Shirley Bolton v. Crowley, Hoge & Fein, P.C.
110 A.3d 575
| D.C. | 2015Background
- The Bolton sisters were claimants in a Mississippi mass toxic-tort case; their claims were placed on a dismissal track under a 2007 MOU that created an $11M settlement fund.
- They fired original counsel and later pursued an arbitration malpractice claim in D.C.; in 2009 they engaged Crowley, Hoge & Fein (CHF) to represent them in arbitration under a fee agreement that included hourly billing and a 16.5% contingency on gross recoveries.
- Arbitrators found the sisters could not meet Mississippi proximate-cause requirements for malpractice; CHF filed an attorneys’ lien in Mississippi against the sisters’ settlement funds, which was later invalidated.
- CHF sued the sisters in D.C. Superior Court for unpaid fees; the sisters counterclaimed (breach of contract, malpractice, breach of fiduciary duty of loyalty, abuse of process, conversion, fraud). Several counterclaims were dismissed pretrial.
- The trial court granted CHF partial summary judgment (dismissing the fiduciary duty and malpractice claims), imposed $7,338.58 in discovery sanctions against the sisters, and a jury later found the sisters liable for $152,973 in unpaid fees for breach of contract.
- On appeal the D.C. Court of Appeals affirmed the sanctions and the contract liability finding, vacated summary judgment on the fiduciary duty of loyalty counterclaim, and remanded that claim for further proceedings; the court instructed the trial court to hold the fee award in abeyance pending resolution of the fiduciary claim.
Issues
| Issue | Plaintiff's Argument (Bolton) | Defendant's Argument (CHF) | Held |
|---|---|---|---|
| Whether breach of fiduciary duty of loyalty claim required proof of causation when remedy sought is disgorgement | Disgorgement claim does not require proof of proximate causation; only proof of breach of loyalty is necessary | Causation (proximate cause) is required; CHF argued no conflict or actionable breach occurred (notice to counsel / representation ended before lien) | Vacated summary judgment on fiduciary-duty claim; remanded for further proceedings because court may have applied incorrect causation standard and factual disputes exist |
| Whether CHF’s filing of a lien and related conduct established a conflict/loyalty breach | CHF filed lien while representing clients and disclosed confidences; conduct supports disgorgement and bar to collection | CHF contends lien filing was proper, clients had repudiated retainer before lien, and no conflict of interest shown | Fact questions exist (timing of termination vs. filing; notice issues); remanded to resolve whether fiduciary breach occurred |
| Validity of jury verdict for breach of contract and related jury instructions (mitigation, contingency-fee ambiguity) | Sisters argued trial court erred by refusing mitigation instruction and by not instructing on ambiguity of contingency-fee clause | CHF argued no clear repudiation (so no mitigation duty), and the contingency provision was unambiguous | Affirmed liability verdict; court rejected mitigation and ambiguity arguments (no clear repudiation; contract clear). Court ordered fee award held in abeyance pending fiduciary claim outcome |
| Appropriateness of discovery sanction and denial of JMOL/new trial | Sisters argued sanctions were excessive and judge erred in denying JMOL/new trial | CHF sought sanctions for repeated failure to attend depositions; trial court imposed modest monetary sanction and found sufficient evidence for jury verdict | Affirmed sanction ($7,338.58) as within discretion; denial of JMOL/new trial affirmed — sufficient evidence supported jury verdict |
Key Cases Cited
- Hendry v. Pelland, 73 F.3d 397 (D.C. Cir.) (clients seeking disgorgement for breach of loyalty need only prove breach, not causation)
- Mills v. Cooter, 647 A.2d 1118 (D.C. 1994) (discusses overlap of malpractice and fiduciary claims where claims arise from same facts)
- Griva v. Davison, 637 A.2d 830 (D.C. 1994) (attorney misconduct and conflict of interest can constitute breach of fiduciary duty)
- Crist v. Layaconno, 65 So. 3d 837 (Miss. 2011) (distinguishes negligence-based malpractice requiring proximate cause from fiduciary-breach claims that may not require causation)
- Lane v. Alfonso Realty, 873 So. 2d 92 (Miss. 2004) (elements for malpractice vs. fiduciary-breach claims; conduct-based fiduciary claims may proceed without expert testimony)