Opinion ID: 1204924
Heading Depth: 1
Heading Rank: 6

Heading: Recovery Under Oral Agreement

Text: A second theory of recovery that Wilson had in this case was grounded in an alleged oral agreement between the two parties. The decisions of this Court have not always made clear that, in a charging lien proceeding, an attorney's recovery may be premised upon a separate agreement between the attorneys involved. Courts in other jurisdictions have been explicit on this issue. See Ex parte Counts, 683 So.2d 968 (Ala.1996); Jones v. Donovan, 244 Ark. 474, 426 S.W.2d 390 (1968); Komisarow v. Lansky, 139 Ind. App. 351, 219 N.E.2d 913 (1966). See also 73 A.L.R.2d 991 and the cases cited therein. We pointed out in Kopelman that: `In a contingency fee case, where attorneys employed by one firm leave the firm and take clients, and subsequently obtain a recovery, a district court, in allocating attorney fees, should consider the length of time each firm spent on the case, the proportion of funds invested by each firm, the quality of representation, the result of each firm's efforts, the reason the client changed firms, the viability of the claim at transfer, the amount of recovery realized, and any pre-existing partnership agreements. ' Kopelman, 196 W.Va. at 499, 473 S.E.2d at 920 ( quoting syllabus, In re L-tryptophan Cases, 518 N.W.2d 616 (Minn.Ct.App.1994)) (emphasis added). While Kopelman dealt with the single theory of quantum meruit, our decision clearly indicated that the factors we developed in that case to help determine quantum meruit are used in a contingency fee case where lawyers employed by one firm leave that firm and take a client with them and no contract exists governing how the fees are to be divided [.] Kopelman, 196 W.Va. at 499, 473 S.E.2d at 920. (emphasis added.) The issue of an oral agreement between attorneys to share in fees recovered from cases jointly worked on was addressed by this Court in Watson v. Pietranton, 178 W.Va. 799, 364 S.E.2d 812 (1987). Watson involved an action brought by the executrix of an attorney's estate against a law firm to enforce a fee splitting agreement between the attorney and law firm. The deceased attorney, Mr. Pietranton, had engaged the law firm to work with him on thirty-five cases. An oral agreement between the attorneys called for an equal share of any recovery on the cases. In one particular case Mr. Pietranton was retained by Royal and Kelly Sayre to represent their interests in the wrongful death of their two children. Mr. Pietranton subsequently asked the law firm to work with him on the case. Mr. Pietranton, however, did not inform the Sayres that he had associated with a law firm. Shortly after engaging in preliminary work on the case, Mr. Pietranton died. The law firm thereafter contacted the Sayres and entered into a separate contract to represent them in the wrongful death claims. The law firm filed a complaint on behalf of the Sayres. The case eventually went to trial. A verdict was returned in favor of the Sayres for the sum of $800,000. After the verdict was returned the executrix of Mr. Pietranton's estate (his wife) sent a letter to the firm requesting a share of the fee recovered in the Sayre case. The law firm filed a declaratory judgment action to determine what, if any, fee was owed to the estate of Mr. Pietranton. The executrix answered and filed a counterclaim demanding fifty percent of the attorney fees obtained in the case. The attorney fees amounted to $200,000. The circuit court ruled in favor of the law firm. The circuit court found that the fee arrangement between the deceased Mr. Pietranton and the law firm violated DR 2-107 of the West Virginia Code of Professional Responsibility. [7] This Court rejected the circuit court's decision. Instead, this Court formulated the single syllabus in Watson, where we held that [a] lawyer or law firm which enters into and honors a fee-splitting agreement with another lawyer may not later raise DR2-107 of the West Virginia Code of Professional Responsibility as a bar to enforcement of the agreement. We concluded that based upon the evidence of past fee sharing arrangements, the executrix of the estate was entitled to fifty percent of the attorney fees obtained by the law firm. Based upon the above, we conclude that when attorneys jointly undertake to represent a client there is a rebuttable presumption that the attorneys are to equally share any recovery of attorney's fees. This rebuttable presumption arises only in the absence of a valid oral or written agreement between the attorneys as to the division of attorney's fees. In this case, Wilson contends that an oral agreement existed between Castleberry and him, concerning the division of attorney fees recovered in the underlying Shaffer case. In an effort to show that agreement Wilson attempted to question Castleberry, during cross examination, about oral agreements they had involving other cases. The circuit court precluded such testimony. Although the circuit court did not allow Wilson to develop specific aspects of the alleged oral fee sharing agreement between the parties, Wilson elicited from Castleberry an admission that they orally agreed to equally share in the attorney fees from any recovery in the Shaffer case. In spite of the admission by Castleberry that an oral agreement existed between the two attorneys regarding their attorney fees, the circuit court precluded any development of that theory by Wilson as a basis of recovery. We believe it was error for the circuit court not to allow Wilson to proffer evidence that might have allowed him to recover under the alleged oral agreement. We hasten to point out that we are not intimating that the alleged oral agreement is valid or enforceable. Moreover, the record is silent as to whether any such oral agreement contemplated the amount of work effort necessary from each attorney in order to share the attorney fee on a fifty-fifty basis and how the oral agreement would be modified, if at all, should the attorneys terminate their relationship prior to recovery in the case. Further, the record lacks evidence as to whether such an agreement was conditioned on both parties assisting in all aspects of the case and the amount of compensation to each party in the event of settlement as opposed to trial. Our position here is merely that Wilson had a right to develop this theory with appropriate evidence. We hold, therefore, that a charging lien is the equitable right of an attorney to have fees and costs due the attorney for services in a particular action secured by the judgment or recovery in such action. A charging lien by an attorney against another attorney, involving a case in which each worked, may be premised upon an oral or written fee sharing agreement between the attorneys. A charging lien brought against another attorney may proceed in a separate suit or the underlying action in which the attorneys had formerly worked on together. The circuit court's ruling which prohibited Wilson from proffering evidence of an alleged oral agreement between the parties is reversed.