Son v. Margolius, Mallios, Davis, Rider & Tomar

441 112 A.2d Danny SON v. MALLIOS, DAVIS,

MARGOLIUS, et al. RIDER & TOMAR 33, Term, Sept.

No. 1997. Maryland. Appeals Court April 1998.

Reconsideration Denied June Mott, MeAuliffe, & Stock- (Joseph III M. Miles Stephen J. brief), Rockville, P.C., petitioner. on the bridge, Brault, Graham, Brault, Scott Mulquin, David D. G. Albert Rockville; (Bromberg, L.L.C., Barry J. Rosenthal Brault, & Rockville, brief), respondents. Siegel, & Rosenthal RIDGE, C.J., BELL, ELD Argued before CHASANOW, RAKER, RODOWSKY, WILNER CATHELL, JJ.

WILNER, Judge. 5, 1992, severely injured Danny Son was August

On a flat tire on helping change While automobile accident. Beltway, he was struck Capital shoulder of the in a comatose The accident left Mr. Son tractor-trailer. weeks, quadriplegic. he remains a for several condition Park, Jennifer Son’s intermediary,, the of an With assistance Stein, a in then-wife, Gary partner A. employed Tae Yon Davis, Tomar, Mallios, Rider & to Margolius, firm of the law obtaining compensation her in represent her husband and injuries. litigation, commenced respective their Mr. Stein $4,850,000. which, 30, 1993, on was settled for December arise from the manner and The issues now before us proceeds were dis- circumstances under which the settlement that, tributed, although fact particular from the Stein 28.5%, fee of attorney’s on the settlement sheet an showed Park, $1,382,250, to amounting paid to and no amount Ms. $1,139,750—23.5% only fee actually kept attorney’s firm as an amount, $242,500, Park paid of the settlement and Ms. consti- Contending amount. tuting an additional 5% of the settlement any payment never authorized to Ms. that he had until payment unaware that had been made that he was such later, filed suit in the Circuit Court nine months Mr. Son Stein, firm, part- the other Montgomery County against firm, Park, corporation, seeking and Park’s ners in the $1,139,750 $242,500 retained paid recover the fee, attorney’s the firm as an and other compensatory and punitive damages.

In I of complaint, Count his Mr. Son claimed that Ms. Park solicited Ms. to retain firm in Stein Stein’s violation 10-604(a)(l) Code, Barratry (Maryland § the State Law of the (1995 Business Article Occupations Repl.Vol.)), pay- that the fee, ment to Ms. Park was an unlawful referral implemented illegal disbursements fee-splitting Stein agreement public policy contravention Maryland, and that the defendants should not be permitted II agreement. retain the benefits Counts torts, through charged variety V all principally based the asserted concealment from Son of allegedly illegal II, In agreement. charged Count he the defendants with civil conspiracy agreement to enter into the unlawful conceal him; it from III firm charged partners Count and its with by deceiving respect constructive fraud Son with to the fee- splitting agreement; charged them Count IV with actual fraud Park; failing agreement to disclose the to compensate Ms. charged and Count the firm and its partners negli- V with gence failing agreement. to disclose the summary Mr. Son a motion for judgment respect filed I of complaint. Count his Ms. Park and her corporation summary judgment filed a cross-motion for as to Counts I and only applied II—the ones that to them. The lawyer-defen- dants for summary judgment moved on all five counts. cross-motions, respective their the defendants assumed that complaint the sole basis of Son’s was his assertion that the lawyers conduct of Park or the barratry, constituted § violation of 10-604 of the Occupations Business Article. that, law, as They posited a matter of that was not the case that, result, as a none of the applicable counts to them December, 1995, sufficed to constitute a cause of action. court, reasons, assigning the two brief orders no denied motion, defendants, granted by Son’s those filed the judgment entered favor of the defendants.

