# FILED
December 30, 1997 Cecil W. Crowson Appellate Cou rt Clerk IN THE COURT OF AP PEALS OF TENNESSEE WESTERN SECTION AT NASHV ILLE

DAWN LOUISE WADDELL ) WILLIAMS, ) ) Plaintiff/Appellee, ) Sumner Chancery No. 89C-244 ) RICHARD DANCE and ) FRED C. DANCE, ) ) Plaintiffs/Appella

nts, )

) v. ) ) Appeal No. 01A01-9701-CH-00008 THOMAS WICKLIFF COMER, ) Individually and as Trustee, et al., ) ) Defendants. ) )

APPEAL FROM THE CHANCERY COURT OF SUMNER COUNTY

AT GALLATIN, TENNE SSEE

THE HONORABL

E THOMAS E. GRAY, CH ANCELLOR

For the Plaintiff/Appellee : For the Appellan ts, Richard Dance and Fred C. Dance : John R. Phillips, Jr. Richard Dance Timothy R. Rector Fred C. Dance Gallatin, Tennessee Attorneys Pr o Se Nashville, Tennessee

AFFIRMED

HOLL Y KIR BY LI LLA RD, J.

CONCUR: W. FRANK CRAWFORD, P. J., W.S.

ALAN E. HI GHERS, J.OPINION

This case involves the interpretation of a conting ency fee em ployment agreement for two attorneys. The attorneys we re employed by the

plaintiff to file su

it to challenge the

validity of a trust anddeed. After the

plaintiff reques

ted that the attorn

eys withdraw fro

m representing he

r, the case

was settled. The attorneys thereafter filed a motion for att orney’s fees under the contingency fee contract. The tr

ial court denied t

he attorneys’ mot

ion for attorney’ s fees. We affi rm. The facts i nvolved i n the underlying litigation regarding the trust and deed are quite involved. We will discuss only th

e facts pertinent to the c

laim by the attorne

ys, Richard Danc

e and Fred C. Dance (“the Dances”) against their for mer client, Dawn

Louise Waddell Williams (“Williams”). In 1936, R.W. Comer, Guy L. Comer and M ont B. Comer created a revocable trust (the “Comer Trust”) with various classes of beneficiaries. Guy Comer was the appointed trustee. The trust was made irrevocab

le by a 1941 amendm

ent. In 1951, Mont B.

Comer transferr

ed certain real property to Guy Comer as trus

tee, tobe held for the benefit of Ann Comer Shannon and Jacqueline Comer Waddell and their issue. These two transfers were referred to in subsequent litigation as the “Shannon Deed” and the “Waddell Deed.” Upon Jacqueline Comer

’s death in 1987, W

illiams, as

one of Jacqueline Comer’s nine children, be came an income be

neficiary of the

“Waddell Deed”

trust established originally for the benefit of her mother. In 1969, Thomas W. Comer (“Trustee Comer”) became the successor truste

e upon the death of Guy Comer. In 1989, Trustee Comer determined that the “Shannon Deed” and “Waddell Deed” properties held in trust were not actuall

y par t of the Comer Trust but instead were

separate trusts. Trustee Comer then notifie d all parties who w

ere beneficia

ries under the Come

r Trust of his determination. Williams then contacted the Dances for legal advice. Richard Danceadvised Williams by letter that she should file suit to determine the validit y of the original Comer Trust, as well as the Shannon Deed and

the Waddell deed

. The letter state

d in part: You have recently d

iscussed with me

that letter. . . addressed to youby T.W. Comer [successor

Trustee]. It is now thought that the best procedure

would be to bring sui

t in the Chanc ery Court of Sumner County, Tennessee

against T.W. Comer

and all other beneficiaries

named under that T

rust [ the Com er Trust] created by your grandfather, M.B. Comer and his brothers to construe the me aning of that Trust as wellas two deeds executed by your grandfather and grandmother on or about August 15, 1951. The purpose of the lawsuit is to determine the validity of said Trust and deeds.2

As discussed with you, we do not guarante e the results of sa

id lawsuit. It is

possible, of course, that the suit could be lost and you would be charged with the costs

