Opinion ID: 1105538
Heading Depth: 1
Heading Rank: 3

Heading: The Pre-Saucier Method

Text: Predating the seminal Saucier v. Hayes Dairy Products, Inc . case, an attorney retained on contingency, discharged by the client without cause, and replaced by different counsel was entitled to the full benefit of the contract with the client. United Gas Public Service Co. v. Christian, 186 La. 689, 173 So. 174, 176 (1937); D'Avricourt v. Seeger, 169 La. 620, 125 So. 735, 737 (1929). On original hearing in Saucier, this court followed this time-honored precedent thereby safeguarding the contractual contingent fee for discharged counsel in a without cause dismissal. [11] This led to two significant and undesirable results in the attorney-client contingent fee relationship: (1) restriction of the client's right to choose counsel by forcing payment of two contingency fees; and (2) awarding terminated counsel full contractual benefits for less than full and entire performance, which a contingency arrangement necessarily contemplates. Therefore, on rehearing this court formulated a new rule for apportioning fees between counsel discharged without cause and successor counsel. With regard to remuneration of attorneys discharged for just cause before Saucier, both the Third and Fourth Circuits addressed the issue in the contingency fee context. Smith v. Westside Transit Lines, Inc., 313 So.2d 371 (La.App. 4th Cir.), writ denied, 318 So.2d 43 (La.1975); Guilbeau v. Fireman's Fund Insurance Co., 293 So.2d 216 (La.App. 3d Cir.1974). Both circuits agreed that attorneys dismissed for good cause were relegated to a quantum meruit recovery, and were not entitled to their full contractual contingency fee as allowed under the D'Avricourt-United Gas line of cases concerning without cause dismissals. Although permitting only quantum meruit recovery for counsel discharged for cause, the Smith panel observed that the method encompasses far more than simply the hours spent by the attorney.... Smith, 313 So.2d at 378. Observing that an hourly calculation could lead to absurd results in contingency fee situations, the court held that discharged counsel's fee should be fixed based upon a percentage of the maximum he or she could have recovered in the case. The court reasoned: In making that evaluation and allocation the trial judge should not confine his inquiry to the number of hours spent but should carefully evaluate the quality of the work performed and the effect that each attorney's work had on the ultimate settlement of the case. Id. Even in formulating a rule more palpable for the client, as contrasted with the discharge without cause situation, the Smith panel recognized the client could still be cast with fees disproportionate to the settlement amount. Id. To summarize the pre- Saucier status of apportioning fees among discharged and successive counsel, clients were liable for two contractual contingency fees in dismissals without cause. In dismissals with just cause, clients remunerated discharged counsel on a quantum meruit basis, with the successor attorney receiving the benefit of his or her contingency fee contract. As is readily apparent, this dichotomy exposed the client to liability beyond that for which he or she initially contracted.