Court Opinion

ID: 7141180
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:29:25.505767+00
Date Added: 2024-06-11T16:14:48.771230
License: Public Domain

Dissenting Opinion by
Judge Tubnee.
I must respectfully dissent from so much of the opinion. of the court as holds the appellant, Procter, is’ only entitled to recover from appellee $3,333.33.
There is no disputed fact in the record, and in my view, no question of law presented; but really only a question of calculation.
The uncontradieted facts are that Procter and Lynch entered into the contract quoted in the opinion of the court; that the suit was instituted by Procter and diligently prosecuted; that there was a verdict for $25,000 which upon appeal to this court was reversed; that upon the return of the case to the lower court, and before another trial was had, negotiations looking to a settlement were pending between the attorneys for the parties; that at the very time Lynch made the settlement appellee had pending a proposition by it to settle the case for $15,000; that while that proposition was pending Lynch went to Louisville and settled with the appellee’s attorney for $10,000 net to him, Lynch, with the agreement at the time that the company would pay Procter under the terms of Lynch’s contract with him, which contract was before the attorney for the appellee at the time the settlement with Lynch was made.
In order that the circumstances may be fully understood I quote as follows from the uncontradicted testimony of Lynch as to this settlement. In answer to a question from Procter, he said:
“I went to Warfield’s office in Louisville on my own free will and accord to make a settlement of this case. When I went — after talking over the matter sometime Mr. Warfield asked me as to the conditions of the con*473tract between you and I. I told him. about the contract. He asked me if I had it with me. I told him I did, and he asked me if I had any objections to Mm reading it. I told him none whatever, and I showed Mm the contract, and after reading the contract, he offered to compromise for $10,000 net to me. He agreed to pay all legal taxable court costs, your part of the contract, and whatever the contract was with Wright So McElroy, and Dr. Hagan’s bill. I told him, after looking over the contract that he drew up, that your name was not on there. He said your part would be paid according to the contract, and with his assurance that it would, I agreed to accept it.”
We have then, a corporation admitting a liability, in full possession of the fact that one-third of that liability is going to and payable to one party, and deliberately, with its eyes open and in full possession of all the facts, settling with another party two-thirds of that liability for $10,000, and agreeing to settle the remaining part of it with the other party; thereby by its own act fixing its liability to the third party at $5,000.
Suppose the liability had grown out of a contract instead of a tort, and suppose the contractual liability was payable two-thirds to one man and one-third to another, could it have by paying in full the one to whom was due the two-thirds, have reduced its liability to the other? In my mind there can be no difference in principle; if there had been a disputed contractual liability and it had fixed the amount of ultimate liability by settling with one who was only entitled to a part of the recovery, it would not thereafter be heard to say that it was not proportionately liable to the other party.
But it is argued that it is against the policy of the law not to permit a party to compromise or settle out of court his litigation even without the consent of his attorney, and that is true; but it is sufficient to say in this case that the client did not undertake to settle the whole liabilty of the defendant, but only to settle that part which was coming to Lynch, wMch under the terms of the contract was two-thirds. The company expressly agreed, with the contract before it, that it would settle with Procter; by the very terms of its settlement with Lynch it fixed the amount which it must pay to Procter. It may be very readily admitted that it was within the power of Lynch to have made a settlement of the whole liability at $10,000 without the consent of Procter, and *474if lie had done so it would have absolutely fixed Procter’s fee at one-third of that amount; but this he did not undertake to do. On the contrary, he settled only what was coming to him under the contract; that is, he was paid $10,000 net with the agreement that the company, having the contract between him and Procter before it at the time, would settle with Procter; that is to say the company at the time agreed to pay Procter one-half as much as it had paid Lynch, because it knew from the very terms of the contract that Procter was entitled to that much.
The company admits its liability to Procter for a fee under the terms of this contract, and a majority of the court have determined that $3,333.33 is what it must pay, and that amount has been, as shown by the record, paid Procter. Let us see by a simple calculation whether that is a compliance with the terms of the contract. The company has paid Lynch $10,000; it has paid Procter $3,333.33; the aggregate of those sums is $13,333.33. Has Procter received one-third of that liability which the company now admits? Certainly not; he has only received one-fourth of it, and the terms of his contract have been violated over his protest.
In my view of this case the only question is, of what sum is $10,000 two-thirds?
I am of the opinion that appellant Procter is entitled to his $5,000 fee and that the case of Schmitz v. South Covington & Cincinnati Street Ry. Co., 131 Ky., 207, should be overruled.
As long as the rule therein laid down obtains, an easy opportunity is offered agents of corporations to procure from ignorant, dishonest, or improvident persons having claims against them, settlements which will defraud attorneys out of part of their just compensation, to say nothing of their contract rights.
While it is not the policy of the law to discourage settlements between litigants or to prevent a party from settling without the consent of his attorney, we all know as a matter of common experience that settlements made with a litigant m the absence of his attorney (the attorney of the other party being present) are not conducive, as a general rule, to fair or equitable adjustments.
The reference in the opinion to the doctrine of stare decisis can be viewed in no other light than as an apol*475ogy for the opinion in the Schmitz case; if that opinion was and is still right what necessity is there for invoking the doctrine of stare decisis to continue in force the unfortunate doctrine announced therein?
Judge Nunn concurs in this dissent.