Professional Flooring Company, Inc., Limerick Carpet & Flоoring, Inc., Rose Line, Inc. and Renu Electronics, Inc. (hereinafter “Certain Class Plaintiffs”) appeal from the order entered in the Court of Common Pleas of Montgomery County on September 4, 2009, denying their motion for incentive fees, and the order entered on September 10, 2009, authorizing compensation for the court-appointed Claims Administrator, by the Honorable Steven T. O’Neill. 1 After careful review, we reverse and remand for further proceedings.
This matter forms a small part of the class action litigation that arose from the destruction by fire on Mаy 15, 2001 of a large, multi-unit industrial complex known as the Continental Business Center (“CBC”) in Bridgeport, Pennsylvania. Appellants, Certain Class Plaintiffs, are businesses that suffered losses in the fire and are the original plaintiffs, having filed a putative class action suit against the owners and managers of the CBC nine days after the fire occurred. On April 14, 2003, Judge O’Neill certified the class and appointed Certain Class Plaintiffs as representative plaintiffs of the class. 2 He also appointed the law firms of Kline & Specter, P.C. and High Swartz LLP as class counsel.
In the following months and years, the parties engaged in extensive discovery. The court presided over numerous hearings and disposed of over 100 motions and the parties and the court held lengthy settlement discussions. In the midst of this activity, Donald E. Haviland, Jr., Esquire, an associate with class counsel Kline & Specter, 3 left his employment at Kline & Specter and started his own practice, then known as “The Haviland Firm.” As a result of Haviland’s departure, a dispute arose over who would act as class counsel. Ultimately, Kline & Specter remained as class counsel, although Haviland was permitted to represent Certain Class Plaintiffs as personal counsel. 4
A partial settlement was reached on February 19, 2008 for the sum of $30,000,000. The remaining two defendants subsequently agreed to settlements
The other order now before us was filed on September 4, 2009 and denied a motion for incentive payments filed by Attorney Haviland on behalf of Certain Class Plaintiffs. Judge O’Neill denied that motion based upon his belief that Attorney Havi-land lacked standing to file such a motion on behalf of the class representatives, as he is not court-appointed class counsel.
Providing a baсkdrop to the entry of the orders which are the subject of this appeal is a motion for recusal filed by Attorney Haviland on behalf of Certain Class Plaintiffs, which alleges bias on the part of Judge O’Neill against Certain Class Plaintiffs. 5 The motion was filed on May 14, 2009 and has yet to be disposed of. It is the contention of Certain Class Plaintiffs that Judge O’Neill acted improperly by entering substantive orders affecting their rights while a motion seeking his recusal was pending. For his part, Judge O’Neill has opined that Certain Class Plaintiffs are “members of the Class, which [is] represented exclusively by Class Counsel and not Mr. Haviland. The question of fairness and impartiality of the [trial court] has been raised only by Mr. Haviland and not by Class Counsel or any Defendant in this case. Mr. Haviland has no standing to move to recuse the [trial court].” Trial Court Opinion, 12/31/09, at 13 (emphasis in original).
Certain Class Plaintiffs raise the following issues on appeal:
DID THE TRIAL COURT ERR IN DENYING THE PAYMENT OF REASONABLE INCENTIVE FEES FOR [CERTAIN CLASS PLAINTIFFS], WHILE A MOTION FOR RECUSAL WAS PENDING, WITHOUT MAKING THE REQUISITE DETERMINATIONS AS TO ADEQUACY OF REPRESENTATION OF THE CLASS IMPLICATED BY THE COURT’S DETERMINATION TO DENY INCENTIVE FEES?
DID THE TRIAL COURT ERR IN GRANTING AND APPROVING CLAIM ADMINISTRATOR FEES AND COSTS TO BE PAID OUT OF THE COMMON CLASS SETTLEMENT FUND, WHILE A MOTION FOR RECUSAL WAS PENDING, WITHOUT AFFORDING PROCEDURAL OR SUBSTANTIVE DUE PROCESS WITH RESPECT TO THE SAME BY ALLOWING RESPONSES TO BE FILED WITHIN THE NORMAL TIME PERMITTED BY THE RULES?
