*1 A.2d POST, Alan F. Chartered
v.
Douglas M. BREGMAN et al. 15, Sept. Term,
No. 1997. Appeals Maryland. Court
Jan. 1998. Reconsideration Denied March 1998. *4 Bethesda, (Andrew Robertson, brief), for on Roger Scully T. Petitioner. (Patricia Weaver, Rothman, Paley, M. Cooper
Glen M. Chartered, brief), on Bethes- Goldstein, Rosenberg Cooper, & da, Respondent. for Shaffer, III, T. Murphy, Murphy
William J. Robert & & Shaffer, Baltimore, Goldman, amicus curiae of brief Skeen Wadler, P.A. BELL, C.J., ELDRIDGE, RODOWSKY,
Argued before CHASANOW, WILNER, JJ., RAKER and and ROBERT L. KARWACKI, (retired), Judge Specially Assigned.
WILNER, Judge. lawyers
This is a between two over the dispute division agreement one-third of a fee. A letter called for petitioner, Post, (Post), Alan F. Chartered to receive 60% of the third and firm Douglas Bregman (Bregman) for and his to receive the other remaining paid 40%. The two-thirds the fee was another firm that dispute. is involved the instant When settled, the underlying generated case that the fee was Post share, $260,000, received the entire one-third and he then paying Bregman at called for in letter balked 40% ($104,000), agreement contending had done Instead, insufficient work to warrant a fee in that amount. declaratory Post filed an action for judgment the Circuit Montgomery County, Court for asserting honoring 1.5(e) fee would violate arrangement Rule 60/40 (MLRPC). Maryland Rules of Professional Lawyers’ Conduct Bregman filed a two-count counterclaim for declaratory judg- ment for breach of contract. concluded, summary
The circuit court
judgment,
that the
fee
clear
unambiguous,
that Post breached
the agreement
damages,
and was hable for
and that
alleged violation of MLRPC Rule
did not suffice to
constitute a defense to the breach of contract action.
It
granted Bregman’s
summary judgment,
motion for
entered
judgment on the breach of contract counterclaim in
favor
$112,881,
Bregman for
and dismissed the
opposing actions
declaratory judgment
Special Appeals
as moot. The Court of
Post v.
affirmed,
Bregman,
Md.App.
FACTUAL BACKGROUND MLRPC Rule 1.5 generally deals with lawyers’ fees. Sec- (a) requires tion that the fees be reasonable and sets forth some factors to be considered in determining reasonableness. (b) Section requires that the basis or rate of the fee be client, communicated to the if lawyer has not regularly (c) represented the fees, client. Section contingent allows subject to certain conditions set forth in that section and (d); (e)—the certain prohibitions specified §in § section at issue here—deals with the splitting among of fees lawyers who are not part of the same firm. It states:
“A division of fee lawyers between who are not the same firm may be made only if:
(1) the division is in proportion to the services performed or, each lawyer written client, with the each lawyer joint assumes responsibility for the representa- tion;
(2) the client is advised object does not to the participation involved; of all the lawyers
(3) the total fee is reasonable.” In Stanley Taylor diagnosed as suffering from chronic myleogenous leukemia. Believing that his condition may have been caused by exposure to a toxic during substance his employment, sought legal he assistance for the purpose obtaining compensation workers’ benefits. He found a lawyer, claim, who filed a but when benefits initially were denied the lawyer then, withdrew. Taylor in August, interviewed Mr. Bregman as a prospective replacement. Bregman in- compen- firm handle did not workers’ Taylor
formed who, Bregman him to Post ex- introduced sation claims but Bregman, in that experience had field. plained, considerable to Post other cases clients appears, it had referred mutually fee-sharing arrange- acceptable accordance with *6 the pursue compensation retained Post to Taylor ment. later claim, successfully. which Post did Taylor retained compensation pending, case was
While suppliers of the toxic against to file a action separate Post the third- agreement respect retainer with to substance. The any a fee of of action for Post receive one-third party called if if 40% suit filed and recovery case was settled and also that discovery provided undertaken. and may be at discretion employed counsel “[a]ssociate Post, in increase any of F. Chartered without expense Alan attorneys’ paid by to be client.” fees litiga of capable handling Post did himself not believe alone, June, 1990, so, brought in the firm of tion in he Connerton, Simon, ar three-way entered into a Ray & and firm firm.1 Bregman’s that On June rangement with arrangement Bregman in letters to he confirmed the Breg In Simon, firm. his letter to to Ron of the Connerton man, had referred Mr. acknowledged Bregman Post that compensation claim Taylor respect both the worker’s co- brought that “we have and the action and third-party Bregman firm. noted that he and counsel” the He Connerton firm in the Bregman’s participation had discussed the active (Post) and that “there will he Simon believed case that manpower your from certainly be the use opportunities He con pleadings, depositions, office to various etc.” handle tinued: bring into later he was the Connerton firm
1. Post claimed that forced Bregman's honor a commitment he made the case failure to because associate, $2,000/month was to toward the cost of an who to contribute payment, Bregman only made one time to case. devote of her 50% $2,000, disputed that February, Bregman 1990. claim. “Therefore, agreed we have that the firm of Bregman, Berbert & Schwartz will share recoveries extent of 25% all fees recovered from the third party litigation.
You upon will be called to contribute 25% of all out-of- pocket expenses and an appropriate allocation of the labors of litigation.”
That arrangement was recited Post’s letter to Simon as There, well. he confirmed they agreed, that had with respect Taylor’s case, that referring “the law firm of Bregman, Berbert & Schwartz will be entitled to 25% of the net fee recovery, provided they meet their commitment of con- tributing 25% of costs as well litigation as such related tasks as shall be assigned to them.” The letter continued that Post and Connerton would share the other 75% equally. It was anticipated Taylor’s case would be consolidated with at others, least two interest, which had no and that generated the fees in those cases would be shared equally between Post and the Connerton firm. Bregman claimed that *7 he responded to Post’s letter on June in noting his response that the letter correctly stated the understanding, subject to two clarifications. The one of interest here is Bregman’s statement that “our firm’s in involvement the third party actions is dependent upon direction you from or Ron Simon. We are excited about working the case with you, but we cannot you do work until delegate. If you do not ask us to work, do 25% of the nevertheless, our fee will still be 25%.” A copy letter, of Bregman’s properly Post, addressed to is in the record; Post claimed that he did not recall having seen that letter, although he never having denied received it.
