McCoy v. Hershewe Law Firm, P.C.

• Decision Date: 29 May 2012
• Docket Number: No. WD 72728.,WD 72728.
• Citation: 366 S.W.3d 586
• Parties: Riley McCOY, et al., Respondents, v. THE HERSHEWE LAW FIRM, P.C., Appellant.
• Court: Missouri Court of Appeals

366 S.W.3d 586

Riley McCOY, et al., Respondents,
v.
THE HERSHEWE LAW FIRM, P.C., Appellant.

No. WD 72728.

Missouri Court of Appeals,
Western District.

April 10, 2012.
Motion for Rehearing and/or Transfer to
Supreme Court Denied May 29, 2012.

[366 S.W.3d 588]

James Patrick Frickleton and Edward Deroy Robertson, III, Leawood, KS, for respondents.

Susan Ford Robertson and J. Zachary Bickel, Kansas City, MO and Bryan Ormsby Wade and Christopher Francis Weiss, Springfield, MO, for appellant.

Division Three: KAREN KING MITCHELL, P.J., JAMES M. SMART, JR., and GARY D. WITT, JJ.

JAMES M. SMART, JR., Judge.

The Hershewe Law Firm (“HLF”) appeals the ruling of the circuit court of Jackson County determining the value of the law firm's claim in quantum meruit for attorneys' fees in a personal injury contingency case. HLF contends that the trial court erred in refusing to transfer the venue of the attorneys' fee determination to Jasper County, the county in which the law firm's office is located. The firm further contends that the trial court erred in determining the amount to be awarded HLF in quantum meruit, arguing that the judgment lacks substantial evidence and the trial court misapplied the law. We affirm.

Statement of Facts

On August 20, 2007, Ronald and Stacey McCoy gave birth to Riley McCoy at a hospital in Joplin, Missouri. Riley was born with very significant permanent brain damage, allegedly caused by the negligence of the medical personnel attending the birth. Several months later, Mr. and Mrs. McCoy were referred by a friend to the Hershewe Law Firm to assist them with pursuing a medical negligence action.

[366 S.W.3d 589]

The McCoys met with Aaron Smith, an associate who had worked at HLF approximately four years, and agreed to have HLF represent them and their child in the matter. They entered into a contingency-fee contract with HLF. About four months after undertaking the matter, Smith filed a petition for damages for medical negligence on the McCoys' behalf in Jasper County against several defendants, including Freeman Health Systems (“medical defendants”).

Several months later, while the case was still in a very early stage, Smith informed Ed Hershewe, the founder and principal of HLF, that he was resigning from HLF. Smith promptly sent a letter to the clients he was representing, including the McCoys, advising them of his relocation. The letter gave the McCoys the option of remaining with HLF and having someone else at HLF represent them, or being represented by Smith in his new law firm, or being represented by an entirely different firm of their choosing. The McCoys chose to have their case transferred to Smith at his new firm. After the McCoys made their decision to transfer their case from HLF to Smith, HLF filed a notice of attorneys' lien on June 2, 2008, in the Jasper County case and withdrew from further representation.

Thereafter, in September of 2008, the McCoys signed a new contingency-fee agreement with Smith that specifically permitted Smith to associate with other counsel. Smith then arranged with James Frickleton, of Bartimus, Frickleton, Robertson & Gorny, P.C. (“BFRG”), to assist him with the McCoy case. Smith and Frickleton agreed that any contingency fee awarded in the McCoy case would be divided 60% to BFRG and 40% to Smith, with BFRG to pay future litigation expenses. The McCoys consented in writing to the division of the fees, and BFRG formally entered its appearance in the McCoy case in January of 2009.

The McCoys settled their case about eight months later on August 26, 2009, after participating in mediation with the medical defendants. Before the settlement of $4.7 million was approved, the McCoys dismissed the case in Jasper County without prejudice and refiled it in Jackson County with the intent of obtaining approval of the minor's settlement in that venue.¹ BFRG notified HLF of the proposed settlement on September 28, 2009. BFRG wrote that they would include HLF's litigation expenses in the motion for settlement approval and asked Hershewe to advise him as to the amount of HLF's attorneys' lien.

After receiving no response from HLF, the McCoys filed a motion to determine the value of HLF's attorneys' lien along with a motion to approve the settlement they had reached with the medical defendants. On November 23, 2009, HLF filed a motion seeking additional time to respond to the McCoys' motion so that it could conduct discovery, to which BFRG agreed.

