Poole v. Prince

• Decision Date: 22 October 2010
• Docket Number: 1090461.
• Parties: Phil POOLEv.Robert F. PRINCE et al.
• Court: Alabama Supreme Court

61 So.3d 258

Phil POOLE

v.Robert F. PRINCE et al.

1090461.

Supreme Court of Alabama.

Oct. 22, 2010.

W. Stanley Rodgers, George E. Knox, Jr., and Jeffrey T. Kelly of Lanier Ford Shaver & Payne P.C., Huntsville, for appellantMichael L. Edwards of Balch & Bingham L.L.P., Birmingham; John A. Owens of Owens & Millsaps, LLP, Tuscaloosa; Dena D. Prince of Prince Glover Law, Tuscaloosa; and Kenneth Mendelsohn of Jemison & Mendelsohn, Montgomery, for appellee Robert F. Prince.Richard F. Ogle, Deborah Alley Smith, and Abbott Marie Jones of Christian & Smith LLP, Birmingham, for appellee Charles E. Pearson, P.C., and Charles E. Pearson.BOLIN, Justice.

These parties have been before this Court previously. See Prince v. Poole, 935 So.2d 431 (Ala.2006) (“ Prince I ”). Because the facts and procedural history of Prince I are necessary for a complete understanding of the issues presented by this appeal, we quote extensively from the detailed statement of the facts and procedural history in Prince I, and we use the terms defined therein as defined terms in this opinion:

“Beginning in 1999, 38 individual plaintiffs filed 22 separate lawsuits involving claims for damage allegedly caused by an underground gasoline spill in or near Moundville (‘the Moundville gasoline litigation’). A settlement of those claims was reached in January 2003. This appeal involves a dispute over an alleged fee-sharing or fee-splitting agreement among the attorneys in the Moundville gasoline litigation.

“It is undisputed that Charles E. Pearson of Charles E. Pearson, P.C. (Charles E. Pearson and Charles E. Pearson, P.C., are hereinafter referred to jointly as ‘the Pearson appellants'), and Robert F. Prince of Prince, Poole & Cross, P.C. (Robert F. Prince and Prince, Poole & Cross, P.C., and the successor law firms are hereinafter referred to jointly as ‘the Prince appellants'), were the principal attorneys who prosecuted the Moundville gasoline litigation.

“Poole, a ‘name’ partner in Prince, Poole & Cross, P.C., had an unwritten arrangement with Prince, Poole & Cross, P.C., under which he received 50% of the attorney fees earned from cases that he secured for or referred to the firm. Poole apparently was able to work out this arrangement with Prince, Poole & Cross, P.C., because of what his brief describes as ‘Poole's unmatched connections, relationships and influence in the Town of Moundville.’

“Poole contends he first became aware of the claims underlying the Moundville gasoline litigation in early 1996 when, he says, several landowners affected by the gasoline spill contacted him. Poole learned from those landowners that a town meeting concerning those claims would be taking place in February 1996, and he contends that, because he could not attend the meeting, he contacted Prince, Poole & Cross, P.C., to inform the firm of the meeting. Poole argues that by contacting the firm regarding the meeting, he ‘presented’ the Moundville gasoline litigation to the Prince appellants.

“Silas G. ‘Dell’ Cross, Jr., a principal in Prince, Poole & Cross, P.C., attended the February 1996 town meeting, Poole contends, at his request. At that meeting, Cross saw Pearson's brother, Greg Pearson, who is also an attorney. Cross talked to Greg Pearson and informed him, Poole contends, that Poole had been contacted by several landowners about the gasoline spill, including William B. ‘Buster’ Chandler, whose case eventually became the only Moundville gasoline litigation to go to trial. Thus, Poole argues that he, in effect, also presented the Moundville gasoline litigation to the Pearson appellants.

“Pearson and Prince dispute Poole's contentions that he presented the Moundville gasoline litigation to them. Prince asserts he first became aware of the claims underlying the Moundville gasoline litigation in February 1996, and Pearson contends he learned of the claims from his brother, Greg. Pearson contends that by the time of the February 1996 meeting, Greg already had been contacted by several landowners, including Buster Chandler, regarding the claims. Pearson testified that after the February 1996 town meeting, Greg told Pearson that he had seen Cross there. Pearson stated that Cross's presence at the town meeting caused him to assume that Prince, Poole & Cross, P.C., was involved in representing the landowners in the Moundville gasoline litigation.

