Title: McAdam v. Dynes

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

442 N.W.2d 914 (1989) Toby C. McADAM, Plaintiff and Appellant, v. George T. DYNES, Defendant and Appellee. Civ. No. 890072. Supreme Court of North Dakota. July 17, 1989. Saefke Law Office, Bismarck, for plaintiff and appellant; argued by Frederick E. Saefke, Jr. Freed, Dynes, Reichert & Buresh, P.C., Dickinson, for defendant and appellee; argued by Eugene F. Buresh. ERICKSTAD, Chief Justice. We granted Toby McAdam's petition to review a decision of the North Dakota Temporary Court of Appeals affirming a summary judgment in favor of George T. Dynes. McAdam v. Dynes, 445 N.W.2d 25 (N.D.1988). We reverse and remand. Without executing a written fee agreement, Dynes represented McAdam in a claim against West River Management for wrongful discharge under the Fair Labor Standards Act. McAdam and West River Management ultimately settled the matter for $15,800. According to Dynes, that representation of McAdam resulted in total attorney fees and out-of-pocket expenses of $11,800. In 1986 Dynes received $8,300 of the settlement from West River and sent a release and letter to McAdam which provided, in part: McAdam endorsed the check and thereafter received $2,000 of those funds and Dynes' law firm received $5,500. McAdam thereafter sued Dynes in small claims court, alleging in substance that there was no written contract for attorney fees and that he believed Dynes was representing him on a contingency fee basis. McAdam further alleged that he was informed of the amount of Dynes' attorney fees after the case was settled and that although he agreed to the settlement with West River, he did not agree to the amount of the attorney fees. Dynes removed the case to county court and answered, alleging that McAdam was informed of all the conditions surrounding the case and the settlement thereof and agreed to the division of monies when the case was settled. Dynes moved for summary judgment and submitted an affidavit stating that "McAdam promptly endorsed all checks and signed all releases requested, thereby completing and settling our contractual arrangement." McAdam resisted the summary judgment motion and submitted an affidavit stating: The county court granted Dynes' motion for summary judgment, concluding: Summary judgment is proper only if, after viewing the evidence in the light most favorable to the party against whom it is sought, there are no genuine issues of material fact and the party seeking it is entitled to judgment as a matter of law. E.g., Larson v. Baer, 418 N.W.2d 282 (N.D. 1988). Where an agreement is oral rather than written and must be proved by the testimony of the parties, summary judgment is inappropriate to resolve disputed issues of material fact as to the terms of the contract. Security State Bank v. Schultz, 350 N.W.2d 40 (N.D.1984). Prior to the establishment of an attorney-client relationship, the essentials of an express fee contract for legal services are the same as any other contract of employment, and the parties may deal with each other at arm's length. 7 Am.Jur.2d, Attorneys at Law, §§ 247, 248 (1980). However, because of the confidential nature of the attorney-client relationship, compensation agreements made during the existence of that relationship are closely scrutinized and construed most strongly against the attorney. Tidball v. Hetrick, 363 N.W.2d 414 (S.D.1985); 7 Am.Jur.2d, Attorneys at Law, § 249 (1980). In this case there is a genuine issue of material fact about whether Dynes and McAdam entered into an oral fee agreement when the attorney-client relationship between them was established and, if so, what the terms of that oral agreement were. Any fee agreement made during the existence of the attorney-client relationship must be construed most strongly against the attorney, who has the burden of showing the fairness of the agreement. We believe that material factual issues exist about the terms and fairness of any such agreement. Because any fee agreement made during the existence of an attorney-client relationship must be construed against the attorney, we do not believe that McAdam is precluded from contesting any fee agreement because he accepted $4,000 of the settlement from Dynes. See Mercy Hospital, Inc. v. Johnson, 390 So. 2d 103 (Fla.Ct.App.1980). The summary judgment is reversed and the case is remanded to county court for further proceedings consistent with this opinion. GIERKE, LEVINE and MESCHKE, JJ., VERNON R. PEDERSON, Surrogate Justice, concur. VERNON R. PEDERSON, Surrogate Justice, sitting in place of VANDE WALLE, J., disqualified.