445 summary judg- affirmed the Appeals Special The Court of I, on the reversed those entered entered on Count but ments proceed- the case for further four counts and remanded other 190, v. Margolius, 114 689 A.2d to them. Son Md.App. ings as I, (1997). the court concluded respect to Count 645 With Ms. Park and the arrangement between alleged the if the illegality only would voidable because lawyers be from conduct that amounted to barra- arrangement proceeded statute, and it would be Maryland try under the if it amounted to grounds only public policy voidable on other Lawyer’s Maryland 5.4 or Rule 7.2 of the a violation of Rule (MLRPC) and those rules Conduct Rules Professional to render public policy statement of constituted sufficient that, of them. The court held void contract violation no evidence to indicate that Ms. ever because there was firm employ or Mr. Stein or his law solicited Mr. Ms. Son requisite barratry was a element of and because solicitation statute, Maryland complained the the conduct under holding on its recent barratry. did not constitute Based Son (1996), in Post v. 665 Bregman, Md.App. 686 A.2d that, alleged arrangement if the court further concluded even 7.2, of MLRPC Rule 5.4 or amounted to a violation provide violation of those rules “do not basis voidance supra, v. Margolius, a contract.” Md.App. at held, law, a matter of Accordingly, 689 A.2d at 659. it him agreements made Son was not entitled void illegality public policy. on or violation of on his behalf based counts, noted, depend court did not appellate The other pay Ms. Park a 5% fee constitut- agreement whether instead on illegal fee-splitting arrangement, ed an but rested agreement concealed that parties the assertion that had thereby misrepresented had Ms. Park’s from Mr. Son and lawyers. with the agreement status and the true fee although dispute, the matter was in there court concluded that a trier of fact find in the record from which could was evidence exist Ms. Park and fee-splitting agreement that a did between dispute there was a of fact as to whether lawyers, and that arrangement lawyers Ms. Park and the concealed Mr. Son and the misrepresented arrangement. actual fee regard, this latter the court concluded that the of impact any knowledge constructive that Mr. had of Son such agreement court, in was raised the circuit there genuine dispute was a of fact as to whether a power of wife, attorney gave that Mr. to his might Son that have provided agree a basis for her to to a fee-splitting arrange- ment lawyers, between Ms. Park and the valid. lack violation, held, not, barratry itself, of a the court did suffice to render the four tort actions non-viable. The factual dis- moreover, putes, summary made judgment on the four tort impermissible. counts apparently

Son in acquiesced appellate the court’s conclu- sion that Count I could not upon be founded a violation of 7.2, MLRPC Rules 5.4" or apparently and the defendants counts, in acquiesced that court’s decision as to the other for no petitions for certiorari were filed as to those matters. Son for certiorari petition filed a limited to a narrow regard- issue ing the of barratry—whether offense the element of solicita- tion is satisfied when “there is no that dispute alleged the in engaged barrator constructive solicitation by regularly hold- ing herself out to the public engages as one who in the practice of a fee charging selecting lawyer, and when contacted in this case demanded a fee before selecting the lawyer.” and, granted 10, 1997,

This Court petition November argument heard on the limited issue in petition. By raised then, however, also pending we had before us review Post v. Bregman, upon Court of Special Appeals decision case, which that court relied its decision in raising this broader issue of agreements whether entered into by lawyers that were contravention of applicable MLRPC rules could against be declared void as public policy. Recognizing that arguably issue had been raised in his complaint view, in Post v. being of the after having argument heard Bregman, Special Appeals may the Court of have erred MLRPC, conception application its we took the unusual step directing reargument in this case on question Ms. Park and the arrangement between alleged whether expressed against public policy void lawyers us now is the and 7.2. All that is before Rules 5.4 MLRPC affirming judgment Appeals decision Special Court of initial grant I neither our complaint; of the entered on Count of certiorari reargument encompassed nor our order counts. to the other four tort For rulings respect court’s Opinion, in this we shall reverse explained the reasons to Count I. Special Appeals of the judgment Court UNDERLYING FACTS and, noted, summary judgment, to us on As this case comes nutshell, Special problem. in a is the As Court out, in dispute. certain material facts are We Appeals pointed of or produced support must consider the evidence in a most favorable opposition light to the defendants’ motions Bankerd, v. King 608, 98, 111, 303 Md. 492 A.2d to Mr. Son. (1985). then-wife, Son, Yon are of Korean Mr. Son and his Tae and, heritage. Although they spoke English through some businesses, had some operation independent presumably culture, English of American business was not understanding comfortable primary language, they their and were far more American community with the local Korean than with broader injuries as a result of the society. suffered Mr. Son life-threat- catastrophic, being immediately accident were both him ening permanently disabling having a dramatic on Ms. as well. Mr. comatose for at least impact Son was treatment, medical several weeks. He would need substantial followed rehabilitation and overall assistance. The therapy bills, reduced, ultimately medical some of which were exceed- $500,000, eventually prepared and a Life Plan for ed Care him, general care and involving continuing future medical assistance. set of overwhelming prob-

