Court Opinion

ID: 9707149
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:03:47.908486+00
Date Added: 2024-06-11T18:22:28.622694
License: Public Domain

RODOWSKY, Judge,
concurring.
Although I agree with the result in this case, I would explain it by analyzing the special contract sued upon as having effected a novation.
*192The authority of an attorney to act for a client is revocable at the will of the client. Boyd v. Johnson, 145 Md. 385, 389, 125 A. 697, 698-99 (1924). The client’s power to revoke is an implied term of the retainer contract so that, by terminating the representation, with or without cause, the client does not breach the retainer contract. Martin v. Camp, 219 N.Y. 170, 114 N.E. 46, reh’g denied, 219 N.Y. 627, 114 N.E. 1072 (1916), modified on other grounds, 220 N.Y. 653, 115 N.E. 1044 (1917). If the client discharges the attorney for cause, the prevailing rule is that the attorney may not recover any compensation. See F. MacKinnon, Contingent Fees for Legal Services, at 77-80 (1964); S. Speiser, Attorneys’ Fees § 4:37, at 189-90 (1973); E. Wood, Fee Contracts of Lawyers Sec. 68, at 201-203 (1936). If the client terminates the representation without cause, the attorney is entitled to be compensated for the reasonable value of the legal services rendered prior to termination. Palmer v. Brown, 184 Md. 309, 40 A.2d 514 (1945); Boyd v. Johnson, supra, 145 Md. at 389-90, 125 A. at 699; Western Union Telegraph Co. v. Semmes, 73 Md. 9, 20 A. 127 (1890). For purposes of the instant appeal we consider Ellis to have terminated Kandel’s representation without cause. By finding that Kandel’s surrender of his retaining lien was the consideration for Yogelhut’s promise to pay, the trial court necessarily found that Kandel had not breached the retainer contract.
Thus, as a matter of legal theory, Ellis had a present obligation as of the time of termination to pay Kandel the reasonable value of the services rendered by Kandel. On the other hand, Kandel, in accordance with legal theory, would retain the funds and papers of the client then in hand until he received that payment. Ashman v. Shecter, 196 Md. 168, 76 A.2d 139 (1950). The reality is that this situation can result in an impasse. Kandel and Vogelhut cut through the impasse in a practical manner by reaching their agreement.
*193Kandel surrendered his retaining lien on Ellis’s papers and moneys as well as his claim against Ellis. It would be inconsistent for Kandel to receive, in the event of recovery, twenty-five percent of Vogelhut’s fee and at the same time claim in quantum meruit against Ellis. This is because the former substitutes for the latter. The implicit beginning point of the negotiation between Vogelhut and Kandel’s representative, Wolf, was Kandel’s quantum meruit claim on which an unliquidated amount was then due and payable by Ellis. The contract that was made substituted Vogelhut for Ellis as obligor, substituted a percentage of Vogelhut’s contingent fee for the unliquidated amount, deferred payment, and made payment contingent on Vogelhut’s earning a contingent fee out of a recovery on behalf of Ellis. Against that background Vogelhut’s agency, illegality, and consideration arguments may be dispatched quickly.
Vogelhut was not contracting as agent for a fully disclosed principal inasmuch as he was the promisor. Concededly, Ellis benefited from the novation because her liability was discharged. She was no longer an obligor; however, she is not a promisor.
Vogelhut’s primary illegality argument assumes that DR 2-106 governs and that it renders the contract unenforceable. This argument confuses the two obligations involved here. Kandel was governed by DR 2-106 in valuing his services and could not ethically claim an excessive fee for release of his retaining lien. Ellis’s obligation to pay Kandel, however, was discharged by novation. The special contract that was substituted for the quasi-contract fee agreement, and on which this suit was brought, is not subject to DR 2-106.
Finally, as consideration for Vogelhut’s promise there is the detriment to Kandel in surrendering the lien, the benefit to Vogelhut in obtaining the files, and the benefit to Ellis in obtaining a discharge on the quantum meruit obligation.