HomeMy WebLinkAbout1155 MessickIn Re: Harry Messick
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Daneen E. Reese, Chair
Julius Uehlein
Louis W. Fryman
John J. Bolger
Frank M. Brown
Susan Mosites Bicket
98- 035 -C2
Order No.1 155
4/12/00
4/28/00
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission
conducted an investigation as to the above -named Responde�nt of regarding F Lp2 si 6e
vio of the Public Official and Employee Ethics Law, Act
P.S. §401 e seq., as codified by the Public Official and Employee Ethics Act, Act 93
of 1998, Chapter 11,
65 Pa.C.S. §1101 et ems., which, inter alia, provides for the
completion of pending matters under that Act. At the commencement of its
investigation, the Investigative Division served upon Respondent written notice of the
specific allegation(s). Upon completion of its investigation,
the Investigative Division
issued and served upon Respondent a Findings Report identified as an "Investigative
Complaint." An Answer was filed and a hearing was held. The record is complete.
This adjudication of the State Ethics Commission is issued under Act 93 of
1998 and will be made available as a public document thirty days after the mailing
date noted above. However, reconsideration may be requested. Any reconsideration
request must be received at this Commission within thirty days of the mailing date and
must include a detailed explanation of the reasons as to why reconsideration should
be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration
will not affect the finality of this
Commission.
ion but will defer its public release pending
action on the request by the
The files in this case will remain confidential in accordance with the Ethics Act.
Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor
subject to a fine of not more than $ 1,000 or imprisonment for not more than one year.
Confidentiality does not preclude discussing this case with an attorney at law.
Messick, 98- 035 -C2
Page 2
I. ALLEGATION:
That Harry Messick, a public official /public employee in his capacity as President
of the West Shore School District Board of Directors, violated Sections 3(a) and 5(b)(6)
of the State Ethics Act (Act 9 of 1989) when he used the authority of his office for
a private pecuniary benefit when he used the legal services of the school district
solicitor for private legal matters at no cost to himself; when he participated in actions
of the board to approve payments to Charles Steele and /or Timothy Finkelston at a
time when they were providing private legal representation for him; and when he
failed to report the receipt of free legal services on Statements of Financial Interests
filed by him for the years 1993 through 1998 inclusive.
II. FINDINGS:
A. Pleadings
1. The Investigative Division of the State Ethics Commission received information
alleging that Harry Messick violated provisions of the State Ethics Act (Act 93
of 1998).
2. Upon review of the information the Investigative Division initiated a preliminary
inquiry on April 22, 1998.
3. The preliminary inquiry was completed within sixty days.
4. On June 19, 1 998, a letter was forwarded to Harry Messick, by the Executive
Director of the State Ethics Commission informing him that a complaint against
him was received by the Investigative Division and that a full investigation was
being commenced.
a. Said letter was forwarded by certified mail, no. P 487 031 871.
b. The domestic return receipt bore the signature of Harry P. Messick, with
a delivery date of June 22, 1998.
5. On September 8, 1998, the Executive Director of the State Ethics Commission
filed an application for a ninety day extension of time to complete the
Investigation.
6. The Commission issued an order on October 8, 1998, granting the ninety day
extension.
7. On November 19, 1998, the Executive Director of the State Ethics Commission
filed an application for a ninety day extension of time to complete the
Investigation.
8. The Commission issued an order on December 15, 1998, granting the ninety
day extension.
9. Periodic notice letters were forwarded to Harry Messick in accordance with the
provisions of the Ethics Law advising him of the general status of the
investigation.
10. The Investigative Complaint was mailed to the Respondent on June 14, 1999.
Messick, 98- 035 -C2
Page 3
11. In the fall of 1990 the West Shore School District began a process to select a
Labor Counsel to represent the District.
12. The law firm of Steele & Hoffman was one of the firms applying for the
position.
13. Steele & Hoffman specialized in school and labor law.
a. Charles Steele, Esquire, was a partner in the former Pittsburgh based law
firm Steele & Hoffman.
14. The law firm of Steele & Hoffman was selected by the West Shore School
District to serve as the District's Labor Counsel at the Board's November 15,
1990, meeting.
a. Messick participated in the interview.
b. Messick made the motion to hire Steele & Hoffman.
c. Messick participated in the vote to hire Steele & Hoffman.
15. While Steele & Hoffman was serving as School District Labor Counsel Messick
was contemplating legal action against an individual [Boise P. Shanabrough]
who had a contract to purchase property from him.
a. Messick felt that the purchaser defaulted and /or breached provisions of
their land sale contract by failing to make payments on a timely and
regular basis and by failing to keep the property in good repair.
b. The sale of this property was financed by the sellers, Harry and Shirley
Messick.
c. Shanabrough was to make monthly payments to Messick in the amount
of $1,504.45 during the first year decreasing to $ 1,449.77 monthly
thereafter.
16. In 1993, prior to March 18, 1993, Messick discussed with Steele the possibility
of legal action against Shanabrough.
a. Steele agreed to have his firm represent Messick in this matter.
17. By way of correspondence dated March 18, 1993, Boise Shanabrough was
notified of alleged material defaults and breaches of the agreement with the
Messicks.
a. Peter M. Rubash, Esquire, of the law office of Steele & Hoffman, 422
Frick Building, Pittsburgh, PA 15219 is identified as the attorney of
record representing the Messicks in this matter on the correspondence.
b. The letter was prepared by Rubash.
c. The correspondence was signed by Harry L. Messick and Shirley E.
Messick.
d. This was the first official action taken by Steele & Hoffman on behalf of
Messick in the matters.
Messick, 98- 035 -C2
Page 4
18. The Board was not satisfied with the services of Solicitor Richard Stewart.
19. Steele & Hoffman was one of seven applicants for the position.
a. Steele submitted a proposal letter dated May 6, 1993, to Superintendent
Larry Sayre for the District's solicitorship.
20. Steele's proposal letter for the District's solicitorship (May 6, 1993) occurred
within five (5) weeks of Steele & Hoffman's first correspondence (March 18,
1993) representing the Messicks in their civil litigation against Boise
Shanabrough.
21. Interviews of four firms, including Steele & Hoffman, were conducted by the
Board on May 13, 1993.
a. Messick was one of the nine Board Members participating in the
interview of Steele & Hoffman.
b. Charles Steele made the presentation to the Board on behalf of Steele &
Hoffman.
22. Following the applicant interviews it was the consensus of the Board that Steele
& Hoffman be appointed Solicitor.
a. Messick participated in the discussion.
23. The law firm of Steele & Hoffman was hired by the West Shore School District
to serve as the District's Solicitor at the Board's May 20, 1993, meeting.
a. Messick was not present at this meeting.
24. While receiving legal services from Steele & Hoffman Messick regularly
participated in Board action taken to re- appoint the law firm of Steele &
Hoffman as the District's Solicitor.
25. Messick participated in Board actions to re- appoint the law firm of Steele &
Hoffman as the District's Solicitor in 1994, 1995 and 1996.
a. May 19, 1994
"It was moved by Mrs. lams and seconded by Mr. Delaney that
the board appoints the law offices of Steele & Hoffman, 107
South Second Street, Harrisburg, PA 17101, as solicitor for the
year beginning July 1, 1994, in accordance with the terms set
forth in their proposal dated May 11, 1994. The motion carried on
a roll call vote 8 -0."
Present: Messick, lams, Sharp, Delaney, Hunter, Schubert, Sharretts,
Sanford
b. May 18, 1995
"It was moved by Mr. Delaney and seconded by Mrs. lams that
the board appoints Charles E. Steele of the law offices of Steele
& Hoffman, 107 South Street, Harrisburg, PA 17101, as solicitor
Messick, 98- 035 -C2
Page 5
for the year beginning July 1, 1995, in accordance with the terms
set forth in his proposal dated May 11, 1995. Motion carried on
a roll call vote 9 -0."
Present: Messick, lams, Sanford, Sharp, Smith, Delaney, Hunter,
Schubert, Sharretts
c. May 16, 1996
"it was moved by Mr. Delaney and seconded by Mr. Schubert that
Charles Steele of the law offices of Steele & Hoffman, 107 South
Street, Harrisburg, PA 17101, be appointed as solicitor for the
year beginning July 1, 1996, in accordance with the terms set
forth (in) his proposal dated April 30, 1996. Motion carried on a
roll call vote 9 -0."
Present: Messick, lams, Sanford, Sharp, Smith, Delaney, Kambic,
Schubert, Sharretts
26. Steele & Hoffman continued to represent Messick after being selected as the
District's Solicitor.
27. On or about August 2, 1993, a "Complaint in Ejectment Installment Land
Contract" was filed on behalf of the Messicks in the Court of Common Pleas of
York County, Pennsylvania, by the Steele & Hoffman law firm.
a. The complaint was filed to Case No. 93 -SU- 03313 -04.
b. Messick is identified as being represented by Charles E. Steele, Pa. E.D.
#36583, and Peter M. Rubash, PA I.D. #58290, Steele & Hoffman, 422
Frick Building, Pittsburgh, PA 15219.
c. The complaint is signed by Peter M. Rubash of Steele & Hoffman on
behalf of the Messicks.
28. In December 1996 Steele was convicted of Mail Fraud and Obstruction of
Justice charges.
a. Steele was convicted of having a mathematical formula to inflate clients'
monthly statements.
29. Steele was sentenced on March 25, 1997, to serve a thirty -three (33) month
sentence as a result of his conviction on Mail Fraud and Obstruction of Justice
Charges.
30. Steele & Hoffman's letter of representation and contingency agreement provided
the following agreement regarding attorney fees:
a. "In the event of the recovery of any sums of money, by way of
settlement or verdict, this office in consideration of the
professional services to be rendered to you in the investigation,
institution and general conduct of this case, shall be entitled to
receive as counsel fees 33 1/3% of any recovery by way of
verdict, settlement or otherwise plus reimbursement of all costs
expended by Steele & Hoffman incident to the investigation,
institution, prosecution and trial, if any of the case. Should it be
Messick, 98- 035 -C2
Page 6
necessary to try this case more than once or represent you in an
appeal of this matter after trial, this office will charge additional
amounts for those fees."
31. The effective date of Steele's resignation was December 20, 1996.
a. Steele's resignation was accepted by the Board via a 9 -0 vote with
Messick participating.
32. Attorney Timothy J. Finkelston was appointed Solicitor to replace Steele for the
remainder of the 1996 -97 school year at the Board's January 16, 1997,
meeting.
a. Finkelston is the son of District Deputy Superintendent H. H. Finkelston.
b. Messick was present at the meeting and participated in the vote.
33. Eleven days after voting to retain the services of Timothy Finkelston as School
District Solicitor, Messick entered into an agreement with Finkelston, to
represent him in matters pertaining to Shanabrough.
34. By letter dated January 27, 1997, to Messick, Finkelston confirmed their earlier
conversation regarding Messicks' desire to have Finkelston represent him at the
same fee arrangement as with Steele.
a. The conversation occurred prior to January 27, 1997.
b. Both Finkelston and Messick signed this letter.
35. Finkelston continued to represent Messick until April 9, 1998.
36. Messick, in his official capacity as a West Shore School Board Member
participated in a subsequent board action on May 15, 1997, to appoint Timothy
J. Finkelston Esquire, District Solicitor.
37. Minutes from the West Shore School Board's May 15, 1997, meeting include
the following official action taken to hire Finkelston as District Solicitor:
"It was moved by Mr. Delaney and seconded by Mrs. lams that
Timothy J. Finkelston, 300 Bridge Street, New Cumberland, PA
17070, be appointed as solicitor for the year beginning July 1,
1997, in accordance with the terms set forth (in) his proposal
dated May 7, 1997. Motion carried on a roll call vote 8 -0."
Present: Messick, lams, Sanford, Sharp, Smith, Delaney, Kambic,
Schubert
38. On September 9, 1997, Finkelston addressed correspondence to Messick of his
intent to withdraw as counsel to Messick in the Shanabrough matter.
a. Upon retention of new counsel, Finkelston would enter a Praecipe to
Withdraw from the matter.
39. Finkelston's September 9, 1997, letter cited two reasons for his decision to
withdraw as counsel:
Messick, 98- 035 -C2
Page 7
a. (1) I am uncomfortable taking this matter to trial due to the publicity that
it will generate; and (2) although I do not perceive a conflict of interest
in my representation of you and your wife, I believe it is in the best
interests [sic] of the School District for you to retain separate counsel.
My relationship with you has at all times been professional and above
board; however, I do not want to give any third party the opportunity to
make more out of this relationship than there is.
40. Messick and Finkelston eventually agreed to a Mutual Release dated January
[29] (year not stated) wherein Finkelston agreed to withdraw from any further
representation of Messick and release all claims to any settlement in the matter.
a. Messick agreed to pay Finkelston the amount of $340.00 for services
rendered.
41. On March 31, 1998, Finkelston invoiced Messick in an amount of $340.00.
a. Attached to the invoice Finkelston identified the following services
rendered on behalf of Messick:
Da a Hours Attorney Description
04/29/97 1.3 TJF Draft and file praecipe to
list matter for trial, file
same, review file and
depositions
05/08/97 0.2 TJF Receive and review order
of Court
05/14/97 0.7 TJF Draft correspondence to E.
McKenna in re witness
list, file praecipe to enter
appearance
05/23/97 0.4 TJF Receive and review fax
correspondence from E.
McKenna in re witness list
05/26/97 0.4 TJF Receive and review
correspondence from E.
McKenna in re witness list
10/01/97 0.4 TJF Teleconf w /HLM in re
potential settlement, draft
correspondence to E.
McKenna in re same.
42. Shirley Messick issued personal check number 1425 dated March 10, 1998,
payable to Timothy J. Finkelston in the amount of $340.00.
43. On April 9, 1998, Finkelston filed a Withdrawal of Appearance in the York
County Court of Common Pleas regarding the Messick v. Shanabrough case.
44. The Steele & Hoffman law firm and later Timothy Finkelston performed legal
services for Harry Messick, including but not limited to, the following:
Messick, 98- 035 -C2
Page 8
Date Description of Work
04/14/93 Letter to Norman Zarwin, Esquire, from Peter Rubash, re
termination of agreement
08/02/93 Complaint in Ejectment filed by Rubash
08/24/93 Letter to Zarwin from Rubash re extension of time to file
pleadings
09/30/93 Plaintiff's first set of Interrogations directed to Defendant
filed by Peter Rubash.
09/30/93 Plaintiff's first Request for Production of Documents filed by
Peter Rubash
10/01/93 Letter from Rubash to York County Prothonotary enclosing
Plaintiff's Reply to New Matter and Counterclaim, First of
Interrogatories, Request for Production of Documents.
11/08/93 Letter from Rubash to Lewis Markawitz, Esquire
11/12/93 Letter to Lewis Markowitz, Esquire, and Edward McKenna,
Esquire, from Rubash re Motion to Compel Discovery.
11/12/93 Plaintiff's Motion to Compel Discovery filed by Peter
Rubash.
