Post v. Bregman

Decision Date01 September 1995
Docket NumberNo. 1746,1746
Citation686 A.2d 665,112 Md.App. 738
PartiesAlan F. POST, Chartered, v. Douglas M. BREGMAN, et al. ,
CourtCourt of Special Appeals of Maryland

Roger T. Scully (Andrew Robertson, on the brief), Bethesda, for Appellant.

Glenn M. Cooper (Patricia M. Weaver and Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, on the brief), Bethesda, for Appellees.

Argued before CATHELL, DAVIS and EYLER, JJ.

DAVIS, Judge.

Alan F. Post, Chartered, appeals from a grant of summary judgment by the Circuit Court for Montgomery County (Donohue J.) in favor of Douglas M. Bregman, and Bregman, Berbert & Schwartz (appellees). The circuit court granted summary judgment on the grounds that appellant had breached a contract for the division of fees stemming from litigation in which both had participated. Appellant presents two questions for our review, which we restate as follows:

I. Could a trial court reasonably find the terms of the fee-sharing contract ambiguous?

II. Do the Maryland Rules of Professional Conduct control the interpretation of fee-sharing contracts between attorneys?

We answer both questions in the negative and affirm the circuit court. 1

FACTS

In 1988, Stanley W. Taylor was diagnosed with chronic myelogenous leukemia. Upon learning that his condition may have been related to exposure to certain substances while a heavy equipment mechanic with the District of Columbia, he filed a claim for worker's compensation benefits. His first counsel in the benefit litigation withdrew in 1989; in due course, Taylor contacted Bregman. Bregman invited Post to meet with him and Taylor to discuss representation, although his motivation for doing so is disputed. 2 After this meeting appellant alone represented Taylor in his worker's compensation claim, to a favorable result. The retainer agreement between appellant and Taylor, signed by Taylor on August 30, 1987, specifies that "Associate counsel may be employed at the discretion of and expense of Alan F. Post, Chartered without any increase in the attorneys' fees to be paid by the client." 3 At the same time, Taylor pursued a separate, third-party action against the manufacturers and suppliers of the products that allegedly caused his injury. Both appellant and appellees were listed as counsel of record during this litigation. This third-party action spawned the fee-sharing agreement between appellant and appellees that is the subject of this appeal.

Alan Post asserted, in an affidavit submitted to the circuit court, that Bregman expressed a "strong interest" in participating actively in the third-party litigation. According to Post, he advised Bregman that he lacked the resources to pursue properly Taylor's claim. Appellees agreed to provide support and assistance, and advanced appellant $2,000 in February 1990. According to Post's affidavit, appellees' failure to provide any further financial support compelled appellant to hire other counsel, namely, Ronald Simon of Connerton, Ray & Simon. From then until its later withdrawal, the Simon firm was lead counsel in the Taylor litigation.

Appellant maintains that Simon, appellant, and Taylor "continued to develop" Taylor's claim, while keeping appellees informed of developments. Appellees, appellant, and Connerton, Ray & Simon agreed to a fee-sharing arrangement, as evidenced by letters sent by appellant to both Bregman and Connerton, Ray & Simon. The letter to Bregman, sent on June 14, 1990, included the following:

You and I have discussed the active participation of Bregman, Berbert & Schwartz in this case. I have discussed this with Ron Simon and we do feel that there will certainly be opportunities for the use of manpower from your office to handle various pleadings, depositions, etc. Therefore, we have agreed that the firm of Bregman, Berbert & Schwartz will share in the recoveries to the extent of 25% of all fees recovered from the third party litigation.

You will be called upon to contribute 25% of all out-of-pocket expenses and an appropriate allocation of the labors of litigation.

Appellant also drafted a letter to Simon which read, in pertinent part:

... We have agreed that in the case of Stanley Taylor, the referring law firm of Bregman, Berbert & Schwartz will be entitled to 25% of the net fee recovery, provided that they meet their commitment of contributing 25% of costs as well as such litigation related tasks as shall be assigned to them. The law firm of Post and Slattery and Connerton, Ray & Simon will share equally in the net remainder of the fees.

Appellant asserts that the above letters show that the division of fees was premised upon appellees providing proportionate services. Appellees, however, claim that they sent a reply letter on June 21, 1990, which reads, again in pertinent part:

Thank you for your letter dated June 14, 1990, in connection with the [Taylor case].

Your letter correctly states our understanding, subject to some clarification.

