsville. Respondent also billed the firm for travel expenses in the amount of $48.30.

(b) On September 6, 2001, respondent sent a letter to Sharon Monahan, claims representative, stating, “Please be advised that I attended the hearing in the above-referenced matter on August 30,2001. This hearing was held in Pottsville, PA and was delayed, as usual, due to the judge’s schedule.” Respondent also stated in this letter, “After some additional negotiations, the parties entered the hearing room and advised Judge Stapleton of our respective positions. After some additional conversation concerning the average weekly wage, Judge Stapleton indicated that we could submit a stipulation to him within the next 30 days which would be approved and the petition would be withdrawn.”

(c) No hearing took place on August 30, 2002, as it was cancelled while respondent was en route to Potts-ville. The law firm reduced the amount of time billed by respondent from 4.2 hours to 2.0 hours, showing a refund to the client of $231. Respondent did travel part of the way to Pottsville before the hearing was cancelled, during which he negotiated with claimant’s attorney by cell phone and reached an agreement as to a resolution of the case, which was conveyed to the judge.

(d) Respondent misrepresented to the claims representative that a hearing had occurred and submitted an inflated bill.

(31) Respondent cooperated with Farrell & Ricci by reviewing invoices to be sent to clients and signing a joint letter with his firm which was sent to the firm’s clients announcing his termination.

(32) Respondent made partial restitution to Farrell & Ricci in the amount of $10,000.

(33) Respondent cooperated with Office of Disciplinary Counsel.

(34) Respondent has shown sincere remorse for his misconduct.

(35) Farrell & Ricci refunded $6,730.69 to affected clients who the firm determined had been over billed by respondent.

(36) Farrell & Ricci ultimately paid $20,000 as a negotiated settlement with Travelers Insurance for additional fee over-charges discovered by a fee audit conducted by Travelers.

(37) The firm lost lawyer productivity worth $26,350 for the efforts of its lawyers expended in its investigation of the over billing.

(38) Farrell & Ricci incurred legal fees paid to attorneys retained by the firm to provide criminal and ethical advice, which amounted to approximately $2,650.

(39) Following respondent’s termination by Farrell & Ricci, he worked for the Public Defender’s Office of Berks County from January 2002 until April 2004.

(40) Following respondent’s termination from Farrell & Ricci, he was referred by Lawyers Concerned for Lawyers to Frederick E. Henry, a licensed clinical social worker with an emphasis on mental health.

(41) Mr. Henry found no history of psychological or psychiatric treatment prior to the meeting of December 12, 2001. Mr. Henry diagnosed respondent with an adjustment disorder with depressed mood resulting from his employment termination and the ethical violations of over-billing his clients.

(42) Mr. Henry opined that respondent was aware at the time of his misconduct that his actions were wrong.

(43) Respondent continues to see Mr. Henry every two to three weeks.

(44) Respondent met with Dr. L. A. Rotenberg, a psychiatrist, in December 2001. Dr. Rotenberg concluded that respondent suffered from an adjustment disorder, but did not find that the disorder caused the misconduct.

(45) Respondent is currently under the care of Dr. John Timko for medication and therapy.

(46) Respondent presented the testimony of five character witnesses. Of these witnesses, only two knew him prior to the time of the misconduct.

(47) Respondent presented numerous character letters attached to his answer to petition for discipline.

(48) Glenn D. Welsh, Esquire, and Kevin M. Beals, Esquire, who initially submitted character letters of support and recommendation, withdrew their respective letters.

III. CONCLUSIONS OF LAW

By his conduct as set forth above, respondent violated the following Rules of Professional Conduct:

(1) R.P.C. 1.5(a) — A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee.

(2) R.P.C. 8.4(c) — It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

IV. DISCUSSION

This matter is before the Disciplinary Board on a petition for discipline charging respondent with professional misconduct arising out of his pattern of over billing clients. Respondent cooperated with Office of Disciplinary Counsel by stipulating to the facts of this matter and to each of the violations alleged in the petition for discipline.

From January 23,2001 to November 6,2001, respondent engaged in a pattern of conduct which included billing clients for work he had either not actually performed, or significantly exaggerating the amount of time spent for services actually performed. Respondent sent correspondence to clients that misrepresented the services performed, such as stating that he had attended hearings on matters which he had not attended. This conduct involved representation of 10 different clients, who were either insurance companies or self-insured employers, in the defense of 24 separate workers’ compensation matters. The record is clear that the clients paid the fraudulent invoices. After November 2001 through December 10, 2001, respondent entered false time on his daily time sheet for services he did not perform for clients, but these time entries were never incorporated into any invoices sent to clients since they were discovered by the law firm prior to the billing cycle.

Respondent’s misconduct came to light upon discovery by his former law firm. Financial losses emanating from respondent’s misconduct collectively cost his former firm approximately $55,000 in refunds, in lost lawyer productivity during the investigation and ensuing fee audit by a major client, and in legal fees paid to outside counsel.