11/18/93 Letter to Honorable John Uhler, York County Court of
Common Pleas from Rubash re canceling hearing to file
motion.
01/28/94 Letter from Rubash to Edward McKenna
01/28/94 Answer to Defendants Interrogations and Answer to
Request for Production of Documents prepared by Rubash
(21 pages)
01/31/94 Letter from Rubash to McKenna and Markowitz scheduling
deposition of Shanabrough for 02/25/94 in Harrisburg office
of Steele & Hoffman.
01/31/94 Notice of Deposition of B. Shanabrough filed by Rubash
03/16/94 Letter from Rubash to McKenna & Markowitz re
rescheduling of Shanabrough's deposition to 04/21/94.
03/16/94 Notice of Deposition to Shanabrough prepared by Rubash
04/20/94 Letter from Rubash to McKenna re cancellation of
Shanabrough's deposition.
06/07/94 Oral depositions of Messick and Shanabrough (3.5 hours)
Rubash representing Messick
06/13/94 Rubash letter to McKenna requesting documents.
Messick, 98- 035 -C2
Page 9
06/24/94 Letter from Rubash to McKenna re asking for concurrence
to filing an amended complaint.
07/07/94 Rubash letter to York County Prothonotary enclosing filing
request for Entry to Property.
07/08/94 Motion to amend complaint filed by Rubash (14 pages)
07/11/94 Motion filed by Rubash to Request for Inspection and
Examination of Property
07/21/94 Rubash letter to McKenna advising hearing on Motion to
Amend Complaint postponed.
07/22/94 Rubash letter to Prothonotary enclosing Plaintiff's Response
to Supplemental Request for Production of Documents.
07/22/94 Plaintiff's Response to Supplemental Request for Production
of Documents.
Undated Letter from Rubash to McKenna requesting if 09/23/94 or
09/30/94 is agreeable for premises inspection.
10/27/94 Rubash letter to McKenna proposing inspection of
11/02/94.
11/09/94 Rubash letter to McKenna offering to settle claim.
11/28/94 Rubash letter responding to McKenna letter of 11/14/94
12/21/94 Rubash letter to McKenna enclosing Plaintiff's Response to
Supplemental Request for Documents
12/21/94 Plaintiff Response to Supplemental Request for Production
of Documents
01/10/95 Request for Admissions Directed to Defendant filed by
Rubash
03/08/95 Rubash letter to Prothonotary enclosing Plaintiff
Memorandum in Opposition to Defendant Motion for
Summary Judgment.
03/09/95 Plaintiff Memorandum filed by Rubash (25 pages).
06/13/95 Petition to Enter Case Upon One Judge Disposition list filed
by Timothy Finkelston
06/96 Amended Complaint filed by Finkelston
06/19/96 Finkelston letter to Prothonotary enclosing signature page
and certificate of service to Amended Complaint
08/30/96 Finkelston letter to McKenna re earlier conversation to grant
extension
Messick, 98- 035 -C2
Page 10
11/13/96
04/29/97
05/14/97
11/06/97
01/16/98
Date Calls
Plaintiff Reply to New Matter and Counterclaim filed by
Finkelston (10 pages)
Finkelston letter to Prothonotary enclosing Praecipe to List
Case for Pre -trial Conference
Finkelston letter to McKenna enclosing witness list pursuant
to Court Order.
Finkelston letter to McKenna re settlement discussion
Praecipe to List Case for Pre -trial Conference filed by
Finkelston.
45. In addition to the legal services outlined in Finding No. 57, attorneys from Steele
& Hoffman also engaged in telephone contacts on Messick's behalf with
attorneys representing Shanabrough.
11/17/93 McKenna to Rubash
02/02/94 From Steele & Hoffman
04/20/94 McKenna to Rubash
07/21/94 From Steele & Hoffman
07/02/96 To Steele & Hoffman
07/16/96 To Steele & Hoffman
07/16/96 From Steele & Hoffman
08/28/96 To Steele & Hoffman
08/28/96 From Steele & Hoffman
Time
12 minutes
12 minutes
6 minutes
6 minutes
6 minutes
6 minutes
6 minutes
6 minutes
6 minutes
46. Finkelston did not bill Messick for the November 6, 1997, letters to Edward
McKenna regarding possible settlement of the case or for the January 16, 1998,
filing of the Praecipe to List the Case for Pre -trial Conference. (See Finding No.
57).
47. Harry Messick regularly participated in the actions of the West Shore School
District Board of Directors to approve payments to Steele & Hoffman, and
Timothy Finkelston during the period 1993 through 1998.
a. Messick's participation came during the period when Steele & Hoffman
and Finkelston were providing legal services to him.
48. Following Steele's indictment in September 1996, allegations including Steele's
over - billing of the West Shore School District were discussed between Steele
and Members of the School Board.
a. Steele denied the allegations.
49. Messick in his official capacity as a School Board Director annually filed
Statements of Financial Interests forms.
50. Statements of Financial Interests on file with the West Shore School Board
include the following filings for Messick:
a. Calendar Year: 1997
Filed: 04/20/98 on SEC Form 1/98
Messick, 98- 035 -C2
Page 11
b. Calendar Year:
Filed:
c. Calendar Year:
Filed:
d. Calendar Year:
Filed:
e. Calendar Year:
Filed:
1996
04/12/97 on SEC Form 1/97
1995
04/11/96 on SEC Form 1/95
1994
02/25/95 on SEC Form 1/95
1993
04/18/94 on SEC Form 1/94
B. Stipulations
51. The value of the legal services rendered by the firm of Steele & Hoffman to
Harry and Shirley Messick, if not rendered under a written or oral contingent fee
agreement, would exceed $200 in value for each of the years 1993, 1994,
1995, and 1996. (Tr. at 15).
52. With regard to Paragraph 68 of the Investigative Complaint, it is stipulated that
on the following dates, amounts were approved for payment to the firms of
Steele & Hoffman, Steele & Finkelston, or Timothy Finkelston in the
approximate amounts indicated below, and that Respondent participated in the
votes as indicated below:
Meeting Date Billing Amt. Action Vote
1993
01/21/93 None Vote 7 -0
02/18/93 $ 8,732.48 Vote 9 -0
03/18/93 $ 6,005.47 Vote 9 -0
04/15/93 $ 6,654.05 Vote 7 -0
05/20/93 $ 4,384.24 Vote 7 -0
06/24/93 $11,831.31 Vote 8 -0
07/15/93 None Vote 7 -0
08/19/93 $ 5,738.89 Vote 7 -0
09/16/93 $ 9,724.23 Vote 8 -0
10/21/93 $25,760.38 Vote 9 -0
11/18/93 None Vote 7 -0
12/16/93 $14.679.40 Vote 7 -0
1994
1993 TOTAL $93,510.45
Meeting Date Billing Amt. Action Vote
01/20/94 $ 17,943.96 Vote 8 -0
02/17/94 $ 9,932.06 Absent 6 -0
03/17/94 $ 15,252.46 Vote 8 -0
04/21/94 $ 15,881.37 Vote 8 -0
05/19/94 $ 19,591.25 Vote 8 -0
06/16/94 $ 19,528.50 Vote 7 -0
07/27/94 $ 19,675.72 Vote 7 -0
08/18/94 $ 19,496.24 Vote 9 -0
09/15/94 $ 19,432.14 Vote 8 -0
10/20/94 $ 11,752.02 Vote 9 -0
11/17/94 $ 9,264.74 Absent 8 -0
12/15/94 $ 7,628.33 Vote 9 -0
Messick, 98- 035 -C2
Page 12
1994 TOTAL
Meeting Date
1995
01/19/95
02/16/95
03/16/95
04/20/95
05/18/95
06/15/95
07/20/95
08/17/95
09/21/95
10/19/95
11/16/95
12/21/95
1995 TOTAL
Meeting Date
1996
01/18/96
02/15/96
03/21/96
04/18/96
05/16/96
06/20/96
07/18/96
08/15/96
09/19/96
10/17/96
11/21/96
12/19/96
b.
Meeting Date
1997
01/16/97
02/20/97
03/20/97
04/17/97
05/15/97
06/19/97
07/17/97
08/21/97
09/18/97
10/16/97
11/20/97
12/18/97
1997 TOTAL
Meeting Date
1998
01/15/98
$185,378.79
Billing Amt.
$ 7,911.26
$ 10,346.93
$ 14,384.45
$ 15,325.92
$ 16,018.46
$ 15,873.16
$ 19,968.19
$ 15,217.96
$ 36,340.94
None
$ 23,304.97
$ 27.821.46
Action Vote
Vote 9 -0
Vote 5 -0
Vote 9 -0
Vote 9 -0
Vote 9 -0
Vote 6 -0
Vote 7 -0
Vote 8 -0
Absent 8 -0
Vote 9 -0
Vote 9 -0
Vote 8 -0 -1
$ 202,513.70
Billing Amt. Action Vote
None Vote
$ 14,306.81 Vote
$ 43,909.33 Vote
None Vote
$ 20,125.27 Vote
$ 21,254.04 Vote
$ 10,418.83 Vote
None Vote
$ 11,457.66 Vote
None Vote
$ 15,653.19 Vote
$ 37.04 Vote
Payments to Timothy Finkelston
Billing Amt. A ctio n Vote
$ 6,713.95 Vote
$ 7,818.15 Vote
$ 7,053.51 Vote
None Vote
$ 11,001.76 Vote
$ 11,922.98 Vote
$ 11,703.72 Vote
$ 8,536.50 Vote
$ 7,693.24 Vote
$ 9,807.70 Vote
$ 11,104.64 Vote
$ 6,809.68 Vote
$100,165.83
Billing Amt. Action
None Vote
8 -0 -1 (Schubert Abstained)
7 -0
8 -0 -1 (Schubert Abstained)
7 -0 -1 (Schubert Abstained)
9 -0
8 -0 -1 (Schubert Abstained)
8 -0
8 -1 (Schubert Abstained)
8 -1 (Schubert Abstained)
8 -0
8 -1 (Schubert Abstained)
8 -1 (Schubert Abstained)
6 -3 (Schubert Abstained)
8 -1 (Schubert Abstained)
6 -1 (Schubert Abstained)
9 -0
9 -1 (Schubert Abstained)
7 -1 (Schubert Abstained)
8 -0
6 -0
8 -1 (Schubert Abstained)
7 -2 (Schubert Abstained)
8 -0
9 -0
Vote
5 -1 (Schubert Abstained)
Messick, 98- 035 -C2
Page 13
02/19/98 $ 6,131.88 Vote 9 -0
$10,536.04
03/19/98 $ 6,652.00 Vote 9 -0
04/16/98 None Vote 6 -1 (Schubert Abstained)
05/21/98 $ 7,490.18 Vote 6 -1 (Schubert Abstained)
$ 7,637.48
06/18/98 $ 8,441.50 Vote 5 -1 (Schubert Abstained)
07/16/98 $ 9,841.63 Vote 8 -0
08/20/98 $ 7,097.60 Vote 7 -0 -1 (Schubert Abstained)
09/17/98 None Vote 8 -0 -1 (Schubert Abstained)
10/15/98 $ 5,468.90 Vote 8 -0
11/19/98 $ 7,327.00 Vote 7 -0 -1 (Schubert Abstained)
12/17/98 $ 2.584.00 Vote 7 -0 -1 (Schubert Abstained)
1998 TOTAL $79,208.21
(Tr. at 16).
a. By this stipulation, Respondent does not admit that any payment amount
is accurate to the penny, or that any payment was approved for work not
done or for overbillings by Steele & Hoffman, or that his actions were
influenced by the fact that beginning in early 1993, Steele & Hoffman
and later Timothy Finkelston represented him and his wife in a civil claim
under what is represented by the Respondent as being a contingent fee
agreement. (Tr. at 16).
b. As part of this stipulation, any indication that Finkelston received any
funds for legal work in 1993 or at any time before he was hired
individually by the West Shore School Board is denied, as a law firm, not
Finkelston personally, was paid for those services. (Tr. at 16).
C. Testimony
53. Tamara Reed ( "Reed ") is an employee of the Pennsylvania Department of the
Auditor General.
a. Reed has been employed by the Department of the Auditor General for
over 12 years.
b. On October 8, 1997, in the course of her duties for the Department of
the Auditor General, Reed interviewed the Respondent.
(1) Respondent's daughter, Heather Messick, was present and took
notes during the interview.
c. On October 9, 1997, which was the day following Reed's interview of
the Respondent, Reed typed a memorandum of the interview.
d. The Respondent told Reed that Steele's firm represented him in the case
of Messick v. Shanabrough.
(1) The Respondent told Reed that Steele had assigned the case to an
associate with the firm named Peter Rubash ( "Rubash ").
e. In speaking with Reed, the Respondent described the matter of Messick
v. Shanabrough as a "rental case." (Tr. at 43).
Messick, 98- 035 -C2
Page 14
(1) The Respondent told Reed that the objective of the case was to
get his property back.
f. The Respondent told Reed that he had not been billed by Steele or Steele
& Hoffman.
g. The Respondent told Reed that the case was on a contingency basis.
(1) The Respondent did not hesitate when giving this answer to Reed.
h. The Respondent told Reed that if Steele & Hoffman received a recovery
in the case, the firm would get 33 - 1 /3% of the recovery.
(1) Reed asked the Respondent what the 33 1 /3% would be of, given
that the matter was a rental case.
J•
(a) Reed testified that in response to this question, the
Respondent stated, "That's something we would have to
negotiate." (Tr. at 47; 71).
The Respondent told Reed that Timothy Finkelston ( "Finkelston ") was
representing him in the ongoing case against Shanabrough.
The Respondent told Reed that he had the same fee arrangement with
Finkelston as he had with Steele & Hoffman.
(1) The Respondent told Reed that he did not have any copies of the
fee agreement, but that Finkelston would have a copy.
k. The Respondent told Reed that he informed the Members of the Board of
the West Shore School District about the representation by Steele /Steele
& Hoffman in his case.
Reed testified that upon her inquiry, the Respondent told Reed that
Attorney Peter Rubash wrote a letter on behalf of the Respondent's
daughter in an insurance matter.
(1) Reed testified that she thought the Respondent indicated that this
letter related to his daughter Heather Messick.
(2) Reed testified that the Respondent indicated there was only one
letter.
(3) Reed testified that she believed that the Respondent told her that
the letter was sent to Florida.
(4) Reed testified that the Respondent told her that Attorney Rubash
could not charge him a fee for writing the letter because he
(Rubash) did not have a license to practice law in Florida.
(5) Reed stated that she did not recall speaking to Heather Messick,
who was present during the interview, about the matter of the
letter.
m. Reed talked to Finkelston in late 1997 or early 1998.
Messick, 98- 035 -C2
Page 15
(1) Finkelston told Reed that he was representing the Respondent at
that point in time.
n. ID -35 and ID -36 are photocopies of fee letters which Reed obtained from
Finkelston (see, Findings 66 and 67).
