Gaines, Gaines & Gaines, P.C. v. Hare, Wynn, Newell & Newton
| Decision Date | 28 September 1989 |
| Citation | 554 So.2d 445 |
| Parties | GAINES, GAINES & GAINES, P.C. as successor in interest to Gaines, Gaines & Barnett, P.C. v. HARE, WYNN, NEWELL & NEWTON, et al. Civ. 7135. |
| Court | Alabama Court of Civil Appeals |
George C. Douglas, Jr. and Ralph D. Gaines, Jr. of Gaines, Gaines & Gaines, Talladega, for appellant.
James J. Thompson, Jr. of Hare, Wynn, Newell & Newton, Birmingham, Joseph W. Hutchinson III, Butler, and Larry U. Sims and Joseph D. Steadman of Coale, Helmsing, Lyons, Sims & Leach, Mobile, for appellees.
This is an appeal from an order awarding attorney's fees of $7,500 based on quantum meruit.
Following the vehicular accident death of Thomas Benton Barnett, a minor, in 1987, his father, Robert B. Barnett, Sr. (Mr. Barnett) had to decide what to do as father and next of kin.
The collision involved a vehicle and driver of Floyd and Beasley Transfer Company (Floyd & Beasley) and the deaths or injury of four persons. Thomas Benton Barnett and Steven Joseph Rytlewski were killed; Teddy Alvis and Lee Henry McGrew were seriously injured in the car crash. Two law firms, a Mobile firm and Hare, Wynn, Newell and Newton (Hare, Wynn) of Birmingham, became involved in representing other parties in the case. Mr. Barnett had conversations with Mr. Rytlewski, the father of one of the victims in the wreck, who had employed Hare, Wynn. Mr. Rytlewski recommended Hare, Wynn to Mr. Barnett. After it was determined that there was negligence on the part of the driver for Floyd & Beasley which caused the collision, Robert B. Barnett, Jr., (Barnett, Jr.) at his father's request, attempted settlement negotiations with the insurer of Floyd & Beasley. Barnett, Jr., was at that time a partner in the law firm of Gaines, Gaines, and Barnett, P.C., of which Gaines, Gaines, and Gaines, P.C. (the Gaines firm), is the successor in interest.
Both Mr. Barnett and Barnett, Jr., testified that the only arrangement they discussed was for Barnett, Jr., to make contact with the insurance company and attempt to make settlement so as to avoid a lawsuit. Such arrangement for settlement was contemplated to be without any fee arrangement.
Mr. Barnett stated that if a lawsuit was necessary he had no intentions of engaging the Gaines firm but would use the Hare, Wynn firm.
On November 3, 1987, when it became apparent that a settlement could not be reached and that a law suit would be filed, Barnett, Jr., at Mr. Barnett's direction, contacted James J. Thompson, Jr., of Hare, Wynn to prosecute a wrongful death action against Floyd & Beasley. Barnett, Jr., arranged with Thompson for a 25% contingency fee split equally between the firms with the understanding that Barnett, Jr., would continue an active role working on the case with Hare, Wynn. However, approximately two months after writing the letter to Mr. Thompson, Barnett, Jr., decided to leave the Gaines firm, move to Atlanta, and no longer participate in the prosecution of the case. In discussing this career move with his family, he advised his father, Mr. Barnett, that the Gaines firm was under the impression they would still be involved in the case. Mr. Barnett expressed his dissatisfaction with that employment arrangement and stated that he never intended that the Gaines firm represent him.
By letter of February 12, 1988, to the Gaines firm, Mr. Barnett confirmed his earlier conversation discharging the firm. He also requested an invoice for any expenses incurred by the firm in the case up to the time of discharge. Mr. Barnett then negotiated and entered into a formal agreement with the Hare, Wynn firm to represent him in the lawsuit. The Gaines firm later responded (on April 8, 1988), acknowledging their discharge but asserting a right to one-half of a 25% contingent fee. On May 25, 1988, the Gaines firm filed a motion to enforce a fee agreement and establish an attorney's lien for 12.5% of any amount recovered. The trial court held a conference with the attorneys and ordered that consideration of the motion filed by the Gaines firm be deferred until resolution of the case.
After two days of trial the case was settled for $1,500,000 on November 29, 1988. The trial court then ordered the disputed 12.5% of the total recovery to remain on deposit with the clerk until the fee dispute was resolved. At the trial court's request, both parties to the fee dispute wrote briefs setting out their positions. The trial court later set a hearing and received ore tenus evidence. On January 9, 1989, the trial court entered an order finding that any contingent fee agreement between Mr. Barnett and the Gaines firm was terminated in January 1988 when the Gaines firm was discharged by Mr. Barnett. The trial court further found that any agreement between the Gaines firm and Hare, Wynn was conditioned on the active participation of the Gaines firm in the case, which was not fulfilled, and that discharge of the Gaines firm had the effect of relieving Hare, Wynn of any obligations it had to share the contingent fee with the Gaines firm.
Finally, the trial court held that the Gaines firm was entitled to a fee recovery based on quantum meruit for the reasonable value of services it rendered. The trial court set the quantum meruit fee for the Gaines firm at $7,500, disallowing any enhancement and following the criteria set out by our supreme court in Peebles v. Miley, 439 So.2d 137 (Ala.1983). From that order, the Gaines firm appealed to the supreme court on the basis that the amount sought exceeded $10,000. The supreme court transferred the case to this court due to its lack of jurisdiction in that the judgment appealed from is less than $10,000. Ala.Code 1975, § 12-3-10 (1986 Repl.Vol.).
On appeal, the Gaines firm raises the issue of whether the trial court committed reversible error by awarding the Gaines firm an attorney's fee based on quantum meruit rather than enforcing an agreement to equally divide a contingent fee based on the amount of recovery. The Gaines firm separates that issue into subparts as follows: (1) whether the trial court should have enforced the fee division agreement between the Gaines firm and Hare, Wynn; (2) whether the trial court's holding that the fee division was conditioned on active participation by the Gaines firm was supported by the evidence; (3) whether the trial court misapplied the law to the facts; (4) whether the Gaines firm became entitled to one-half of the fee at the time it associated Hare, Wynn, or at least one-third of the fee for referring the case to Hare, Wynn; (5) whether the trial court's quantum meruit award was without evidentiary support and therefore palpably wrong and manifestly unjust; and (6) whether Hare, Wynn should be allowed to raise the discharge of the Gaines firm by the client as a defense to enforcement of the fee division agreement.
Before we address the particularities of the issue presented on this appeal, we feel compelled to first focus on what we believe to be the real thrust of the matter before us. That matter details itself into what effect Mr. Barnett's February 1988 discharge of the Gaines firm had on the original contingent fee arrangement between the Gaines firm and Hare, Wynn.
It is well recognized that the employment of an attorney by a client is revocable by the client with or without cause, and that such discharge ordinarily does not constitute a breach of contract even with a contract of employment which provides for the payment of a contingent fee. There are, of course, well recognized procedures where a discharged attorney may recover compensation for the services rendered to that client before the discharge. See 7A C.J.S. Courts § 220 and §...
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