Amar Law v. Goodman
1 CA-CV 24-0299
| Ariz. Ct. App. | Feb 27, 2025Background
- Michael Goodman worked as an associate at Amar Law Group (ALG) under a verbal agreement, earning bonuses for client acquisitions, but with no fee-splitting arrangement.
- Goodman left ALG, formed Goodman Lemon Law (GLL), and 31 of ALG’s then-current, unresolved Lemon Law clients chose to move their representation from ALG to Goodman’s new firm.
- ALG’s engagement agreements with these clients expressly stated clients would never owe ALG attorneys' fees; all fees would come from the automobile companies as part of settlements.
- Following the clients’ transfer, ALG alleged that GLL received attorneys’ fees from car manufacturers or clients for those cases and sought payment from Goodman/GLL for work performed and client acquisition costs.
- ALG’s sole surviving claim was for unjust enrichment after dropping other claims; the superior court granted a motion to dismiss and awarded attorneys' fees and costs to defendants. ALG appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Viability of unjust enrichment claim | GLL was unjustly enriched by fees from clients procured by ALG’s work; ALG suffered impoverishment. | No unjust enrichment; contracts with clients preclude any entitlement to fees from ALG; no attorney lien. | No actionable unjust enrichment claim; ALG bound by its client contract prohibiting recovery. |
| Entitlement to attorney fees and costs | Section 12-341.01 inapplicable; unjust enrichment is a non-contractual claim. | Fees are proper under 12-341.01 as claim arises out of contract; Arizona law covers such claims. | Attorney’s fees properly awarded; claim arises out of contract per Arizona law. |
| Relevance of “walkaway” settlement offer | ALG’s offer to dismiss with each party bearing its own fees/costs was more favorable to defendants. | Defendants are prevailing party; judgment more favorable as they retained right to fees/costs. | Defendants properly treated as successful party; fee award affirmed. |
| Scope of quantum meruit/ethical recovery | ALG entitled to equitable fee division for its portion of prior work on client matters. | No entitlement; engagement agreement prohibits client fee liability; no claim against clients asserted. | No viable claim; cannot recover where contract forbids and equity is similarly barred. |
Key Cases Cited
- State Farm Mut. Ins. Co. v. St. Joseph’s Hosp., 107 Ariz. 498 (remedies for quantum meruit apply only against client in contingent fee setting)
- Schwartz v. Schwerin, 85 Ariz. 242 (quantum meruit claims require no fixed fee by agreement)
- Coleman v. City of Mesa, 230 Ariz. 352 (de novo review of motion to dismiss)
- Pyeatte v. Pyeatte, 135 Ariz. 346 (benefit alone does not establish unjust enrichment; retention must be unjust)
- Zambrano v. M & RC II, LLC, 254 Ariz. 53 (courts will enforce contracts even if terms are harsh or represent a bad deal)