Second opinions are always good, but did you know you still have to pay your first attorney if you hire a new one?

 In Law Planet

scalesIn Florida, the right of a client to discharge a personal injury attorney is absolute. The attorney cannot contest the termination and must abide by the clients wishes to obtain new counsel. However, the old attorney is entitled to get paid for the work done under a theory known as “quantum meruit.” Can that theory be avoided by claiming the old attorney wasn’t as good as the new attorney and/or wasn’t as aggressive? Apparently it cannot.

In the recent Florida 3rd District Court of Appeal (DCA) decision of Courtney v. Hall-Edwards, 39 Fla. L. Weekly D540b, the trial judge was faced with this exact situation and argument when the subsequent attorney obtained a $19 million jury award. The first attorney claimed a charging lien of approximately $115,000 based on the amount of time that had been spent prior to the termination, including filing the original lawsuit and conducting discovery. Of interest, the successor attorney agreed that this amount was reasonable.

Despite a $19 million award, the client refused to acknowledge that the prior attorney was entitled to be paid anything. The trial judge denied any fees to the first attorney, buying the argument of the client’s subsequent lawyer that the original lawyer wasn’t as good and wasn’t as aggressive. That proved to be a mistake, according to the Florida 3rd DCA. By having bought into the argument of the greedy client and/or his attorney, the trial judge avoided clear precedent that discharged attorneys have a right to be paid for the services that they had provided. The subsequent attorney had stipulated that the amount claimed was reasonable in regards to the work performed but still argued the attorney was not entitled to be paid. Even when the trial judge noted that the prior attorney had interviewed witnesses, located and preserved the automobile involved in the accident, filed the lawsuit, and crafted meaningful and appropriate discovery; the judge still ruled that this attorney wasn’t entitled to anything. That is a hard decision to justify given the judge acknowledged the lawyer did some work.

Given this opinion, is there any risk on the part of the lawyer and/or insurance carrier for the other side?

You bet there is. There is clear appellate court precedent that the adverse party, their lawyer and even the insurance carrier may be on the hook, if they fail to protect a perfected charging lien. In the case of Hall, Lamb, & Hall, P.A. v. Sherlon, 7 So.3d 639 (Fla. 3d DCA 2009), the original lawyers were terminated shortly before mediation. The terminated law firm notified the parties of its interest in recouping a fee for the services rendered and filed a notice of charging lien in the lawsuit.  The former client then hired a suspended lawyer who ended up settling the case and never notified the terminated law firm. The underlying litigation was shortly dismissed after undisclosed funds were tendered to the suspended lawyer and his client. Nobody notified the terminated lawyers of what had happened. The terminated law firm subsequently filed a motion to adjudicate its charging lien. They ultimately obtained a court order adjudicating the charging lien and directing the former client and suspended lawyer to pay more than $76,000.

Approximately six months later the discharged law firm unsuccessfully moved to adjudicate its charging lien against the other party. The discharged law firm appealed. In addressing the denial of the request to adjudicate the charging lien against the other party, the Florida 3rd DCA cited the Florida Supreme Court case of Sinclair, Lewis v. Baucom, 428 So.2d 1383 (Fla. 1983) in reversing the trial judge and quoted: “To perfect a charging lien, the lienor-attorney need only demonstrate that he or she provided the parties to the litigation with timely notice of the interest…. Such a perfected lien is “chargeable against any person who, at the time notice of intent to claim a lien is given, holds monies or property which become proceeds of a judgment to be entered in the future.”

Parties to litigation can themselves be held responsible for paying such a charging lien. In the case of Brown v. Vt. Mut. Ins. Co.,  “…the paying party may be held jointly and severally liable for the attorneys fees along with the attorney’s client to the extent of the settlement proceeds or other funds held”. This opinion goes on to state that there is no question that, as a party to the settlement, they had an affirmative duty to notify the prior law firm of the settlement and to protect the law firms lien interest in the settlement proceeds.

Savvy lawyers need to be aware of these opinions. They should put provisions calling for further attorneys fees and costs into their representation agreements in case litigation like this becomes necessary. Perhaps the client and his new attorney thought they had nothing to lose by trying to go this senseless route. Either way, the Florida 3rd DCA fixed the problem and ordered the learned judge to enter a reasonable award in the previously stipulated amount of approximately $115,000.

What does all of this tell us?

Trying to deceive and wrong a lawyer who has perfected a charging lien is a dangerous path to travel. Why anyone would go that route is beyond me! The case law is well-established, and clearly states that lawyers, adverse litigants and their insurance carriers/ adjusters would seem to all be on the hook for the amount of the charging lien. On the rare occasions that I have been discharged from litigation, I always file a notice of charging lien citing all of the above cases. I then send a copy of the charging lien to everyone involved, including the insurance adjuster on the other side. Sending such transmittals by certified mail return receipt requested is obviously prudent. By the way, these cases also work in family law matters; I have successfully recovered against the other spouse and their lawyer for not protecting my lien.

Image courtesy of freedigitalphotos.net by​Kittisak

 

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