Bass v. Rose

• Decision Date: 12 November 2004
• Docket Number: No. 31402.,31402.
• Citation: 609 S.E.2d 848,216 W.Va. 587
• Court: West Virginia Supreme Court
• Parties: Douglas BASS, Plaintiff Below, Appellee v. Laura Coltelli ROSE, Defendant Below, Appellant.

609 S.E.2d 848

216 W.Va. 587

Douglas BASS, Plaintiff Below, Appellee v. Laura Coltelli ROSE, Defendant Below, Appellant.

No. 31402.

Supreme Court of Appeals of West Virginia.

Submitted September 1, 2004.

Decided November 12, 2004.

Dissenting Opinion of Justice Davis November 19, 2004.

D. Michael Burke, Burke, Schultz, Harman & Jenkinson, Martinsburg, for the Appellee.

Richard L. Douglas, Suzanne Williams-McAuliffe, Martinsburg, for the Appellant.

PER CURIAM:

By way of this appeal, attorney Laura Coltelli Rose (hereinafter referred to as "Appellant") challenges the October 15, 2002, order of the Circuit Court of Berkeley County. This order relates the lower court's finding that a portion of the attorney's fee Appellant charged on a contingency fee basis for recovery of medical payment insurance benefits (hereinafter referred to as "med-pay" or "med-pay benefits") was excessive and unreasonable, and then directs Appellant to refund the same to her client, Douglas Bass (hereinafter referred to as "Appellee"). Appellant contests the ruling and argues that the lower court grounded its conclusion regarding the unreasonableness of the fee charged on an improper method of review and did not follow the law of the case doctrine and ignored the mandate of Bass v. Coltelli-Rose, 207 W.Va. 730, 536 S.E.2d 494 (2000) (hereinafter referred to as "Bass II"¹). Based upon review of the briefs, the pertinent record, and arguments of counsel, we reverse the decision of the lower court and remand the case for entry of an order consistent with this opinion.

I. Factual and Procedural Background

When this case was last before this Court in Bass II, we were called upon to review the lower court's ruling that the provisions of the fee contract at play in this case did not go so far as to allow the agreed-upon contingency fee formula to be applied to med-pay recovery. We reversed, finding that the plain meaning of the contract language permitted application of the contract to amounts received for med-pay, and remanded the case "for further proceedings consistent with this opinion." 207 W.Va. at 734, 536 S.E.2d at 498. Upon receipt of the case on remand, the court below did not dismiss the case. Instead, in response to Appellee's request, an evidentiary hearing was conducted to examine the reasonableness of the fee charged.

In conducting its review of the fee, the lower court separately examined Appellant's representation in the following four activities: (1) collection of med-pay benefits through the insurance contract held by the driver of the vehicle in which Appellee was a passenger at the time of the accident; (2) collection of med-pay benefits through the insurance contract of Appellee; (3) negotiation of a liability settlement; and (4) collection from an underinsured motorist policy. This examination consisted of the lower court separately applying the twelve factors for determining the reasonableness of an attorney's fees set forth in Aetna Casualty & Surety Company v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986),² to each of the four activities. The lower court explained in its resulting October 15, 2002, order that this approach was taken because "the Supreme Court has seen fit to consider the different recoveries as separate recoveries, and considers the reasonableness of the contingency fee with reference to each factor of the recovery." The lower court also noted in the October 15 order that the overall fee charged for all of the work Appellant performed in the case would not be excessive if the basis of comparison would have been the total fee in relation to the total amount recovered.³ Nevertheless, based on its categorical analysis, the lower court concluded that the portion of the fee charged for collection of med-pay from the driver's policy was excessive and ordered Appellant to refund the entire amount charged, $6,250,⁴ plus pre- and post-judgment interest.⁵ Appellant petitioned this Court for appeal of the judgment, which was granted on June 18, 2003.

II. Standard of Review

We note generally that the matters raised are questions of law and "[w]here the issue on appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995). Furthermore, a challenge is being made to the lower court's adherence to the mandate and law of the case settled on appeal in Bass II. "A circuit court's interpretation of a mandate of this Court and whether the circuit court complied with such mandate are questions of law that are reviewed de novo." Syl. Pt. 4, State ex rel. Frazier & Oxley, L.C. v. Cummings, 214 W.Va. 802, 591 S.E.2d 728 (2003).