In September, 1990, suit was filed in Taylor’s case in the Superior Columbia, Court of the District of with the Conner- ton firm acting as lead counsel. Connerton continued that October, 1991, role until when it withdrew from the case. -withdrawal, Faced with that Post then contacted the firm of Paulson, Nace, which, Norwind & Sellinger, as a condition of assuming the role of counsel, lead insisted on receiving two- thirds, one-half, rather than of the total contingency fee. In 20, 1991, firm, dated December Barry Nace of that
letter the Paulson which agreed arrangement—one that Post for the responsibility act as counsel “and bear firm would lead ar That a new litigation.”2 required costs entailed 21, 1991, day, next with December rangement Bregman. (Post) had informing him that he to Bregman, Post wrote firm, fund which agreed Paulson had engage decided in excess of discovery costs litigation, including expected $100,000. The letter concluded: is there has been
“Unfortunately, one draw back that in a longer and no in the fee we are arrangements, upset amount gross fee of of the to extend a referral position 1/3 Nace, insisting of the Paulson Barry [Mr. firm] of fees. firm, is reasonable which a sense share [h]is on 2/3 taking expenses that he is on the considering fact remaining to be divided as a fees [sic] That leaves well. 1/3 remaining I will split I would up propose reason- an effort to be you on a basis portion 60/40 ably fair.” modification, arrange- Bregman accepted the new one
With letter, the words “Plus Costs” At the bottom of ment. handwriting and added in fees owed” were unpaid “Plus by Post. initialed settled, as a Taylor case was
On November $260,000, one-third representing which Post received result of firm received other two-thirds. fee. The Paulson of the before us initial communi- not clear from the record what It is Breg- Bregman regarding Post and occurred between cations that, upon asserted share of the fee. man’s him that his share (Bregman’s) Post informed inquiry, that, $90,000. $80,000 appears It fee was between *8 10, to settle 1994, Bregman offering Post wrote November terms, 1992, 3, accepted with two By January Mr. Nace those letter of 2. (1) the case fee if minimum would be 26.67% clarifications: Paulson’s appeal an was by jury verdict and if or resolved 33.33% was settled (2) any responsible costs necessary, would not Paulson point, only by thereafter. up costs incurred Paulson but incurred $50,000, the matter for an Bregman rejected offer that next day.3 impasse Post, With an looming, 28, on November Complaint filed a for Declaratory Relief in the Circuit Court for Montgomery County. Though acknowledging the Decem 21, letter, ber that, whereas, Post contended between December, October, 1994, (1) 1991 and he in directly volved the preparation 100,000 or review of over pages of (2) documentation, participated directly 35 depositions, re others, viewed 62 and attended 30 court hearings and over 100 (3) litigation conferences, and expended “thousands of hours” and “thousands of dollars” in the representation of Taylor, Mr. Bregman documentation, drafted no participated no deposi tions, attended no court hearings conferences, or and expend ed no material amount of time or money on the case. He therefore asked the court “to declare the agreement letter dated December unenforceable against public policy, and to [Bregman’s] declare demand to recover a fee in $100,000, amount excess of without performing any material services assuming any significant responsibili and/or ty for the benefit of [Taylor either Post] be a ‘per se’ 1.5(e) violation of Rule of the Maryland Rules of Professional Conduct.”4
In response to a dismiss, motion to Post filed an Amended Complaint then, in response to dismiss, another motion to a Second Amended Complaint seeking essentially the same relief. Specifically, he asked (1) the court to declare that and, MLRPC particular, Rule governs the conduct of 3. The November 10 letter from Post is Bregman’s not in the record. response, dated November is in the response, record. In that Bregman takes issue allegations with a number of and claims made in letter, Post’s particularly most the claim that very contributed litigation little to the agreement and that might the fee violate Rule 1.5(e) of the MLRPC. record, Throughout 4. parties sometime refer to the letter of December 20 noted, and sometime to the letter of December 21. As Nace; first letter was sent Post to second letter was sent Post Bregman. Bregman accepted arrangement communicated to him in the letter of December so that letter constituted the effective Bregman. between Post and *9 (2) Taylor no with the was written parties, there (3) joint Taylor was advised and consented representation, for for joint except Bregman, of all co-counsel representation (4) by Bregman, of fees claimed in order to obtain the division required perform proportion he have been services would (6) (5) so, thereto, did not and Bregman either did or do sharing agreement” “an fee does alleged of existence 1.5(e). requirements of Rule exception an to the create de- responded with counterclaim for Bregman promptly Reciting and for breach contract. claratory judgment of. of June and December agreements two letter asserted, that his firm had things, other Bregman among array legal in a of services” in connection with engaged “wide of record litigation, throughout that it was co-counsel tort “jointly responsible” Taylor’s for that it was litigation, any “never representation, requested partic- and that Post firm that the provision Bregman of services ipation fully satisfy.” any denied Bregman Bregman firm did not that, he if there part; of Rule asserted violation the.Rule, Post responsible it was who was was a violation Bregman’s conduct should not affect wrongful and that Post’s He asked that the court agreed-upon entitlement fees. $104,000 fees that legal he declare that was entitled enforceability “not to the impediment [the MLRPC In the of contract parties].” between the breach contract $106,000 count, plus for costs Bregman sought judgment interest, litigation, in the and court costs. Taylor advanced Bregman a motion pleadings, On this state of the renewed In had filed connec- summary judgment he earlier. motion, through stipulations, tion documents and presented: “facts” following were (1) throughout Taylor litiga- beginning From the co-counsel; tion, on the as Bregman pleadings listed (2) drafting firm Bregman participated The to him co- was sent complaint, copy initial which counsel;
(3) Bregman firm participated drafting an amended March, 1991; complaint
(4) his firm were included on the Official Service List provided February, the clerk the court in 1992;
(5) No separate agreements retainer were entered into *10 firm, between and Taylor Taylor the Connerton between and firm, or Paulson between and Taylor Bregman; (6) Post no kept accounting of the time he or firm spent his and, on the Taylor litigation obviously, gave no such account- firm; ing to the Paulson
(7) gave The Paulson firm no accounting to Post of the time it spent Taylor litigation; on the and
(8) during litigation “At no time the course of the Taylor any was the firm Bregman assigned task that it did not properly perform.” documents, in form of
Other under oath statements but made on information personal and belief rather than on knowledge, to purported generate dispute Breg some over man’s in the litigation. role for Taylor, example, claimed that he requested had never or his firm Bregman represent him matter,” “in any legal that he never repre consented to their sentation, that, December, 1994, until he was unaware or Bregman provided his firm any service on his behalf. Notwithstanding other Taylor evidence that a copy received every case, filed in paper all which Bregman showed as co-counsel, Taylor also stated that he was Breg unaware that that, man was listed co-counsel. Post asserted “[a]t no 1, time during period April, through 1994, 1991 November did Bregman perform, Mr. any further Taylor services case, matter” and that meet “[i]n order to demands I Bregman’s was forced Mr. failure to perform reduce caseload, my other causing a substantial financial sacrifice.” That, course, stands contrast sharp stipulation, to Post’s quoted above, during at no litigation time was assigned firm any task that it properly did not
154 statement Bregman’s It contrast perform. also stands array” “a services to performed legal firm wide that his client, interviewing Taylor, meeting with including defendants, theories, legal investigating potential developing court, deposition, attending drafting pleadings, appearing legal strategy, conducting co-counsel discuss meeting with research, He that on reviewing pleadings. added several could he Post to what else he do inquire occasions called req nothing often told that was then and was assistance uired.5 mo- presented through Bregman’s to the court
The issues
arrangement
Post asserted that
the fee
tion
clear.
were
(c) requires
support
Maryland
an
of or in
5.
Rule 2-501
affidavit
summary judgment
personal
to be on
opposition to motion
only
belief
knowledge: A
based
on information and
does
statement
affidavit,
Flournoy,
even if
oath.
v.
198
as an
under
Fletcher
suffice
denied,
(1951),
72
A.2d
cert.
343 U.S.
S.Ct.
Md.
Friel,
(1956).
(1952);
v.
