Freese v. Don A. Mitchell Richard A. Freese
| Decision Date | 15 May 2014 |
| Docket Number | C/W NO. 2013-CA-00361-SCT,NO. 2012-CA-01045-SCT,2012-CA-01045-SCT |
| Court | Mississippi Supreme Court |
| Parties | RICHARD A. FREESE, DENNIS C. SWEET, III, TIM GOSS, SHEILA M. BOSSIER, d/b/a SHEILA M. BOSSIER, ATTORNEY AT LAW, PLLC, BOSSIER & ASSOCIATES, PLLC, SWEET & FREESE, PLLC, DENNIS C. SWEET, III, P.A., d/b/a SWEET & ASSOCIATES, THE FREESE LAW FIRM, P.C., FREESE & GOSS, PLLC AND MEDRESOLVE, PLLC v. DON A. MITCHELL RICHARD A. FREESE, DENNIS C. SWEET, III, TIM GOSS, SHEILA M. BOSSIER d/b/a SHEILA M. BOSSIER, ATTORNEY AT LAW, PLLC, BOSSIER & ASSOCIATES, PLLC, SWEET & FREESE, PLLC, DENNIS C. SWEET, III, P.A. d/b/a SWEET & ASSOCIATES AND FREESE & GOSS, PLLC v. McHUGH FULLER LAW GROUP |
JEFFREY M. TILLOTSON
ANSELM J. McLAURIN
SHEILA M. BOSSIER
RICHARD ARTHUR FREESE
R. DAVID KAUFMAN
ROBERT RICHARD CIRILLI, JR.
BEFORE WALLER, C.J., CHANDLER AND KING, JJ.
¶1. The appellants in this consolidated appeal challenge the Rankin County Chancery Court's denial of their motions to compel arbitration of claims brought against them by Don A. Mitchell and the McHugh Fuller Law Group, PLLC. Finding no error, we affirm.
¶2. This case concerns a fee dispute between associated attorneys arising out of mass-tort cases in Copiah County between 2005 and 2010. The first appeal arises out of a joint-venture agreement between Don A. Mitchell and the law firm of Sweet & Freeese, PLLC. The second appeal arises out of an alleged oral referral agreement between McHugh Fuller Law Group, PLLC, and the members of the joint venture. The relevant facts leading up to the instant dispute are as follows.
¶3. During the summer of 2005, Attorney Don A. Mitchell began representing Copiah County residents who claimed to have been injured by the improper disposal and elimination of certain toxic chemicals (polychlorinated biphenyls, or PCBs) at a Crystal Springs manufacturing facility. Mitchell attained representation of approximately 3,000 potential plaintiffs for a mass-tort suit related to the PCB contamination ("the PCB litigation"). To assist in this representation, Sheila Bossier, another attorney involved in the PCB litigation, recommended that Mitchell associate the law firm Sweet & Freese, PLLC, to pursue his clients' claims.
¶4. Mitchell and Sweet & Freese ("the Joint Venture") entered into a Joint Venture and Representation Agreement ("JVA") on February 28, 2006. The JVA, which did not contain an arbitration clause, set out the allocation of work responsibilities, costs, expenses, and fees among the members of the Joint Venture. The JVA applied to "all claims referred by Don Mitchell to Sweet & Freese, which are part of the PCB litigation." The JVA explicitly did not apply to "any other PCB claims which Sweet & Freese may handle, which were not referred by Mitchell." Under the JVA, Sweet & Freese would receive two-thirds of the netattorneys' fees from the PCB litigation, and Mitchell would receive the remaining one-third. Finally, the parties agreed that the JVA could be amended only by written agreement.
¶5. Mitchell informed his clients that Sweet & Freese, as well as Bossier, would be assisting in the PCB litigation. Bossier was not a member of the Joint Venture, but she was employed by the Joint Venture and was to be compensated from Sweet & Freese's share of the attorneys' fees in the PCB litigation.
