157 So. 3d 876
Ala.2014Background
- In 2013 Mary Hall and Anaya McKinnon, as personal representatives for two estates, sued Environmental Litigation Group, P.C. (ELG) alleging breach of attorney-employment agreements and unjust enrichment for charging extra "administrative" fees on asbestos-settlement proceeds in addition to a 40% contingent fee.
- Plaintiffs sought declaratory relief, damages, and attorneys' fees, and initially asserted class-action allegations for similarly situated clients.
- ELG moved to dismiss under Rule 12(b)(6) and alternatively for lack of subject-matter jurisdiction, attaching the fee agreements and a February 23, 2012 client memorandum announcing the administrative charges.
- ELG argued Rule 1.5, Ala. R. Prof. Cond., made excessive-fee complaints a matter for the Alabama State Bar, so a court ruling would be an advisory opinion; plaintiffs maintained their claims were contract-based (breach/unjust enrichment), not disciplinary.
- The trial court denied dismissal, then stayed proceedings pending State Bar review, later dismissed the action with prejudice; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the circuit court has subject-matter jurisdiction over contract and unjust-enrichment claims challenging ELG's extra administrative charges | Plaintiffs: claims allege breach of the attorney-employment agreement and unjust enrichment; resolution does not require State Bar action | ELG: claims effectively ask court to rule on excessive fees under Rule 1.5, which only State Bar disciplinary bodies can enforce | Court: plaintiffs stated breach-of-contract/unjust-enrichment claims distinct from pure Rule 1.5 enforcement; circuit court has subject-matter jurisdiction |
| Whether a declaratory judgment would be an impermissible advisory opinion because the State Bar is not a party | Plaintiffs: no — the suit seeks to enforce private contract rights, not to bind the State Bar | ELG: yes — fee-reasonableness is governed by Rule 1.5 and the Bar, making any judicial ruling advisory | Court: distinguishable from B.W.T.; because resolution does not require adjudication of Rule 1.5 as a disciplinary matter, judgment would not be merely advisory |
| Whether B.W.T. v. Haynes & Haynes mandates dismissal here | Plaintiffs: B.W.T. is distinguishable because that case’s "crux" was Rule 1.5 enforcement | ELG: B.W.T. controls — State Bar enforcement is exclusive | Court: B.W.T. is distinguishable and does not require dismissal |
Key Cases Cited
- Newman v. Savas, 878 So.2d 1147 (Ala. 2003) (standard of review for motions dismissing for lack of subject-matter jurisdiction)
- B.W.T. v. Haynes & Haynes, P.C., 20 So.3d 815 (Ala. Civ. App. 2009) (trial court judgment on fee-reasonableness may be advisory if State Bar enforcement is implicated)
- Stamps v. Jefferson Cnty. Bd. of Educ., 642 So.2d 941 (Ala. 1994) (void judgment for lack of subject-matter jurisdiction cannot support appeal)
MOTION TO DISMISS DENIED; JUDGMENT DISMISSING COMPLAINT REVERSED; CASE REMANDED FOR FURTHER PROCEEDINGS.