210 Md.
The court viewed the essentially, as a breach of action, contract which ethical argument made Post’s complaint declaratory judgment was offered aas defense. It found that there was a contract between the parties— December, emanating from the 1991 letter—and that contract was clear unambiguous. It also determined that the “ethical question is not a defense to a breach of contract between the parties,” especially Post, when parties, one into, “not only entered but in his made proposal case himself.” Upon findings, granted Bregman’s those the court motion for summary judgment with to the respect breach of declared, contract claim result, aas longer there no a dispute requiring a declaratory judgment. It manifest- ed those decisions in order entered June *12 granting judgment summary on of Bregman’s Count II coun- terclaim, entering judgment in Bregman favor of in the $112,881 amount of $104,000 (representing the share of the fee, $2,283 reimbursement for in funds by Breg- contributed man, and pre-judgment $106,233 interest on the from Novem-
156 of and I 1, 1994), complaint Post’s Count dismissing and ber moot. counterclaim as Bregman’s claimed Special Appeals, to the of Post In his Court appeal (1) judg- finding, summary in court erred that the circuit the ment, only consisted of December agreement that the fee of and December letter, the the June rather than combination clear letters, agreement that the was finding in further and (2) the concluding and in that unambiguous, and issue, the Rule the first governed by MLRPC 1.5. On was was, fact, dispute there a that court concluded appellate the agreement was of part the June letter over whether that was dispute but it determined parties, between that, if are read and even the two letters not a one material and unambiguous. was clear resulting agreement together, 25% of alleged “duty” part on the contribute The letter, was, in the litigation, to the mentioned June con- view, plain language “The passive court’s one: tract, litigation role in the then, appellees’ that specifies arise until one; duty appellees no contribute would passive ” at Bregman, supra, v. 112 Post Md.App. upon.’ ‘called were 754, 672. 686 A.2d at issue, said, from the principle it emanated second (4 Wall.) 535, Quincy, v. 71 U.S. Von Hoffman
established 550,18 (1866), a contract are deemed parties L.Ed. 403 knowledge existing have of law contracted making time place laws subsist at the “the which it, if they form a were part ... enter into and a contract terms.” Post v. incorporated to or its expressly referred 674, A.2d at Bregman, supra, quoting at 686 Md.App. Clark, v. Trust Co. 289 Md. Wilmington from v. in turn from Von (1981), quoting A.2d Hoffman Quincy, that statutes constitute supra. Although recognizing contracts,” the court drew interpreting for purposes “law Waldron, 683, 426 v. Attorney Maryland 289 Md. Gen. of from (1981), legislative enact- “a clear distinction between A.2d passed by and rules legislature general ments lawyers” conduct of purpose regulating judiciary for did not constitute from that that MLRPC and concluded
157 Nor, continued, “laws” to read into contracts. the court did qualify “judicial MLRPC as precedent,” assuming even that judicial automatically was into precedent incorporated con Finally, tracts. the court to expressed turned the concern Scope part purpose MLRPC that the of the rules “can when they by parties be subverted are invoked opposing procedural weapons” and the that admonition that the fact rules a for may disciplining lawyers imply be basis not “does antagonist that an proceeding a collateral or transaction has seek standing large extent, enforcement of the Rule.” To a this view followed earlier pronouncements by the Court of that Special Appeals represent MLRPC does not reflection Grack, See public policy. Kersten v. Van 92 Md.App. (1992); however, 1270 compare, A.2d v. Fraidin Weitz man, 168, 191, (1992). Md.App. 1046,1057 611 A.2d this,
From all of Special the Court Appeals concluded that judiciary extremely “the must be careful not to abuse its autonomy extending application it promul- rules gates into not primary areas within its and authority” that enforceability “the agreements contract fee-sharing be- attorneys Post, tween is one such area.” supra, at A.2d at 676.
DISCUSSION A. An Unresolved Issue Although major presented issue to the circuit court was agreement whether fee Bregman between Post and was 1.5(e) (and subject to MLRPC Rule what the effect that be), subjection might Bregman that, made clear position even if violated, the rule were applicable, it was not at least not by him. The principal for that position basis was that was, fact, joint there responsibility on the part of Post and Bregman that, the representation of Taylor, turn, and (1) was based on the retainer between Post and Taylor allowing (2) counsel, Post to engage additional the fact that Bregman was on pleadings, papers, listed and official (3) co-counsel, service list as fact that he his firm Apart work on the case. actually considerable performed further that, participation contended that his from Post, work being perform asked dependent was upon work called he additional but perform offered tasks that he whatever properly perform do did any, him. assigned were Rule any alleged violation of finding of its
Because
*14
1.5(e)
fee
to enforcement of the
not suffice as a defense
would
question
court never reached the
whether
agreement,
the
Indeed,
fact,
the
the
was,
given
a violation of
Rule.
there
record,
at all
the
it is not
clear
violation
nature of the
judg-
summary
resolved on
properly
issue could
have been
them-
the
and the documents
stipulations
ment. Other than
selves,
on that
only
bearing
“evidence” before the court
legally
insuffi-
the form
dispute,
issue was either
least,
“affidavits,”
At the
the court would
very
or both.
cient
on
deny summary judgment
to
certainly have had discretion
allow
of the relevant
ground
development
further
Basiliko,
25, 28,
Fd. v.
Metropolitan Mtg.
288 Md.
facts. See
(1980):
upon
cannot draw
582,
A.2d
583
“whereas
‘court
415
(6 Pt. 2
summary judgment’
any discretionary power
grant
to
¶
(2d.
56.15[6],
ed.1980)),
at 56-601
Federal
Practice
Moore’s
it,
pass upon,
discretion to refuse
ordinarily,
possess
does
summary
affirmatively
judgment
deny,
well as discretion
merits;
this
hearing
of a
on the
request
in favor
full
requirements
the technical
though
discretion exists even
have been met.”
entry
judgment
of such a
press
argument,
both
Bregman continued
us, that
no
Appeals and before
there was
Special
Court of
Rule,
an
address.
but that is
issue we cannot
violation of the
Medical, 313
v. Greater Baltimore
Geisz
out in
pointed
As we
(1988),
301,
5,
658,
n.
appeal
“[o]n
Md.
314 n.
A.2d
is
summary judgment
of a
which
reversible
grant
from the
court
in the
relied
trial
grounds
upon
of error
because
ordinarily undertake
sustain
appellate
court will not
upon by
ruled
ruling
ground,
judgment by
another
as to which the trial
court,
ground
if the alternative
one
trial
court had a discretion to deny summary judgment.”
also
See
Three
Village
Garden
Ltd.
v.
Partnership
Fidelity
U.S.
&
Co.,
98,
(1989);
Sussex,
Guar.
318 Md.
B. The Actions For noted, As the circuit court dismissed Post’s and Bregman’s respective actions for declaratory judgment on the that, ground by entering judgment on Bregman’s breach of claim, contract the actions for declaratory judgment were moot. If the issue raised an action for declaratory judg moot, truly ment is may dismissed, for, action properly be as we held in Reyes v. Prince George’s County, 281 Md. 289 n. (1977), 380 A.2d 18 n. 5 the declaratory judgment process “is not available for the decision of purely theoretical questions arise, which may never questions which have be come moot and abstract questions” and should not be used “where a declaration would neither serve a purpose useful nor *15 controversy.” Nonetheless, terminate a when an action for declaratory judgment lie, does clearly case, it in did this it is ordinarily not permissible for a court to avoid declaring the rights of the parties by entering judgment on another pending count. Compare Farm, Popham 136, v. State 333 Md. 140 n. 2, 28, (1993), 634 A.2d 29 2 where, n. though noting that the resolution of another claim in the same action rendered moot the need for a declaratory judgment, we also observed that the order to purporting dismiss the declaratory judgment action “also declared rights parties.”
We understand the constraints under which trial judges operate must and can well appreciate the court’s desire to avoid the extra effort necessary to draft a declaratory when, judgment view, in its entry judgment on breach of contract action essentially decides the issue. None theless, we have historically enforced the provisions of the Declaratory Judgment Act and insisted that courts declare the
160
properly
action
parties
presented
of the
when
with an
rights
held,
have
declaratory judgment. Rarely,
to a
we
susceptible
declaratory judgment
for
an action
permissible
is it
dismiss
judg-
declaring
seeking
rights
party
in lieu of
State,
461,
934
303
494 A.2d
Broadwater v.
Md.
ment. See
rule,
(1985).
that,
general
as a
courts will
have made clear
We
pend-
“if there is
declaratory judgment
a
action
not entertain
for
the action
at
the time of the commencement of
ing,
relief,
involving the
proceeding
action or
declaratory
another
are in-
and in
the identical
parties
which
issues
same
may
adjudicated.”
Waick-
declaratory
in the
action
volved
(1997).
113,
426,
Colbert,
A.2d
We
347
699
428
er v.
Md.
not, however,
peculiar
in the
circumstance
except
have
Farm,
634 A.2d
supra,
v. State
Md.
Popham
for declara-
proper
dismissal of a
action
generally blessed the
in
on an
claim
ruling
of a
alternative
tory judgment because
remedy, at law or
action.
existence of another
the same
a
to seek
ordinarily
party’s right
does not
defeat
equity,
Ins.
declaratory
Casualty
Turner v.
judgment.
a
obtain
Mfrs.
Watkins,
(1955);
Co.,
Glorius v.