Brief of Appellants, at 5.
Prior to addressing the specific claims raised by Certain Class Plaintiffs on ap
“A trial judge should recuse himself whenever he has any doubt as to his ability to preside impartially ... or whenever he believes his impartiality can be reasonably questioned.”
Commonwealth v. Goodman,
Presently, the trial court never reached the merits of Certain Class Plaintiffs’ recusal motion. Rather, the trial court refused to act on it, based upоn its belief that Attorney Haviland’s clients lacked standing to seek his recusal, as they were not acting on behalf of the Class and Attorney Haviland is not class counsel. Likewise, Appellees argue that only the Class may act in a class action and may do so only through class counsel. Thus, they believe that Judge O’Neill properly refused to rule on the motion filed by individual counsel for Certain Class Plaintiffs. 6
Certain Class Plaintiffs argue that Judge O’Neill’s impartiality may reasonably be questioned in this matter and, as such, recusal is appropriate. They cite the trial cоurt’s recusal from the related “Fire Company Cases,” in which the parties are part of the same global settlement as Certain Class Plaintiffs.
7
They note that the
The purpose of class actions is to promote efficiency and economy of litigation in adjudicating the claims of large groups of similarly situated plaintiffs. To that end, the presiding court appoints representative parties and class counsel to spearhead the litigation and prevent matters from devolving into the chaos that would ensue if hundreds, if not thousands, of plaintiffs were allowed to barrage the court with individual pleadings.
See
Pa. R.C.P. 1702; 1709. As a general rule, individual class members acting through private counsel are not allowed to participate independently of the class, except in limited circumstances where class members are allowed to appear and object.
See,
e.g.,
(Dauphin Deposit Bank & Trust Co. v. Hess,
Having concluded that Certain Class Plaintiffs possess standing to file a motion to recuse, we must now determine whether it was appropriate for the trial court to continue to enter substantive orders during the pendency of the recusal motion. Appellants do not cite, and we are unable to find, any Pennsylvania appellate case addressing this particular issue. However, Florida courts have addressed this issue on multiple occasions.
In
MacKenzie v. Super Kids Bargain Store, Inc.,
Similarly, the Florida Court of Appeal, in
Airborne Cable Television, Inc. v. Storer Cable TV of Florida, Inc.,
The
Airborne
court distinguished
Fischer,
noting that the
Airborne
trial judge had not issued an oral ruling prior to receiving the motion to disqualify and, thus, the fee order could not be considered a mere “ministerial” act undertaken in fulfillment of an earlier ruling.
Airborne,
a sequence of events such as those at hand can create at least an appearance of impropriety. For instance, the entry of the recusal order four days following the attorney’s fee award could lead to the belief that the judge might have delayed disqualifying himself so that he could rule in Storer’s favor on the attorney’s fee issue.... To avoid such perceptions and to maintain the integrity of the judiciary in the eyes of the public and of litigants, strict adherence to the appropriatе procedure for dealing with recusal must be demanded.
Id. at 119.
The U.S. Court of Appeals for the Third Circuit addressed a similar set of facts in
Moody v. Simmons,
In conclusion, and in light of the foregoing, we hold that the most prudent course of action is for a court to abstain from entering any substantive orders until a pending recusal motion has been disposed of. In this way, litigants can be assured that no decision affecting their substantive rights might be tainted by bias in the event the court ultimately decides to re-cuse itself. It follows that any decision on a recusal motion must be made in a timely manner so as to avoid unnecessary delay in the underlying litigation.
We now turn to the specific issues raised by Certain Class Plaintiffs on appeal. First, Certain Class Plaintiffs allege that the trial court erred in denying their motion for incentive payments while a motion for recusal was pending and without making the requisite determinations as to the adequacy of representation of the class. Initially, we note that the order denying incentive payments must be vacated based on our foregoing conclusions regarding the propriety of the entry of substantive orders during the pendency of a recusal motion. However, given that Certain Class Plaintiffs question implicates additional issues, we will proceed to address them.