. Notwithstanding tha

t possibility you have

authorized the f

iling of the lawsuit. ***** Attorney’s fees . . . shall be 40% of the amount you receive from this litigation, with the proviso that in th

e eve nt there are pro

ceedings in the Ap

pellate Court, the

n my fee shall be 50% of all sums which you may collect. The aforementioned fees, which you will be obligated f

or and all fees awarded to me out of the amount you receive, are in addition to any and all fees awarded to me by the Court and payable out of the Trust and/or deed which are the subject of the litigation. The complaint filed by Dance on Williams’ behalf alleged that the Comer Trust and Waddell Deed

were violative of the rule against perpetuities. The complaint sought a declaration that the Comer Trust and Waddell Deed were void, as well as the appointment of a receiver and/or interim trustee to take possession, administer and distribute the property in question and the income fr om the property. The complaint also sought a determination of Williams’ ownership interest in the Comer Trust and Waddell Deed, as well as an accounting. In April 1992, the Da

nces, on Williams’ behalf, filed a m otion for partial s

ummary judgment, contending that the Comer Trust andWaddell Deed violated the rule against perpetuities. Trustee Comer filed a response and counter-motion for partial summary judgment, asserting that the Comer Trust and Waddel

l Deed were not v

iolative of the rul

e against perpet

uities. After a hearing, the trial court entered an order (“the January 1993 Order”) denying Plaintiff’s motion for partial summary judgment. It also filed a memorandum opinion finding that the Waddell Deed and

the Comer Trust did not violate the rule against perpetuities. Trustee Comer then filed a motion to clarify the January 1993 O

rder, asking the t

rial court to

grant his cross-motion for partial summary judgment. Subsequently, the trial court entered an order ( the “April 1993 Order”) expressly granting Trustee Comer’s motion for partial summary judgment. T

he April 1993 Orde

r also designated the January 1993 Order as a f

inal judgment, purs

uant toTenn. R. Civ. P. 54.02, and stated expressly that the Waddell Deed and the Comer Trust did not violate the rule against perpetuities. After the April 1993 Order, the Dances filed two pleadings in Willia

ms’ suit. In respon

se to the trial court’s

pre-trial confe

rence order, th

ey filed a pre-t

rial memorandum i

n March 1994 , reasserting the previo

usly rejected theory of a violation of the rule against perpetuities. In March 1994, the Dances also f

iled a motion to set aside the April 1993 Order granting partial summary judgmentto Trustee Comer o n the issue of the r

ule against perpe

tuit ies, app arently because of3

procedural problems. For want of opposition, this

motion was granted. However, the granting of the motion to set aside the April 1993 order did not affect the trial court’s January 1993 ruling that the Waddell Dee

d and the Comer Tru

st did not violate the

rule against per

petuities. In early September 1 994, Mr. Phillip Kelly, an attorney representing some of the other children of Jacqueline Com er Waddell in matt

ers involving the Co

mer Trust, propose

d that certain real property encomp

assed in the Wadd

ell Deed be sold, w

ith the proceeds i

nvested for the be

nefit of the nine children of Jacqueline Waddell, including Williams. Williams met with Richard Dance to discuss the letter. Shortly thereafter, W illiams told the Danc

es she no longer wa

nted them to represent her. As a result, in mid-September 1994, the Dances fi led a m otion to withdraw from representing Williams in the lawsuit. The Dances also moved to fix an attorney’s lien for services rendered to Williams. The trial court granted the motion to withdraw and reserved a ruling on the issue of fixing an attorney’s lien. Subsequently, at a he aring on the remaining issues in the lawsuit, Williams represented herself and indicated she

did not agree with

Mr. Kelly’s settle

ment proposal.Williams eventual ly settled the various contested issues in Ju ne 1996, approximately forty-one months after the trial court hadruled against Williams on the rule against perpetuities issue and nearly twenty months after the Dances had withd

rawn from repre

senting Williams. The settlement entered into by Williams cal led for certain

real property f

rom the Waddell Deed to be sold by Truste

e Comer and conve

rted into cash

proceeds. The cash proceeds were then invested in assets producing a regular income stream for the beneficiaries, including Williams. The settlemen tdid not invalidate th e Comer Trust. The

consent decree

stated that the tri

al court ha d “heretofore

determined” tha

t neither the Come

r Trust, t he Waddell Deed, nor the Shannon Deed “violate the rule against perpetuities.” In September 1996, the Dances filed a motion for an award of attorney’s fees, seeking: (1) an attorney’s fee in this case as a result of that contract of

employment between RichardDance and Fred

C. Dance and the Plaintiff and impose a lien for that fee on any recovery of money by the Plaintiff, (2) an a ttorney’s fee of Sixty Thousand Dollars ($60,000.00) payable from that property commonly referred

to in this litigation as the Waddell Deed property, and (3) an attorney fee

of Thirty Thousand

Dollars ( $30,00 0.00) payable from the R.W.COMER & SON Trust all for work done by the movants in connection with the above captioned litigation.4