Faced with the immediate and accident, Ms. Park arising lems from the Ms. Son contacted Park was known in the Korean assistance. Jennifer well community generally as someone who helped people Korean heritage problems deal with of one kind another. She was also known Ms. who had worked as a bookkeeper Ms. Park for about two months in when Ms. Son first Maryland. came to Ms. Park said that she had been helping years other Koreans for about 15 and in a variety ways, including one, them find a helping lawyer they when needed usually services, that she not charge anything did for her but that, began charge she fees. On at least one occasion, June, 1992, brought had a possible Stein, wrongful death claim to Mr. representa- who declined tion because he did not believe the case had sufficient merit to warrant the effort.

Ms. Son contacted Ms. Park days within two or three after accident, August 7 or Both Ms. Son and Ms. Park purpose stated that of the call was to elicit Ms. Park’s in finding lawyer. assistance Ms. Son testified that she knew Ms. Park had helped people attorney, find an that she accident, told Ms. Park that her husband had been that she asked Ms. help lawyer. Park to her find a Ms. testified similarly: have,

“She tell me about the accident her husband a couple doctor, days ago. according And to the she doesn’t know whether Mr. Son will be survive or family not. And their to, know, you wants hire lawyer, right away, ‘cause she don’t know where to go. And she ask me whether I could help her.” afternoon,

The following Ms. Park met family—Ms. with the Son and some of Mr. Son’s brothers and in-laws—at hospital explained and that she would them a give list of two lawyers best, three and let them decide which one was that go she would with them to talk to the lawyers and would work fee, family,

for the but that she intended charge separate to fee, any attorney’s amount any recovery. of 10% of family agreed When the to that arrangement, gave Ms. Park Ms. a list of lawyers—Mr. lawyers three Stein and two whose names she got Pages from the Yellow of the telephone Park called on the list. Ms. name was first Mr. Stem’s book. him him about Son’s or 10 and informed August on on met with Stein apparently and Ms. Son injuries. She August 12, 1992, agreements. three signed Ms. Son August

On Contract,” written Korean One, “Employment entitled Park; signed by Ms. it was and Ms. was between the Sons and Son, Park. As Son, for Mr. and Ms. and for herself stated, part, in relevant English, it later into translated (1) spokesperson “as the Ms. Park employ to agreed the Sons the best of her so that for both us consultant and attorney of us and the abilities, with both cooperate she can compen- filed to claim the law suit in connection with we select the matters accident ... and traffic Danny for Son’s sation health,” recovery of Danny Son’s hospital during related to the for “prepare representative Park as their Ms. appoint suit, and the law hospital to the relative questions and all me and on behalf of attorney and others to the respond us,” pay her consultation my upon husband my I and proceeds “of the total her efforts 10% all attorney from the receive, apart separately will husband signed agreement According to Ms. fees.” home, Ms. Son 12 at Son’s before August morning met with Mr. Stein. ever signed agreements were retainer agreements two

