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Judge rejects ‘absurd’ claim by ex-clients, awards $500K in legal fees, blasts new counsel

Posted Jun 24, 2014 9:45 AM CDT
By Martha Neil

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A Pennsylvania law firm was, by contract, entitled to a $500,000 legal fee for representing the parents of a therapist killed in a 2012 shooting rampage, in a lawsuit against a psychiatric hospital.

But Farrell & Reisinger agreed to take $350,000, after the case settled the same year for $1.5 million, to allow clients Harry and Mary Schaab to pay off their son's fiancee's student loans. The Schaabs never signed a settlement release, however, and retained a new attorney who argued the Farrell firm was entitled to nothing. On Friday, an Allegheny County Common Pleas judge awarded the firm over $500,000, calling the claim that the Schaabs don't owe attorney's fees "absurd," reports the Pittsburgh Post-Gazette.

The argument against attorney's fees was based on the fact that the $1.5 million settlement was actually paid after the Schaabs terminated the Farrell firm's representation and retained new counsel, the newspaper explains. The couple had been referred to attorney Michael O'Day by the Farrell firm because they wanted to pursue additional litigation against other parties, which the Farrell firm did not want to take on.

A point of contention in the attorney's fees litigation that ensued, according to court filings, was whether the release applied to parties in addition to the defendant psychiatric hospital. The Farrell firm said only Western Psychiatric Institute and Clinic and its affiliates were included, but the Schaabs were not persuaded.

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

O'Day told the newspaper he plans to appeal O'Toole's ruling that the contract was substantially performed.

Attorney William Pietragallo represented the Farrell firm. He said it had obtained for the Schaabs "an outstanding settlement in the face of a worker’s compensation defense."

The Tribune-Review also has a story.

An earlier Pittsburgh Post-Gazette article provides additional details about the shooting rampage and litigation brought on Mary Schaab's behalf by O'Day.

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