The Dances argued that the settlement to which Williams ultimately agreed was similar to a proposal the Dances had pre

viously discussed w

ith Williams. The tr

ial court denied t

he Dances’ motion for an award of attorney’s fees. From this decision, the Dances now appeal. On appeal, the Dances assert that the evidence shows that Williams entered into a contingent fee employment arrangement with the Dances, and that it was terminated without cause. They maintain that their discharge was an attempt to defeat the fee arrangement that entitled the Dances to 40% of any recovery that Williams received from the ensuing litigation. Williams assert s that the attorney employment agreement states that the purpose of the lawsuit was “to determine the validity of” the trust, that is, to secure a

ruling by the trial court that the trust was in violation of the rule against perpetuities and therefore invalid. This was not done. Williams notes that she was a beneficia ry of the trust and

would have received some benefit from it, regardless. The settlement merely changes the form of the corpus of the trust, from re

al estate to cash, Williams contends. Consequently, no “contingency” was satisfied and the Dances are

entitled to no fee. Our review of this ca

se is de novo upon the record with a presumption of correctness of the findings of fact by the trial court. Absent error of law, the trial court ’s decision will be affirmed, unless the evidence preponderates against the factual findings. Tenn. R. App. P. 13 (d). No presumption of correctness attaches to the trial court’s conclusions of law. See Carvell v. Bott oms , 900 S.W.2d 23, 26 (Tenn. 1995). In construing a contract between an attorney and a client, the general rules of contract law apply

. Alexander v. Inman , 903 S.W.2d 686, 694 (Tenn. App. 1995) . The court must not o nly look at the language o

f the contract, b

ut must also seek to a

scertain the inte

nti on of the parties. Covington v. Ro binson , 723 S .W.2d 643, 645 (Tenn. App. 1986). The court will adopt the construction which is reasonable and fair. Id. at 645 -46. In a contract between an attorney and a client, ambiguities a

re const rued against the attorney who drew the contract. Alexander , 903 S.W.2d at 694. Generally, a contingency fee agreement is understood to be “an agreement for legal service s under which the amount or payment of the fe

e depends, in whol

e or in part, on the outcome of the proceedings for

which the services were rendered.” Id. at 696. Contingent fees are frequently higher than hourly fees bec

ause the attorne

y “has assumed a s

ignificant degre

e of risk that he or

she will5

not be compensated if the outcome is not successful.” Id. In this case, we must determine whether enforcement of the contingency fee contract, unde r the interpretation advanced by the Dances, would contravene Disciplinary Rule 2-106 of the Code of Professional Re

sponsibility, Tenne

ssee Supreme Cour

t Rule 8. DR 2-106 pro

vides: (A) A lawyer shall not

enter into an agr

eement for, charge , or collect an illegal or clearly excessive fee. (B) A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudencewould be left wit h a d efinite and firm c

onviction that the f

ee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include the following: (1) The time and labor required, the novelty anddifficulty of the questions involved, and the skill requisite to perform the legal service properly. (2) The likelihood, if apparent to the client, that the acc eptance of the particular employment will preclude other employment by the lawyer. (3) The fee cus

tomarily charge

d in the locality for

similar legal serv

ices. (4) The amount involved and the results obtained. (5) The time limitat

ions imposed by the c

lient or by the circ

umstances. (6) The nature a

nd length of the pro

fessional relati

onship with the clie

nt. (7) The experie

nce, reputation,

and ability

of the lawyer

or lawyers performing the services. (8) Whether the fee is fixed or contingent. These factors are

guides; the reaso

nableness of the fee is determined by the circumstances in each individual case. White v. McBride , 937 S.W.2d at 796, 800 (Tenn. 1996). One factor which must be considered is whethe r ther e was a true cont