206 Md.
A.2d
(1954).
546,
This
was
Post, indeed,
objected
the court’s refusal
judgment.
intended
rights.
his
After the court announced its
declare
decision,
and asked
argued
right
he
declaration
(which
court, in
dis-
define the contract
writing,
the con-
applied
whether
Rule
pute), state
MLRPC
tract,
to the
and declare whether he was was not entitled
not an
of contract
sought.
ordinary
relief he
This was
breach
lawyers,
used
many
parties
As is the
both
action.
case
they sought
fee-sharing agreements
practices,
their
1.5(e) applied
MLRPC Rule
specific determination of whether
and,
(1)
if so
the Rule
fee-sharing
whether
agreement,
to their
(2)
violated,
case,
if the
what
this
Rule was
was violated
*16
They
were
of that
was on
contract.
the effect
violation
declaration,
just
rulings
oral
specific
to a
written
entitled
determinations,
judg-
on those
It is
matters.
implicit
T.
Robert
rights
must
the parties.
ment that
declare the
W.S.S.C.,
(1978).
v.
Foley Co.
283 Md.
Post’s fluctuated between the two but is currently cast closer to the Court Special Appeals view of it. He does not now contend that fee-sharing agreement, calling for a split fee, of one-third of the itself is in 60/40 Rule; violation of what is unethical imper- therefore missible, view, in his Bregman’s demand for a 40% share when he did not make a proportionate contribution to effort. he Presumably, would find problem no with the agree- ment, enforcement, or its if Bregman, fact, had contributed
162 was, fact, 13%) in (or or if there of the effort 40% of one-third he Because representation. the for joint responsibility existed, urges he that circumstance that neither believes 1.5(e), cannot be enforced Rule light of read agreement, as written. precisely sub- Rule is either over whether disagreement or constitutes parties contract between into the
sumed
dis-
larger
from a
stems
on its enforcement
external check
Rule,
general,
or MLRPC
over whether
public
statement
and enforceable
cognizable
constitutes
general
that more
to a statute. On
in effect
equivalent
policy,
contradictory pronouncements
seemingly
finds
question, one
to us the
party citing
each
country,
courts around
from
must
One
position.
to favor his
purport
pronouncements
basis of those
however,
underlying
careful,
to consider
courts,
have
example,
for
A number
pronouncements.
and the various
Conduct
of Professional
viewed the Code
to it
that pertain
considerations
and ethical
rules
disciplinary
regulations prescribing
internal
merely “self-imposed
Ford,
bar,” State v.
for members
of conduct
standards
from
part
397,
(Utah.Ct.App.1990), quoting
400
793 P.2d
(1979),
448,
273,
454
Green,
274 N.W.2d
405 Mich.
People v.
reason,
defining public
for
and,
not as “a vehicle
for
Snow,
351,
(Utah.Ct.App.
P.2d
355
Tanasse v.
policy.”
(Me.1977);
Dineen,
A.2d
1996);
also In re
see
493, 495,
I,
N.Y.2d
559 N.Y.S.2d
v. Team 76
Niesig
Dineen,
(1990).
case,
1030,1032
In the Maine
558 N.E.2d
force of
not “have the
the Code did
made clear that
court
only by the State
promulgated
it was
law” because
positive
from the
court.
It is not clear
not
Association and
Bar
Utah;
Michigan
the Code
promulgated
opinions who
by the
Bar
State
York,
promulgated
apparently
it was
New
divi-
appellate
the intermediate
“enacted”
Association and
at
559 N.Y.S.2d
supra,
Niesig,
York courts.
of the New
sion
at 1032.
558 N.E.2d
in MLRPC do not
contained
In
the rules
Maryland,
They are
regulations.”
internal
“self-imposed
constitute
adopted by lawyers
byor
lower levels
guidelines
precatory
(Md.
by this Court
system,
adopted
the court
but are rules
16-812) in
inherent Constitutional
Rule
the exercise
its
Attorney
of law.
General v.
authority
regulate
practice
Waldron,
Together
MLRPC
extent,
therefore,
of that
To the
charge
responsibility.
are
on a different
pronouncements
of other courts
based
authority of the Code in their
view of the function and
States,
Mary
not relevant
to the
they
simply
are
respective
of public
constitutes a statement
land situation. MLRPC
having
in this
the Constitutional
policy by
only entity
State
statement, and it has the force of
authority to make such a
lawyers may
disciplined—even
law. The mere fact that
legal signifi
rules attests to the
violating
disbarred—for
those
thus share the view of the Illinois
cance of the rules. We
Vrdolyak,
in In re
Court,
137 Ill.2d
Supreme
expressed
(1990),
243, 248,
“[a]s
148 Ill.Dec.
560 N.E.2d
and as
power
exercise of this court’s inherent
over the bar
with the force of law.” See
court,
operates
rules
Code
Cloud,
(La.1988) (“The
also
1146,1150
Succession of
530 So.2d
Responsibility
in the
of Professional
which
standards
Code
attorneys
the force and effect of
govern the conduct
have
Reform,
Tort
Inc. v.
law”);
Citizens Coalition for
substantive
(Alaska 1991).
McAlpine,
165
that Act. In
relating
information
to one of his clients under
Prahinski,
784,
227, 241,
791
v.
321 Md.
582 A.2d
Prahinski
5.4(b)
(d),
(1990),
lawyer
a
applied
precluding
we
Rule
persons
for the
of law with
forming partnerships
practice
from
“has
lawyers,
holding
non-lawyer spouse
that a
who are
practice
in the
and therefore
lawyer-spouse’s
no interest
as marital
practice may
not be included
goodwill
Harris,
310,
In 530 So.2d the Louisi- Succession of a Supreme property ana Court invalidated transfer client to her on the that the transfer ran afoul lawyer ground lawyer acquiring ethical rule from *20 precluding 1150, in the client’s cause of action. At proprietary interest the court held:
166 mandatory are rules that disciplinary provide
“The
rules
attorney
to
an
must con-
minimum level
conduct
which
an
being subject
disciplinary
action. When
form without
in
and
into a contract with his client
direct
attorney enters
disciplinary
subsequent
of a
rule and
flagrant violation
(or annulment) of
action raises the issue of enforcement
civil
contract,
court,
integrity
in
preserve
this
order
judicial power,
prohibit
should
the enforcement
its inherent
directly
adopted
contravenes the Code
of the contract which
of law.”
regulate
practice
this court to
point,
applied
provisions
to the
courts have
Code
More
sharing
lawyers
deciding upon
fee
between
dealing with
Baer
In
enforceability
fee-sharing agreements.
validity
(7th Cir.1995),
Inc.,
Illinois is not alone private agreements lawyers declining Code to between fee-sharing provisions. enforce contracts violation those Kolts, 635, 44 v. Scolinos Cal.App.4th Cal.Rptr.2d In a fee-sharing the California court held (Cal.Ct.App.1995), invalid it contravened lawyers between because agreements approved rule that such requiring ethical *21 167 640, 31, At 44 the court writing by Cal.Rptr.2d the client. if attorney observed that would be absurd an were “[i]t through enforce an unethical fee court allowed to action, subject the though attorney potentially even discipline entering agreement.” into the See professional v. 147 716 Sayble, Cal.App.3d Cal.Rptr. also Altsckul 83 and Kallen v. 157 (Cal.Ct.App.1978) Delug, Cal.App.3d (refusing 203 to enforce fee Cal-Rptr. (Cal.Ct.App.1984) 879 sharing agreements violation of Code of Professional Con duct). Rentals, Inc., (5th E
In Matter
P
Boat
Although, reached each of the ultimate results necessarily agree with from cited, emanating just adopt premise we do the cases 1.5(e) super constitute a Rule does those cases that MLRPC fee-sharing agree policy to which vening public statement subject, and that the enforcement by lawyers are ments may It disciplinary proceedings. Rule is not limited *22 flagrant in and fee-sharing agreements clear holding extend to 1.5(e) unenforceable, for, following the obser of Rule violation Kolts, supra, v. Scolinos in 37 of the court vation California 31, at 640, 44 it would indeed be Cal.Rptr.2d at Cal.App.4th to invoke the court’s aid lawyer to allow a least anomalous enforcement, that very when enforcing agreement an unethical to be agreement sought of the even the existence perhaps enforced, lawyer subject discipline. the to would render Although “may” for a reason. highlight
We word be held may in violation of Rule fee-sharing agreement defense, per se unenforceable, rendering Rule is not a fee-sharing agree or unenforceable otherwise valid invalid technical, merely that are because of rule violations ments manifestly incidental, it would be or insubstantial or when agreement. inequitable and not to enforce unfair makes clear that note that introduces MLRPC Scope partly partly obligatory, that are Rules are “rules reason” goes It descriptive. constitutive and disciplinary, partly point on to out: not rise to a cause of action give of a Rule should
“Violation should, has legal duty that a any presumption it create nor designed provide guid- are breached. The Rules been regulating a structure for lawyers provide ance to and to not de- agencies. They are through disciplinary conduct Furthermore, liability. for civil signed to be basis they when are Rules can be subverted purpose of the weapons.” parties procedural invoked as opposing
169
court
v.