III. Discussion

Appellant initially argues that by not dismissing the action on remand the lower court violated the law of the case doctrine. This doctrine was explained in syllabus point one of Mullins v. Green, 145 W.Va. 469, 115 S.E.2d 320 (1960), as follows: "The general rule is that when a question has been definitely determined by this Court its decision is conclusive on parties, privies and courts, including this Court, upon a second appeal or writ of error and it is regarded as the law of the case." Accordingly we have held that

[u]pon remand of a case for further proceedings after a decision by this Court, the circuit court must proceed in accordance with the mandate and the law of the case as established on appeal. The trial court must implement both the letter and the spirit of the mandate, taking into account the appellate court's opinion and the circumstances it embraces.

Syl. Pt. 3, Frazier & Oxley, 214 W.Va. at 805, 591 S.E.2d at 731.

Appellant maintains dismissal of the case on remand was warranted because the unequivocal mandate and law of the case in Bass II is that the contract executed between the attorney and client contemplated a contingency fee for the recovery of med-pay as well as recovery from all other sources. Thus, according to Appellant, the lower court did not faithfully apply the law of the case because it found that a portion of the contingent fee charged by Appellant was excessive for no other reason than it involved med-pay recovery.

To be clear, the quarrel with the lower court's treatment of this case on remand is not with the authority of the court to test the reasonableness of the fees charged. Rather, we are asked to determine if the manner in which the lower court conducted its review of the fees charged and the conclusion reached as a result of this review were faithful to the mandate of Bass II.⁶

The mandate of Bass II is embodied in our stated conclusion about the reach of the contract for services entered into by Appellant and Appellee:

Rather than limiting the application of Rose's contingent fee to recoveries obtained from third-party tortfeasors, we interpret the plain wording of the provision in question to encompass any recovery secured from a party who is legally obligated to compensate Douglas Bass for the losses occasioned by the car accident in which he was involved.

Bass II, 207 W.Va. at 734, 536 S.E.2d at 498 (emphasis added). Thus the letter as well as the spirit of this Court's mandate in Bass II is that all payments, from whatever legally obligated source, received through the efforts of the attorney in furtherance of the valid contingency agreement are subject to the terms of the contingent fee agreement.

In the interim between the remand of Bass II and the entry of order now on appeal, this Court rendered a decision which has direct bearing on the matter before us.⁷ In the case styled Lawyer Disciplinary Board v. Morton, 212 W.Va. 165, 569 S.E.2d 412 (2002), we specifically identified the standards for determining whether a lawyer's charge for collecting med-pay benefits is an excessive or unreasonable fee. Appellee correctly relates that Morton does not stand for the proposition that it is always permissible to charge a contingency fee against the recovery of med-pay. In developing this point, Appellee notes that although application of a contingency fee to med-pay is not per se unreasonable pursuant to Morton, an analysis of the work actually done for the client is necessary prior to determining whether the resulting fee should be sustained. While this is an accurate summation, it stops short of explaining that in Morton we said the reviewing court's analysis is to be conducted by looking at all of the services performed during the term of the contract. We held in Morton that it is incumbent upon the reviewing body "to fairly examine all of the relevant circumstances of a lawyer's engagement and the professional services in fact rendered when considering whether compensation is excessive." Id. at 170, 569 S.E.2d at 417. Thereafter we specifically said "that focusing on a single component of that compensation without consideration of the entire engagement and services rendered may lead . . . to an unjust conclusion. . . ." Id. Consequently, we are somewhat perplexed with the lower court's statement in its October 15, 2002, order that our "opinions which have considered the matter of the recovery of medical payment under a contingent fee contract of employment . . . [require reviewing courts] to consider the different recoveries as separate recoveries, and consider[] the reasonableness of the contingency fee with reference to each factor of the recovery." In light of Morton, it is obvious that the segmented activity method the lower court employed when completing the fee review was incorrect.⁸ The review of discrete activities of representation by the lower court only served to lead to the type of unjust conclusion we were attempting to prevent in Morton, as evidenced by the lower court's finding that the total fee charged was not excessive when all elements of the representation were considered. Moreover, by conducting its review based on segmented...