Incentive awards to class representatives have become increasingly common in recent years. Although we are unable to uncover a Pennsylvania a appellate court opinion addressing the issue of incentive awards, the Honorable John W. Herron provided a thorough overview of the topic in Milkman v. American Travellers Life Insurance Company, 61 Pa. D. & C. 4th 502, 570 (Pa.Com.Pl.2002):
The plaintiffs role in [class action] cases is to protect the interests of the class and foot the bill for litigation. However, the public policy favoring private civil litigation as a means to promote certain important social values often fails to provide adequate compensation or incentive for plaintiffs to take on this burdеn simply on principle. The representative assumes substantial risk, not just of losing time and costs of litigation, but also of retaliation or collateral notoriety....
In general, class representatives are entitled to reimbursement of expenses if the suit is successful, but not compensation for their services. In addition, the named plaintiff is a party to the litigation and not a witness, and so cannot be compensated for witness fees or travel expenses incurred in giving a deposition during discovery. In part for these reasons, incentive awards are not uncommon in class action litigation and particularly where ... a common fund has been created for the benefit of the entire class.
Id. (internal citations and quotation marks omitted).
In determining whether to grant incentive awards, courts have commonly relied on five factors: (1) the risk to the class representative in commencing suit, both financial and otherwise; (2) the notoriety and personal difficulties encountered by the class representative; (3) the amount of time and effort spent by the class representative; (4) the duration of the litigation; and (5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation.
Id.
at 571 (citing
Van Vranken v. Atlantic Richfield Co.,
First, we must address whether the trial court should have acted on the motion at all. As discussed above, in a class action, the class acts as a whole and is represented by class counsel, which submits pleadings to the court on behalf of the class. In this matter, private counsel for Certain Class Plaintiffs filed a motion for incentive payments on behalf of his clients. Class counsel responded by arguing that the motion should be stricken on the grounds that “it is the province оf Class Counsel to file a motion relating to incentive fees for class representatives!)]” R.R. at 182b. Thereafter, class counsel filed a motion for incentive payments on behalf of all class representatives. Despite the trial court’s insistence that Attorney Haviland and his individual clients lack standing to seek relief from the court separate and apart from the class, he did not strike the motion for that reason, as requested by class counsel. Instead, the court addressed Certain Class Plaintiffs motion on its merits and denied their request for incеntive payments. Oddly, the court failed to take any action on the motion filed by class counsel.
We conclude that, in this instance, Certain Class Plaintiffs lacked standing to file their own motion for incentive payments and that the trial court erred in addressing the merits thereof, while simultaneously and without explanation ignoring the motion properly filed by class counsel. As stated above, the court in a class action appoints class representatives and class counsel for a reason, i.e. so that the action may proceed in an оrderly manner without hundreds, or even thousands, of individual plaintiffs inundating the court with pleadings. In contrast to the scenario presented with regard to the recusal motion, we can ascertain no pressing reason to create an exception to the general practice of limiting the filing of pleadings to class representatives, by and through class counsel. The proper course of action would have been for the trial court to strike Certain Class Plaintiffs’ motion and rule on the merits of class counsel’s motion (after, of coursе, ruling on the recusal motion). Accordingly, we remand with instructions that the trial court rule promptly on the motion filed by class counsel. The trial court is directed to take the factors cited in Milkman, supra, into consideration in making its determination on the propriety of incentive awards. Of course, if the trial court recuses itself, the motion for incentive payments must be ruled upon by the newly appointed judge.
Finally, Certain Class Plaintiffs assert that the trial court erred in approving the claims administrator’s fees and costs while a motion for recusal was pending and withоut allowing responses to be filed within the normal time permitted by the rules. As with the order denying incentive awards, this order must be vacated because it was entered during the pendency of the recusal motion. However, as Cer
The certified docket reveals that the motion for compensation of the claims administrator was filed on September 1, 2009; Judge O’Neill signed the order approving the fees of the claims administrator on September 8, 2009. The cover sheet аttached to the motion indicated that the motion was filed as a Rule to Show Cause. Although no response date was affixed to the copy made available to us, Montgomery County Local Rule of Civil Procedure 208.3(b)(2) requires that “the Court Administrator shall fix promptly a return day which shall not be less than thirty (30) days from the date of filing of said motion[.]” Montg.R.Civ.P. 208.3(b)(2) (emphasis added). As such, in signing the order seven days after filing, the trial court deprived the respondents of an opportunity to respond and object to the fees and costs requested by the claims administrator.