54. Boise P. Shanabrough ( "Shanabrough ") is an owner of " Shanny's Service
Center" located at 109 Old York Road in New Cumberland, Pennsylvania (see,
Finding 64 d).
a. In September, 1987, Shanabrough purchased the property that Shanny's
Service Center is located on from the Respondent and Respondent's wife,
Mrs. Shirley Messick (see, Finding 62).
b. ID -1 is a photocopy of the installment land agreement between
Shanabrough and the Messicks regarding the purchase of the property
now known as Shanny's Service Center (see, Finding 62).
(1) The agreement was signed by Shanabrough and his wife.
(2) Pursuant to the terms of the agreement, the Messicks held the
loan for the balance owed, such that Shanabrough made payments
to the Messicks.
c. ID -2 is a letter dated March 18, 1993 from the Messicks to Shanabrough
regarding issues that the Messicks had with regard to their agreement
with Shanabrough (see, Finding 63).
d. ID -3 through ID -34 inclusive consist of documents related to the case of
Messick v. Shanabrough.
e. ID -3 is a copy of a Complaint in Ejectment that was filed by the
Respondent and his wife through their attorneys, Steele & Hoffman, and
was served upon Shanabrough (see, Finding 64).
f. Messick v. Shanabrough was in litigation for approximately six years.
g.
The case of Messick v. Shanabrough was ultimately settled in 1999.
55. Julia C. Rhyner ( "Rhyner ") is a former secretary /Office Manager for Steele and
the law firm of Steele & Hoffman.
a. Rhyner worked for Steele at the firm of "Kirkpatrick & Lockhart," from
1983 until approximately 1988.
b. Rhyner worked for Steele & Hoffman from the time the firm formed in
approximately 1988 until 1996.
c. Rhyner testified that throughout her tenure with Steele & Hoffman, she
was closely associated with the billing process and was familiar with the
billings within the office as a whole.
d. The practice of the firm of Steele & Hoffman was primarily concentrated
in the area of school law.
Messick, 98- 035 -C2
Page 16
e. Rhyner testified that Steele & Hoffman handled personal matters for
people they knew.
f. Rhyner testified that legal services were provided by Steele & Hoffman
to various school board members.
g.
(1) Rhyner testified that some of these matters were handled as
favors, some were billed, and others were on a contingency fee
basis.
Steele & Hoffman represented the Respondent in a matter involving
Shanabrough.
(1) Rubash was the associate attorney who was assigned to handle
the matter.
(2) Finkelston was another associate at the firm who worked on this
case.
h. Rhyner did not know when Steele talked to the Respondent about taking
the case.
Rhyner testified that in early March, 1993, an associate at Steele &
Hoffman named Phil McCalister ( "McCalister ") discovered an overbilling
scheme by which additional time was being added onto the bills of
clients of Steele & Hoffman.
(1) McCalister confronted Rhyner about the overbilling.
(2) Rhyner testified that McCalister left the firm of Steele & Hoffman
on March 19, 1993.
(3) Rhyner testified that on April 15, 1993, Steele learned for the first
time that McCalister had a copy of a chart that had been used to
inflate the bills.
Rhyner testified that after allegations were brought by McCalister,
"papers were starting to be generated that didn't exist previously." (Tr.
at 138).
k. ID -35 is a contingency fee letter dated April 8, 1993, which Rhyner
prepared for the matter involving the Messicks and Shanabrough (see,
Finding 66).
(1) Rhyner was instructed to prepare the contingency fee letter.
(2) Rhyner testified that she was told to prepare a letter similar to
other contingency fee letters that were prepared by the firm.
(3) Rhyner prepared the contingency fee letter and presented it to
Steele for signature.
Rhyner gave conflicting testimony as to the date the contingency fee
letter at ID -35 was prepared.
Messick, 98- 035 -C2
Page 17
(1) On direct examination, Rhyner repeatedly testified that the
contingency fee letter was prepared after the litigation began. (Tr.
at 132; 135; 138; 147 -148).
(a) The litigation in Messick v. Shanabrough began on or about
August 2, 1993, when the Complaint in Ejectment (ID -3)
was filed in the York County Court of Common Pleas see,
Findings 27 and 64 b).
(2) Rhyner also testified that the contingency fee letter was "most
likely" prepared on April 8, 1993, which is the date that appears
on the letter. (Tr. at 133; 137).
(3) Following extensive questioning, Rhyner testified that when she
said that the contingency fee letter at ID -35 was prepared after
the "litigation" began, she did not mean that the contingency fee
letter was written after the institution of the lawsuit, but rather,
that it was written after Steele & Hoffman started doing work on
the case. (Tr. at 148 -149; 151; 154 -155).
(4) Rhyner testified that the Steele & Hoffman attorneys did keep time
sheets for their work on the Messick case. (Tr. at 168).
(5) Rhyner testified that the fee letter for the Messick matter was
drafted after the attorneys started putting time on their time
sheets and started working on the case. (Tr. at 149; 151; 154;
155).
(6) Rhyner testified that she didn't remember when the attorneys
started doing work, and when it started appearing on their time
sheets, but that she recalled that the fee letter was drafted
afterward. (Tr. at 151).
(7) Rhyner testified that the contingency fee letter was drafted after
a "lot of work" had been put into the case. (Tr. at 150).
(8) On cross - examination, when Respondent's Counsel sought to link
the preparation of the contingency fee letter to Steele's anxieties
over the allegations that were being made by McCalister,
Respondent testified: "I don't remember the time, the day that it
went out. All I remember is being told to draft it." (Tr. at 166-
167).
m. Rhyner testified that "many, many hours" were expended by the firm of
Steele & Hoffman in the matter involving Messick and Shanabrough. (Tr.
at 130).
(1) When asked whether the time expended by the firm in this matter
was more than ten hours annually, Rhyner responded that to her
recollection, it was.
(2) Rhyner testified that Finkelston expended more than three hours
on this case.
(3) Rhyner acknowledged that she did not know what was filed in the
Messick v. Shanabrough matter.
Messick, 98- 035 -C2
Page 18
n. Rhyner testified that Rubash complained to Rhyner about the amount of
time that he expended in the Messick matter.
(1) Rhyner testified that the nature of Rubash's complaint was that
in the firm's calculation of Rubash's billable and non - billable hours,
these hours were counted by the firm as non - billable.
o. As the attorneys submitted their time sheets for work on the Messick
case, the time was added to a running tally.
There were no alterations made to the time sheets for the Messick case.
The Messick case was not part of the monthly billing.
(1) Rhyner testified that she did not remember whether the reason the
Messick case was not part of the bills going out of the firm was
that it was a contingency fee case.
r. Rhyner testified that for contingency fee cases handled by Steele &
Hoffman, the clients were charged fees for the costs associated with
their cases.
P.
q.
(1) Rhyner did not remember whether the clients were billed for these
costs during the course of the litigation or at the conclusion of the
litigation.
(2) Rhyner testified that when the representation by Steele & Hoffman
ceased, for whatever reason, the costs associated with the matter
would be required to be paid by the client.
s. There were costs associated with the Messick v. Shanabrough case.
t. Rhyner testified that the firm of Steele & Hoffman paid for the costs in
the Messick v. Shanabrough case.
(1) Rhyner testified that to her knowledge, the Respondent did not
reimburse Steele & Hoffman for the costs expended in terms of
proceeding with the case.
u. Rhyner testified that to her knowledge, the Respondent was never billed
for any work performed by Steele & Hoffman.
v. Rhyner testified that during the course of her employment with Steele &
Hoffman, to her knowledge, the Respondent never requested an invoice
for hours spent on his case.
w. During Rhyner's tenure with Steele & Hoffman, indictments were filed
against both Rhyner and Steele charging overbilling within the firm of
Steele & Hoffman.
(1) Rhyner cooperated with the federal government and testified in the
matter of United States v. Steele.
(2) The charges against Rhyner were ultimately dismissed.
Messick, 98- 035 -C2
Page 19
x. In United States v. Steele, Rhyner testified that there was one month
where she did not have time to inflate the client's bills, but that she lied
to Steele and told him that she had done so.
56. Dr. Larry A. Sayre ( "Sayre ") is the Superintendent of Schools for the West
Shore School District.
a. Sayre testified to the Respondent's reputation for character as follows:
"He's a person of high integrity, high character." (Tr. at 196).
b. Sayre testified to the Respondent's reputation for honesty and
truthfulness as follows: "In my own experience and those that I've
known dealing with Harry, he's a tough businessman, but he's known as
being very honest and very forthright." (Tr. at 196).
c. In addition to its "regular" School Board meetings, the West Shore
School Board holds what are called "study sessions."
(1) The Board's study sessions consist of a public study session and
an executive study session.
d. The Board typically builds a consensus at its study sessions.
e. In November, 1990, the West Shore School Board hired Steele &
Hoffman as Labor Counsel for the West Shore School District.
f. From November 16, 1990 until May of 1993, Steele & Hoffman
continued to serve as Labor Counsel for the West Shore School District.
g. In 1993, the West Shore School Board consolidated the positions of
Labor Counsel and Solicitor into one Solicitor position.
h. Four applicants, including Steele /Steele & Hoffman, were interviewed in
1993 for the consolidated Solicitor position.
(1) All four of the interviews occurred on the same night.
(2) The Respondent was present during the interviews of the four
applicants.
(3) Sayre testified that in conducting the interviews, the Board used
scripted questions which he (Sayre) had prepared and distributed
to the Board Members in advance.
(4) Sayre testified that he did not remember the Respondent asking
any questions that were not part of the script.
Following the interviews, the Board arrived at a consensus that
Steele /Steele & Hoffman was the candidate that the Board wanted to
hire.
(1) Messick participated in the discussion (see, Finding 22a).
(2) The Board was not unanimous as to the selection of Steele /Steele
& Hoffman.
Messick, 98- 035 -C2
Page 20
J•
On May 20, 1993, Steele & Hoffman was appointed Solicitor to the
West Shore School District (see, Finding 23).
(1) The Respondent was not present when the actual vote was taken.
k. Sayre testified that as early as 1990 or 1991, the Respondent first
discussed with Sayre the Respondent's legal concerns involving a filling
station that the Respondent had owned, which was located across from
the Capital City Airport.
(1) Sayre testified that the discussion(s) with the Respondent
occurred prior to any deliberation by the Respondent on the hiring
of Steele /Steele & Hoffman as the Solicitor for the West Shore
School District.
Sayre testified that he was aware of the legal representation and
contingency agreement involving the Respondent and Steele, and later,
the Respondent and Finkelston, as to the filling station matter.
(1) Such appears to have been based upon statements made by
Steele, Finkelston, and the Respondent. (Tr. at 210; 214 -215;
235 -237).
(2) Sayre never reviewed any written contingency agreement between
the Respondent and Steele. (Tr. at 212).
m. The Respondent never formally announced at any public meeting of the
West Shore School Board that Steele /Steele & Hoffman or Finkelston
were providing representation to him.
(1) Sayre testified that the legal matter was discussed by Steele and
the Respondent in Sayre's presence and in the presence of others.
n. Although the Respondent did not participate in the May 20, 1993 vote
to appoint Steele /Steele & Hoffman as the Solicitor for the West Shore
School District, the Respondent did participate in subsequent votes of the
Board to reappoint Steele /Steele & Hoffman as Solicitor, as well as in
votes concerning Finkelston.
o. Sayre testified that the Respondent was very consistent in supporting the
consensus of the Board.
p. Sayre testified that he did not observe the Respondent protect Steele
from criticism.
q.
In June, 1994, Sayre was interviewed by postal authorities with regard
to alleged overbilling by Steele /Steele & Hoffman.
r. Sayre testified that both he and the West Shore School Board viewed the
allegations as to overbilling by Steele with skepticism.
s. Sayre testified that the Board indicated that until Steele was either
proved innocent or guilty they would maintain him as their Solicitor and
support him.
Messick, 98- 035 -C2
Page 21
t. Sayre testified that the West Shore School District administration
scrutinized the bills and reviewed auditor's reports and internal controls
that had been exercised throughout the time period in question.
(1) Sayre testified that the administration could detect no such
overbilling scheme as was alleged by the government.
(2) Sayre testified that in reviewing certain of the bills in question, it
was his conclusion that the School District had been underbilled
by Steele.
u. Sayre testified as a witness for the United States government in the
matter of United States v. Steele.
(1) Sayre testified that the indictment against Steele pertained to the
time period from May, 1992 through February, 1993, during
which it was alleged that a chart was utilized to overbill Steele's
clients.
v. Sayre testified that it was his understanding that Steele did not start
working for the Respondent until at or after the time that the overbilling
scheme ended.
w. Messick Exhibit H is a Victim Impact Statement which was submitted by
the West Shore School District to the federal government a little over one
month after Steele's conviction (see, Finding 76).
(1) Sayre testified that the Victim Impact Statement was prepared by
Sayre, based upon Board direction given at a mid - January study
session, and with suggestions of an individual Board Member who
was an attorney.
(2) Sayre testified that Messick Exhibit H is a fair record of the
response which the West Shore School Board had to the
allegations against Steele.
(3) No actual vote was taken by the Board to approve the Victim
Impact Statement.
(4) The Victim Impact Statement does not reference any specific
dollar figure as having been lost by the School District.
(a) At the time of the preparation of the Victim Impact
Statement, Sayre /the School District was aware that
according to the federal government, approximately $6,610
had been overbilled to the West Shore School District during
the time period under review.
x. Messick Exhibits I and J are letters prepared by Sayre which pertain to
efforts by the West Shore School Board to obtain restitution based upon
Steele's conviction for overbilling (see, Finding 77).
y. The firm of Steele & Hoffman dissolved in September of 1996.
(1) Steele and Finkelston split off from the rest of the firm.
Messick, 98- 035 -C2
Page 22
z. Following the dissolution of Steele & Hoffman, Steele continued to be the
Solicitor for the West Shore School District.
(1) Sayre testified that most of the work for the School District at that
point was performed by Finkelston but at the direction of Steele.
aa. Sayre testified that after Steele resigned, Finkelston was appointed the
interim Solicitor by the Board, based upon the Board's consensus that the
Board wanted continuity as to pending matters.
bb. Sayre described his relationship with Steele as "Friendly. A good, strong
professional relationship." (Tr. at 237).
(1) Sayre stated that he and Steele were friends, but never socialized.
cc. Sayre has accepted hospitality from Steele /Steele & Hoffman.
(1) Sayre, Sayre's son, and the Respondent attended an All -Star
baseball game in Pittsburgh with tickets provided by Steele &
Hoffman.
(2) Sayre attended a reception at the Rivers Club hosted by Steele &
Hoffman during a Pennsylvania School Boards Association (PSBA)
Convention.
(3) Sayre testified that he was at the Rivers Club on one other
occasion which may have been before or after the All -Star game.
dd. Sayre testified that his relationship with the Respondent was similar to
Sayre's relationship with Steele, and that they did not socialize.
ee. Sayre is a friend of Timothy Finkelston's.
