Barr v. Day, 11856-8-III
| Decision Date | 13 May 1993 |
| Docket Number | No. 11856-8-III,11856-8-III |
| Citation | 69 Wn.App. 833,854 P.2d 642 |
| Court | Washington Court of Appeals |
| Parties | Ella BARR, individually and as Personal Representative of the Estate of Lewis D. Barr, Appellant, v. Gerald G. DAY and Jane Doe Day, husband and wife, d/b/a Eastridge Law Offices, and Gerald G. Day, P.S., a Washington corporation, and Randall Stamper and Jane Doe Stamper, husband and wife; of Stamper & Taylor, P.S., a Washington corporation, and Steven Stocker and Jane Doe Stocker, husband and wife, Respondents. Division 3, Panel Two |
Robert B. Crary, Crary & Clark, Spokane, for appellant.
Sam B. Franklin, Lee, Smart, Cook Law Firm, Seattle, James S. Craven, Philip J. Vandeveer, Evans, Craven & Lackie, Spokane, for respondents.
Ella Barr, individually and as the personal representative of the estate of Lewis Barr, appeals a summary judgment in favor of Randall Stamper, Gerald Day and Steven Stocker. The court dismissed Mrs. Barr's claims for negligence, breach of contract, and breach of fiduciary duties against her attorneys, Mr. Stamper and Mr. Day, ruling each was barred by the doctrine of collateral estoppel. Mr. Stocker served as Mr. Barr's guardian ad litem. His dismissal was based on "witness immunity". We find unresolved genuine issues of material fact and, therefore, reverse and remand for trial.
On October 21, 1982, Lewis Barr, age 51, suffered a severe head injury while working aboard a tugboat on Puget Sound. He was in a coma for a prolonged period of time; he suffered brain damage, periodic seizures, and personality changes. His treatment included neurosurgery. He incurred medical expenses of approximately $100,000.
In December of 1982, Mr. Barr retained the services of attorney Gerald Day to pursue a claim for relief pursuant to the Jones Act, 46 U.S.C. § 688. 1 Mr. Barr signed a contingency fee agreement which provided in part that
[f]or the services rendered and to be rendered, client will pay to attorney a fee based upon the amount received by client after deduction of the costs incurred in connection with this matter as follows:
a. If the matter proceeds to trial, 33 1/3 of the amount received.
b. If the matter is settled before the commencement of trial, an amount between 25% and 30% of the amount received, depending on how near to trial settlement is made.
The agreement made no provision for fees in the event of a structured settlement (deferred or periodic payments). Mr. Barr and his wife, Ella, sued Mr. Barr's employer, Crowley Maritime Corporation, on July 2, 1985. 2 On July 19, Mr. Day wrote to Mrs. Barr requesting that she sign a second contingency fee agreement, which provided in part:
If client accepts a settlement or is awarded a judgment payment of which is deferred in whole or in part, the fee shall be based upon the present value, at the time of settlement or judgment, of the recovery; the entire fee so calculated shall be paid from and upon receipt of the initial cash payment.
Mr. Day told her that the fee agreement contemplated the possibility of a settlement based upon deferred payments. He further informed her that even though the matter was "some distance from trial", he was expecting to charge a 30 percent fee because he had "been working on the case so long". Mrs. Barr signed the agreement.
Mr. Barr's consumption of alcohol increased following the accident and his condition continued to deteriorate. Mrs. Barr contacted attorney Randall Stamper and indicated a desire to discharge Mr. Day. On July 7, 1986, Steven Stocker, a former law associate of Mr. Stamper's, was appointed Mr. Barr's guardian ad litem. Mr. Stamper prepared the order appointing Mr. Stocker. The order stated that Mr. Stocker has the "requisite knowledge, training or experience to perform the duties required by RCW 11.88.090 ..." and is appointed guardian ad litem to
represent the ward with reference to any Petition or proceeding in which the ward may have an interest, and to contest any Petition or proceeding herein in the same manner as any other interested person might contest the same if in the best interests of the ward, LEWIS D. BARR.
Pursuant to RCW 11.88.090, Mr. Stocker filed a guardian ad litem report recommending that Mrs. Barr be appointed her husband's guardian. On July 21, the court declared Mr. Barr incompetent and appointed Mrs. Barr the guardian of his person and estate.
On July 22, Mr. Stamper prepared a letter for Mrs. Barr's signature advising Mr. Day that he was terminated as the Barrs' attorney. For reasons unclear in the record, Mr. Day did not withdraw as counsel. Instead, Mr. Stamper associated with Mr. Day. Mrs. Barr apparently acquiesced in this arrangement.