As the Minnesota
observed
Christensen
Eggen,
(Minn.App.1997), although
weAs matters. It must now considered these the circuit court never do so. RE- APPEALS OF COURT OF SPECIAL
JUDGMENT THAT VERSED; REMANDED TO COURT WITH CASE REMAND TO CIRCUIT COURT TO INSTRUCTIONS PRO- FOR FURTHER COUNTY FOR MONTGOMERY OPINION; THIS IN ACCORDANCE WITH CEEDINGS IN AND COURT OF SPECIAL IN THIS COURT COSTS THE ABIDE RESULT. APPEALS TO RODOWSKY, J., concurs. CHASNOW, JJ., dissent.
ELDRIDGE RODOWSKY, Judge, concurring. Court, separately but I write
I in the join opinion remand. issues on possible address further he is remand, argue will Bregman presumably On law, on the facts and the summary judgment entitled In support of the Court. opinion set forth latter is motion, of the facts motion, analysis or renewed such undoubtedly Chasanow will dissenting Judge opinion Bregman. presented by then I be- summary judgment,
If
defense survives
Post’s
*24
Manown,
463,
171 under the of the considerations (1992), relevant. One becomes so Court, is found to be “if the of the opinion unenforceable,” all or is “whether as to be of the Rule violative returned to the amount should be disputed any part of extent, unreason- that, the fee is to that ground on the client (1998). client, 142, 170, 707 A.2d 349 Md. able.” however, action. party not a this Taylor, is Stanley as to judgment was from a In Adams v. Manown appeal holder was bankruptcy judgment the trustee which interest, party. not a but the trustee was party the real Adams, remanding In A.2d at 618. at 328 Md. bankrupt- send notice to the trial court to case we directed the to intervene. opportunity the trustee an give trustee and cy Id. at A.2d at 619-20. defense,
Here, in his it if on the merits Post is successful account, keeps, that he for own necessarily does not follow by Bregman. Because one of the fee claimed portion to some or all of outcome is that the client entitled possible fee, it for may appropriate the circuit court deem disputed opportunity notice to the client and an give the court in Adams. intervene, procedure approved to the similar ELDRIDGE, CHASNOW, in which Judge, dissenting, Judge, joins. summary judgment In a where respectfully
I dissent. case granting the Court reverses properly granted, apply vague summary judgment and remands motion by the Court. “equitable” test fashioned problematic THE DID NOT ERR IN GRANTING TRIAL JUDGE JUDGMENT
SUMMARY that, in court, attorney In Alan Post contended the trial of the fee attorney Douglas Bregman to recover 13% order for had to sharing agreement, Bregman provided a fee Rule Professional Con- Maryland compliance establish legal to the proportion the 13% was by proving duct *25 performed by services him. In his response Bregman’s to summary judgment, motion for Post position makes his clear: Maryland “The Rules of prohibit Professional Conduct ratifying from conduct which reasonably [Post] be- [Post] lieves to be violation of the [Bregman Rules. and his have refused to provide any firm] with evidence to [Post] support the division of fees claimed. not at- [Post] has tempted any obligation [Bregman], has, to avoid but response to failure to [Bregman’s] provide any evidence to claimed, support the division of fees properly requested that circumstances, this Court review the facts and and declare [Bregman’s] whether claim is lawful.” goes Post on to set out he what contends are the issues in complains the case and that has not addressed those issues. explains: He Law,
“In their Memorandum of [Bregman and his firm] have failed to address the issue which the Court has been address, asked to is the division of fees claimed in propor- tion to performed by [Bregman] the services required by as 1.5(e). [Bregman Rule and his firm] have also failed to issue, possible secondary address the should [Bregman’s] violation of of Maryland Rule Rules of Profession- al Conduct bar [Bregman’s] enforcement of the December 20, 1991, agreement to obtain the division of fees claimed.” hearing At the on the cross for summary judgment, motions attorney Post’s press continued to his contention that it would unethical to Bregman’s enforce contractual claim unless as a precedent recovery condition Bregman proves that his in proportion claim 13% of the fee is legal services performed he for the client. seeing
“[POST’S We are it COUNSEL]: condition fee; precedent payment of the we are not seeing it as a fee, therefore, defense to the claim for a all right? And there is a I lengthy, difference---- did a re- exhaustive search in of the city, several best law libraries this and I was not any reporter, any reporter, able under state bar whatsoever, any published document any to find case deal- Profession- the Rules of particular provision ing with this model original or in its Conduct, current form either its al form. Code heavily been dealt an area that has I think this is not
So that certain Bar. I understand the members matter, ethical mat- not an this as a civil jurisdictions see ter..... is entitled to my I think that client something
So it mean, Declaratory Judg- I under the he asked. ask what again, it. And it is to ask for Act he is entitled ment fee; it is offered for for a claim for a offered as a defense fee should deciding what precedent condition *26 be....” support find little acknowledged that he could apparently
Post ethical that it would be an novel contention for his somewhat by Bregman demanded the contractual fee pay violation Bregman proves recovery precedent unless a condition to the proportionate fee is percentage contractual that his on behalf of the actually performed of work he percentage client. limited perhaps claim was Bregman’s
Post’s defense could Post fraught pitfalls. was argument because at the time was unethical Bregman’s 13% share argue not that Breg- agreement, contracting because Post initiated Post could not merely accepted proposal. Post’s written man duty to any implied Bregman that breached seriously contend agreement since present after the fee do additional work him by lead delegated initiate work not Bregman could not did all work counsel, Bregman that stipulated and it was Also, claiming that his Decem- if Post was assigned to him. ber, pay Bregman promise unconditional seemingly 1991 Breg- because any fee was unenforceable 40% of one-third (13%) work, share of the Post to do a proportionate man failed to establish under traditional contract law bears the burden Duvall, v. contract. Glen Alden Bregman breached the (1965). not 405, 422, Post could 215 A.2d 167 240 Md. legal 13% of the efforts did not constitute prove Bregman’s records, services since it was stipulated kept Post no time lead records, counsel who settled the kept case no time and a firm that did a portion considerable of the work no part received Similarly, the fee. the burden of proving that a contract unreasonable or unethical should be on the party asserting Polan’s, 525, 534, this defense. Sears v. 250 Md. 243 A.2d Cf. (1968); Backus, 83, 90, 607-08 v. Gingell 246 Md. (1967); Comm., A.2d 352-53 Bernstein v. Real Estate 221, 231, (1959). Md. 156 A.2d The trial judge, opinion, his oral held that there was a fee, contract to pay Bregman 13% of the that the contract was Post, proposed by and prepared by did work on case, Taylor’s if and even it is assumed that Bregman did not exactly do 13% of the so that may theoretically work there violation, an ethical it would constitute a defense to the contract based on the undisputed evidence the instant case. judge stated in part: contract,
“There is no question that the December 20th existence, letter—there is no question its of who it, to, is, wrote of the fact that it agreed and there course, question no of the fact money that the has not been paid.