57. Shirley E. Messick ( "Mrs. Messick ") is the wife of the Respondent.
a. The Messicks have been married for 21 years.
b. Mrs. Messick actively helps the Respondent manage the family finances.
c. Mrs. Messick pays all of the Messick family bills.
d. Mrs. Messick handles and keeps track of all of the financial paperwork for
the Messick family.
e. In the 1970's, prior to the Messicks' case against Shanabrough, the
Messicks were involved in a class- action lawsuit under a contingency fee
agreement.
(1) The Messicks were represented in that suit by Hepford,
Zimmerman & Swartz.
(2) Under the contingency fee agreement, the firm would get 33 -
of the recovery.
f. ID -1 is the installment land agreement between the Messicks and
Shanabrough (see, Finding 62).
Messick, 98- 035 -C2
Page 23
9.
(1) Under the agreement, Shanabrough was required to make monthly
payments to the Messicks.
In 1992, the Messicks had serious concerns about their agreement with
Shanabrough.
(1) The Messicks were informed that Shanabrough was not paying
sewer bills, taxes, or auto parts bills.
(2) Shanabrough was also no longer selling gas at the property.
(a) Mrs. Messick testified that the Messicks considered the
property to be worthless without the filling station business.
(b) The Messicks were concerned about their own liability as
the property owners of record if the gasoline tanks would
leak.
(3) Mrs. Messick testified that the property had also been damaged.
h. In the final 2 -3 months of 1992, the Messicks discussed obtaining
counsel to help them with the Shanabrough matter.
(1) The Respondent mentioned to Mrs. Messick the possibility of
asking Steele to look into the matter.
Mrs. Messick testified that it was probably after the holidays of 1992
that they found out that Steele & Hoffman was going to take their case
against Shanabrough.
Prior to receiving a fee agreement from Steele & Hoffman, Mrs. Messick
provided information regarding the Shanabrough matter to Steele &
Hoffman.
k. The letter at ID -2 was sent by the Messicks to Shanabrough after
Steele /Steele & Hoffman had determined that the Messicks had a case
against Shanabrough (see, Finding 63).
(1) The letter was drafted by Steele & Hoffman.
At the time that Mrs. Messick signed ID -2, it was her understanding that
Steele & Hoffman would be representing the Messicks under the same
arrangement that the Messicks had in their prior case with Hepford,
Zimmerman & Swartz.
(1) It was Mrs. Messick's understanding that Steele & Hoffman would
be paid when the case was over.
m. Mrs. Messick testified that the Messicks discussed the fee arrangement
with Steele & Hoffman.
(1) Mrs. Messick stated that Steele & Hoffman wasn't certain how
the property recovery would be handled but that the firm would
get 33 - - of any damages.
Messick, 98- 035 -C2
Page 24
n. Mrs. Messick testified that there was no agreement whereby the
Messicks would get free legal services from Steele & Hoffman.
o. ID -35 was the fee agreement between the Messicks and Steele &
Hoffman (see, Finding 66).
P. Mrs. Messick testified that ID -35 substantially reflects her understanding
of the agreement that the Messicks had with Steele & Hoffman.
q. Mrs. Messick recalled receiving ID -35 in mid - April, 1993, at the same
time the Messicks settled on a home that they had built.
r. Mrs. Messick testified that the Respondent signed one copy of the
agreement and returned it to Steele & Hoffman.
s. Mrs. Messick testified that the copy of the agreement at ID -35 looks like
the Messicks' copy of the agreement, which Mrs. Messick originally kept
in her file and subsequently provided to Timothy Finkelston.
t. When Steele & Hoffman dissolved, the Messicks did not pay Steele &
Hoffman.
(1) Steele & Hoffman never billed the Messicks for the services that
had been rendered.
(2) Mrs. Messick testified that no money was owed to Steele &
Hoffman at that point.
(a) Under the terms of ID -35, Steele & Hoffman was to be paid
at the end of the case.
(b) Mrs. Messick testified that per the agreement, no money
was owed unless Steele and Hoffman obtained a recovery
for the Messicks.
(c) Mrs. Messick testified that the Messicks did not terminate
the authority of Steele & Hoffman or the agreement
between the Messicks and Steele & Hoffman.
(3) Mrs. Messick testified that Steele & Hoffman "just disappeared,"
and "hadn't done the work." (Tr. at 293).
(4) Mrs. Messick testified that as a result of the problems at Steele &
Hoffman, the Messicks were left "just hanging" and had to get
another attorney. (Tr. at 293).
u. The Messicks subsequently hired Timothy Finkelston to represent them
in the matter against Shanabrough.
(1) The Messicks believed that Finkelston would be familiar with their
ongoing case.
v. ID -36 is the contingency fee agreement by which the Messicks hired
Finkelston.
Messick, 98- 035 -C2
Page 25
(1) Mrs. Messick testified that per ID -36, she expected to pay
Finkelston under the same terms as contained in the Messicks'
agreement with Steele & Hoffman (ID -35).
w. By letter dated September 9, 1997, Finkelston announced his intention
to withdraw as Counsel for the Messicks (see, Finding 39; ID -48 /Messick
Exhibit K ).
x. There is a span of approximately six months between the date of the
September 9, 1997 letter by which Finkelston notified the Messicks of
his intention to withdraw as their Counsel, and the date of Finkelston's
invoice (March 31, 1998) for services rendered (see, ID -48 through ID-
50; Messick Exhibits K and L).
(1) Mrs. Messick wrote and signed check No. 1425 in payment of the
invoice (see, Messick Exhibit L, third page; Finding 78).
(a) The check was dated March 10, 1998.
(2) The handwritten notation on the invoice, "Ck #1425 3- 25 -98,"
was placed upon the invoice by Mrs. Messick.
y. When asked why there was a six month span between the date of
Finkelston's September 9, 1997 letter indicating his intention to
withdraw, and the March 10, 1998 date on the check, Mrs. Messick
stated, "Well, that's when he billed us." (Tr. at 311).
z. The date on the Messick check (March 10, 1998) was prior to the date
of the invoice that it was used to pay (March 31, 1998).
(1) Mrs. Messick testified that she probably called Finkelston and
asked what they owed him, because they hadn't received a bill.
(2) Mrs. Messick testified that she made out the check, waited for the
bill to come, and then sent the check.
(3) Mrs. Messick testified that the Messicks' new attorney, Matthew
Owens, refused to be hired until the Messicks paid their prior
attorney.
aa. The Messicks and Finkelston signed a "Mutual Release" (ID -47; Messick
Exhibit L, final page).
bb. Mrs. Messick was not pleased with the services rendered by Finkelston.
(1) Mrs. Messick testified that the case was not proceeding quickly
enough.
(2) In addition to the reasons cited by Finkelston for withdrawing, the
Messicks determined that it would be best to dissolve the
lawyer /client relationship with Finkelston.
(3) Finkelston billed the Messicks and they paid him.
cc. Mrs. Messick was not pleased with the services rendered by Rubash of
Steele & Hoffman.
Messick, 98- 035 -C2
Page 26
(1) In December of 1998, the Messicks were informed by a York
County judge that their lawsuit had been filed incorrectly by Steele
& Hoffman.
(2) Mrs. Messick testified that she felt that error cost the Messicks
their case.
(3) The Messicks ultimately settled the case against Shanabrough.
dd Mrs. Messick testified that the legal representation from Steele &
Hoffman and from Finkelston was not a gift.
58. Timothy J. Finkelston ( "Finkelston ") is an attorney who currently resides in
Maryland.
a. Finkelston was formerly an associate attorney at Steele & Hoffman.
(1) Finkelston commenced working for Steele & Hoffman in March of
1995.
b. When the partnership of Steele & Hoffman dissolved, Steele and
Finkelston began a partnership.
(1) The partnership of Steele and Finkelston existed for approximately
2 months, at the end of 1996.
c. As of January 1, 1997, Finkelston had his own practice.
d. In 1996 and 1997, Finkelston did legal work for the West Shore School
District.
e. At the end of 1996, Finkelston was doing all of the legal work of the
West Shore School District except for a few tax matters handled by
Hoffman.
f. Finkelston worked on the Messicks' case while he was employed by
Steele & Hoffman.
g. Costs were expended by Steele & Hoffman in the Messick matter.
h. Finkelston testified that the Messicks were seeking to remove
Shanabrough from the property and to recoup monetary damages in the
form of rents that would be due and owing.
(1) Finkelston testified that he did not recall whether there was any
other measure of damages reflected in the file.
i. As an associate at Steele & Hoffman, Finkelston recorded his billable
hours but had no role with regard to the actual collection of the bills or
how the bills were sent out from the firm.
Other than with regard to the recording of his own time, Finkelston had
no information whatsoever about the billing practices of Steele &
Hoffman.
j•
Messick, 98- 035 -C2
Page 27
(1) Finkelston testified that he thought that Steele & Hoffman kept its
billing records separately from the files.
k. Finkelston testified that when he worked on the Messicks' case for
Steele & Hoffman, he recorded his time spent on the Messicks' case as
he would for any other client.
I. Finkelston testified that at no time was he instructed that there was not
to be a billing of the Messicks for the work done by Steele & Hoffman.
m. Finkelston testified that at no time during his work for the Messicks did
he ever hear the Respondent or Steele say, suggest, or imply that the
Messicks were not expected to pay for the services rendered by Steele
& Hoffman.
n. Finkelston testified that he could not remember when he found out that
the Messicks' case was being handled by Steele & Hoffman under a
contingency fee arrangement.
(1) Finkelston knew of the contingency fee arrangement between
Steele & Hoffman and the Messicks before Finkelston took over
representation of the Messicks as a sole practitioner.
o. When Steele & Hoffman broke up, the Messicks' case went with Steele.
(1) At that time, Finkelston did all of the work on the Messicks' case.
p. When Steele was no longer in a position to represent the Messicks,
Finkelston approached the Respondent to determine whether the
Respondent wanted Finkelston to continue representation in the
Messicks' personal matter.
(1) The Respondent indicated that he would like Finkelston to handle
the matter.
q.
(2) Finkelston asked the Respondent whether he would like to
continue having the matter handled on a contingency fee basis.
ID -36 is the contingency fee agreement between Finkelston and the
Messicks.
(1) Finkelston testified that ID -36 references ID -35 when it speaks of
the arrangement that the Messicks had with Steele & Hoffman.
r. ID -49 is an invoice for professional services that Finkelston submitted to
the Messicks following his decision to terminate his services to them.
(1) Finkelston testified that the attorney /client relationship between
himself and the Messicks had, for the most part, ended at the end
of 1997, but that such was not formalized until 1998.
(2) Finkelston testified that he did not recall the reason for the delay
in billing, nor did he recall when he filed the motion with the York
County court to withdraw as Counsel of record for the Messicks.
M 98- 035 -C2
Page 28
s. Finkelston did not include on the invoice (ID -49) two documents which
he had prepared, specifically, a praecipe to list the matter for trial, and a
two - sentence letter.
(1) Finkelston testified that he did not know why those items were
not listed, and that it was not the result of a conscious decision.
(2) Finkelston testified that he thought that the amount which he
billed the Messicks ($340) was reasonable for the services
rendered.
(3) Finkelston testified that the Respondent's official actions as a
West Shore School Board Member to retain Steele & Hoffman or
Finkelston or to pay fees to same did not cause Finkelston to
reduce his bill to the Messicks in any way.
t. Finkelston and the Messicks signed a Mutual Release (ID -47; Messick
Exhibit L, fourth page).
(1) Finkelston testified that the date of the Mutual Release would be
January 29, 1998.
u. The monies which Finkelston collected from the Messicks were for work
that he had done as a sole practitioner.
v. Finkelston testified that he did not attempt to bill for work that was done
at Steele & Hoffman and that he did not have the right to do so.
w. Finkelston testified that he did not bill the Messicks for time while he was
in partnership with Steele, and that he did not recall any work being done
on the case during that time period.
x. Finkelston testified that when Steele & Hoffman broke up, the file for the
Messick matter was in Finkelston's possession and he did not lose access
to it.
(1) Finkelston testified that he had control of the file until the time
new counsel took over the case.
(2) When asked whether the Respondent also provided Finkelston with
documents to be put in the file, Finkelston responded, "Well, I
remember him providing an amortization schedule. I'm sure there
were." (Tr. at 368).
y. Finkelston testified that ID -35 and ID -36 appeared to be copies that he
made for Special Investigator Tamara Reed, from the Steele & Hoffman
file.
(1) Finkelston recognized certain lines on the Exhibits as having been
a type of marking made by his equipment.
(2) Finkelston testified that he did not alter the documents which he
provided to Reed.
(3) The copy of the fee agreement which is in evidence as ID -35 does
not bear the signature of the Respondent.
Messick, 98- 035 -C2
Page 29
z. Finkelston testified that to his knowledge, there was never a time when
free legal services were being provided to the Messicks.
aa. Finkelston testified that to his knowledge, under the terms of the
contingency fee agreement at ID -35, the Respondent never had an
obligation to pay Steele & Hoffman because the Respondent did not
terminate the relationship.
bb. Finkelston testified to the Respondent's reputation for character as
"unblemished." (Tr. at 331).
59. Harry L. Messick ( "Respondent ") served on the West Shore School Board for 18
years.
a. The Respondent was appointed to the West Shore School Board in March
of 1981.
(1) The Respondent served as Vice President of the Board for 4 years
and as President of the Board for six years.
b. The Respondent has also served on the Boards of the Cumberland -Perry
Vocational - Technical School and the Harrisburg Area Community College,
and as President of the Board of the Capital Area Intermediate Unit.
c. Before the Respondent retired, Mrs. Messick took care of the books,
billings, payment of bills, and the like for the Messicks' business.
(1) Mrs. Messick continues to participate in the tracking and handling
of financial matters for the Messick household.
d. The Respondent told Steele about the problems he was having with
Shanabrough and asked Steele whether the Messicks would have a case
against Shanabrough.
(1) Steele told the Respondent that he would research the matter and
see whether the Messicks had a case or not.
e. Messick Exhibit M is a memorandum dated February 10, 1993 which
reflects that Steele & Hoffman conducted research as to the Messicks'
problems involving Shanabrough (see, Finding 79).
(1) The Respondent testified that Messick Exhibit M came from the
Messicks' own files.
f. The Respondent testified that when he asked Steele & Hoffman to handle
the case against Shanabrough, he wanted to get the property back and
he wanted damages.
The Respondent testified that in 1990, Shanabrough stopped selling
gasoline at the property, in violation of their agreement (ID -1).
(1) The Respondent testified that if he got the property back without
an ongoing business of selling gasoline, the property would not be
worth as much.
9.
Messick, 98- 035 -C2
Page 30
(2) The Respondent testified that he was concerned about the
maintenance /condition of the gasoline tanks.
h. The Respondent testified that Shanabrough hadn't paid the sewer bills or
the taxes as required by the agreement.
(1) The Respondent testified that the sewer authority was coming
after him for collection.
(2) The Respondent was notified by the tax collector that since the
Messicks still held the deed, they would be held responsible for the
unpaid taxes.
The Respondent testified that the property was in physical disrepair.
(1) The Respondent testified that the Township contacted him about
cleaning up the property.