The other In husband. both for herself and her by Ms. only except as to respects identical all which were agreements, Mallios, fee, Margolius, firm employed the Sons damages their claim Davis, prosecute Tomar to Rider & version, agreed Ms. Son one resulting from the accident. 33)6% tried) (33)6-- (or percent if case is 40% “equal to a fee 40%) judgment any settlement of the total amount version, appears which in the the other obtained case.” and for certain scratch-outs except of the first copy be a fee, “equal to a fee to the she assented relating interlineations tried) (33)6-40%) (or the total percent if to 30% 35% case amount of settlement or judgment obtained the case.”1 changes were initialed Ms. Son and Mr. Stein. In her answer to Mr. complaint, Son’s Ms. Park stated that modifications were made Ms. Son. There is no corrobora record, tion of that statement and there is nothing to indicate why agreements both signed. were When the three agreements were signed, comatose, Mr. Son was still or at least unable to communicate.

Mr. Stein testified that he was unaware of the written agreement between Ms. and Ms. Park when he met with in August. Ms. Son He said that later—“in the course of this litigation”—he was advised that she had a agreement, written but that he “was not privy specifics.” He added that it was his understanding that Ms. Park had engaged by been family help Ms. Son and that “she was providing services them, including finding lawyers for them and helping with logistical details of life.” He assumed that the arrangement was a financial one but did not know what it was. Ms. Park directly contradicted that part Mr. Stein’s testimony. She said that she told Stein that she was charging the Sons a fee that, they because could not pay rate, afford to an hourly she was “10 charging percent overall recovery.” She added that Mr. Stein asked no questions about the services she was providing, but simply replied “very interesting.” As we shall see, whatever may have been the state of Mr. Stein’s knowl- edge early the process, clearly he became aware of the details of arrangement between Ms. Son and Ms. Park in November, 1992, (and drafted) for he then signed likely an agreement between the Sons and Ms. Park only that not spelled out very clearly what the arrangement was between those parties obligated but him to implement that arrange- ment. first, agreement, being apparent

1. The second copy repeated of the ¡é% places 40% numbers both in the clause. The first time figures appeared, in the clause they that the were scratched out and replaced figures with the No 30% such amendments were 35%. made as to figures, creating the second mention of the thus some facial ambiguity as to the fee.

451 a 20, 1992, hospital Ms. Park took to September On by Mr. Stein that had drafted Attorney of been Power General condition Ms. Son. Mr. Son’s it to both Mr. and explained and Park and Ms. Son testified unclear. Both Ms. at the time is then, sup which is regained he had consciousness attorney of “signed” power fact that he by the ported appeared that Son personally notary, a who attested before his His to be act. attorney of acknowledged power and however, that he attorney power suggests, of signature on in some frail, actually impaired if not physically at least was one lines, running of two a short It consists unconnected way. it, one, direction, a below longer and southwesterly in a appear lines to be The running southeasterly in a direction. written, and, to the extent deliberately than more scrawled they significantly are different signature, a they constitute the December appears Mr. Son signature than Special Appeals The 30, 1993 Court settlement sheet. a intelligible in as way lines “are no that the two commented do, as we language” suggested, known and signature of impair under form laboring was some signatory “the supra, at 198 n. 689 Margolius, v. Md.App. ment.” A.2d at 649.2 his wife as his attorney, appointed

In the Mr. Son power things, other general authority, among attorney-in-fact with contracts, suits, and “take prosecute manner of enter into all for the necessary and conduct steps proper all and remedies ” affairs.... management and business [his] Mr, 11, 1992, and Ms. Stein On November “Consulting a Contract signed Agreement, Employment between Mr. Assignment.” agreement stated be “Clients,” and Ms. Park. family,” denominated Son “and (1) clauses, it recited that Mr. introductory “Whereas” several that, incapacitated, he "was complaint, In his Mr. Son asserted while upon placed which a his wife he presented he was with document purported that this document ... [He] his mark. did learn present attorneys Attorney his obtained a Power of until be General Margolius complete Firm] Law December copy [the of his file from document] the file.” [the of 1994 and discovered collision, Son had been serious automobile the clients were to speak English “unable and are unversed and unfamil iar dealing aspects with with nearly all bureaucracy States,” (3) require United they “numerous extensive services dealing day and assistance in day their with our system interactions health care social services system and in their our legal system,” interface with was well-versed and Korean English willing and was and various, to provide able “the numerous and extensive services” (5) to the time,” clients “over an period extended of the clients had from no funds which compensate to Park properly and would never be able to compensate they her unless obtain a recovery accident, substantial as the result Park was willing compensation to defer and bear the of receiving risk clients, none if recovery no was obtained and willing Sons were “to Ms. Park assign to a nominal portion of (6.5%) six percent and one-half of any recovery they may any receive from source result of as their claims” and Ms. willing “to provide her consulting extensive services to Clients in return for assignment any said 6.5% of obtained, recovery unless the case is settled to prior trial which case the consultant’s is 5%.”3 fee recitals,