¶6. During the time Mitchell was gathering clients for the PCB litigation, the law firm of McHugh Fuller Law Group, PLLC, had been retained by approximately 1,000 Copiah County residents who claimed to have been affected by PCB contamination. Some time prior to April 17, 2007, Michael J. Fuller contacted Mitchell to discuss the possibility of the Joint Venture accepting representation of McHugh Fuller's PCB clients. In exchange for the referral, McHugh Fuller requested a "consultation/referral fee" of ten percent of the attorneys' fees recovered on behalf of the clients it referred to the Joint Venture. The terms of Mitchell's agreement with McHugh Fuller were not reduced to a separate writing; nevertheless, McHugh Fuller transferred its PCB client list to Mitchell on May 9, 2007. After receiving McHugh Fuller's PCB client files, Mitchell then referred those clients to the Joint Venture as part of the PCB litigation. A major dispute in McHugh Fuller's subsequent lawsuit is whether Sweet & Freese was aware that these clients were referred from McHugh Fuller and were subject to a referral-fee agreement.
¶7. Sometime after the execution of the JVA, the record does not reflect when exactly, Dennis Sweet and Richard Freese ended their business relationship and began operating their own law firms.1 In April 2007, Freese merged with Tim Goss to form the law firm Freese & Goss, PLLC. Throughout the remainder of the PCB litigation, it appears that Freese & Goss was substituted for Sweet & Freese to represent the Joint Venture's clients, though Freese & Goss did not join the JVA, nor was the JVA ever amended or terminated.
¶8. By the spring of 2008, the Joint Venture represented more than 3,300 clients in the PCB litigation. Later, the Joint Venture terminated representation of approximately 3,000 PCB clients, approximately 968 of whom had been referred to the Joint Venture by McHugh Fuller. The Joint Venture was then left with 348 PCB clients, the majority of whom had been referred to the Joint Venture directly by Mitchell.
¶9. One federal lawsuit and two state lawsuits were filed on behalf of the Joint Venture's remaining PCB clients. These 348 clients became known as the "Filed Clients," as they were named plaintiffs in the PCB lawsuits. Approximately ninety-nine of the Filed Clients had been referred by McHugh Fuller.
¶10. In the spring of 2010, the parties to the PCB litigation were actively engaged in settlement negotiations. B.W.,2 one of the PCB defendants, indicated that it would agree to a settlement only if it received releases from all Filed Clients as well as 3,000 other claimants not named in the PCB lawsuits. Therefore, Freese & Goss and Mitchell began contacting the Joint Venture's previously terminated clients to sign them up for a settlement with B.W. Between April and May of 2010, Freese & Goss and Mitchell undertook representation of approximately 3,000 additional PCB clients, consisting of both new clients and former clients who previously had been terminated from the Joint Venture. These clients became known as the "Unfiled Clients," because no lawsuit was ever filed on their behalf in the PCB litigation. Freese & Goss notified Mitchell that representation of the Unfiled Clients fell outside the scope of the JVA and required a new agreement regarding the allocation of fees and expenses related to those clients. No such agreement appears in the record, however, and the original JVA was never terminated.
¶11. Each Unfiled Client who entered (or re-entered) the PCB litigation signed a new representation agreement ("the Retainer Agreement") to which Freese & Goss, Mitchell, and the client were parties. The Retainer Agreement included an arbitration clause that provided:
Any and all disputes, controversies, claims or demands arising out of, or relating to this agreement or any provision hereto, including but not limited to services of attorneys to Client, distribution of proceeds, expenses charged, fees paid or other attorneys, or any matter related to the relationship between attorneys and Client whether in contract or tort, or otherwise, at law or in equity, for damages or any other requested relief, shall be resolved by binding arbitration[.]
The Retainer Agreement governed the general rights and duties attendant to the attorney-client relationship; it did not contain any provisions governing fee-splitting or allocation of expenses among associated attorneys.
¶12. Ultimately, the parties to the PCB litigation reached two separate settlements. Each settlement involved a different combination of plaintiffs and defendants.
¶13. On May 25, 2010, the Filed Clients reached a settlement with PCB defendant D.W. and related parties. The parties to the D.W. settlement entered into a Confidential Master Settlement Agreement ("the D.W. Settlement Agreement"), which included the following arbitration clause:
The Parties and Participating Claimants agree that any dispute as to the interpretation of, or performance or breach of any obligation under, or any other issue, claim or controversy arising out of this Agreement or the Release, shall be submitted exclusively to and resolved in a final and binding arbitration.
The term "Parties" was defined as the Filed Clients and their counsel on the one hand, and the D.W. defendants on the other hand. The Unfiled Clients did not...
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