Jo Jo Pizza & Eastern Alliance Ins. Co. v. Larry Pitt & Assoc., P.C.

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Jo Jo Pizza and Eastern Alliance : Insurance Company : : v. : : Larry Pitt & Associates, P.C., : No. 1162 C.D. 2021 Appellant : Argued: June 23, 2022 BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE FIZZANO CANNON FILED: August 5, 2022 Larry Pitt & Associates, P.C. (Attorney Pitt) appeals from the January 15, 2021, order of the Court of Common Pleas of Dauphin County (trial court) that found Attorney Pitt in civil contempt for failure to respond to a subpoena issued by the Workers’ Compensation Judge (WCJ) upon the request of Jo Jo Pizza and Eastern Alliance Insurance Company (together, Employer). Upon review, we affirm. I. Factual & Procedural Background The underlying facts are not in dispute. Martha Mondragon Garduno (Claimant) slipped and fell on ice in Employer’s parking lot on February 11, 2016. Trial Ct. Op., 4/5/21, at 1; Reproduced Record (R.R.) at 32a. Attorney Pitt filed a workers’ compensation claim petition on her behalf as well as a third-party premises liability action in the trial court against the owner of the property where Employer is located. R.R. at 32a. The claim petition was granted by a WCJ in April 2018 and Claimant began receiving wage loss and medical benefits. Id. at 33a. In December 2018, the WCJ approved a compromise and release agreement (C&R) between the parties that resolved Claimant’s medical and wage loss claims for $70,000, inclusive of Attorney Pitt’s 20% attorneys’ fees. Id. at 33a & 49a. The C&R recognized Employer’s right to subrogation against the property owner to the extent of Employer’s lien, which included roughly $138,000 for wage losses and $19,000 for medical costs. Subsequently, Attorney Pitt began negotiations with Employer to reduce its lien voluntarily in hopes that the third-party action could be resolved since it was unlikely that a trial would recover the entire amount of the lien, much less generate any additional amount that Claimant could recover. R.R. at 33a. Employer declined to reduce its lien and in anticipation of the risks of a trial, Claimant and Attorney Pitt signed a new fee agreement increasing Attorney Pitt’s fee to 50% of any recovery in tort. Id. at 34a. The third-party action ultimately resolved in January 2020 for $80,000. R.R. at 34a. In February 2020, Attorney Pitt sent Employer documentation from the third-party settlement, including a distribution worksheet stating that Attorney Pitt would receive $40,000 in attorneys’ fees and would pay the remaining $40,000 to Employer in partial satisfaction of its lien. Employer’s Supplemental Reproduced Record (S.R.R.) at 45b-46b. Employer, suspicious that Attorney Pitt improperly diverted amounts from his attorneys’ fees to Claimant that should have been subject to Employer’s subrogation lien, filed review and modification petitions in April 2020 with the WCJ; the petitions indicated that Employer sought an adjudication by the 2 WCJ as to subrogation credit for the third-party recovery. R.R. at 1a-6a. In …

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