Upon Park, by those Ms. and Ms. their signa- tures, agreed Ms. Park act would as a consultant to the Sons “to them in assist all necessary activities for the ultimate prosecution of their legal claims other than services.” Those services to translation, were include “advocacy negotiation and providers health care community resources assist clients in their day-to-day during activities pending litiga- tion, services, research, investigation paralegal support to the attorney representing claim, Clients in their acting as liaison between Clients’ attorney and the Korean community and other support attorney services to Clients and their may be required from time to The agreement obliged time.” Ms. Park to “cooperate attorney,” and work with Clients’ carry out language 3. The italicized was added interlineation and initialed by Ms. Ms. and Mr. Stein. pending in the on her assist tasks skills “appropriate based proceeding, deposi- court any be litigation,” and available Koreans,' time that her tion, any “or other meeting with but made clear that appropriate requested” is appearance any activity may be engaged Park was “to be legal services.” providing construed as stated: agreement balance is attorney Clients’ Agreement, of this By “8. means pay to Consultant and instructed hereby authorized present any recovery (including to 6.5% of equal sum tried, or settlement) the case is any structured value if any from source 5% the case settled Clients receive if occurred on in the collision that injuries sustained paid Consultant to be August 1992. Said sums are are turned over Clients.141 any before sums agreement terms this under the Any payable sums agreement may Clients fee separate apart are terms of this attorney their reached with have such way separate agree- are related to agreement in no attorney. have with their ment Clients of construed under laws agreement 5. This is be agree to Clients Maryland of and Consultant and State any from attorney harmless indemnify hold Clients’ Agreement.” resulting from the terms of this losses by The Ms. Son and Ms. Park. agreement signed statement, signed by Mr. signatures appears Below their agreement terms of this hereby “I to follow the agree Stein: Park accordance with its and to disburse funds to Jennifer recovery and if is Clients.” terms when obtained agreement, drafted this The record does not indicate who by it was drafted certainly there is a fair inference but firm, Ms. Son or by or in his rather than Mr. Stein someone than sophisticated Not it far more only Ms. Park. by it drafted Ms. but Employment Agreement earlier language by interlineation and initialed 4. italicized was added The Park, by Ms. Stein. includes provisions specifically benefitting Mr. Stein and his firm, that have nothing directly to do with the services to be performed Ms. by Park. At least facially, appears it rather clearly to been have drafted either lawyer by someone with legal drafting skills.

On 1992—-just December three weeks after the Consult- 3, ing Agreement was signed—Ms. signed two new retainer agreements the Margolius Except fee, law firm. for the the agreements are each identical to other and similar in most respects to the two agreements signed in August. The first agreement called for a fee of any 28.5% of settlement and 33/6 % of any judgment obtained. agreement second called any 23.5% settlement and any 26.83% judgment. August Unlike the agreements, there were no interlineations in these agreements. The record why does not indicate two different agreements were signed and does clearly estab- lish which was intended to prevail. later,

