Opinion ID: 1521565
Heading Depth: 2
Heading Rank: 2

Heading: DR2-106(A): Charging an Excessive Fee

Text: Bar Counsel alleged, and the Hearing Committee found, that Respondent charged a clearly excessive fee. Respondent claimed at different times that his fee was: 1) $3,500 based on one-third of the amount that the third party carrier had offered; 2) $3,000 based on quantum meruit; 3) and one-third of any settlement. Respondent testified that his claimed fee was only a negotiating position. H.Comm.Rpt. 4 and 9. Respondent relied on the Kaushiva decision in determining his fee. [] In Kaushiva, the court stated that an attorney who enters into a contingency fee agreement with his client, substantially performs, and is then prevented by his client from completing performance is entitled to the full amount specified in the fee agreement. 454 A.2d at 1374. The court further stated only where an attorney renders less than substantial performance will quantum meruit be the appropriate measure of damages. Id. The Kaushiva court held that the attorney was entitled to his contingency fee. The attorney in that case had represented his client at three days of arbitration hearings and was drafting a final brief concerning the arbitration when his client discharged him due to a personality conflict. In Kaushiva, the court cited in support of its holding Mackie v. Howland, 3 D.C. App. [App.D.C.] 461 (1894). Mackie involved an attorney who was authorized by a representative of an estate to collect from Venezuela monies due on bonds. A contingent fee arrangement was agreed to. The collection took many years during which time the attorney had performed services of great value in attempting to collect the monies. The attorney was discharged without cause shortly before the money was received. The court held that the discharged attorney was entitled to the contingent fee because the new attorney had done little toward collection of the monies and the discharged attorney had substantially performed. A more recent case from this jurisdiction than Mackie, not cited in Kaushiva, is Friedman v. Harris, 81 U.S.App.D.C. 317, 158 F.2d 187 (1946). In Friedman the attorney was hired to file a personal injury suit under a contingent fee contract. He was discharged by the client, although it was unclear whether he was discharged before or after the suit was filed. The court reversed because the facts were unresolved as to when the attorney was discharged. The court stated, however, that the discharged attorney was entitled only to the value of his services; otherwise his client's right to choose her own lawyer would have little practical value. 158 F.2d at 188. Friedman and Kaushiva can be read together. Friedman stands for the principle that an attorney discharged without cause who has not substantially performed is not entitled to recover under the contract but only is entitled to quantum meruit. Assuming that Respondent in the instant case was not discharged for cause, the issue is whether Respondent substantially performed. [] While Respondent performed the services that he should have prior to his discharge, the services were not substantial in furtherance of securing benefits for the client. See Mackie, supra; Friedman, supra . Thus, Respondent was not entitled to a one-third contingency fee. In addition, Respondent's claim of a $3,500 fee based on one-third of the amount that the third party carrier had offered was improper. Respondent's negotiations, which were allegedly made on behalf of Ms. Houston, resulted in the third party carrier's settlement offer. However, these negotiations occurred after Ms. Houston had discharged Respondent. Accordingly, Respondent had no authority to enter into such negotiations on behalf of Ms. Houston, who was no longer his client. Further, the Board concludes that Respondent's actions and testimony demonstrate that he did not in good faith assert that he was entitled to a one-third contingency fee pursuant to the Kaushiva case. Respondent claimed varied fees and then asserted that the amounts were only a negotiating position. For these reasons, the Board affirms the Hearing Committee's conclusion of a violation of DR2-106(A).