“Pearson asserts that he contacted Prince to see if Prince would be interested in ‘associating’ to jointly prosecute the Moundville gasoline litigation. Pearson and Prince claim that at some point before July 1996, they orally agreed to associate and to prosecute the Moundville gasoline litigation together, splitting expenses and fees equally. Prince claims that after his initial agreement with Pearson, he talked with Poole about lowering Poole's fee percentage from 50% to 33 1/3% for Moundville gasoline litigation cases that Poole had contributed or had referred to the firm. In July 1996, Pearson, Prince, and Poole reached an oral agreement (‘the July 1996 agreement’) regarding the Moundville gasoline litigation. The terms of the July 1996 agreement, however, are disputed.

“Regarding the splitting of fees under the July 1996 agreement, Poole claims that he, Prince, and Pearson agreed to ‘pool’ all the Moundville gasoline litigation cases and split the fees equally, regardless of which attorney had contributed or had referred the case. Prince's deposition testimony on this point is somewhat conflicting. He first testified that the initial agreement was that Poole would receive an equal share of the fees from all of the cases. Prince later explained in his deposition, however, that the parties agreed to that arrangement only because it was understood that Poole would be contributing virtually all of the cases. But, Prince contends, ‘[w]hen Poole failed to carry through with that promise, and other lawyers began bringing cases, the original understanding lost all applicability.’ (Prince's reply brief, p. 22 n. 16.)

“Pearson's testimony regarding the July 1996 agreement directly conflicts with Poole's understanding of that agreement. According to Pearson, he agreed to split fees equally with Prince and Poole only on those cases Poole secured or referred; on cases not secured or referred by Poole, Pearson and Prince were to split the fees 50/50.

“The parties agree that under the July 1996 agreement Poole was not responsible for any of the litigation expenses because Prince and Pearson had agreed to split the costs of the litigation equally. The parties, however, dispute Poole's obligations under the July 1996 agreement. Poole contends that he had a duty only to ‘refer’ any Moundville gasoline litigation case that came to him, but he claims he had no other obligations under that agreement.

“Prince's understanding of the July 1996 agreement, however, was that Poole would be contributing virtually all of the Moundville gasoline litigation cases. Similarly, Pearson believed that Poole agreed to contribute Moundville gasoline litigation cases. Pearson also claims that Poole agreed to ‘work’ on the Moundville gasoline litigation. Pearson's testimony on that point, however, is not very specific; he testified that Poole agreed to ‘handle’ necessary work with the Alabama Department of Environmental Management arising out the Moundville gasoline litigation and that Poole generally agreed to ‘work’ on the Moundville gasoline litigation.

“Eventually, 38 individual plaintiffs signed contingency-fee contracts with either Charles E. Pearson, P.C., or Prince, Poole & Cross, P.C. As mentioned, those 38 plaintiffs filed 22 separate lawsuits. On January 17, 2000, before any of the Moundville gasoline litigation cases had been resolved by trial or otherwise, Poole, Cross, and Fischer left the law firm of Prince, Poole, Cross & Fischer, P.C., and formed a new firm—Cross, Poole & Fischer, L.L.C.

“In an effort to wrap up the dissolution of Prince, Poole, Cross & Fischer, P.C., Prince, Cross, and Fischer executed a written ‘exit agreement’ on January 27, 2000. Among other things, the exit agreement exempted from its coverage the Moundville gasoline litigation. Paragraph 2 of the exit agreement stated that ‘[t]he allocation of revenues, attorney fees and reasonable and necessary case expenses arising out of the [Moundville gasoline litigation would] be addressed by a separate agreement between [Prince, Cross, and Fischer].’

“The exit agreement did not, however, end the dissolution dispute. In particular, the continuing dispute focused on the division of fees from the Moundville gasoline litigation. In a series of letters between Cross, Fischer, and Prince in early February 2000, the conflict escalated to the point that Cross and Fischer accused Prince of breaching the exit agreement because, they alleged, Prince refused to execute a separate agreement pertaining to the Moundville gasoline litigation.

“Prince claims that in an effort to resolve the dissolution dispute, he asked Pearson to make a concession on the fees to which he was entitled from the Moundville gasoline litigation. Pearson agreed to Prince's request because, Pearson says, the dissolution dispute was interfering with the prosecution of the Moundville gasoline litigation. Through a series of telephone calls and a meeting on February 6, 2000, an oral agreement was reached regarding the division of fees from the Moundville gasoline litigation.

“On February 15, 2000, Pearson sent a letter to Cross, Poole, Fischer, and Prince; each attorney signed it (‘the February 15 letter’). The February 15 letter states:

“ ‘RE: Fee Splits for Moundville Gasoline Cases vs. Chevron & Plantation Pipe Line

“ ‘Dear Gentlemen:

“ ‘This will confirm the fee splits and other issues that were discussed and generally endorsed by everyone at the end of the day on Sunday, February 6th. The Fee Splits and understanding expressed by this letter agreement are applicable only to the following...