Court Opinion

ID: 9548385
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:02:38.923641+00
Date Added: 2024-06-11T15:18:52.640849
License: Public Domain

STEWART, Justice:
(dissenting).
I respectfully dissent.
The plaintiffs hired the law firm of Un-gricht, Randle & Deamer (“Ungricht”) to pursue a medical malpractice claim against the defendants. The plaintiffs were to pay Ungricht a one-third contingent fee. Un-gricht filed the required notice of intent to commence an action, performed much of the legal research, prepared a complaint (although it was never filed), engaged in multiple settlement offers and negotiations, and obtained a settlement offer of *453$39,984.31. The Phillipses were dissatisfied with the offer, discharged Ungricht, and hired Brian C. Harrison, who presently represents the Phillipses. He was to be paid a one-quarter contingent fee. Eight months later, Harrison obtained an identical settlement offer, and the case was settled.
The majority focuses on whether Un-gricht has a lien under Utah Code Ann. § 78-51-41 (1987). The majority properly states that the statutory attorney’s lien, § 78-51-41, “is only as good as the underlying agreement regarding compensation.” While that is true, the real question in this case is, how much compensation is owed Harrison and how much is owed the Un-gricht firm? Because of the special nature of attorney fees contracts and the power of the courts over fee agreements, the question of what is owed the two groups of attorneys ought to be decided in one proceeding. Indeed, requiring them to be decided in two separate proceedings, as the majority does, is not only inefficient and costly, but also will likely lead to mischief and inequitable results. The attorneys and the trial court recognized as much in the proceedings below — indeed, the parties stipulated to the court’s settlement of the entire fee controversy in this case.
The majority’s ruling will be unnecessarily burdensome to the Phillipses, the Un-gricht law firm, and possibly to Harrison. In effect, the majority holds that Harrison is entitled to the full contingent fee although he reached a settlement identical to the proffered settlement obtained by Un-gricht. The majority suggests that the Un-gricht firm may, however, recover something in a second, independent suit based on quantum meruit, but that may subject the Phillipses to a fee that may or may not be equitable from their point of view, having already paid Harrison a full fee.1
The awarding and approving of attorney fees is subject to the inherent power of a court to regulate the professional conduct of attorneys. Seal v. Pipeline, Inc., 731 F.2d 1194, 1196 (5th Cir.1984) (citing Schlesinger v. Teitelbaum, 475 F.2d 137 (3d Cir.), cert. denied, 414 U.S. 1111, 94 S.Ct. 840, 38 L.Ed.2d 738 (1973)). The existence of an attorney-client relationship is governed not only by contract law, see Anderson v. Gailey, 100 Idaho 796, 801, 606 P.2d 90, 95 (1980), but also by numerous ethical principles. See Rules of Professional Conduct, Rule 1.5 (adopted by Utah Supreme Court, effective January 1, 1988).
It has been held unjust for attorney fees to exceed the amount provided by a single contingent fee agreement when successive law firms are involved, as here. See Reubenbaum v. B. & H. Express, Inc., 6 A.D.2d 47, 174 N.Y.S.2d 287, 290-91 (1958). But see Adams v. Fisher, 390 So.2d 1248, 1251 (Fla.Dist.Ct.App.1980). That result, however, may depend on the understanding of the attorneys and the client.
The time and place to resolve the issue is clearly in the trial court on remand. All interested parties will be before the court. The only issue to settle will be the claims of counsel to the funds set aside as attor*454ney fees. In dealing with a problem similar to the one at hand, the court in Seal stated:
The dispute before the court is not one between a client and an attorney over the validity of an employment contract or the setting of a fair fee. The fee has been found fully earned and appropriate, albeit on the high side of this court’s preference. The sole issue is apportionment of the earned fee between the lawyers who earned it.
The magistrate chose to apportion the fee as between Bart and Robin, allowing Bart 13% and awarding the balance to Robin. Breland, the first attorney employed, was compensated exclusively on a quantum meruit basis. We find that disparate treatment inappropriate under the circumstances of this case.
The scenario of seriatim attorneys is regrettable, but as the magistrate found, Breland and Bart were discharged without cause. Each was retained by Seal to assist in the recovery of damages for his injuries. Each undertook the same professional obligations. Each had the same 40% contingent fee agreement. Each contributed to the ultimate result. Each is entitled to the same evaluation of his contributions and professional efforts, measured by the guidelines established by DR 2-106(B) of the Code of Professional Responsibility....
731 F.2d at 1195-96. '
A just result can only be obtained by apportioning fees among the successive counsel. See, e.g., Seal, 731 F.2d at 1196; LaBach v. Hampton, 585 S.W.2d 434 (Ky.Ct.App.1979). And that should be done in one proceeding before disbursement of proceeds from which the fees should be paid. Continental Bank & Trust Co. v. Bybee, 6 Utah 2d 98, 306 P.2d 773 (1957), and Midvale Motors, Inc. v. Saunders, 21 Utah 2d 181, 442 P.2d 938 (1968), which are relied on by the majority, are not applicable to this case.
A determination of the total fees payable and an apportionment of them between the attorneys, if appropriate, in the trial court is exactly what all the parties wanted. Their express stipulation authorized the trial court to resolve the issue of attorney fees:
The Court: Is it stipulated that I can hear this matter with regards to the lien, attorney's lien for fees in this matter? Mr. Harrison: Yes.
The Court: So, there will be no need for any type of further action and based upon what is presented to me today I can make a decision as to whether or not they’re entitled to fees.
Mr. Harrison: I think if the Court looks at the law — I brought a case that should be dispositive on the issue, your Honor, and I believe once the court reviews that case that the course will be clear.
So, I guess with that provision I suggest that I think the court should hear that issue of the attorney’s lien that was filed by predecessor counsel, and I think that is appropriate prior to defendant’s and our settlement being entered as a court order.
The Court: Is that agreeable with all parties, then?
Mr. Randle: That’s agreed, your Honor. The Court: Is that agreeable, Mr. Harrison?
Mr. Harrison: Yes.
The Court: So, we all understand that I will determine, first of all, whether they have a right to a lien. If they have a right to a lien, there may be the necessity of an evidentiary hearing to determine the amount of fees you’re entitled to. Is that stipulated to by all parties, that that is the issue before me?
Mr. Harrison: Yes.
Mr. Randle: Yes.
(Emphasis added.)
This case should be reversed and remanded for an apportionment of fees between the Ungricht firm and Harrison.
HOWE, Associate C.J., concurs in the dissenting opinion of STEWART, J.

. Damages are recoverable for breach of contract where the attorney under a contingent fee arrangement has been discharged without cause:
It has been held that where an attorney is employed on a contingent contract to perform legal services, his discharge without fault on his part, before he has performed his work, constitutes a breach of the contract and renders the client liable to respond in damages. The measure of damages in that situation is the agreed percentage of the amount the client is subsequently able to secure by settlement or judgment less a fair allowance for services and expenses not expended by the discharged attorney in performing the balance of the contract. In some instances the right to recover the full fee has been upheld. Other cases, although allowing the attorney to recover as for breach of contract, do not allow the full fee as the measure of damages where the employment contract had not been substantially performed.
Some cases hold that an attorney discharged under a contingent fee contract without fault on his part may at his election recover the reasonable value of the services rendered up to the time of discharge. In other jurisdictions the discharged attorney has no election and may not recover on the contract, but is restricted to a quantum meruit recovery.
7 Am.Jur.2d Attorneys at Law § 298, at 321-22 (1980) (footnotes omitted). Whether there was a discharge here has not been determined.