Opinion ID: 2625921
Heading Depth: 2
Heading Rank: 2

Heading: Elliott and Dudding

Text: Two prior decisions of this court hold that the Rule 5(d) notice requirement works to limit quantum meruit recovery of attorney's fees, when the agreed upon legal services have not been completed because of termination of the attorney-client relationship. In Elliott v. Joyce, 889 P.2d 43 (Colo.1994), we held that where there is a contingent fee agreement and the attorney voluntarily withdraws from representation prior to completing the contingency of the fee agreement, the attorney may recover under quantum meruit only if that possibility is outlined in the fee agreement or a subsequent written agreement. Elliott, 889 P.2d at 45. In Elliott, attorney Elliott and client Joyce entered into a written contingent fee agreement. After Elliott expended about 120 hours of time on Joyce's behalf, Elliott moved to withdraw from the case. The motion was granted and Joyce retained new counsel who was able to obtain a settlement. Elliott then sought attorney's fees based on quantum meruit for the time and efforts he expended on Joyce's behalf. Applying Rule 5(d), we held that where an attorney voluntarily abandons the contingent fee agreement by withdrawing from representation, there can be no recovery in quantum meruit unless the client's possible liability is expressly stated in the agreement. Id. at 45. We did so because without notice to the contrary, a client has no expectation to pay if the attorney withdraws prior to completion of the work agreed upon. Id. at 46. Therefore, for the attorney to be compensated under quantum meruit where the agreed upon services are not completed, it must be shown that in the agreement the client had notice of this potential liability to the attorney in the event that the services were not completed. Citing our Rule 5(d) analysis in Elliott, in Dudding v. Norton Frickey & Assoc . we determined that although recovery for fees under a theory of quantum meruit generally exists for attorneys, it was not available because Dudding did not have notice that Norton Frickey & Associates could seek such recovery. Dudding, 11 P.3d at 444. In Dudding, client Dudding and attorneys with Norton Frickey & Associates entered into a written contingent fee agreement which set forth the conditions of payment as a percentage of damages recovered for representation in a wrongful termination suit against Dudding's employer. The agreement did not address any payment in the event that Dudding was reinstated in his employment and no monies were recovered. Although, Norton Frickey attorneys filed suit on Dudding's behalf, Dudding independently settled the case, obtaining reinstatement in his employment without the assistance of his attorneys. In Dudding, as in Elliott, the attorneys did not recover the monies from which the contingency fee was to be paid. In the case before us, the court of appeals based its decision on Dudding. Quoting Dudding, the court of appeals stated that attorneys may seek quantum meruit recovery even when a contingent fee contract fails, provided that the attorney gave the client some notice in writing of the possibility of a quantum meruit claim. Id. at 449. In the case before us Mullens did not provide Hansel with written notice that payment for legal services was required even if the services were not completed. Hence, based on this language from Dudding the court of appeals determined that Mullens was not entitled to attorney's fees under quantum meruit. We believe that our holding in Dudding is limited to those circumstances where the attorney has failed to substantially perform the agreed upon legal services. We specifically recognized this limitation in Dudding by stating [t]he case before us today does not encompass the question of whether substantial performance of the agreement entitles the attorney to the full contingent fee. [11] Therefore, we conclude that the rule in Dudding, and in Elliott, does not apply to those situations where the agreed upon services have been completed.