The Respondent testified that at the time he asked Steele & Hoffman to
take the case, he estimated that the cost of putting the station back in
operation would be around $200,000.
k. The Respondent testified that he discussed the fee arrangements with
Steele.
(1) The Respondent testified that this discussion occurred sometime
around "February," and "right after the February memorandum."
(Tr. at 393 -394; 397).
(2) The Respondent testified that his discussion with Steele was that
the representation would be under a contingency fee agreement
such as the Messicks had in prior litigation (with a different firm).
The Respondent testified that at the time Rubash prepared ID -2, the
Messicks had an oral agreement with Steele & Hoffman for
representation in the matter against Shanabrough on a contingency fee
basis.
m. The Respondent testified that he first saw the written contingency fee
agreement which is in evidence at ID -35 on or about "April 12," a
"couple of days after it was mailed from Pittsburgh." (Tr. at 394).
n. The Respondent testified that he did sign the contingency fee agreement
with Steele & Hoffman (ID -35).
(1) agreement, he mailed it back to the Pittsburgh office contingency
Steele fee
&
Hoffman.
(2) The Respondent testified that he did not see that particular
document which he had signed again.
(3) The Respondent testified that the copy of ID -35 which was in his
own files did not bear his signature.
J.
Messick, 98- 035 -C2
Page 31
q.
(a) The Respondent stated that he never signs his own copies.
(4) The Respondent testified that if the copy of ID -35 which is in
evidence had come from the file of Steele & Hoffman, it would
have had his signature on it.
o. The Respondent did not disclose Steele's representation of the Messicks
at any public meeting.
(1) The Respondent testified that Steele's representation of the
Messicks was discussed in executive sessions of the Board.
p. The Respondent testified that in May, 1993 when Steele & Hoffman was
competing for the consolidated Solicitor position, Steele & Hoffman was
representing the Messicks on a contingency fee basis in their matter
against Shanabrough.
The Respondent testified that there was no agreement, express or
implied, that the agreement to represent the Messicks in the case against
Shanabrough would give Steele & Hoffman any benefit or advantage in
competing for the position as Solicitor for the West Shore School District.
r. The Respondent did not participate in the May 20, 1993 meeting of the
West Shore School Board at which Steele & Hoffman was first hired as
the District's Solicitor (see, Finding 23).
(1) Prior to the meeting, the Respondent was aware that there were
some Board Members who did not favor hiring Steele & Hoffman
for the consolidated Solicitor position.
s. The Respondent testified that his votes to pay bills of Steele & Hoffman
were not influenced in any way by the fact that he was also represented
by Steele & Hoffman.
t. The Respondent testified that he did not expect free legal services from
Steele & Hoffman and that he never agreed to such.
u. The Respondent testified that he never heard Steele say that he would
provide the Respondent with free legal services.
v. The Respondent testified that he expected to pay Steele & Hoffman for
their legal services on the Messicks' case under the contingency fee
basis.
w. The Respondent testified that it was his view that Steele & Hoffman
defaulted on their contract with the Messicks.
x. The Respondent testified that when Steele & Hoffman defaulted on the
agreement, he had no lawyer, and he hired Finkelston.
The Respondent testified that after Steele & Hoffman had dissolved and
Finkelston got the files, there were some documents that Finkelston did
not have in the file.
y•
(1) The Respondent testified that the Messicks took their files from
home and gave them to Finkelston.
Messick, 98- 035 -C2
Page 32
z. The Respondent testified that he never changed the way he evaluated or
voted upon the retention of Finkelston or the payment of Finkelston's
fees because of Finkelston's relationship with the Messicks on their
private case.
aa. The Respondent testified that he thought that in the latter part of 1997,
he verbally told Finkelston that there wasn't much being done on the
Messicks' case and that "either we have to do something or maybe we
should sever our relationship and I look for another attorney." (Tr. at
401; 416).
bb. The Respondent testified that following Finkelston's representation of the
Messicks, the file that Finkelston had did not immediately come to the
Messicks but rather, went to someone else.
cc. The Respondent testified that Steele & Hoffman had made errors during
the time that it handled the Messicks' case against Shanabrough.
(1) Respondent testified that the complaint which was originally filed
did not name Mrs. Shanabrough as a party.
(2) Respondent testified that the case was thrown out for a filing error
that had been made by Rubash.
dd. The Respondent never paid Steele & Hoffman with regard to the
Messicks' case against Shanabrough.
ee. The Respondent never paid Steele & Hoffman for costs or expenses that
the firm had advanced on behalf of the Messicks in their case against
Shanabrough.
ff. The Respondent testified that he did not pay Steele & Hoffman as to the
matter involving Shanabrough because: Steele & Hoffman failed to name
Mrs. Shanabrough as a party; the case dragged on after Steele got in
trouble; the firm defaulted on its agreement and left the Messicks with
no attorney; and the Messicks' case was thrown out because of an error
that Steele & Hoffman had made.
gg. The Respondent stated that even though he did not pay Steele &
Hoffman, he did not get "free" legal services because he had a
contingency fee contract with Steele & Hoffman.
hh. The Messicks ultimately settled with Shanabrough.
ii. The Respondent has received hospitality from Steele & Hoffman.
(1) The Respondent attended a baseball game with tickets provided by
Steele & Hoffman.
JJ•
(2) The Respondent attended a buffet style luncheon at the Rivers
Club at the expense of Steele & Hoffman.
In July, 1994, Steele & Hoffman represented the Messicks in sending the
letter at ID -53 on behalf of the Messicks (see, Finding 73).
(1) The letter is unrelated to the Shanabrough matter.
Messick, 98- 035 -C2
Page 34
k. Gokay testified that even though she was a law clerk, she told Steele
that she did not want to practice personal injury law, and that she would
like to stay in the school law business.
(1) Gokay testified that she asked Steele to be excused from a great
deal of that type of practice.
Gokay did not recall being directly involved in the Messicks' private case
involving Shanabrough.
(1) It was Gokay's understanding that the Messicks' case was a
contingency fee case, that the attorneys who were working on it
were to keep records, and that ultimately, there would be a
settlement and there would be a fee attached to it.
m. Gokay testified that Steele & Hoffman expected to collect its contingent
fees.
n. Steele & Hoffman held general firm meetings at which the status of the
contingency fee cases would be discussed.
(1) Gokay testified that for all of those cases, the expectation of the
firm was that ultimately, the firm would see some sort of recovery
and some sort of payment.
o. Gokay testified that when it became known at Steele & Hoffman that
Attorney McCalister had taken some records to the Disciplinary Board,
the entire firm was "in a turmoil." (Tr. at 435).
p. Gokay testifed, ". . . I recall ultimately all of our records were to be
turned over to [Steele's] attorney." (Tr. at 435).
61. Charles E. Steele ( "Steele ") was a partner in the former law firm of Steele &
Hoffman (see, Finding 13 a).
a. Steele & Hoffman represented the Respondent and Mrs. Messick in their
case involving Shanabrough.
b. Steele testified before this Commission in this case on February 1, 2000.
c. Steele testified on February 1, 2000 that he did not have any "present
recollection" as to whether the date on ID -35, specifically, April 8, 1993,
was an accurate date. (Tr. at 453).
(11 Steele testified:
(Tr. at 454).
I don't have a present recollection of it being
backdated. It's very possible it wasn't backdated.
I didn't date it. Julia Rhyner dated it. She would
probably have a better recollection of when the date
was.
d. Steele had been interviewed by David P. Wingert ( "Wingert "), Assistant
Counsel for the Investigative Division, within a few weeks prior to
Messick, 98- 035 -C2
Page 35
(1) During that interview, Wingert and Steele discussed the document
(contingency fee agreement) which is in evidence as ID -35. (Tr.
at 452 -453).
e. During his testimony on February 1, 2000, Steele was questioned as to
whether he had not indicated to Wingert just a few weeks earlier that the
contingency fee letter at ID -35 had been drafted in 1994, not in 1993.
(Tr. at 453).
(1) Steele testified that he indicated to Wingert that the letter was
drafted in response to Steele's concern about the Disciplinary
Board investigating his law firm, and his wanting to have "all the
letters" in place. (Tr. at 454).
(2) Steele testified that he told Wingert that the contingent fee letter
could have been drafted in 1994 because it was in 1994 that
Steele was apprised for the first time that a complaint had been
filed against him with the Disciplinary Board. (Tr. at 454 -455).
(3) Steele testified that following the Wingert - Steele interview, he
(Steele) reviewed the transcripts of his trial and discovered that in
1993 as well, McCalister made claims prior to departing from the
firm on March 19, 1993 that he ( McCalister) was going to the
Disciplinary Board. (Tr. at 454).
(a) Steele testified that he did not remember this fact at the
time of his interview with Wingert. (Tr. at 454).
(4) Steele testified that having reviewed his trial transcripts, there
were two events dealing with the Disciplinary Board - -one in 1993
and one in 1994- -and that the contingency fee letter could have
been prepared in 1993 or 1994. (Tr. at 454).
f. On July 7, 1998, Steele was interviewed by Rodney George ( "George "),
a Special Investigator for the State Ethics Commission. (Tr. at 458).
At the hearing before this Commission on February 1, 2000, Steele was
questioned with regard to his indication to George that the contingency
letter at ID -35 was "drafted later" because of Steele's concerns about
having "wound up in the paper" and the "government" investigating
Steele. (Tr. at 459).
(1) Steele testified that the interview was done without much notice
to him and without notes or any papers for reference. (Tr. at
460).
g.
Steele's testimony before this Commission on February 1, 2000. (Tr. at
452 -453).
(2) Steele conceded that the contingency letter at ID -35 was prepared
after the formal representation of the Respondent was undertaken.
(Tr. at 460).
(3) Steele did not concede to either 1993 or 1994 as being the
accurate date of the preparation of the contingency fee letter. (Tr.
at 460).
Messick, 98- 035 -C2
Page 36
(4) Steele testified that he considers the Disciplinary Board to be an
arm of the government. (Tr. at 460).
(5) phraseology for him to use. phraseology
at 460 -461 government" was odd
(a) Steele testified that he has always referred to the federal
government as either "the federal government" or "the
postal inspectors." (Tr. at 461).
(b) Steele acknowledged that he had referred to the Disciplinary
Board during interviews. (Tr. at 461).
h. On cross - examination, Steele testified:
My testimony very precisely is that this letter was
drafted when I asked Miss Rhyner to check all files, make
sure fee agreements were in place, and I was prompted to
ask her to do that based upon my concern of the
disciplinary board investigating my office.
There were two events in my life that rose the
specter of the disciplinary board. One that unfortunately I
had forgotten when I was interviewed by Mr. Wingert, that
was when Mr. McCalister was going around each and every
attorney in my office -- and they could be interviewed to
corroborate this -- in saying that he had billing concerns and
he was going to turn it over to the disciplinary board, and
that was related back to me. The other was in August of
'94, when I received formal notice that a complaint had
been issued against me by the disciplinary board.
Given that my concern in writing this letter was I
simply telephoned Julia and said, "Make sure we have fee
agreements in place for all our cases," that could very well
have happened in '93 when I first was aware that Mr.
McCalister was threatening a disciplinary complaint, or it
could have occurred in August of '94, when I received
formal notice.
(Tr. at 462 -463).
i. Steele stated that he would hope that it would be understandable that he
would repress a lot of the painful memories of what happened to him,
that they were not on the forefront of his mind when he was talking to
Wingert, and that he apologized. (Tr. at 463).
Steele testified that he thought that the Respondent had signed a copy
of the contingency fee letter that is ID -35, but that he would not have
monitored or superintended whether the Respondent did so. (Tr. at 464) .
k. Steele testified that ID -35 accurately reflects his understanding of the fee
agreement that he had with the Messicks for the representation by Steele
& Hoffman for their private matter. (Tr. at 464 -465).
1•
Messick, 98- 035 -C2
Page 37
Steele testified that he told Wingert that "whether the letter was
backdated or not," he specifically recalled discussing with the Messicks
how they would proceed. (Tr. at 465).
(1) Steele testified, inter alia, that he told the Messicks that they
would have to accept the growing pains of working with a new
attorney in his office, that Steele wouldn't know the value of the
new attorney's services until the end, that they could set up a
contingency fee agreement because it would probably be a money
recovery anyway, and that the firm would want to share in those
proceeds. (Tr. at 465)
(2) Steele testified that he told the Messicks that they would set the
"outer marker" at 33 - %, that they would evaluate the quality of
the legal services and the effort put in to accomplish the amount
of money recovered, and that they would negotiate at the end
whether it would be less. (Tr. at 465 -466).
D. Documents
62. ID -1 is a photocopy of the September, 1987 installment land agreement
between Shanabrough and the Messicks regarding the purchase of the property
now known as Shanny's Service Center (see, Findings 54 b and 57 f).
a. The agreement was signed on September 4, 1987 by Harry L. Messick
and Shirley E. Messick who are identified as the "Vendor."
b. The agreement was signed on September 4, 1987 by both Boise P.
Shanabrough and Judy Marie Shanabrough, his wife, although only Boise
P. Shanabrough is identified as the "Vendee."
63. ID -2 is a letter dated March 18, 1993, from the Messicks to Shanabrough.
a. The letter gave Notice to Shanabrough that the Messicks were
terminating their Agreement due to material defaults and breaches of the
Agreement.
b. The letter directs that all correspondence or inquiries regarding the matter
be directed to "legal counsel," identified as the law office of Steele &
Hoffman, and particularly Rubash.
64. ID -3 is a copy of a Complaint in Ejectment that was filed by Steele & Hoffman
on behalf of the Respondent and his wife, as Plaintiffs, against Defendant Boise
P. Shanabrough (see, Finding 54 e).
a. The Complaint was signed by Rubash and dated July 29, 1993.
b. The Complaint was filed in the Court of Common Pleas of York County,
Pennsylvania on or about August 2, 1993.
c. The Complaint consisted of three Counts.
d. Count I of the Complaint averred that Shanabrough failed to comply with
the terms of the Land Sale Agreement between Shanabrough and the
Messicks.
Messick, 98- 035 -C2
Page 38
(1) Count I of the Complaint sought possession of the property at 109
Old York Road, New Cumberland, York County, Pennsylvania, and
a judgment ejecting Shanabrough from the said property.
e. Count II of the Complaint averred that Shanabrough failed to maintain
and repair the property and to pay all related property taxes.
(1) Count II of the Complaint sought judgment in favor of the
Messicks and against Shanabrough for money damages
attributable to non - payment of property taxes, failure to maintain
and repair the parcel, and wrongful deprivation of the use and
enjoyment of the parcel.
f. Count III of the Complaint claimed damages for Shanabrough's alleged
unlawful detention of the parcel and failure to pay monthly installments.
(1) In Count III of the Complaint, the Messicks sought judgment
against Shanabrough for unpaid monthly installments in an amount
that was to be determined.
65. ID -15 /Messick Exhibit A is a letter dated November 9, 1994 from Rubash
(Counsel for the Messicks) to McKenna (Counsel for Shanabrough) offering to
settle Messick v. Shanabrough for $200,000.