Respondent has shown sincere remorse for his misconduct. He cooperated with Office of Disciplinary Counsel’s investigation and stipulated to each of the violations alleged in the petition for discipline. Respondent made partial restitution to his former law firm of $ 10,000.

Respondent testified to various factors that contributed to his misconduct. Respondent believed there was a strong expectation from the law firm that each attorney would bill 195 to 200 hours per month, although Joseph Ricci, the law firm’s principal, explained that those numbers were merely an ideal goal. Respondent had billed the second largest number of hours in the firm and had received salary increases and bonuses consistent with his achievements at the firm. Another factor was respondent’s need to impress his then-fiancée and her family with his financial ability to support her. A third factor was that respondent owed more than $100,000 in undergraduate and law school loans.

After respondent’s termination from the law firm, he was referred by Lawyers Concerned for Lawyers to Frederick Flenry, a licensed clinical social worker with an emphasis on mental health. Mr. Henry described respondent as extremely depressed and distraught. From the very first contact, respondent expressed remorse to Mr. Henry for his unethical actions and the reasoning that led to these actions. However, Mr. Henry indicated that respondent did not reveal to him that he made misrepresentations to clients concerning the status of their cases. Mr. Henry diagnosed respondent with an adjustment disorder, which was caused by respondent’s employment termination. Mr. Henry continues to counsel respondent.

Respondent also met with Dr. L.A. Rotenberg, a psychiatrist. Dr. Rotenberg conducted an interview of respondent shortly after respondent’s termination. Dr. Rotenberg concluded that respondent suffered from an adjustment disorder, but he did not conclude that this disorder was a cause of the misconduct. Evaluation of this evidence persuades the board that respondent did not prove by clear and convincing evidence that he suffered from a psychiatric disorder which substantially caused the misconduct. Office of Disciplinary Counsel v. Braun, 520 Pa. 157, 553 A.2d 894 (1989).

Respondent presented extensive character evidence, both through live witnesses and by letters, all of which was very positive and laudatory regarding his reputation for truthfulness. However, some of the witnesses did not know respondent at the time of the misconduct, having met him after the fact, and did not know all of the pertinent details of the misconduct.

The record presents a picture of a young attorney at his first law firm job, under tremendous stress to meet professional and personal goals. Unfortunately, the method chosen by respondent to meet these goals involved dishonesty and deceit, in every way contrary to the code of ethics governing the legal profession. It is clear from the record that respondent was aware at the time that his actions were wrong. Respondent has paid for these actions, having lost his employment and his fiancée, and enduring emotional distress. While the background of respondent’s life at the time of the misconduct may help the board to understand his situation, it in no way provides a defense to his dishonest behavior.

This case involves fraudulent fee billings and repeated misrepresentations by respondent regarding his clients’ cases. Prior cases involving similar misconduct have resulted in a range of sanctions, depending on the unique circumstances of each case. Three recent matters have involved inflated fees: In re Anonymous No. 149 D.B. 1995, 380 Disciplinary Docket no. 3 (Pa. Dec. 30, 1997) (respondent improperly billed $18,338 in fees and $9,164 in travel expenses, made partial restitution, provided Braun mitigation, and was suspended for one year and one day); In re Anonymous No. 82 D.B. 1999, 637 Disciplinary Docket no. 3 (Pa. Dec. 28, 2000) (respondent improperly billed between $30,000 and $40,000, made no restitution, and was suspended for three years); and Office of Disciplinary Counsel v. Rovner, 157 D.B. 2000, 822 Disciplinary Docket no. 3 (Pa. May 6, 2003) (respondent improperly billed $53,509; however, respondent intentionally did not send the bills to the clients, and he was suspended for six months).

Review of the totality of the facts and circumstances of this matter, as well as consideration of the above cases, persuades the board that a suspension of one year and one day is appropriate, retroactive to July 20, 2004, the date of respondent’s voluntary assumption of inactive status. This sanction accounts for the seriousness of respondent’s misconduct, and requires that he petition for reinstatement and prove his fitness and character if he desires to practice law in the future.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania recommends that the respondent, Michael K. Hollinger, be suspended from the practice of law for a period of one year and one day retroactive to July 20, 2004.

It is further recommended that the expenses incurred in the investigation and prosecution of this matter are to be paid by the respondent.

Board Vice-Chair Rudnitsky and Members Raspanti, Suh, Pietragallo and O’Connor dissented for a one-year suspension.

Board Members Gentile andNordenberg dissented for a suspension of less than one year.

ORDER

And now, June 16, 2005, upon consideration of the report and recommendations of the Disciplinary Board dated March 21,2005, it is hereby ordered that Michael Keith Hollinger be and he is suspended from the bar of this Commonwealth for a period of one year and one day retroactive to July 20, 2004.

It is further ordered that respondent shall pay costs to the Disciplinary Board pursuant to Rule 208(g), Pa.RD.E.