ingency; that is, whether there was a genuine risk of nonrecovery

. Id. at 801. In White v. McBride , an attorney entered into a contingency fee contract with a client on a probate matter. Id. at 797. The client was the survivin g spouse of a decedent who had left nothing in her will to the client. Id. It wa s undisputed that the surviving spouse was entitled, as a matter of law, to one-third of the decedent’s estate. Id. at 799. The only contingency was how large a disbursement the client would receive. Id. The attorney argued that there was a genuine risk of nonrecov ery because re

latives removed s

ome of the assets to Texas. Id. at 800. However, the Court noted that the attorney was not aware of the removal of asset

s at the time

the contract was executed, and concluded that the attorney could not have believed there w

as a genui ne risk of nonrecovery at the time the contract was executed. Id. at 801. Considering this factor , as well as the other factors set forth in DR 2-106, the Court determinedthat the fee sought to be charged under the agreement was “clearly excessive” and that the agreement was therefore unenforceable. Id. In this case, Williams is a beneficiary of the trust at issue, and

would have rece

ived benefits from the trust even if the lawsuit had never been filed. The settlement entered into did not increase1 As opposed to 30% in White

. 6

Williams’ proportionate share of the income from the

trust. Instead, th

ere was a change in the form of some of the corpus

of the trust, from r

eal estate to ca

sh proceeds, and

investment of the c

ash proceeds in order to provide an income stream to all beneficiaries, including Williams. Therefore, it

appears that the only true contingency involved was whether the trust would be declared invalid as violative of the rule against per petuities. This

objective was not accomplished. As to the remainder of the

litigation, there was no true risk of non-recovery, since Williams remained

a beneficiary of

the trust. As in White , the only true contingency was how large a disbursement the client would receive. White , 937 S.W.2d at 799. T herefore, unde

r the interpreta

tion of th e agreement

advanced by the D

ances, aside fr

om the issue regar

ding the validity

of the trust, there was

no genuine risk of nonrecovery. The agreement would enti tle the Dances to 40% 1 of any monies received by Williams, under circumstances in wh ich there wa s no assumption of “a significant degree of r isk that [they would ] not be compensa

ted if the outcome

[were] not succ

essful. ” Alexander , 903 S.W.2d at 696. The Dances here seek $90,000 in fees, despi te the fact that the primary objective, obtain ing a d eclaration that t

he trust was invali

d, was not accompl

ished. This indicates a likelihood that the fees sought under the Dance s’ interpr etation of the employment agreement would be excessive under DR 2-106. Against this backdrop, we must examine the agreement and ascertain the intention of the parties. The letter agreement indicates that the Dances recommended filing a lawsuit against Trustee Comer and the bene

ficiaries of the

trust: . . . to construe the meaning of that Trust as well as two deeds. . . . The purpose of the lawsuit is to dete

rmine the validity o

f said Trust and de

eds. Thus, the agreement states explicitly the purpose of the litigation. It then states that

the attorney’s fees would be “40% of the amount you receive from this litigation. . . ,” with a provision for a 50% share if the matter were appealed. The statement in the agreement of the purpose of the litigation indicates an intention by the parties that the Dances should obtain 40% of the amounts collec

ted only if the purp

ose of the lawsuit

were accomplished, i.e., the trust were de clared invalid. T

his interpretatio

n is supported by the high percentage

of the contingent fee, 40% at the trial level and 50% if ap p ealed; such percentages indicate an intent to compensate the attorneys for assuming “a significant degree of risk that [they]7

will not be compensated if the outcome is not successful.” Alexander , 903 S.W.2d at 696. In a contract between

an attorney and a client, ambiguities are construed against the attorney who drew the contra

ct; in this case against the Dances. Id. at 694. As noted above, adoption of the interpretation asserted by the Dances would likely result in an excessive fee; this Court will adopt the construction that

i s reasonable and fair. Covington , 723 S.W.2d at 645. U nder all of these circumstances,

we find that the evide

nce prepondera

tes in favor of the trial court’s implicit finding that the parties to the agreement inten ded t he attorney’s fee to be contingent upon obtaining a declarationby the court that the trust at issue was invalid. Consequently, we affirm the trialcourt’s denial of the Dan

ces’ claim for a

ttorney’s fees. The decision of the trial co urt is affirmed. Co sts on appeal are

taxed to the Appel

lants Richard Dance and Fred C. Dance, for which execution may issue if necessary.

HOLLY KIRBY LILLARD, J. CONCUR:

W. FRANK CRAW

FORD, P. J., W.

S.

ALAN E. HIGHERS, J.