The case year was settled a on December 1, prior settlement, Just in November, 1993, Mr. Stein prepared for Mr. Son a settlement analysis, showing Son his approximate net recovery, depending varying settlement amounts ranging million to From those million. $3 $5 amounts, deductions are for attorney’s shown at fees the rate legal costs of 28.5%, medical bills of $22,000, $500,000, loans of No deductions are any $65,000. shown for payment to Ms. notwithstanding provision November, of the Consulting Agreement obligating pay Stein 5% settlement amount to her. Contemporaneously, an effort to convince the Department State Health and Mental Hygiene reduce half its subrogation claim for Medicaid $125,607 benefits, Stein wrote to Department on November it, informing among things, other attorneys “[t]he fees in this case are at a rate but we are discounting 33/6% to facilitate settlement and in light of the extreme 28/6% hardship this case in and the enormous of Danny future needs Son.” Nothing was said that letter any payment about to Ms. Park. Stein did state that “[ejxpenses incurred to date $20,000.” total approximately signed, and Mr. Son 30,1993, prepared, Stein December

On recovery the total shows That document Sheet. a Settlement (1) of attorney’s fee an is deducted $4,850,000,from which as $24,865, aggregating “Legal Costs” $1,382,250, 28.5%, $500,424. The aggregating bills outstanding medical and deductions, as “Net Re- listed those remaining after amount From that $2,942,460. Son,” was Mrs. For Mr. & covery $17,000 loan, $50,000 repay to were deducted amount cost Son, $800,000,representing Mr. and to prior advances $2,075,460. then, No balance, net annuity. The of an Park. to Ms. payable was shown amount itself, from firm 1994, paid 11, Margolius January On only $1,139,750, representing account, a fee its escrow $16,648. day, The next 23.5%, reimbursement expense Park Consultants company, her incorporated Ms. Park portion “that Ltd., company assigned to Associates. [her] assigned previously proceeds ... settlement firm “to distribute Margolius and directed plaintiffs,” $242,500) (the to Park me sum owed to all such funds with that Associates, In accordance Ltd.” Consultants a check or delivered direction, firm, day, sent that same $242,500 company. to Ms. Park’s record concerns disputes significant of the more One Ms. Park a pay arrangement of the knowledge Mr. Son’s only documents recovery. amount of fee based on the signed by Park were revealing a fee Ms. calling for or analysis the settlement husband. Neither her settlement sheet nor the for Mr. Son by Mr. Stein prepared owing fee reveal signed by Mr. Son to and presented 28.5%, attorney’s fee Indeed, both show they Ms. Park. agree- two retainer one of the last which is inconsistent stated he complaint, his signed by Ms. Son. ments $242,500 from the paid Park had been not learn that Ms. did his wife when September until proceeds settlement deposition taken course of a information revealed that further his alleged He case. divorce then-pending their of the Consult- of the existence did not learn that he complaint November, gave Ms. Park when Agreement until ing 456

deposition testimony in the divorce case. Although excerpts of the deposition testimony are attached as exhibits to the complaint, there is no corroboration in the record that Mr. Son first learned of arrangement through those depositions. Son, indeed, contradicted(that assertion. In other deposi- tion testimony, given case, in this she said that she told her in husband September, that Ms. Park usually charged a fee of 10% but that she intended charge only them 5%. She said that she also showed Mr. Son the Consulting Agreement but could not recall when that occurred.

DISCUSSION Barratry The issue that initially we took this case to consider is whether the Special Court of Appeals erred in concluding that the conduct of Ms. Park and Mr. did Stein not constitute the prohibited practice barratry, 10-604(a) in § violation of 10-604(a) Business Occupations Article. Section provides, in relevant part:

“Without an existing relationship or interest an issue: not, a person may personal for gain, solicit another person to sue or to retain a lawyer to represent the other lawsuit; person a lawyer, except as provided in the Rules of Profes- Conduct,

sional may not: (i) personal for gain, solicit person another to sue or to lawyer represent person lawsuit; in a .retain (ii) directly or indirectly employ or way compen- agree sate or to employ or compensate any person ... the purpose of having person solicit or attempt solicit clients for the lawyer;

(iii) knowingly represent a person who retained the law- yer as a result of solicitation prohibited section; under this or

(iv) cause a case to be instituted without authority a client.” violates A who person criminal statute. is a 10-604