So that leaves us with the question, really third which is *27 brought by way Court, of request first [Post’s] which is that there either is or be may underlying an ethical that, problem, that and because that problem needs to be of fact, word, resolved. In uses the phrase [Post] or the precedent.’ ‘condition problem,
That or the resolution problem, that is a of precedent condition to whether or not be [Bregman] should entitled to consummate his claim breach contract. for of belief, my
It is upon based the motions and memoran- dums that have supplied, been that that ethical question is not a defense to a breach of contract between the parties. It seems to me that there is no party suggests that that Maryland of that is. There is substantial law outside there not. suggests that it is that, to me to be it doesn’t make sense
But addition contract, that as a defense to a breach able to raise case, lawyers—not this one of the parties—in one into, proposal in this case made the only entered but himself. is made I the ethical argument
So don’t believe that violation, [Post], an ethical by even there is defense if contract, a breach and that to this suit or the claim for case, why is no other reason it seems to me there being the [Breg- Summary Judgment part the Motion granted.” should not man] insisting absolutely correct. Post was judge
The trial was unless, precedent,” as a “condition Bregman could not recover by proving no ethical violation Bregman proved that there was with this judge disagreed he 13% of the work. The trial did that, might held even if there be a Rule contention and did Bregman prove pre- violation did not he ethical because work, should not be a cisely 13% of the such violation in the of the instant case where Post defense circumstances knowing the amount proposed paying Bregman 13% of the fee Bregman already knowing of work had done the case might to be turned over to another lead counsel who about not, not, any by Bregman. demand further work At did December, 1991, the time of the fee there was existing pay Bregman contract to 25% of the fee. new At that Bregman’s percentage. fee division contract reduced already enough had done work to make Post’s point, Bregman any of 13% of fee a reasonable enforceable fee promise that when the client’s case was proof contract even without “in finally Bregman’s precisely propor- concluded 13% fee was to the each performed by lawyer.” tion services judge of the facts considered the trial when Some summary judgment plead- were Post in granting admitted ings They and documents he filed in the instant case. includ- client, Taylor, ed the fact that first met with the *28 Taylor then to Post. In several letters Post ac introduced knowledged Bregman referring attorney was the for the Bregman and tort cases.1 also contrib compensation worker’s expenses Taylor uted two thousand dollars toward for the Bregman arranged In late for an associate litigation. and preparation complaint in the of an amended participate matters. That associate worked preliminary discovery certain case until 1991. facts are since April undisputed Other filed they by Bregman, are contained amended affidavits motion for only support which were the affidavits summary judgment proper that were form and based on thus, personal knowledge, only properly and affidavit Bregman’s considered the circuit court. One of affidavits alleges that: Post, my array firm request
“At the of Mr. rendered wide Stanley Taylor, which included: legal services Mr. W. client, meeting interviewing developing legal with and defendants, against investigating theories for the actions defendants, pleadings (e.g., numerous potential drafting interrogatories, interrogatories), ap- answers to Complaint, court, co- pearing attending deposition, meeting with research, strategy, conducting legal case counsel discuss counsel, speaking [opposing] reviewing pleadings, voluminous receiving, reviewing, organizing pleadings, records, faxes, expressed and federal hand-delivered and/or documents from all counsel. judge sharing agreement
1. The trial did not decide whether the fee was joint responsibility also enforceable because had for the representation. potential Post contended there was a factual issue joint representation. the client had consented to about whether majority Taylor makes reference to an affidavit the client albeit noting the affidavit could not be considered because it did not ' knowledge. personal Taylor’s recite that it was based on affidavit also may questionable hearing attorney because at the motions Post’s judge Taylor, quite frankly, very during informed the tried "Mr. ill this, actually portion after the time the cases were filed. He has people, no recollection whatsoever. He recollects a lot of different case, in this but he has no recollection of Mr. people a lot of involved Bregman at all.” *29 case, in its role as my firm continued Throughout Taylor the record, pleadings hundreds of receiving all of the counsel of firm, myself My specifically by filed both sides. papers associate, get stayed up-to-date prepared and an any time.” Taylor in the case at involved deeply more by the that could considered only the affidavits These were summary judgment, motion for as evidence judge trial by any sufficient affida- legally it never controverted and was for addition, complaint amended In in Post’s second vit. relief, attended a acknowledges Bregman Post declaratory hearing in the tort suit. and court deposition into stipulations relevant entered There are also several judge the trial properly that were considered parties Some of deciding summary judgment. the motion for when were: stipulations those Bregman was listed Taylor litigation, Mr.
“Throughout as co-counsel of Taylor litigation on the in the pleadings Taylor. record for Mr. accounting spent
The Post firm has no of its time Taylor litigation. on the accounting spent
The Nace firm made no of its time litigation to the Post firm. Taylor firm no time on the accounting spent The Post made of its Taylor litigation to the Nace firm. drafting origi- firm in the of the Bregman participated
The litigation. Complaint Taylor nal filed Taylor litigation in the listed original Complaint The filed Bregman Taylor. Mr. as co-counsel Mr. 4, 1990, Taylor provided or Mr. was
On about October original Complaint Taylor litigation. of the filed copy Bregman participated The firm in the drafting Complaint Taylor litigation. Amended filed filed in Complaint Taylor litigation Amended listed Bregman Taylor. Mr. as co-counsel for Mr. 24, 1991, April Taylor provided copy
On about Mr. Complaint Taylor litigation. of the Amended filed Mr. was included in the final version of the Official provided List to the Clerk of the on or Service Court about *30 21,1992. February during Taylor
At no time the course of the litigation was the Bregman assigned any firm that it did properly task perform.
The Simon firm was lead counsel for Mr. from Taylor Taylor litigation commencement of the until Mr. Simon withdrew his in the appearance matter.” why There are several reasons the trial judge properly rejected “ethical” argument Bregman Post’s should not collect his contractual of the 13% fee unless as condition First, precedent he he did of the proves 13% work. none of the firms that worked on the case time it kept records so impossible prove would be almost the proportion Bregman’s efforts bore to the efforts of Post and the other attorneys Second, the case. Ron Simon of the Connerton firm was lead during Taylor’s counsel a substantial tort portion litigation, Taylor’s from the tort suit filed until period before was over year after suit was filed. That firm withdrew before contract; Post-Bregman sharing current fee and his Simon got they firm no fee for the did in the so if Post work case prevails, he would presumably keep percentage also the full Third, the fee attributable Simon’s work. basic contract law is inconsistent with Post’s “ethical” To the defense. actually extent that Post was asserting that the contract should not be enforced because it was unethical or that Bregman contract, somehow breached the then the burden of Fourth, proof prove Post assertions. those by Bregman amount work done at the time the current fee division contract could reasonably estimated to be 13% legal of the work that would be done the client’s case. Post should not be able to shift the almost insurmountable burden of proving proportion of work done by attorney each Bregman by claiming it would him be unethical for to divide portion Bregman fee with unless first proves the contractual division is “ethical.”
