Opinion ID: 2499841
Heading Depth: 1
Heading Rank: 11

Heading: Barillas-Magness Settlement

Text: The same day Respondent placed calls to Nevadomski and Schaeferon April 8, 2008Respondent was granted leave to withdraw from her representation of the Barillas for personal reasons. [10] The Barillas were concerned about the expense of hiring new counsel for the sole purpose of litigating their attorney's fees claim, but they ultimately chose to hire Nick Swartzendruber (Swartzendruber) for this purpose. They did so, in part, to ensure Respondent would be fully compensated for her efforts on their behalf, and in part because they understood that Respondent agreed Swartzendruber's fees would come off of the top of any recovery, with the remaining funds to be divided between them and Respondent, as outlined in their contingency fee agreement. To protect her interests, Respondent also filed a notice of attorney's lien asserting a claim over one-third of the Barillas' attorney's fees recovery. Due to Respondent's withdrawal, the Barillas' attorney's fees hearing was rescheduled until the summer of 2008. Before the scheduled hearing, however, the Barillas signed a settlement agreement with the Magness Defendants whereby the Magness Defendants would pay the Barillas $275,000 for damages, fees, costs and interest, $91,666.67 of which was due to Respondent per the contingency fee agreement and her attorney's lien. The agreement between the parties notes that while Respondent had declined the opportunity to be a party to the settlement, it is the parties [sic] intent that all matters relating to the Litigation be fully and finally resolved by the agreement. [11] The Barillas and the Magness Defendants filed a motion seeking the trial court's approval of the settlement and served Respondent with that motion. Initially, Respondent objected to the settlement, filing a Motion to Intervene, And for Leave to Do Expedited Discovery. But on June 24, 2008, during a telephonic conference in which the trial court judge questioned her, Respondent announced she would not object to the agreement, notwithstanding her belief that the settlement amount was about $200,000 less than what was due. [12] And on June 26, 2008, Swartzendruber filed on Respondent's behalf her Withdrawal of Objection to Settlement. [13] That same day, the trial court issued its order approving the settlement agreement, noting the attorney's fees were fair and reasonable, and suggesting Respondent's recourse for additional compensation lay in pursuing a quantum meruit claim against the Barillas. [14] Just four days later, however, Respondent reconsidered her withdrawal, which she now characterizes as an impulsive act made in a weak moment, and filed an objection to the trial court's order, requesting it vacate its additional findings. [15] On July 12, 2008, Respondent also filed a motion for post-trial relief, seeking a trial on her fee claim and attaching an updated affidavit regarding her fees. The trial court denied both motions. Soon thereafter, Respondent filed a notice of appeal with the Colorado Court of Appeals seeking redress for her compensation claims; the Court of Appeals concluded Respondent lacked standing to appeal the trial court's order approving the settlement agreement. [16] Respondent's petition for certiorari challenging the Court of Appeals' decision is now pending before the Colorado Supreme Court. The Hearing Board finds and concludes Respondent's clients had grown weary of litigation by the time the case was remanded to determine damages and attorney's fees. By that time, Respondent and the Magness Defendants had been engaged in litigation in this case for over ten years, and all parties, not least the Barillas, were anxious to conclude the case and resolve the pending matters, including payment to Respondent of her share of the attorney's fees. In fact, the parties sought judicial approval of the global settlement to preclude further litigation with Respondent. Understanding Respondent to have withdrawn any objection to the settlement, the Barillas and the Magness Defendants finalized their agreement. When Respondent changed her mind and challenged the settlement, she placed the Barillas and the Magness Defendants in a tenuous position. They were then faced with the likelihood that Respondent would continue to litigate the reasonableness of the attorney's fees award, despite their collective desire to bring the case to a close. Nevertheless, the Hearing Board cannot find that Respondent violated Colo. RPC 8.4(d) by challenging the settlement, intervening or appealing the court's denial of her motion to intervene. While the Hearing Board questions Respondent's legal argument that she has an independent claim for attorney's fees, Respondent's motions and appeals do not constitute a violation of Colo. RPC 8.4(d). In so finding, the Hearing Board is cognizant of the comment to Colo. RPC 3.1, which notes a legal action cannot be considered frivolous if a lawyer is able to support that action by a good faith argument for an extension, modification or reversal of existing law in light of the law's ambiguities and potential for change. Here, Respondent sought recourse for an arguably colorable claim [17] through traditional legal channels, and there is no evidence in the record indicating the trial court or the Court of Appeals considered sanctions for her efforts to do so. As such, the Hearing Board finds the People failed to prove by clear and convincing evidence that Respondent's conduct in challenging the settlement was prejudicial to the administration of justice.