*fn*,Arlin M. Adams Schnader, Harrison, Segal & Lewis Philadelphia, PA 19103,KIRK MITZEL; JANET MITZEL, H/W v. WESTINGHOUSE ELECTRIC CORPORATION; DRAVO CORPORATION; DICK CORPORATION; CORTEC INDUSTRIES, INC., T/A, D/B/A INLAND BUILDINGS; DAVY MCKEE CORPORATION, T/A, D/B/A DAVY DRAVO; DRAVO ENGINEERING COMPANIES, INC.; CORTEC INDUSTRIES, INC., T/A, D/B/A SUMMIT BUILDINGS; S.B. ACQUISITION COMPANY, T/A, D/B/A SUMMIT BUILDINGS DICK CORPORATION; DRAVO CORPORATION THIRD-PARTY PLAINTIFFS v. A.C. DELLOVADE, INC.; DAVY MCKEE CORPORATION, T/A, D/B/A DAVY DRAVO THIRD-PARTY DEFENDANTS KIRK MITZEL AND JANET MITZEL, BY AND WITH THEIR ATTORNEYS, A DRAGON ASSOCIATES, APPELLANTS (CAPTION AMENDED PER THE CLERK'S 11/04/94 ORDER)" />

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Mitzel v. Westinghouse Elec. Corp.

December 29, 1995

KIRK MITZEL; JANET MITZEL, H/W

v.

WESTINGHOUSE ELECTRIC CORPORATION; DRAVO CORPORATION; DICK CORPORATION; CORTEC INDUSTRIES, INC., T/A, D/B/A INLAND BUILDINGS; DAVY MCKEE CORPORATION, T/A, D/B/A DAVY DRAVO; DRAVO ENGINEERING COMPANIES, INC.; CORTEC INDUSTRIES, INC., T/A, D/B/A SUMMIT BUILDINGS; S.B. ACQUISITION COMPANY, T/A, D/B/A SUMMIT BUILDINGS DICK CORPORATION; DRAVO CORPORATION THIRD-PARTY PLAINTIFFS

v.

A.C. DELLOVADE, INC.; DAVY MCKEE CORPORATION, T/A, D/B/A DAVY DRAVO THIRD-PARTY DEFENDANTS KIRK MITZEL AND JANET MITZEL, BY AND WITH THEIR ATTORNEYS, A DRAGON ASSOCIATES,

APPELLANTS

(CAPTION AMENDED PER THE CLERK'S 11/04/94 ORDER)



On Appeal from the United States District Court for the District of New Jersey

(D.C. No. 91-cv-05689)

Before: SLOVITER, Chief Judge, SCIRICA, Circuit Judge, and

AMBROSE, District Judge *fn*

Submitted Pursuant to Third Circuit LAR 34.1(a) July 17, 1995

Filed December 29, l995 )

OPINION OF THE COURT

SLOVITER, Chief Judge.

A Pennsylvania law firm, A Dragon Associates, and its clients, Kirk and Janet Mitzel, challenge the district court's application of the New Jersey State Court Contingency Fee Rule to a two-million-dollar settlement received by the Mitzels in a case Dragon filed for them in federal court in New Jersey. They argue that the district court erred in applying New Jersey rather than Pennsylvania law, and, in the alternative, that even if the New Jersey rule is applicable, Dragon is entitled to an increased fee under the terms of the rule because of the extraordinary time and effort it devoted to this case. We have jurisdiction under 28 U.S.C. Section(s) 1291. As none of the defendants have filed briefs, this matter is before us on appellants' brief only. Although the appeal was filed on behalf of both Dragon and the Mitzels, we will treat only Dragon as the appellant.

I.

Kirk Mitzel was severely injured at a construction site in New Jersey when a steel beam on which he was working collapsed and fell 26 feet to the ground. Mitzel and his wife, Janet, were Pennsylvania residents at the time and retained Dragon to pursue worker's compensation and personal injury claims on their behalf. On July 26, 1990, the Mitzels signed a contingency fee agreement with Dragon in which the law firm agreed to represent them in return for 40% of any net recovery. At some point after signing this agreement, but before the complaint was filed, the Mitzels moved to North Dakota.

Dragon filed a complaint on December 30, 1991 in the District Court of New Jersey based on diversity jurisdiction, naming as defendants the primary and general contractors and the companies that designed the equipment and materials involved in the accident. Two attorneys from the firm were admitted pro hac vice to the District Court of New Jersey on May 18, 1992, pursuant to the district court's Local Rule 4(c).

Dragon asserts that during the following two-and-a-half years it invested over 5100 attorney hours in discovery, taking nineteen depositions, accumulating fifty-two expandable files of documents that are over twenty-two feet thick, arguing nearly twenty oral and written motions, reviewing hundreds of thousands of records, and consulting more than ten experts. It also claims to have incurred considerable costs in travelling to Pittsburgh and Orlando to inspect documents.

Ultimately, in mid-1994 the defendants offered the Mitzels two million dollars, and Dragon volunteered to reduce its contingency fee from 40% to one-third in order to facilitate a settlement at this amount. The Mitzels agreed and, on July 25, 1994, filed a motion with the district court asking it to confirm the settlement and approve the one-third counsel fee in the amount of $648,403.28. The motion was referred to a magistrate judge, who instead recommended application of New Jersey Court Rule 1:21-7, and a counsel fee award of $435,181.47. The district court adopted the magistrate's recommendation and denied plaintiffs' motion for reconsideration. This appeal followed.

II.

A. Choice ...


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