There is also a fairly recent case in this Court is not cited by majority, but was cited to judge, the trial and that may case have been a basis for judge’s holding the trial in the Kandel, instant case. In Vogelhut v. Md. 517 A.2d (1986), plaintiff attorney who, was representing a client cause, good without discharged plaintiff attorney and retained attorney. defendant After defendant wrote to plaintiff and files, asked for the client’s the two attorneys came to an agreement that discharged attorney get would 25% of the 40% contingent fee the client agreed to pay the defendant attorney. settled, When the case the defendant attorney *31 refused to pay plaintiff attorney anything more than quantum meruit based on an hourly rate. attorney Plaintiff filed suit against attorney defendant to collect the contractual 25% of fee, the and a bench trial was held. The record extract testimony contains of the defendant attorney expended that he from between case, 300 to 350 hours on the but plaintiff the attorney testified he could not give even an of estimate the number of hours he worked on the case because his kept office no time records. judge
The trial in Vogelhut acknowledged he was faced with a situation party seeking where the splitting enforce the fee contract could prove not what proportion the total legal
180 nevertheless, entered judge, but the he performed, services $18,700 the represented which plaintiff for the judgment attorney. by received the defendant of the fee contractual 25% agreement reached there was judge trial concluded The proof even without enforceable agreement was and done. to the work proportionate was split the contractual fee ... [was] that “the was the contention appeal On it since Responsibility, Professional violating one Code of DR 2-107 violation splitting unethical fee constituted appel- DR 2-206 to prohibited fee in an excessive resulted client].” services to legal [the considering [‘modest’] lee 170, 178, 1124 Kandel, 502 A.2d Md.App. v. 66 Vogelhut the trial (1986). Appeals affirmed Special The Court A.2d at at Md.App. judgment. Vogelhut, court’s to be resolved One of the issues certiorari. granted 1125. We was: sharing from ethically precluded discharged lawyer a
“Is successor, to the value proportion either not of his the fee of the client’s consent?” services, in the absence or This affirmed A.2d at 1095. Court Md. at not because there was holding that judge, of the trial ruling client of the client because representation concurrent sharing agreement, fee affected adversely nor the majority Neither the not violated. ethical rules were to en- any impediment found apparently concurring opinion claim to 25% of attorney’s contractual discharged forcing work on the legal that he did 25% of the proof the fee without case. FEES CONTINGENT
DIVIDING a 1.5(e), to divide proper contract Pursuant to Rule fee contingent on a lawyers who work contingent among fee to the in approximate proportion should be a division case on the case. expects to do lawyer did work each with the client fee contracts contingent reasonableness attorneys nor- among fee contingent dividing contracts percent- on the reasonableness judged mally should contracting, not on whether time of on at the age agreed *32 attorneys put anticipated more less work than to win the recovery case and not whether the was more or less than anticipated. “Courts have generally stated that the reason- contingency ableness fee contract should be looked at in light of the factors they as existed at the time the contract was into, entered but this must be qualified by power the inherent of a court to review fees the case before it.” 1 Robert L. (2d Attorneys’ 2:9, ed.1995). § at 111-12 Rossi, Fees contingent A by fee contract is its nature of a something gamble strength on the of the client’s case and the skill of the If attorneys. is no recovery there for the client attorney gets no fee regardless of the amount of work he or she performed on behalf of the client. If the client has to compro- mise and only receives a small recovery attorney gets only agreed on percentage regardless of the expended. efforts hand, On the other if the case settles for great deal of money shortly retained, after attorney the attorney receives agreed on contingent fee even though relatively little work was done on the long case. As contingent fee division contract proven was not to be unreasonable or unethical when into, entered each attorney ordinarily get should the agreed contractual division. Merely speculating that the fee division might be unreasonable or unethical recomputing pro- portionate division of efforts after the client’s case is settled should not be a defense to a suit on the contract.
This (40% contract initiated Post promised Bregman 18% one-third) of any fee recovered. It was not shown to be an unreasonable or unethical division of potential fee when it was entered into. There suggestion was no by Post that the coercive, contract was improper or unethical when entered into. Post obviously thought at the time of contracting Bregman deserved any 13% of fee since Post was the one who proposed that division. Our ethical focus should be on wheth- er the contract was proper into, and ethical when entered through hindsight based fortuitous events that occurred later. attorney situation, us assume that let analogous
In an *33 action injury personal in a difficult a client represent to agrees As the case the client’s ease. work on considerable and does of the trial, agreement the full attorney, with gets close experi- more skillful and in a much client, bring decides carefully compare attorneys attorney. The two enced trial done and attorney already has referring of work the amount to do reasonably expected be attorney can the new the work and proportionate reasonable it would be mutually agree them. equally fee between contingency the one-third to divide enforce- ought fee to be divide the equally agreement That sup- are everything they attorneys do as both long able as matter It should not the client. on behalf of to do posed turned over shortly being after the settles the case whether done the attorney has original and the attorney trial new the attorney the new trial or whether majority of the work more expends appeal case and its trying the for and preparing Like the necessary. be would party thought effort than either client, normally the contract with contingent fee original judged on should be sharing fee contract validity of the made. the contract was at the time facts Inv. Mortgage this Court held with what This is accord (1976), A.2d v. Citizens Bank 278 Md. attorney’s fee 15% for provided a note case where filed and suit was paid, the note was recovery. When well on the note as the amount due entered for judgment was 15% $150,000 attorneys’ representing fees as over that contention was primary judgment. appeal On amount excessive based grossly fees was attorneys’ judgment the note. to file suit on necessary legal work on the amount several doc- it had to reconcile recognized This Court to oversee “first, of a court power the inherent including trines second, ... of its bar [and] members the activities of long so they please, as make such contracts rights parties 508-09, A.2d at law.” 278 Md. consistent with they as are omitted). (citations the fee because upheld This Court at 49 sophisti- into informed one entered even enforceable and it should be contracting parties, cated though ultimately the amount due at the time of suit made the attorneys’ 15% fee unreasonably high. We stated: “While the amount of the collection fee may regarded grossly disproportionate involved, to the amount of work it must be remembered that [the defendant] was an informed sophisticated borrower, entirely familiar banking practices.”
“The Court tacitly concludes that a provision contract providing for an attorney’s fee should be treated in the *34 same manner any other provision contract; in a for example, an attorney’s fee provision only is void if there is clear evidence of believe, I overreaching. however, that provisions for attorneys’ fees fall in a separate category because of our supervisory are, role over attorneys, who all, after of officers the Court. The majority, course, of recognizes that because attorneys Court, are officers of the the possesses Court power the uphold highest stan- professional dards of conduct and to protect the public from imposition by practitioner. power This should be exer- cised when necessary to merit respect ‘the and confidence of (an ... the society which attorney) serves.’ American Bar Association, Code of Professional Responsibility, Preamble (1975). Achievement of objective this compels, in circum- stances such present here, as are special treatment for contracts for attorneys’ fees.
The Code of Professional Responsibility provides the against touchstone which we should measure an attorney’s conduct:
‘(A) A lawyer shall not enter for, into an agreement charge, or collect an illegal or dearly excessive fee. (B) A fee is clearly when, excessive after a review of facts, a lawyer of ordinary prudence would be left with a a firm that the fee is excess conviction
definite of Responsibility, of Professional reasonable fee.Code (B), 2-106(A), F Maryland App. Rules Rule Disciplinary added). (emphasis mandatory are character state rules
These fall lawyer no can of below which minimum level conduct Bar subject disciplinary action. American being without Association, Responsibility, Prelimi- Code Professional (1975). majority apparently would nary Statement fees, permit- excessive while not attorneys to collect permit agreements enter unconscionable ting them to into draw fine public I that will such doubt excessive fees. (Em- attorneys.” confidence in assessing its distinctions added). phasis 511-12, at In Inv., A.2d 50-51. 278 Md. at
Mortgage Inv., ordinarily when a question we recognized Mortgage contingent fee contract a is raised reasonableness about contracting. The contract the time period the relevant one-third) (40% on give Bregman Post to 13% initiated than reason- not shown be other any fee recovered was contingent fee. Absent ethically divide attempt able case, instant our present in the special circumstances contract should be based ethical fee division evaluation and ethical when entered proper contract was whether into, after the on fortuitous events that occurred not based his breached There was no claim contract. justify contract, required “ethically” he not be should he percentage of the work claim proving contractual *35 the actually equaled percentage of fee. performed its by majority support the of Many of the cases cited an by cases where a fee was claimed position are referral fee are more than a case. nothing did refer States attorney who public there should be a about whether agreement nothing than doing a fee for more policy against charging Miller, Caroll attorney. case to another See J. referring a Fee Annotation, Enforceability Validity and Referral (1984). Had Attorneys, 28 A.L.R.4th Between Agreement portion a substantial pay this contract been a referring case, the fee for contingent merely the the contract itself been might have unethical and thus That unenforceable. issue, however, need not in the be decided instant case. Where a who lawyer gets has worked a case permission from the client refer the case another to handle lawyer the trial the two attorneys agree and on a reasonable division fee, contingent normally agreement should be agreement enforceable unless at the time the was entered into it contemplated split. unethical That is we held in what it Vogelhut, and is what we should hold case. instant Referral of cases can often benefit client and referral agreements should not be considered where improper referring attorney performed has work on the case client’s contracting attorneys agree that the approxi- fee division mates proportion referring attorney the work done anticipated bears the work done by attorney. to be the trial attorney When a client comes to an a that with case will fee, potentially generate very large attorneys most will be reluctant to turn down the Cases potentially case. that can large result in very contingent vigorous- generally fees will be ly opposed by highly counsel competent require and often skill extraordinary expertise. An who attorney takes such a case and comes to realize the client be better might served attorney greater another experience skill or should be not be discouraged from referring the case to attorney another better champion able to the client’s cause. Common sense tells us attorneys would be reluctant to refer potentially cases that will contingent result fees amounting to hundreds of exchange thousands dollars in quantum, payments meruit for services an hourly rendered at rate. policy Public should permit attorney to referring share in the risk of no recovery or the reward very large of a recovery long sharing as the fee is reasonable when into and adversely entered does not affect the client. suggest That is not to that highly disproportionate division contingent would permitted merely fees because one attor- ney however, referred the It suggest, case another. does referring where the attorney has done some work
186 new lead counsel have come as well the referring attorney fee, contingent courts to on division a should agreement an at a ethically have acted and arrived attorneys assume both fees, at the time of recognizing that division proportionate much accurately predict how work agreement no one is able any attorney or even if there will be by will the new be done fee at all.