66. ID -35 is a fee letter dated April 8, 1993 from Charles E. Steele to the
Respondent (see, Finding 55 k).
a. The letter is on "Steele & Hoffman" letterhead.
b. The letter bears the notation, "Re: Land Sale Contract /Shanabrough."
c. The letter states:
Dear Harry:
Thank you for consulting with Steele & Hoffman
regarding the above - referenced matter. This letter is to
confirm our agreement for representation.
We have agreed that Steele & Hoffman will be
compensated for attorney's fees as follow [sic]: In the event
of the recovery of any sums of money, by way of
settlement or verdict, this office, in consideration of the
professional services to be rendered to you in the
investigation, institution and general conduct of the case,
shall be entitled to receive as counsel fees 33 - /3% of any
recovery by way of verdict, settlement or otherwise plus
reimbursement of all costs expended by Steele & Hoffman
incident to the investigation, institution, prosecution and
trial, if any, of the case.
Should it be necessary to try this case more than
once or represent you in an appeal of this matter after trial,
this office will charge additional amounts for those fees.
Messick, 98- 035 -C2
Page 39
Should no sums be recovered as a result of our
efforts, this office will have no claim against you for any fee
for services rendered but will be entitled to reimbursement
for expenses incurred. If you decide to terminate this
authority before any settlement is offered or any award is
obtained, this Firm shall be entitled to reasonable
compensation on our standard hourly rate of $100 for all
work done on the case up to that point.
After you have reviewed this letter, please sign the
original and return it to me in the enclosed envelope. Please
retain the copy for your file.
Should you have any questions regarding this letter,
please do not hesitate to contact me.
d. The letter is signed with the name, "Charles E. Steele."
e. At the bottom of the letter is the designation:
ACCEPTED AND APPROVED:
Harry L. Messick
Date:
(1) On the copy of this document which is in evidence, the above
designation is not signed or dated.
67. ID -36 is a fee letter dated January 27, 1997 from Timothy J. Finkelston to the
Respondent (see, Finding 58 q).
a. The letter is on "Finkelston Law Offices" letterhead.
b. The letter bears the notation, "Re: Legal Representation: Messick v.
Shanabrough."
c. The letter states:
Dear Harry:
The purpose of this correspondence is to confirm our
earlier conversation during which you indicated your desire
for this office to continue to represent you in the above -
referenced matter as per your earlier contingent fee
arrangement with previous counsel, Steele & Hoffman, as
set forth in the fee agreement letter of April 8, 1993. A
copy of that letter is attached hereto for you [sic] review.
Please review these letters and sign the original of
this correspondence and return it to me in the enclosed
envelope. Please sign and retain the copy for your files.
d. The letter is signed with the name, "Timothy J. Finkelston."
Messick, 98- 035 -C2
Page 40
e. Underneath the signature of the name, "Timothy J. Finkelston," is the
signature of the name "Harry L. Messick."
68. ID -41 through ID -45 inclusive consist of the Respondent's Statements of
Financial Interests which are enumerated at Finding 50.
a. None of these Statements of Financial Interests list any free legal
services from Steele /Steele & Hoffman or from Finkelston.
69. ID -46 consists of the minutes of the West Shore School District which relate to:
the appointment of the firm Steele & Hoffman as Labor Counsel on November
15, 1990; the appointment and reappointment of Steele /Steele & Hoffman as
Solicitor on May 20, 1993, May 19, 1994, May 18, 1995, and May 16, 1996;
the Board's acceptance of the resignation of Steele and appointment of Timothy
J. Finkelston as Solicitor /Labor Counsel on January 16, 1997; and the Board's
reappointment of Timothy J. Finkelston as Solicitor /Labor Counsel on May 15,
1997 and May 21, 1998.
70. ID -47 is a copy of the January 29 (year not stated) Mutual Release of the
Messicks and Finkelston which is referenced at Finding 40.
71. ID -48 /Messick Exhibit K is a copy of the September 9, 1997 letter from
Finkelston to the Respondent which is referenced at Finding 39, by which
Finkelston announced his intention to withdraw as Counsel for the Messicks.
72. ID -49 through ID -50 consists of a copy of the March 31, 1998 invoice from
Finkelston to the Respondent which is referenced at Finding 41.
a. ID -49 bears the following handwritten notation:
Ck# 1425
3 -25 -98
b. ID -50 indicates that a total of 3.4 hours was expended at the rate of
$100 per hour, for a total of $340.00.
73. ID -53 is a one -page letter dated July 5, 1994 from Steele to Stephen R.
Johansen.
a. The letter bears the designation, "Re: Purchase of Real Property /Lot 4,
Plan Book LL, page 696."
b. The letter indicates that Steele was the attorney representing Harry L.
and Shirley E. Messick.
c. The letter apprised Johansen that he was in default under an Agreement
for Sale of Real Estate with the Messicks, that the Messicks were
declaring the Agreement to be terminated, and that the Messicks were
retaining the property and his initial payment as liquidated damages.
74. Messick Exhibit B consists of portions of Volume 3 of the transcript of United
State v. Steele, docketed in the United States Court of Appeals for the Third
Circuit at Docket No. 97 -3191.
Messick, 98- 035 -C2
Page 41
75. Messick Exhibit E is a copy of the May 14, 1993 letter of resignation of the
Solicitor of the West Shore School District, which resignation was effective
June 30, 1993.
a. The letter indicates that the Solicitor preferred not to be considered for
the consolidated positions of Labor Counsel and Solicitor because he did
not wish to devote a significant amount of his time to labor matters.
76. Messick Exhibit H is a Victim Impact Statement for the West Shore School
District which was filed with the federal government, related to overcharging
of the West Shore School District by Steele (see, Finding 56 w).
a. The Victim Impact Statement indicates that it was prepared by Dr. Larry
A. Sayre in the matter of United States v. Steele, Case No. 96 -67.
b. In response to the question, "How has your company /business been
affected by this crime ?" the Victim Impact Statement provides:
The defendant, Charles E. Steele, represented the West
Shore School District as Labor Counsel since November
1990 and Solicitor since July 1993. While under contract
to the District, Mr. Steele provided professional and
competent service. He proved to be an exceptionally
talented and skilled legal advisor who provided the District
with valuable advice and opinions.
As for his legal bills, such bills were reviewed monthly by
District administrative staff and approved by the Board of
School Directors at subsequent meetings. At no time,
including the period for which overbilling was alleged, did
the District notice any irregularities. On numerous
occasions, it appeared Mr. Steele did not charge the District
for all the services he provided in the period, and two
billings during the eight month time period in question
reflect a discount.
The Board of School Directors expressed satisfaction with
Mr. Steele's product and would likely have approved a pay
increase if requested and recommended by the
administration. Based on the processes and procedures in
dealing with Mr. Steele and without the benefit of having
heard all of the evidence presented to the jury, the West
Shore School District does not consider itself a victim of a
crime perpetrated by Mr. Steele. To the extent, however,
that the evidence proved the District was overbilled, it has
a duty to its taxpayers to recover those monies and take the
necessary steps to achieve this end.
The West Shore School District has lost a valuable resource;
yet, it has complied with the American system of
jurisprudence in that it both continued to employ Mr. Steele
after his indictment, based upon the belief in his innocence
until proven guilty, and accepted his resignation upon his
conviction. Ultimately, the District's primary obligation to
its taxpayers is to recover any proven overbillings. Based
on the evidence presented and Mr. Steele's conviction, the
Messick, 98- 035 -C2
Page 42
District accepts the Court's conclusion that it was overbilled
as stated in the indictment and requests that it be permitted
to recover that amount in whatever manner the Court may
decide.
c. The Victim Impact Statement does not reference any specific
amount as having been lost by the School District.
d. The Victim Impact Statement indicates that no civil action was
initiated by or on behalf of the West Shore School District with
relation to overbilling by Steele; that no income was lost as a
result of this crime; and that no additional taxes, penalties or
interest had been assessed against the School District as the result
of this crime.
e. The Victim Impact Statement bears the signature of the name
"Larry A. Sayre" and is dated January 28, 1997.
77. Messick Exhibits I and J are letters prepared by Sayre to the Victim /Witness
Coordinator at the United States Attorney's Office and to the Office of Special
Investigations at the Department of Auditor General respectively, which include
summaries of the West Shore School Board's actions as to obtaining restitution
for any amounts lost due to overbilling by Steele & Hoffman (see, Finding 56
x)
a. Messick Exhibit I directed to the Victim /Witness Coordinator at the
United States Attorney's Office indicates that a copy of the West Shore
School District's Victim Impact Statement was attached.
b. Both letters reflect that copies were provided to the Board.
c. There is no indication on Messick Exhibit J as to whether the attachment
was also provided to the Board.
78. Messick Exhibit L consists of the same documents at ID -47 and ID -49 through
ID -50, as well as a photocopy of the front and back sides of Messick check No.
1425 dated March 10, 1998 payable to Timothy J. Finkelston in the amount of
$ 340.00.
a. The back of the check is endorsed, "Timothy J. Finkelston."
b. The check appears to have been cashed or deposited on or about April
14, 1998.
79. Messick Exhibit M is a memorandum reflecting that Steele & Hoffman had
researched the Messick matter (see, Finding 59 e).
a. The memorandum is dated February 10, 1993.
b. The memorandum is from "Steele & Hoffman Peter M. Rubash."
c. The memorandum does not indicate to whom it was directed.
d. The memorandum indicates that it regards "Analysis of
Messick /Shanabrough Installment Land Sale Agreement."
Messick, 98- 035 -C2
Page 43
e. The memorandum concluded, inter alia, that in the event of a default the
Vendors (the Messicks) could: maintain an action to recover possession
of the property; maintain a breach of contract action to recover for
damages for necessary repairs, assessments, and unpaid installments
prior to termination; and retain all monies paid as installments as
liquidated damages (if written notice were given and the defect was not
cured). Messick Exhibit M at 7.
(1) The memorandum cautioned that under Section 906(b) of
Pennsylvania's Installment Land Contract Law, if the Vendee
(Shanabrough) voluntarily surrendered the property, the Vendor
(the Messicks) would be liable for the return of installments
exceeding 25% of the purchase price less allowable damages
recoverable under Section 905(e) of that Act. Messick Exhibit M
at 6 -9.
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Harry Messick (hereinafter
"Respondent" or "Messick ") has been a public official subject to the provisions of the
Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S.
§401 et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of
1998, Chapter 11, 65 Pa.C.S. §1101, a se ., which Acts are collectively referred to
herein as the "Ethics Act."
The issue before us is whether Messick violated Sections 3(a)/1 103(a) and
5(b)(6)/1105(b)(6) of the Ethics Act as to the allegations that he used the authority of
his office for a private pecuniary benefit when he used the legal services of the School
District Solicitor for private legal matters at no cost to himself; when he participated
in actions of the Board to approve payments to Charles Steele and /or Timothy
Finkelston at a time when they were providing private legal representation for him;
and when he failed to report the receipt of free legal services on Statements of
Financial Interests filed by him for the years 1993 through 1998 inclusive.
Pursuant to Section 3(a)/1103(a) of the Ethics Act, a public official /public
employee is prohibited from engaging in conduct that constitutes a conflict of interest:
Section 1103. Restricted activities.
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
65 Pa.C.S. §1103(a).
The term "conflict of interest" is defined under the Ethics Act as follows:
Section 1102. Definitions.
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received
through his holding public office or employment for the
private pecuniary benefit of himself, a member of his
immediate family or a business with which he or a member
of his immediate family is associated. The term does not
Messick, 98- 035 -C2
Page 44
65 Pa.C.S. §1102.
include an action having a de minimis economic impact or
which affects to the same degree a class consisting of the
general public or a subclass consisting of an industry,
occupation or other group which includes the public official
or public employee, a member of his immediate family or a
business with which he or a member of his immediate
family is associated.
Pursuant to Section 5(b)(6) of Act 9 of 1989, 65 P.S. §405(b)(6), a public
official /public employee, candidate, and nominee would be required to list the name
and address of the source and the amount of any gift or gifts valued in the aggregate
at $200 or more, and the circumstances of each gift, subject to certain exceptions not
pertinent to the instant matter. By action of this Commission on February 21, 1997,
the $200 disclosure threshold was increased to $250 effective for forms filed in 1998.
The substantive requirements of Section 5(b)(6) and the $250 disclosure threshold
continue in effect under Section 1105(b)(6) of Act 93 of 1998, 65 Pa.C.S.
§1105(b)(6).
Having noted the issues and applicable law, we shall now summarize the
relevant facts.
The Respondent served on the West Shore School Board for 18 years
commencing in March of 1981. During his tenure on the Board, the Respondent
served as its Vice - President for four years and as its President for six years.
In his private capacity, Respondent is retired. Prior to his retirement, the
Messicks had their own business. Respondent's wife, Shirley E. Messick ( "Mrs.
Messick "), took care of the books, billings, payment of bills, and the like for the
Messicks' business. Mrs. Messick continues to actively help the Respondent manage
the family finances. Mrs. Messick is the family member who pays the family bills and
handles and keeps track of all of the financial paperwork for the family.
In September, 1987, the Messicks entered into an installment land agreement
with Boise B. Shanabrough ( "Shanabrough ") as to a property which included a filling
station. The agreement was signed by the Messicks and by Shanabrough and his
wife. Pursuant to the terms of the agreement, the Messicks held the loan for the
balance owed, such that Shanabrough made monthly payments to the Messicks.
In 1992, the Messicks had serious concerns about their agreement with
Shanabrough. The Respondent testified that Shanabrough hadn't paid the sewer bills
and that the Sewer Authority was pursuing the Respondent for collection. The
Respondent further testified that he was notified by the Tax Collector that
Shanabrough hadn't paid the taxes on the property, and that since the Messicks still
held the deed, they would be held responsible for the unpaid taxes. The property was
in disrepair, and the Township contacted the Respondent about cleaning it up. There
were also a concern about the timeliness of payments, but one of the greatest
concerns expressed by the Messicks in their testimony was that Shanabrough ceased
selling gasoline, in violation of the agreement.
The Messicks' concern about the sale of gasoline at the property arose for two
reasons. First, both the Respondent and Mrs. Messick testified that the property was
not worth as much without the filling station business. Since the Messicks were
holding the loan on the property, the property's value was of concern to them. The
second basis for concern was as to the maintenance /condition of the gasoline tanks.
Messick, 98- 035 -C2
Page 45
The Messicks were concerned about their own liability as the property owners of
record if the gasoline tanks would leak.
Mrs. Messick testified that in the final two to three months of 1992, she and
the Respondent discussed obtaining counsel to help them with the Shanabrough
matter. Mrs. Messick testified that her husband, the Respondent, mentioned the
possibility of asking Charles Steele to look into the matter.
Charles Steele ( "Steele ") was, at that time, a partner in the law firm of Steele
& Hoffman which was headquartered in Pittsburgh. In 1990, Steele & Hoffman had
been appointed by the West Shore School District to serve as its Labor Counsel.