On January 18, 1987, the Barrs were offered a structured settlement, which included several annuity options, each providing for a guaranteed payment for 5 years. The Barrs and Mr. Stamper discussed the options and selected one that provided for a total payout of $865,005, if Mr. Barr (age 56) lived until the year 2006 (age 76). Mr. Stamper asked Mr. Stocker to review the proposed settlement with the Barrs. Mr. Stocker telephoned Mr. Barr's physician to ask about Mr. Barr's current medical condition. He was informed that Mr. Barr still suffered from chronic alcoholism, organic brain injury, fluctuating moods and temperament, and very poor memory.
Mr. Stocker did not review each of the settlement options with the Barrs; he discussed only the option they had selected based upon their discussions with Mr. Stamper. Mr. Stocker asked the Barrs if they agreed to the 30 percent contingency fee called for in their agreement. He did not advise the Barrs that the fees would be, as he later described, on "the high end" if Mr. Barr died shortly after the settlement was entered. Mr. Stocker did not discuss alternative methods for calculating fees; methods other than a percentage share of a total annuity's present cash value, assuming a normal life expectancy. Mr. Stocker did not know whether an attorney fee award based on maintenance and cure was customary; 3 he did not raise the issue with the Barrs or with Mr. Stamper. He recommended that the Barrs accept the settlement rather than proceed to trial.
Mr. Stamper hired an economist to calculate the present cash value of the selected annuity option assuming Mr. Barr lived to age 76. The economist was not asked to consider Mr. Barr's health problems. Nor was he requested to calculate the present value of the selected guaranteed 5-year payment. The economist calculated the present value of Mr. Barr's lifetime annuity at $392,814.
The total value of the settlement offer was $1,079,493.27 calculated as follows:
Lifetime Annuity (present cash value assuming life to age 76) $ 392,814.00
Settlements from
Reynold Power Transmission Corp. 313,333.00
Crowley Maritime Corporation 183,333.00
Besco, Inc. 3,000.00
Maintenance and Cure 180,935.45
Wage Loss Payments 5,850.00
Medical Payments 227.82
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$1,079,493.27
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Crowley had paid the maintenance and cure award and the medical and wage loss payments. 4 Mr. Stamper and Mr. Day calculated their 30 percent contingency fee award based on $1,079,493.27. The attorney fee award totaled $323,847.96.
On June 17, 1987 (4 years and 8 months after the injury), the Barrs petitioned the Superior Court for approval of the settlement. At the settlement hearing, Mr. Stocker testified that, as the guardian ad litem, he had reviewed the settlement proposal with the Barrs and "discuss[ed] other items that possibly could effect [sic ] the ultimate outcome." He testified that he believed the proposed settlement exceeded what the Barrs could achieve at trial in light of Mr. Barr's injury and prior alcohol use. The court asked Mr. Stocker if any special skill was required on the part of an attorney to prosecute a Jones Act claim. Mr. Stocker responded that it would require the "same ability as is required in any lawsuit ...".
Mrs. Barr testified that she approved of the settlement. The court asked whether she had reviewed the fee agreement. Mrs. Barr responded, "I have." The court then asked if she felt the fees were fair and reasonable. Mrs. Barr, who has an 8th grade education and minimal work experience, responded, Mr. Barr, who had been declared incompetent by the court, was asked whether he believed the 30 percent attorney fees was appropriate. Mr. Barr responded, The court approved the settlement and the award of attorney fees. On March 17, 1989, 1 year and 9 months after the settlement was approved, Mr. Barr died. Over the course of the 5-year payment, the Barrs received a total of $144,551. Again, the attorney fee award totaled $323,847.96.
On April 30, 1990, Mrs. Barr, individually and as the personal representative of Mr. Barr's estate, filed an action against Messrs. Day, Stamper and Stocker. She alleged that Mr. Day and Mr. Stamper breached the contingency fee agreement by charging a fee in excess of the agreed amount, 5 were negligent in failing to properly and adequately evaluate the annuity, were negligent in failing to properly inform and advise her of the possibility of receiving a lump sum instead of a structured settlement, and had breached their fiduciary duties by miscalculating the value of the structured settlement. Mrs. Barr alleged Mr. Stocker, as guardian ad litem, had failed to protect the interests of Mr. Barr.
Messrs. Stamper, Day and Stocker moved for summary judgment. Mr. Stamper and Mr. Day contended that...
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