Opinion ID: 2709668
Heading Depth: 3
Heading Rank: 1

Heading: The Terms of the Retainer Agreement

Text: Like Judge Pallmeyer, we agree with Judge Keys’ well reasoned opinion that Gomberg does not hold a valid lien on Goyal’s settlement. The retainer agreement authorized an equitable lien on only the funds “secured by us.” Gomberg’s representation put no cash in Goyal’s hands. Gomberg argues, though, that GTI’s offer of $375,000 in early 2004 constituted funds that he “secured” for Goyal. In support he cites a dictionary’s definition of “secure” as “to give a pledge of a payment to (a creditor) or of (an obligation); to bring about, effect.” Gomberg seems to be relying on the part of the definition that refers to securing repayment of a debt 10 No. 12-3756 with a promise to pay, but such “security” requires an agreement between the relevant parties. That portion of the definition has no application here, of course, for the parties (GTI and Goyal) simply never reached an agreement while Gomberg was involved. Gomberg argues further that he “secured” $375,000 for Goyal when GTI made the offer: “If Mr. Goyal had accepted the settlement offer of $375,000.00, GTI would have paid it. The offer was on the table. All it required was Mr. Goyal’s agreement.” That’s true but legally irrelevant. In our legal system, it is axiomatic that there is no contract (and no settlement) without both offer and acceptance. This is a fundamental principle of contract law. See 2 Williston on Contracts § 6:1 (4th ed.) (“Acceptance of an offer is necessary to create a simple contract, since it takes two to make a bargain.”); Restatement (Second) of Contracts § 3 (1981) (“An agreement is a manifestation of mutual assent on the part of two or more persons.”). GTI’s offer, alone, in no way “secured” funds for Goyal and thus no funds were “se- cured” by Gomberg. Another fundamental principle of contract law dictates that an offer, once rejected, no longer exists. See Minneapolis & St. Louis Ry. Co. v. Columbus Rolling-Mill Co., 119 U.S. 149, 151 (1886) (“[N]o contract is complete without the mutual consent of the parties, an offer to sell imposes no obligation until it is accepted according to its terms. . . . [A]nd either rejection or withdrawal leaves the matter as if no offer had ever been made.”). GTI’s offer of $375,000 was extinguished once Goyal rejected it. No. 12-3756 11 To illustrate how unreasonable Gomberg’s position is, suppose that one condition of GTI’s offer had been Goyal’s agreement never to work in the industry again. Receiving an offer with such an onerous condition would not have meant that his attorney had “secured” the offered funds. And Goyal retained the right to reject any conditions of a proposed settlement, including even the mutual releases that would be customary. Or suppose that GTI and Goyal had actually agreed to settle for $375,000, with a written and signed settlement agreement with mutual releases. And then suppose that GTI had reneged on the agreement and refused to pay. No attorney in his right mind would claim that he had then “secured” $375,000 for Goyal and was then entitled to immediate payment of a percentage of the unpaid settlement. See Restatement (Third) of Law Governing Lawyers § 35(2) (2000) (“Unless the contract construed in the circumstances indicates otherwise, when a lawyer has contracted for a contingent fee, the lawyer is entitled to receive the specified fee only when and to the extent the client receives payment.”). Gomberg did not take Goyal even as far as an agreement, and yet he still claims a right to a fee based on having obtained an unacceptable offer. The retainer agreement’s term “secured by us” is not ambiguous as applied to the unaccepted offer. Gomberg is not entitled to an equitable lien on funds that were merely offered to Goyal on terms that were not ac- ceptable to him. 12 No. 12-3756