Judge's referral fees at issue in Montco Superior Court appeal
Pennsylvania Superior Court on Wednesday reheard an appeal in a 20-year-old lawsuit in which a housing developer argues that the entire Montgomery County Court bench should have recused itself.
Pennsylvania Superior Court on Wednesday reheard an appeal in a 20-year-old lawsuit in which a housing developer argues that the entire Montgomery County Court bench should have recused itself.
The developer's attorney, Thomas A. Leonard, argued that there was at least "an appearance of impropriety" for one Montgomery County jurist to decide both the verdict and monetary damages in a case in which his colleague stood to receive a $600,000 referral fee.
Leonard mentioned other Pennsylvania jurists who have faced investigations in recent years over referral fees or campaign donations paid to themselves or their relatives.
Some of the nine judges on the panel hearing the current appeal questioned whether a fellow judge is a close-enough associate to taint a case.
"There's a difference, at least in my mind, if you have a bench of" seven judges vs. a bench of 50 "who may or may not have any interaction with each other," Judge Christine L. Donahue said.
Montgomery County Court currently has 20 judges.
Paul Rosen, the opposing lawyer, said referral fees and contingency payments from former clients are common and proper, and said neither of the judges in question - Thomas P. Rogers, who ruled in the case, and Thomas C. Branca, who would receive the fee - acted improperly.
If every judge had to recuse himself or herself from a case in which a colleague had been involved, Rosen argued, "there wouldn't be a judge in the state who could hear a case."
A three-judge panel of Superior Court previously heard the appeal in July 2013, and in March upheld a $1.7 million judgment against the developer. In May, Superior Court vacated its ruling and agreed to hear the arguments anew.
The panel could take weeks or months to issue a ruling.
The case dates to 1994, when carpeting contractor Roy Lomas sued housing developer James B. Kravitz for failing to pay a $31,000 bill, according to court documents.
When Branca, Lomas' attorney, was elected to Montgomery County Court in 2001, he referred Lomas to another law firm and negotiated a standard referral fee.
Kravitz's attorneys said they did not know about Branca's referral fee when they agreed to a nonjury trial before Rogers, a colleague of Branca's. Rogers also said he did not know of the fee until after issuing his ruling.
Superior Court Judge John T. Bender, writing for a 2-1 majority in March, upheld Rogers' ruling and criticized the "almost incomprehensible" length of the case due to Kravitz's "delaying tactics."
In a footnote, Bender said that although Rogers' "extensive, well-reasoned opinion accurately disposes of the issues" involving Branca, "this type of situation should be avoided in the future."
Referral fees are legal in Pennsylvania, but legal experts have cautioned that they can lead to conflicts and should be disclosed.
In 2013, the FBI began investigating referral fees paid to the wife and legal aide of state Supreme Court Justice Seamus McCaffery. No charges have been filed against McCaffery, but in the wake of that and other judicial ethics disputes, the high court in January tightened its code of conduct for judges statewide.
Among other things, the new code requires judges to disclose potential conflicts to the parties before them "even if the judge believes there is no proper basis for disqualification or recusal."
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