Furthermore,
a
attorney seeking
contingent
to set aside
the
that
proving
should have the burden of
sharing agreement
fee
when entered
or unethical
agreement
was unreasonable
Attorneys’
13:12,
2 Robert L.
into. See
§
at 309
Rossi,
Fees
(2d ed.1995).
Post did not and could not
Unquestionably,
ultimately
if
that
proof,
a
even we assume
meet such burden
might
precisely proportionate
not
division
the division
be
to require.
seem
that the ethical rules
position
attorneys
Bregman’s
courts permit
Other
not exactly
if
fee is
contractual fee divisions even
recover
performed.
services
proportion
attorneys
between
agreement
faced with
“When
rule
legal
applicable
a
fee in a situation where the
share
attorneys
that
division of fees between
required
each,
many courts
to the services
proportion
performed
to that
Some
requirement.
a
construction
given
have
liberal
have
that such an
enforceable
courts
held
attorney
according
provided
terms
that
who seeks
its
work,
or
her share of the fee contributed some
labor
his or
fee.
have
earning
Other courts
service toward
position, stating
less
that
only
slightly
liberal
taken
precisely
correlate with the work
fees need
respective
that
agreed
fee divi-
performed
attorney,,
each
there is
division
sion should be enforced where
substantial
(Footnotes omitted).
or responsibility.”
of services
(2d
Attorneys’
§ 4:1,
at 218-19
L.
Rossi,
Fees
Robert
ed.1995). See,
Krupa,
v.
Schniederjon
656,
e.g.,
Ill.App.3d
805,
(1985)(noting
85 Ill.Dec.
474 N.E.2d
work,
service,
labor,
fee
attorney
some
performed
where
despite fact
actual
agreement may be enforced
sharing
participation in
may
case
not have been in proportion to
claimed);
amount
fee
Fitzgibbon v. Carey,
70 Or.App.
*37
688 P.2d
1374 (1984)(noting that agreement between
attorneys to divide a contingency
may
fee
be enforced “even
though it is claimed that the division is not directly proportion-
al to
performed
the work
denied,
each” attorney), review
(1985).
298 Or.
EQUITABLE PRINCIPLES The majority, any without citation of authority, decides that an ethical violation of Rule should be treated as an “equitable defense” and holds “principles equity ought to be applied” to these ethical 169, 170, violations. 349 Md. (1998). A.2d 819 The majority also holds that contracts that ” violate ethical “per rules are not se invalid are but unenforce- able “technical, unless the ethical incidental, violation is or insubstantial” or unless it would “manifestly be unfair and inequitable” not to enforce agreement. the unethical 349 Md. 168, 707 A.2d vague, 819. This amorphous “equitable” test for contract enforcement not else, is anywhere law and is at best problematic. For example, what variance an between ethical fee and the actual contractual fee would constitute an “insubstantial” difference justifying enforcement of the unethi- cal agreement? Can clients also use this “equitable” to test abrogate contingent fee contracts either because the case settled before the attorney had to do very much work or because the recovery was lower than the attorney and client expected? lead Will counsel be able to paying avoid agreed upon percentage of the contingent fee to associate counsel by not assigning the same proportion of the work as associate proportion counsel’s of the fee?
Although I do not subscribe to the majority’s equitable principles defense, if equitable principles are to going be applied, then as a matter of law the clean hands doctrine and equitable estoppel should bar Post from challenging the fee division contract he proposed and prevent him from keeping the full one-third the fee without having” to justify his own fee by proving he did one-third of the legal work. The Court an “equitable so Post can assert the case
remands all fee keep Post some defense” that would allow though proposed even Post give Bregman he contracted to contract. did not breach the fee this division seem very equitable. Where equitable That defense does attorneys proven is to be between two to evade the ethical attempt of the fee or an unethical division rules, they attorneys required prove be what both should should attorney meruit and neither quantum are entitled to fee. If keep share permitted disproportionate be Breg- as well as agreement is not enforceable then Post this percentages their the fee and justify man have to should should any justified by attorney of the fee not either portion If and not retained Post. the Court go to client trial we express- the case to the court should going remand proceedings made a to the party direct that the client be ly *38 not contractual fee recoverable any portion Bregman’s not to It seems go should to the client Post. by Taylor work on the obvious that Mr. Simon did considerable fee part his firm no of the fee. If the yet case he and received attorneys’ conformity divided going contracts, Breg- share as well as proportionate then Simon’s fee should be refunded to man’s unearned share of the unethical, fee being than unearned windfall client rather fee can allowing keep Post. more of the than he Isn’t Post allowing Bregman he at unethical as prove earned least as prove fee can he earned? recover more of the than he that a Rules of judge The trial did not hold violation agree- could never void a fee division Professional Conduct ment; judge held that under the circumstances justified client’s behalf Bregman’s instant case efforts conceivably might 13% of the fee even if there contractual Bregman did not have been a violation of Rule because legal 13% of the total work. prove his efforts constituted unrea- sharing agreement There is that the fee was proof no into, there at time it entered sonable or unethical was he proof any Bregman, no breach so should be was argument Post’s ethical agreement. entitled to enforce properly held the trial judge not to constitute a defense to Post’s contract to pay Bregman 40% of one-third of the fee he from attorney. received the lead This Court should affirm the judgment entered below. I respectfully dissent.
Judge ELDRIDGE has joins authorized me to state that he dissenting opinion. this
OF
v. KNOX, Jr., Respondent.
Thurmon A. (Subtitle AG), Misc. Term, Docket Sept. No. 1998. Appeals Court of Maryland.
March 1998. ORDER This matter came before the Court on the Joint Petition of the Attorney Grievance of Maryland Commission Respon- dent, Knox, Jr., Thurmon A. to indefinitely suspend the Re- spondent from practice of law. Court,
This having Petition, considered the *39 it is this 23rd March, day of
ORDERED that the Respondent, Knox, Jr., Thurmon A. and he is hereby indefinitely suspended from practice law the State of Maryland, effective day 23rd March, 1998, and it is further
ORDERED, that the Clerk of this Court shall remove Knox, name of Thurmon Jr., A. from the register of attorneys Court, in this and certify that fact to the Clients’ Security