The trial court defends its actions in this regard as follows:
When this Court ... granted the [Motion to Appoint Gary S. Silow, Esquire as Claims Administrator] on July 8, 2008, it implicitly approved Mr. Snow’s fee schedule, which was contained therein. Therefore this Court’s directive of September 9, 2009 that Mr. Silow be compensated from the Settlement Fund for the completion of his duties as Claims Administrator was simply a procedural directive in accordance with this Court’s already-entered July 8, 2008 Order. It was not a new ruling that required notice or an opportunity to be heard by any party. Accordingly, no party’s due рrocess rights were violated.
Trial Court Opinion, 12/31/09, at 11. We disagree with the trial court’s rationale.
Pursuant to Pa.R.C.P. 1709, a trial court overseeing class action litigation is charged with ensuring that representative parties will “fairly and adequately assert and protect the interests of the class[.]” Further, under Pa.R.C.P. 1714, the trial court is required to approve all settlements, compromises and discontinuances of class actions. Similarly, under Pa. R.C.P. 1716, the trial court is empowered to fix the amount of counsel fees to be awarded to class counsel. In short, the role of the court in a class action is akin to that of a fiduciary, insuring that the class is well represented throughout the duration of the litigation, that settlements are fair, and that counsel fees are awarded in an equitable manner.
See In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation,
Orders vacated; case remanded with instructions. Jurisdiction relinquished.
Notes
. The Appellees in this matter are the Class Plaintiffs in the class action, which technically include among their number the Appellants, Certain Class Plaintiffs. The Appellants are represented by their individual counsel; Appellees are represented by class counsel.
. In addition to Certain Class Plaintiffs, Salmons Industries, Inc. and Purdy-Pale, Inc. were also named by the court аs class representatives.
. At the time the action was initiated in May 2001, Attorney Haviland was employed by the law firm of Levin, Feishbein, Sedran & Ber-man. In November 2001, Attorney Haviland left that firm and became associated with Kline & Specter. He left Kline & Specter on September 7, 2006.
. Several disputes arose over Attorney Havi-land’s continued communication with the class representatives. At the time of his departure from Kline & Specter, Attorney Havi-land sought appointment as class counsel, which he later withdrew. After class counsel complained, Judge O’Neill entered an order barring Haviland from soliciting сlass members, which he appealed. This Court ultimately vacated that order for lack of specificity. The trial court subsequently issued a new order barring Attorney Haviland "from communicating with any Class Member other than those he represents in a personal capacity, specifically [Appellants herein].” Trial Court Opinion, 12/31/09, at 7. Attorney Havi-land continued to make numerous filings concerning the class action, which were disregarded or denied by Judge O’Neill, as they were "outside of his scope as personal counsel for his clients and were not made by Class Counsel.” Id. at 6. Judge O’Neill took the position that it was solely within the court’s purview as to which counsel was authorized to submit filings on behalf of the class.
. In their brief, Certain Class Plaintiffs quote extensively from hearing transcripts in support of their contention that Judge O'Neill was biased against them. They allege that the trial court "actively participated as an advocate” in a way that was detrimental to their interests. Brief of Appellants, at 22. They also allege that the court "ignored clear testimony” in ruling against them and received relevаnt information in an ex parte manner from a source "outside the hearing or the record.” Id. at 23.
. Appellees also argue that we are precluded from considering the effect of the motion for recusal, as it is not contained within the certified record. The general rule is that this Court may only consider items which have been included in the certified record. Those items which do not appear of record do not exist for appellate purposes and any argument based on those missing items is waived.
Stumpf v. Nye,
. The "Fire Company Cases” are two suits brought by the fire companies that first responded to the 911 call on May 15, 2001. The fire companies opted out of participation in the class action, but their cases were presided over by Judge O’Neill and shared defendants in common with the class action litigation.
. A review of Mr. Show's summary of charges reveals that he requests the sum of $2,327 for secretary time and $260 for “supplies.” We note that such line items are commonly con