Approximately a month later, HLF filed a motion to stay or continue the hearing on the McCoys' motion to determine the value of HLF's lien, which had been set for January 8, 2010. HLF contended that the

[366 S.W.3d 590]

hearing should be stayed or continued because HLF was not a party to the Jackson County case and not subject to the jurisdiction of the Jackson County court, and the court should defer to Jasper County because the firm already had a declaratory judgment action pending in Jasper County (which action had been filed that same day). The McCoys objected to the proposed stay of their motion. On December 30, 2009, the trial court denied HLF's motion to stay or continue the hearing on the McCoys' motion to determine the value of HLF's lien.²

On December 31, 2009, HLF filed a motion to intervene in the McCoys' suit. The motion to intervene was granted. HLF immediately moved for a change of judge under Rule 51.05 and change of venue under Rule 51.045.³ Judge May granted the motion for change of judge, noting that the venue motion would remain pending with the case. Both the McCoys and the medical defendants opposed the motion to transfer venue. The trial court denied HLF's motion for change of venue, finding that HLF did not have standing to challenge venue since the defendants (and the plaintiffs) were content with venue in Jackson County.

One week later, HLF filed a motion to reconsider the ruling on its motion to transfer venue, this time citing section 508.012, RSMo.⁴ On February 3, 2010, without explicitly addressing the motion to reconsider venue, the court approved the minor's settlement in the McCoy case. The court approved the reimbursement of litigation expenses to HLF in the amount of $11,031.01; to Smith in the amount of $4,826.00; and to BFRG in the amount of $26,069.05; and approved the sum of $1,900,000 in total attorneys' fees. HLF then filed a supplemental motion to transfer venue due to the settlement of the case against the defendants. The court denied both HLF's motion to reconsider and the supplemental motion to transfer venue on February 8, 2010. HLF's writ applications to other courts to compel venue change were denied.

HLF moved for the dismissal of the medical defendants from the lawsuit and again sought a change of venue pursuant to section 508.012.⁵ The stipulation of dismissal was approved on May 19, 2010, and the trial court ordered the medical defendants dismissed with prejudice. On the morning of the trial as to attorneys' fees, HLF once again moved for a change of venue, arguing that the court was required to transfer venue because the medical defendants had been dismissed and the trial court was required under section 508.012 to redetermine and transfer venue. The trial court denied the motion and conducted a trial to decide HLF's petition for declaratory and quantum meruit relief.

At the trial, both sides presented expert testimony regarding the contribution that HLF's work on the case provided the McCoys in achieving the settlement with the medical defendants. HLF presented the testimony of Judge J. Miles Sweeney

[366 S.W.3d 591]

(retired) regarding the value of the services rendered by HLF. Sweeney opined that the reasonable value of these services was $950,000, or 50% of the total attorneys' fee award. The main value that Miles Sweeney attributed to HLF's work was the decision to take the case, which was based on the firm's expertise and reputation with medical negligence cases, and the subsequent engagement and retention by HLF of two medical experts.

The McCoys presented the testimony of Judge John Parrish (retired). John Parrish reviewed the materials from the case, and the list of work Miles Sweeney considered important in the case, and opined that most of the work performed by HLF was “quite preliminary,” and was work that legal assistants did, or could have, performed. He testified that HLF's work, as identified by Miles Sweeney, could have reasonably been completed in sixteen hours. Billing at a rate of $300 per hour, John Parrish opined that the value of the services provided by HLF was around $4,800. Neither of these experts testified substantially as to the matter of the relative difficulty of discerning and demonstrating the liability of the medical defendants in the case.

Hershewe, Smith, and Frickleton all testified at length regarding what work each of them, and their respective firms, had performed on the McCoy case. Hershewe testified regarding his significant experience, excellent reputation, and success in representing plaintiffs in medical malpractice cases. He also described his experience in analyzing potential claims of plaintiffs in complex birth trauma medical malpractice cases, and his previous experience bringing claims against the particular medical defendants involved in the McCoys' case. Hershewe's personal involvement in the case included reviewing the obstetrical records, calling and retaining expert witnesses, possibly having reviewed the petition (which was signed only by Smith), and writing one substantive memorandum to the file regarding his conversation with one of the retained doctors. Smith, along with legal assistants, handled the remainder of the work on the McCoy case over the seven months the case was with HLF.

Smith testified that while he was employed at HLF, he spent less than ten hours altogether working on the McCoy case. Smith then estimated that he spent between 200–300 hours working on the McCoy case before BFRG joined the case....