Untiedt v. Grand Laboratories, Inc., C3-96-590

• Decision Date: 30 July 1996
• Docket Number: No. C3-96-590,C3-96-590
• Citation: 552 N.W.2d 571
• Parties: Charles UNTIEDT, et al., Appellants, v. GRAND LABORATORIES, INC., a South Dakota corporation, et al., Respondents.
• Court: Minnesota Court of Appeals

Page 571

552 N.W.2d 571 Charles UNTIEDT, et al., Appellants,
v.
GRAND LABORATORIES, INC., a South Dakota corporation, et
al., Respondents. No. C3-96-590. Court of Appeals of Minnesota. July 30, 1996.
Review Denied Oct. 15, 1996.

Page 572

Syllabus by the Court

When interpreting contingent fee agreements, we construe ambiguous terms against the drafting attorney in the absence of a clear showing that the parties had a contrary intent.

Richard I. Diamond, Diamond, Liszt & Grady, P.A., Minneapolis, for Appellants.

James E. Malters, Von Holtum, Malters & Shepherd, Worthington, for Respondents.

Considered and decided by SHORT, P.J., and SCHUMACHER and FOLEY ^*, JJ.

OPINION

SHORT, Judge.

This appeal involves a determination by the trial court that Charles and Wanda Untiedt (collectively Untiedt) executed a valid and unambiguous contingent fee agreement with Douglas E. Schmidt and Sieben, Grose, Von Holtum, McCoy & Carey, Ltd. (firm). On appeal, Untiedt argues the trial court: (1) made a clearly erroneous finding that the parties executed a valid agreement; (2) erred in concluding the 40 percent contingent fee unambiguously applies to an award of statutory attorney fees; and (3) committed plain error in basing its decision on irrelevant evidence.

FACTS

After his original counsel withdrew from litigation involving the manufacture and sale of a defective cattle vaccine, Charles Untiedt met with attorney Schmidt concerning his willingness to assume responsibility for Untiedt's case. Following ten hours of discussions, Schmidt dictated a retainer agreement, which provided:

3. In the event of a cash settlement or jury verdict, I agree to pay said attorneys from any money and or [sic] property paid, received, or collected by action, compromise, or otherwise, 40 percent of any recovery for attorney fees for handling my case to settlement or suit including appeal.

* * * * * *

5. I agree to pay for all the necessary costs and expenses incident to the performance of said services and the handling of said case, in addition to attorney fees, and after fees have been subtracted from my recovery. I agree that during the pendency of the action, I will advance and pay all costs relating to expert witnesses. Said firm agrees to advance and pay all other costs normally incident to the prosecution of a case such as this including court filing fees, deposition expenses, travel expenses, et cetera. It is agreed that all of the expenses advanced by both retainer and retainee will first be deducted from our recovery, and the remaining sum left after expenses will be split in accordance with the provisions of Paragraph 3 above. In the event there is no recovery, each party will bear their new [sic] expenses.

After requesting a typist to transcribe the agreement, Schmidt left the office without obtaining Untiedt's signature. When Untiedt signed the retainer later that evening, he added the following language next to paragraph 5:

I have an objection to the first part of Paragraph # 5. I have signed this with the understanding that Paragraph # 5 will be corrected to our mutual agreement.

Untiedt then handed the agreement to the typist, who signed Schmidt's name on a line, under which she had typed "Douglas E. Schmidt by Jacqueline McKone."

For approximately three years, the parties acted in conformance with the retainer agreement; Untiedt paid the expert fees, and

Page 573

Schmidt's firm advanced the remaining costs. When the litigation drew to a close, the parties could not agree on how to divide the proceeds, which included a $1,038,775 jury verdict and $366,584.24 in costs and attorney fees. Initially, no one disputed the firm's entitlement to 40 percent of Untiedt's recovery. Rather, the parties disagreed as to whether statutory...