The Respondent testified that he told Steele about the problems he was having
with Shanabrough and asked Steele whether the Messicks would have a case against
Shanabrough. Respondent testified that Steele told him that he would research the
matter to determine whether the Messicks had a case or not.
The Respondent introduced into evidence Messick Exhibit M, which is a
memorandum dated February 10, 1993. The memorandum reflects that Steele &
Hoffman conducted research as to the Messicks' problems with Shanabrough. The
memorandum is from Peter M. Rubash ( "Rubash "), who was one of the attorneys at
Steele & Hoffman. The memorandum does not indicate to whom it was directed. The
memorandum sets forth a detailed analysis of remedies which Rubash had concluded
would be available to the Messicks, which included: maintaining an action to recover
possession of the property; maintaining a breach of contract action to recover for
damages for the necessary repairs, assessments, and unpaid installments prior to
termination of the agreement; and retaining all monies which had been paid as
installments as liquidated damages. The memorandum cautioned as to certain
concerns under Pennsylvania's Installment Land Contract Law.
The Respondent testified that when he asked Steele & Hoffman to handle the
case against Shanabrough, he wanted to get the property back and he wanted
damages. The Respondent testified that at the time he asked Steele & Hoffman to
take the case, he estimated that the cost of putting the filling station back in operation
would be around $200,000.
Steele agreed to have his firm represent the Messicks in the matter against
Shanabrough.
Mrs. Messick testified that it was probably after the holidays of 1992 that the
Messicks found out that Steele & Hoffman was going to take their case against
Shanabrough.
The Respondent testified that "right after the February memorandum," he had
a discussion about fee arrangements with Steele. The Respondent testified that the
discussion was that the representation by Steele & Hoffman would be under a
contingency fee agreement such as the Messicks had in a prior lawsuit in the 1970's.
In that case, the attorney's percentage of their recovery was 33 - %.
It was also Mrs. Messick's understanding that Steele & Hoffman would be paid
when the case was over. Mrs. Messick stated that Steele & Hoffman wasn't certain
how the property recovery would be handled but that the firm would get 33 - of
any damages. Both Mrs. Messick and the Respondent testified that there was never
any agreement whereby the Messicks would get these legal services for free.
Messick, 98- 035 -C2
Page 46
The most detailed testimony as to discussion of the fee arrangements for the
Messicks was provided by Charles Steele himself. Before we review Steele's
testimony, however, we would parenthetically note that in December of 1996, Steele
was convicted of mail fraud and obstruction of justice. Steele's conviction was related
to an overbilling scheme as to clients which included the West Shore School District.
Steele's conviction has relevance in this case for certain limited purposes. Obviously,
it may impact upon Steele's credibility, and it also lays a necessary foundation for
various actions by the West Shore School Board and administration, as set forth in the
Findings. However, due to concerns which have been raised by the Respondent as to
an "overarching assumption" of some "connection" between the federal prosecution
and conviction of Steele and the conduct of the Respondent in this matter (see, Motion
for Fees for Bad Faith Prosecution, at 18, paragraph a), and so that there will be no
misunderstanding, we shall state as directly and emphatically as possible that Steele's
conviction in no way reflects upon the Respondent. Having so stated, we shall resume
our recitation of the facts.
Steele testified that he told the Messicks, inter alia, that they would have to
accept the "growing pains" of working with a new attorney in his office, that Steele
wouldn't know the value of that attorney's services until the end of the case, that they
would set up a contingency fee agreement because it would be a money recovery
anyway, and that the firm would want to share in the proceeds. Steele testified that
he told the Messicks that they would set the "outer marker" at 33 - %, that they
would evaluate the quality of the legal services and the effort put in to accomplish the
amount of money recovered, and that they would negotiate at the end whether the
firm's share would be less.
The first official action taken by Steele & Hoffman on behalf of the Messicks in
the matter involving Shanabrough was the issuance of the letter at ID -2. The Messicks
testified that Rubash drafted the letter ( Rubash was the Steele & Hoffman attorney
who was assigned to handle the Messicks' case). The letter notifies Shanabrough of
alleged material defaults and breaches of the agreement with the Messicks. The letter
is dated March 18, 1993.
The Respondent testified that at the time Rubash prepared ID -2, the Messicks
already had an oral agreement with Steele & Hoffman for representation in the matter
against Shanabrough on a contingency fee basis. Mrs. Messick similarly testified that
at the time she signed ID -2, it was her understanding that Steele & Hoffman would be
representing the Messicks under the same arrangement that the Messicks had in their
prior contingency fee case (through other Counsel). The letter itself directs that all
correspondence or inquiries be directed to "legal counsel," which is identified to be the
law offices of Steele & Hoffman and particularly Rubash.
In May of 1993, the West Shore School Board was planning to consolidate the
Labor Counsel position, which Steele & Hoffman held at that time, with the Solicitor
position, which Steele & Hoffman did not hold. Approximately five weeks after the
issuance of the March 18, 1993 letter (ID -2), Steele submitted a proposal letter dated
May 6, 1993, seeking to serve in the consolidated Solicitor position at the West Shore
School District. The Respondent testified that at that time, Steele & Hoffman was
already representing the Messicks on a contingency basis in their matter against
Shanabrough.
On May 13, 1993, the West Shore School Board conducted interviews of four
firms, including Steele & Hoffman. The Respondent participated in the Board's
interviews of the applicants for the position.
Messick, 98- 035 -C2
Page 47
The Respondent testified that there was no agreement, express or implied, that
the agreement for representation of the Messicks in the case against Shanabrough
would give Steele & Hoffman any benefit or advantage in competing for the position
as Solicitor of the West Shore School District.
The Superintendent of the School District, Dr. Larry Sayre ( "Sayre "), testified
that he did not recall the Respondent asking any questions during the interviews that
were not part of the "scripted" questions which Sayre had prepared in advance.
Following the applicant interviews, it was the consensus of the Board that Steele &
Hoffman be appointed Solicitor, although not all of the Board Members agreed with
that choice. The Respondent did participate in the Board's discussion as it built the
consensus.
The law firm of Steele & Hoffman was officially hired by the West Shore School
District to serve as its Solicitor at the Board's May 20, 1993, meeting. The
Respondent was not present at that meeting, and he did not participate in that vote.
Although the Respondent did not participate in the vote to initially appoint Steele
& Hoffman as Solicitor, it is clear that the Respondent participated in votes to
reappoint Steele & Hoffman as Solicitor, and in votes to pay the bills of Steele &
Hoffman during the time at which Steele & Hoffman represented the Messicks in their
case against Shanabrough (see, Findings 24, 25, 52).
The parties agree that at some point in time, the contingency fee agreement at
ID -35 was prepared. The parties disagree as to when it was prepared.
ID -35 purports to be a written contingency fee agreement between the Messicks
and Steele & Hoffman. The document bears the date of April 8, 1993. It is the
Investigative Division's position that the agreement is a sham and that it was
backdated. It is the Respondent's position that the agreement is legitimate, that it was
prepared at or about the time of its date, and that it served to reduce to writing an oral
agreement which was already in existence.
The document was prepared by Julia Rhyner. Rhyner gave conflicting testimony
as to the date that the document was prepared. Rhyner repeatedly testified that the
contingency fee agreement was prepared after the litigation began which, if true,
would have placed the preparation of the document at some point after August 2,
1993, well after the date which appears on the document. But Rhyner also testified
that the contingency fee letter was "most likely" prepared on April 8, 1993, which is
the date which appears on it. Following extensive questioning, it was determined that
when Rhyner testified that the letter was prepared after "the litigation," she did not
mean that it was prepared after the institution of the lawsuit, but rather that it was
prepared after Steele & Hoffman started doing work on the case. Rhyner had worked
for law firms for approximately 13 years, from 1983 through 1996, as a secretary
and /or Office Manager, yet it is clear from her testimony that she did not have a
correct understanding of the meaning of the term "litigation."
Rhyner testified rather vaguely that the fee letter was prepared after "a lot of
work" had been put into the case. (Tr. at 150).
Rhyner was questioned as to whether the preparation of ID -35 tied into
allegations that had been brought by Phil McCalister ( "McCalister "), an attorney with
Steele & Hoffman, who, in March, 1993, discovered Steele's overbilling scheme.
Rhyner testified that McCalister did discover the scheme in early March, 1993, and
that he left the firm on March 19, 1993. Rhyner indicated that after April 15, 1993- -
the date that Steele learned that McCalister had a copy of a chart that had been used
Messick, 98- 035 -C2
Page 48
to inflate the client bills -- "papers were starting to be generated that didn't exist
previously." (Tr. at 138). However, when the preparation of ID -35 was posed to
Rhyner as possibly being linked to Steele's anxieties over McCalister's allegations,
Rhyner testified: "I don't remember the time, the day it went out. All I remember is
being told to draft it." (Tr. at 166 -167).
Steele's testimony on the issue of the preparation of ID -35 was equally vague
and clearly differed from prior information which he had provided to the Investigative
Division.
At the hearing before this Commission on February 1, 2000, Steele testified that
he did not have any "present recollection" as to whether the date on ID -35, specifically
April 8, 1993, was an accurate date. Steele testified:
I don't have a present recollection of it being backdated.
It's very possible it wasn't backdated. I didn't date it. Julia
Rhyner dated it. She would probably have a better
recollection of when the date was.
(Tr. at 454).
Steele's testimony differed from the information which he had previously
provided to representatives of the Investigative Division on two separate occasions,
one of which occurred only a few weeks before the hearing at which Steele testified
before this Commission. The disparity between Steele's testimony and his prior
interviews is detailed in Finding 61.
At the hearing on February 1, 2000, Steele conceded that the contingency letter
at ID -35 was prepared after the formal representation of the Respondent had been
undertaken. However, he explained his differing reports as to the timing of the
preparation of the letter based upon his recollection that the preparation had been tied
into his concerns about the Disciplinary Board investigating his office. Steele explained
in his testimony that there were actually two events that "rose the specter" of the
Disciplinary Board. Steele stated that the one event was in 1993 and the other was
in August, 1994. Steele testified that he had forgotten the 1993 event until after his
most recent interview with Commission staff, but that having reviewed the transcripts
from his own (federal) trial, the document could have been prepared in either 1993 or
August of 1994.
The Respondent testified that he first saw the written contingency fee
agreement on or about "April 12," a "couple of days after it was mailed from
Pittsburgh." (Tr. at 394).
Mrs. Messick testified that she recalled receiving ID -35 in mid- April, 1993, at
the same time that the Messicks settled on a home that they had built.
Both the Respondent and Mrs. Messick testified that the Respondent signed one
copy of the agreement and returned it to Steele & Hoffman. The Respondent testified
that the copy of the agreement which was in his own files did not bear his signature.
The Respondent stated that he never signs his own copies.
Both parties have theories as to why the copy of the document which is in
evidence does not bear the signature of the Respondent. It is the theory of the
Investigative Division that the document was never signed by the Respondent and that
the "agreement" was in fact a sham. It is the theory of the Respondent that the
document which is in evidence is actually his own copy of the agreement or a copy
Messick, 98- 035 -C2
Page 49
which was made from his own copy. The Messicks testified that there came a point
in time when they had to provide documents from their own files to Finkelston to
supplement what was in the Steele & Hoffman file for the case against Shanabrough.
Karen Bringe Gokay ( "Gokay "), who was a former associate attorney with Steele
& Hoffman, testified that when it became known at the firm that Attorney McCalister
had taken some records to the Disciplinary Board, the entire firm was "in a turmoil."
(Tr. at 435). Gokay testified, ". . . / recall ultimately all of our records were to be
turned over to [Steele'sJ attorney." (Tr. at 435) (Emphasis added).
Other testimony which would relate to the origin of the particular document that
is in evidence as ID -35 was provided by Tamara Reed, a Special Investigator for the
Pennsylvania Department of the Auditor General, and Attorney Timothy Finkelston
( "Finkelston ").
Finkelston's involvement in the events which are at issue in this case began
when he was an associate at Steele & Hoffman. When Steele & Hoffman dissolved,
Finkelston and Steele formed a partnership which existed for a couple of months at the
end of 1996. As of January 1, 1997, Finkelston had his own practice. Finkelston
worked on the Messick case both while he was at Steele & Hoffman and when he
became a sole practitioner. Finkelston testified that he had control of the Messick file
when Steele & Hoffman broke up, and that he did not lose access to it.
The testimony of both Special Investigator Reed and Finkelston insofar as it
regards the document which is in evidence at ID -35 was that Finkelston provided to
Reed a copy of ID -35, unaltered, from his file. Reed testified that she recognized the
document which is in evidence as the copy which she obtained from Finkelston. When
Finkelston was asked whether the Respondent provided Finkelston with documents to
be put in the file which Finkelston had, Finkelston responded, "Well, I remember him
providing an amortization schedule. I'm sure there were." (Tr. at 368).
As for the substance of the contingency fee agreement, under the terms set
forth in ID -35, Steele & Hoffman would be entitled to receive 33 - of any recovery
that they obtained for the Messicks, plus reimbursement of all costs expended by
Steele & Hoffman incident to the case. Steele & Hoffman would charge the Messicks
additional amounts if it was necessary to try the case more than once or to handle an
appeal. The agreement indicates that if no sums would be recovered as the result of
Steele & Hoffman's efforts, the firm would have no claim against the Messicks for any
fee for services rendered, but would be entitled to reimbursement for expenses
incurred. The agreement states, "If you decide to terminate this authority before any
settlement is offered or any award is obtained, this Firm shall be entitled to reasonable
compensation on our standard hourly rate of $ 100.00 for all work done on the case
up to that point."
Gokay testified as to the legitimacy of the contingency fee agreement. Gokay
testified that she was not directly involved in the Messicks' private case involving
Shanabrough, but that she attended general firm meetings at which the status of the
contingency fee cases were discussed. Gokay testified that for all of those cases, the
expectation of the firm was that ultimately the firm would see some sort of recovery
and some sort of payment. Gokay testified that it was her understanding that the
Messicks' case was a contingency fee case, that the attorneys who were working on
it were to keep records, and that ultimately, there would a settlement and there would
be a fee attached to it.
The Messicks testified that after Steele & Hoffman dissolved they were "left
hanging" with no attorney. The Messicks subsequently hired Finkelston to represent
Messick, 98 035 -C2
Page 50
them in their matter. Mrs. Messick testified that they believed that Finkelston would
be familiar with their ongoing case. The Messicks entered into a contingency fee
agreement with Finkelston under the same terms that the Messicks had with Steele
& Hoffman. The agreement was reduced to writing and was signed by Finkelston and
the Respondent. It is in evidence at ID -36.
It is clear that Respondent did participate as a School Board Member in at least
one and possibly two votes to appoint Finkelston as Solicitor as well as in multiple
votes to pay Finkelston's bills during the time Finkelston represented the Messicks in
their private matter against Shanabrough (see, Findings 32 -35 and 52). The
Respondent testified that Finkelston's relationship with the Messicks on their private
case never caused the Respondent to change the way he evaluated or voted as a
School Director as to the retention of Finkelston or the payment of Finkelston's fees.
