Opinion ID: 3052575
Heading Depth: 4
Heading Rank: 2

Heading: Improper modification of the fee agreement

Text: Appellants also claimed the May 2001 corporate resolution, which provided for a 1% contingency fee, was a modification of the hourly fee agreement in the March 2001 retainer agreement, and this modification did not comply with Washington law.12 The district court found the May 2001 corporate resolution was not a modification of the fee agreement in the March 2001 hourly retainer agreement.13 The court further held even if either the May or the September 2001 corporate resolutions modified the March 2001 hourly fee agreement, Harris did not breach his fiduciary duty by modifying the agreement to provide for a contingency fee; the agreements complied with Washington law because they were “fair and reasonable, made after full disclosure and free of undue influence based on the standards set out in Ward v. Richards & Rossano, Inc.” 3. Contingency fee over-charge and failure to set forth the method for calculating the fee Appellants also claimed Harris over-charged them under the September 2001 corporate resolution, by calculating the 1.5% fee based in part on the price of Tesoro’s option to pur12 Under Washington law, when an attorney’s fee agreement is renegotiated after the attorney-client relationship is established, the fee modification is “void or voidable until the attorney establishes that the contract with his client was fair and reasonable, free from undue influence, and made after a fair and full disclosure of the facts upon which it is predicated.” Ward v. Richards & Rossano, Inc., 754 P.2d 120, 124 (Wash. Ct. App. 1988) (internal quotation marks and citation omitted). 13 Specifically, the district court found the May 2001 corporate resolution and the March 2001 retainer agreement were separate agreements: the March hourly retainer dealt with Harris’s “work in trying to resurrect the Bertelsen[s’] business relationship with ARCO. The May [2001] corporate resolution dealt with the potential sale of the six gas stations through the efforts of Mr. Harris and Mr. McPherson.” The district court also held the subsequent September 2001 corporate resolution was not a modification of the May 2001 corporate resolution, because the May 2001 resolution had expired by its own terms. BERTELSEN v. HARRIS 10267 chase the stations, which it had not exercised.14 The district court made no findings as to this claim. It also made no findings as to Appellants’ claim that Harris breached his fiduciary duty by violating RPC § 1.5(c)(3), which requires “[u]pon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.” The district court held, even if Jeffrey and Amy Bertelsen had a valid breach of fiduciary duty claim as to the May and September 2001 corporate resolutions, the claim was barred by Washington’s three-year statute of limitations for such actions, because the Bertelsens did not file their action until December 2004.