First, by way of clarification, our firm's involvement in the third party actions is dependent upon direction from you or Ron Simon. We are excited about working the case with you, but we cannot do work until you delegate. If you do not ask us to do 25% of the work, nevertheless, our fee will still be 25%.

Appellant denies receipt of this letter.

In September 1990, appellant filed three actions in the Superior Court of the District of Columbia, one of which was Taylor's. The three actions were consolidated. Appellant claims that during the period between December 1990 and April 1991, appellees provided the use of an associate's time to assist appellant in the drafting "of some early discovery" and in obtaining the service addresses of additional defendants named in the amended complaint that appellant had filed. In April 1991, appellant alleges, appellees transferred the associate to other projects. From that point on, continues appellant, appellees performed no further services in the Taylor litigation, and in fact advised appellant that it would not assume any further financial risk in the matter. In October 1991, Simon requested permission to withdraw; at that time, appellant explains, appellees renewed their offer of assistance and volunteered to provide replacement co-counsel. Appellant alleges that appellees never provided the name of any counsel, however, and in fact provided no assistance.

Appellees agree that before Simon's withdrawal, they had advanced $2,000 to appellant, in addition to miscellaneous out-of-pocket expenses, because appellant did not have the resources to cover the costs of litigation. Appellees also direct us to the stipulation by the parties that appellees fully satisfied every request for services made of them, including, inter alia, interviewing clients, investigating, drafting discovery, attending a deposition, appearing in court, conducting legal research, and staying up to date on the case. Appellees argue that they had no duty under the contract to perform services or contribute funds until requested to do so.

In fact, many of the services they performed, appellees assert, were done without being requested, and so were above and beyond what the fee-sharing agreement required of them. On several occasions, appellees argue, they called appellant specifically to inquire what else they could do, and were often told that nothing was required. Furthermore, appellees argue, they continued in their role as counsel of record throughout the entire case, receiving pleadings and staying up to date. Appellees conclude by asserting that Taylor was aware both that appellees were co-counsel of record and that they would provide services on Taylor's behalf, by virtue of appellees' listing as co-counsel on pleadings and court filings provided to Taylor during the litigation.

Appellant does not dispute that appellees received all pleadings and filed documents; rather, appellant maintains that it was responsible for placing appellees on the service list, and that it did so merely as a professional courtesy. Appellant also argues that Taylor was unaware of appellees' involvement in his case until December 1994, when appellant advised him of appellees' claim for forty percent of the fees. Appellant supplemented this claim with an affidavit sworn to this effect by Taylor.

Simon's withdrawal generated a cash flow problem for appellant, and by letter sent December 20, 1991, appellant notified appellees that the firm of Paulson, Nace, Norwind & Sellinger had agreed to become lead counsel for the Taylor litigation, and would fund all of the expenses and perform much of the labor. Consequently, Paulson, Nace insisted on two-thirds of the fees generated by the case, leaving one-third to be divided between the remaining firms. In the December 1991 letter, appellant suggested that it and appellees divide the one-third share between themselves on a 60/40 basis, favoring appellant. Appellees agreed to this modification of the contract. A handwritten notation was also added to the letter, reading "Plus costs, Plus unpaid expenses," which Alan Post and Douglas Bregman initialed. At the conclusion of litigation, appellees presented a demand for payment under the contract. Appellant filed the declaratory action in the circuit court and appellees counterclaimed for breach of contract damages.

The circuit court based its grant of summary judgment on five conclusions. First, it found that it had jurisdiction to rule on the counterclaim, a decision not challenged on appeal. Next, it decided that the pleading was unambiguous in setting forth, "without any ambiguity, what the contract is, how it was breached, and its claim for, in this case, liquidated damages." The court decided that the December 20, 1991 letter comprised the contract, and then concluded that appellant breached the contract, saying "there is no question of its existence, of who wrote it, of the fact that it was agreed to, and there is, of...

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  • Post v. Bregman
    • United States
    • Maryland Court of Appeals
    • 1 Septiembre 1997
    ...$112,881, and dismissed the opposing actions for declaratory judgment as moot. The Court of Special Appeals affirmed, Post v. Bregman, 112 Md.App. 738, 686 A.2d 665 (1996), and we granted certiorari to consider (1) whether a fee-sharing agreement between lawyers is subject to Rule 1.5(e) an......
  • Son v. Margolius, Mallios, Davis, Rider & Tomar
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