Finkelston represented the Messicks until April 9, 1998. Respondent testified
that he thought that in the latter part of 1997, he told Finkelston that there wasn't
much being done on the case and that "either we have to do something or maybe we
should sever our relationship and I look for another attorney." (Tr. at 401; 416).
ID -48 /Messick Exhibit K is a letter dated September 9, 1997, from Finkelston
to the Respondent, by which Finkelston announced his intention to withdraw as
Counsel for the Messicks. The letter cited two reasons for Finkelston's decision -- the
first being that he was "uncomfortable" taking the matter to trial due to the publicity
that it would generate, and the second being that although he did not perceive a
conflict of interest in representing the Messicks, he believed it to be in the best
interests of the School District for the Messicks to retain separate counsel. The letter
stated that Finkelston would not want to give any "third party" the opportunity to
make more out of the relationship "than there is." ID -48 /Messick Exhibit K.
Finkelston submitted a bill to the Messicks for 3.4 hours at $100 per hour for
services rendered. Finkelston testified that he did not include on the invoice the
preparation of two documents, specifically, a praecipe to list the matter for trial and
a two - sentence letter, but he stated that the omission of these two items was not the
result of a conscious decision. Finkelston further testified that he felt that the amount
which he billed the Messicks was reasonable for his services.
The Messicks paid Finkelston's bill. The Messicks and Finkelston signed a
Mutual Release (ID -47; Messick Exhibit L, final page).
There was a span of approximately six months between the date of Finkelston's
letter (September 9, 1997) by which Finkelston notified the Messicks of his intention
to withdraw as their Counsel, and the date of his invoice (March 31, 1998).
Finkelston had no explanation for this span of time. The evidence before this
Commission further reveals that the check by which Mrs. Messick paid the invoice was
dated March 10, 1998, which was prior to the date of the invoice itself. Mrs. Messick
provided the following explanation.
As for the date on the Messicks' check being prior to the date of Finkelston's
invoice, Mrs. Messick testified that the Messicks' new attorney refused to be hired
until the Messicks paid their prior attorney. She testified that she probably called
Finkelston and asked what they owed him, because they hadn't received a bill. Mrs.
Messick testified that she made out the check, waited for the bill to come, and sent
the check to Finkelston when Finkelston sent the bill.
Messick, 98- 035 -C2
Page 51
Mrs. Messick testified that she was not pleased with the services of either
Finkelston or Steele & Hoffman. Nevertheless, the Messicks paid Finkelston when he
billed them. The Messicks never paid Steele & Hoffman.
Mrs. Messick testified that Steele & Hoffman never billed the Messicks. Mrs.
Messick further stated that no money was owed to Steele & Hoffman under the terms
of ID -35. Steele & Hoffman was to be paid if and when a recovery was received.
There was none. Mrs. Messick further noted that the Messicks did not terminate the
authority of Steele & Hoffman or the agreement that they had with the firm. Mrs.
Messick testified that Steele & Hoffman "just disappeared," and "hadn't done the
work." (Tr. at 293).
Mrs. Messick further testified that in December, 1998, she was informed by a
York County Judge that their lawsuit had not been filed correctly by Steele & Hoffman.
The Respondent similarly testified that their case was thrown out because of the error
that Steele & Hoffman had made. Mrs. Messick testified that she felt that the error
cost the Messicks their case.
The Messicks ultimately settled their case with Shanabrough through other
Counsel.
The Respondent emphasized that even though he did not pay Steele & Hoffman,
he did not get "free legal services" because he had a contingency fee contract with
Steele & Hoffman, as to which contract Steele & Hoffman defaulted.
There was brief testimony, but no further evidence, as to a letter which Steele
& Hoffman's Rubash may have sent on behalf of the Messicks' daughter without
charge, which letter was believed to have been sent to Florida where Rubash did not
have a license to practice law.
There was also documentary evidence (ID -53) that Steele sent a letter dated
July 5, 1994 on behalf of the Messicks, to a person who allegedly defaulted on an
agreement of sale. As to this letter, the Respondent testified that he did not recall
receiving a bill, but that if a bill were received, it would have been paid by his wife
who paid all of the family bills.
Finally, we would note that several witnesses testified favorably as to the
Respondent's reputation for character and for honesty and truthfulness, which
character evidence was not rebutted.
Having highlighted the facts and issues, we preliminarily address two issues
raised by Respondent.
The first issue to be addressed is in the nature of a comment which appears in
the Post - Hearing Brief of Respondent Messick at 2. In reciting the history of this
matter, the Respondent notes that, "By its Interlocutory Order of September 30, 1999,
the Commission denied without prejudice to refile at a later time Respondent's Motion
for Dismissal, denied the Motion for Fees for Bad Faith without argument, briefing or
hearing and ordered the evidentiary hearing to proceed." (Emphasis added). The
comment, though seemingly made as an aside, shall be addressed so that the
Respondent may understand due process rights.
"The fundamental requirement of due process is the opportunity to be heard 'at
a meaningful time and in a meaningful manner." Mathews v. Eldridge, 424 U.S. 319,
333, 96 S. Ct. 893, , 47 L.Ed.2d 18, (1976) (Citations omitted). Some form
of hearing is required before an individual ina //y deprived of a property interest. Id.
Messick, 98- 035 -C2
Page 52
When Respondent filed the Motion for Dismissal and Motion for Fees for Bad
Faith Prosecution, both the Respondent and the Investigative Division were given the
opportunity to file memoranda in support of their respective positions. Such afforded
the parties an opportunity to be heard which was appropriate for that stage of the
proceedings. When the Respondent's Motions were denied at that stage of the
proceedings, neither Motion was denied with prejudice. Respondent was certainly free
to raise either Motion again. The Respondent has been provided the full protection of
due process through a full evidentiary hearing, and to the extent that Respondent's
Counsel has continued to raise the issue of bad faith and to request dismissal, such
issues are addressed herein.
With regard to Respondent's request for a dismissal of all charges against him
in a confidential order (See, Post - Hearing Brief of Respondent Messick, at 21), such
request shall not be granted. Disposition of this case requires an adjudication based
upon the entire record. Our decision in this case is in every respect a "final order" and
is required by law to be available as a public document. 65 Pa.C.S. §1108(h).
Accordingly, we deny the motion /request for dismissal as well as the request for a
confidential order.
We must now determine whether the actions of Messick violated Sections
3(a)/1 103(a) and 5(b)(6)/1105(b)(6) of the Ethics Act. As we apply the facts to the
allegation, we are mindful that due process requires that we not depart from the
allegation. Pennsy v. Department of State, 594 A.2d 845 (1991). Based upon our
review of the record, we find that there is a lack of clear and convincing evidence to
support a violation under the allegation.
Clear and convincing evidence is "testimony that is so 'clear, direct, weighty,
and convincing as to enable the trier of fact to come to a clear conviction, without
hesitance, of the truth of the precise facts in issue." In Re: Charles E.D.M., 550 Pa.
595, 601, 708 A.2d 88, 91 (Pa. 1998) (Citation omitted).
It is alleged that the Respondent violated Section 3(a)/1103(a) of the Ethics Act
when he used the authority of his office for a private pecuniary benefit when he used
the legal services of the School District Solicitor for private legal matters "at no cost
to himself." Likewise, it is alleged that the Respondent violated Section
5(b)(6)/1 105(b)(6) of the Ethics Act when he failed to report the receipt of "free" legal
services on certain Statements of Financial Interests. These particular portions of the
allegation hinge upon the Investigative Division's position that the legal services
provided to the Messicks by Steele & Hoffman and later by Finkelston were "at no
cost" and "free."
Based upon the record before us, there is insufficient evidence to establish that
these legal services were "at no cost" or "free." To the contrary, there is credible
evidence both as to the services of Steele & Hoffman and Finkelston that in the
Shanabrough matter, there were legitimate contingency fee agreements in place, first
orally, and shortly thereafter, in writing, as has been argued by the Respondent.
The witnesses who apparently were expected to establish that ID -35 had been
backdated (Rhyner and Steele) failed to do so.
We reject any argument that legal services received pursuant to a valid
contingency fee agreement are "free" or "at no charge" to the recipient. Contingency
fee agreements are contractual obligations which require payment to be made if and
when the conditions for payment are met.
Messick, 98- 035 -C2
Page 53
In this case, the conditions for payment of fees to Steele & Hoffman were not
met. Furthermore, Steele & Hoffman never billed the Messicks for any costs expended
on the Messicks' behalf, possibly because Steele & Hoffman ceased to exist.
Payment was made to Finkelston under the terms of his contingency fee
agreement with the Messicks. We do not find a violation of the Ethics Act on the part
of the Respondent simply because Finkelston forgot to include a praecipe and a two -
sentence letter in his invoice.
Finally, as to the implication that a contingency fee agreement would be unusual
for the type of case that the Messicks had against Shanabrough, this Commission is
not aware of any legal authority - -nor has any been cited - -which would preclude a
contingency fee arrangement for legal representation in that case.
As for the two other letters which were mentioned as having been sent by
Steele & Hoffman, one for Heather Messick, and one for the Messicks themselves,
there is insufficient evidence to determine whether payment was made as to the latter,
and there is only Reed's testimony as to what the Respondent told her as to the
former. We do not know enough about the "Florida" letter to know whether it was
actually sent or whether the value of any such service would be greater than de
minimis.
Given that the only legal services that are seriously in question in this case were
provided to the Messicks under valid contingency fee agreements, and given that there
is insufficient evidence to establish violation(s) as to any other legal services, the first
and third portions of the allegation have not been proven and we find no violation as
to them.
We shall next focus upon the remaining allegation, which is that the Respondent
violated Section 3(a)/1103(a) of the Ethics Act when he participated in actions of the
Board to approve payments to Steele and /or Finkelston at a time when they were
providing private legal representation for him. We find no violation as to this remaining
portion of the allegation. Under the allegation, we are focusing upon votes which
occurred during the representation of the Messicks under legally binding contingency
fee agreements. Since valid contingency fee agreements governed the obligations of
the Messicks and their attorneys as to the representation of the Messicks in their
private matter, there is no basis for finding any private pecuniary benefit to the
Respondent from his official actions in voting to approve payments to these attorneys
or their firms as Solicitors. A violation of Section 3(a)/1 103(a) of the Ethics Act may
not bg found absent some use of authority of office for a private pecuniary benefit.
We would parenthetically note that although there are Commission precedents
which have concluded that a conflict may exist where a public official votes in matters
pertaining to a client (see, Kannebecker, Opinion 92 -010; Miller, Opinion 89 -024), in
this case, the public official and "the client" were one and the same - -the Respondent.
Moreover, this was not a situation where Steele & Hoffman had any power over the
Respondent.
There is nothing in the record establishing - -nor is it alleged - -that the Respondent
took these actions based upon any improper understanding. Absent such an improper
understanding, the mere fact that the Messicks chose to retain the services of Steele
& Hoffman and Finkelston for their private legal affairs, under valid contingency fee
agreements, does not establish a conflict of interest under the Ethics Act.
Messick, 98- 035 -C2
Page 54
Based upon all of the above, we find a lack of clear and convincing evidence to
support a violation of Section 3(a)/1103(a) or Section 5(b)(6)/1105(b)(6) of the Ethics
Act with regard to the allegation before us.
Respondent has asked this Commission to direct its Counsel to initiate an
investigation and procedural hearings and determinations into Respondent's claim, first
raised in his Answer to the Investigative Complaint, that the charges against him were
initiated and prosecuted without substantial justification as described in the Costs Act,
71 P.S. §2031, et aaQ. Such request is premature and is denied. Applications under
the Costs Act are submitted after the final disposition of an adversary adjudication.
71 P.S. §2033(b). Any determinations as to "substantial justification" would not be
made by this Commission unless and until such an application would be properly
submitted.
As for Respondent's various assertions of bad faith, we do not find any bad
faith on the part of the Investigative Division in investigating and prosecuting this
matter. The circumstances surrounding the contingency fee agreements suggested
improper conduct by the Respondent. The Investigative Division was supplied with
information that tended to support what the circumstances suggested. The fact that,
following a full hearing in the matter, a violation has not been found does not mean
that the Investigative Division acted in bad faith in pursuing the matter. All relief
requested by Respondent in connection with the claim that the charges against him
were brought in bad faith is denied.
IV. CONCLUSIONS OF LAW:
1. Harry Messick ( "Messick "), as a Member and President of the West Shore
School District Board of Directors, was at all times relevant to this case a public
official subject to the provisions of the Public Official and Employee Ethics Law,
Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401 et sew., as codified by the
Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65
Pa.C.S. §1101, et eeA., which Acts are referred to herein as the "Ethics Act."
2. Messick did not violate Section 3(a)/1103(a) of the Ethics Act when he used the
legal services of the School District Solicitor for private legal matters under a
contingency fee agreement.
3. Messick did not violate Section 3(a)/1103(a) of the Ethics Act when he used the
legal services of the School District Solicitor for other private legal matters
consisting of the issuance of one or two letters, including a July 5, 1994 letter
to "Stephen Johansen," based upon a lack of clear and convincing evidence.
4. Messick did not violate Section 3(a)/1103(a) of the Ethics Act when he
participated in actions of the West Shore School Board to approve payments to
the School District Solicitor at a time when he was represented by the Solicitor
pursuant to a contingency fee agreement.
5. Messick did not violate Section 5(b)(6)/1105(b)(6) of the Ethics Act with regard
to the allegation that he failed to report the receipt of free legal services on his
Statements of Financial Interests for the years 1993 through 1998 inclusive, in
that the legal services were not free.
In Re: Harry Messick
File Docket: 98- 035 -C2
Date Decided: 4/12/00
Date Mailed: 4/28/00
ORDER NO. 1155
1. Harry Messick ( "Messick "), as a Member and President of the West Shore
School District Board of Directors, did not violate Section 3(a)/1103(a) of the
Public Official and Employee Ethics Law, Act 9 of 1989, as codified by the
Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, which
Acts are referred to herein as the "Ethics Act," when he used the legal services
of the School District Solicitor for private legal matters under a contingency fee
agreement.
2. Messick did not violate Section 3(a)/1103(a) of the Ethics Act when he used the
legal services of the School District Solicitor for other private legal matters
consisting of the issuance of one or two letters, including a July 5, 1994 letter
to "Stephen Johansen," based upon a lack of clear and convincing evidence.
3. Messick did not violate Section 3(a)/1103(a) of the Ethics Act when he
participated in actions of the West Shore School Board to approve payments to
the School District Solicitor at a time when he was represented by the Solicitor
pursuant to a contingency fee agreement.
4. Messick did not violate Section 5(b)(6)/1105(b)(6) of the Ethics Act with regard
to the allegation that he failed to report the receipt of free legal services on his
Statements of Financial Interests for the years 1993 through 1998 inclusive, in
that the legal services were not free.
BY THE COMMISSION,
Oj E
DANEEN E. REESE, CHAIR