Section to incarceration subject of a misdemeanor guilty it is 10-606(c). $1,000. § a fine year one made a first § 10-604 was proscribed conduct Md.Laws, ch. in 1908. See Maryland statutory offense of, maintaining, or stirring up then, officious Before no interest had person in which litigation meddling maintenance, barratry, crime common law constituted nature the particular embracery, depending champerty, barretry” as “common Blackstone defined the conduct. of up suits stirring exciting and frequently offense of “the at law or subjects, either majesty’s his between quarrels Blackstone, 4 William on otherwise.” Commentaries * England Hawkins, A also William 1 134. See of Laws (1824): barrator “[A] 474 Pleas of Crown on the Treatise quarrels, or mover, exciter, of suits or maintainer is a common clear, makes courts, country.” As Hawkins or either “no one conduct: persistent or required multiple the offense every only; one act respect of a barrator can be with the defendant charge must for such a crime indictment Id. at 475. barractator.” being communis Blackstone, relation” a “near Maintenance, according to in a intermeddling “an officious and consisted of barratry to one, assisting or maintaining belongs by to way that no suit otherwise, or defend to prosecute or money party either of the supra, perniciousness Blackstone, *135. The 4 it.” and conten- added, alive strife conduct, keeps that “it he law into an of the tion, process the remedial and perverts mainte- Id. A particular species engine oppression.” Blackstone campi-partitio, or which champerty, nance was campum or defendant plaintiff with a bargain as “a defined for between or other matter sued divide the land partiré, law, champertor them, whereupon at they prevail if Id. In expense.” suit at his own party’s on the carry one, was a broad of maintenance day, the offense Blackstone’s suit, suing” right of of a or purchasing “the as characterized prohibi- for the one basis that it formed was so abhorred Id. *135. choses action. assigning against tion 458

Hawkins, subject who treated the extensively more than Blackstone, as “assist[ing] included maintenance another with cause, money carry his by retaining as one to be of him, counsel for bearing otherwise him out the whole or suit,” part expense of the suitor saving a from expense, persuading attorney to represent gratis, party give,- “endeavoring] other kind of assistance to either of parties in the management of the suit depending between them.” 1 supra, at Hawkins, Importantly, person Hawkins noted was not guilty maintenance “for giving friendly another advice ... what counsellor or attorney is do his likely for, business most effectually,” he continued, “it extremely would be make neighb- hard to such kindness, ourly acts of which seem rather commendable than blame-worthy, maintenance, to come under the notion of which always seems to over imply busy contentious and intermed- Id. at 455-56. dling in other men’s matters.” maintenance, The broad scope of common law as described Hawkins, beyond did not survive the mid-Nineteenth Cen Parker tury. Findon v. (1843), & W. M. Lord Abinger, Exchequer, Chief Baron the Court of opined that maintenance, “[t]he law of I it upon as understand the modern construction, is confined to cases where a man improperly, and strife, for the purpose stirring up of litigation and encourages actions, others either bring to or to make defences which they to make.”5 Id. at 682. That statement right have no from Findon, essentially which redefined maintenance to be the equivalent of conception barratry, Blackstone’s of was adopted in Holmes’s revision of James Kent’s Commentaries on Ameri (12th 1873) ed. at favorably 480 and was quoted by can Law continued, dicta, Abinger 5. Lord in to that "if observe a man were to abused, poor person see a oppressed street in the and without the redress, obtaining means of money and furnished him and em- ployed attorney wrongs, an require to obtain redress for his it would a very strong argument convince me to that that man could be said to be strife, stirring up litigation guilty and to be of the crime of maintenance.”

459 O’Brien, 28 Md. v. 574 in our predecessors Schaferman (1868). in it now statute, ap and as as 1908 enacted in Section articulation. more its specific somewhat

pears, is 10-604(a)(l) persons generally; of the conduct deals with 10-604(a)(2) in lawyers, particular. with the conduct of § deals (a)(1): under subsection must be measured Ms. Park’s conduct issue, a or in an relationship interest existing without not, person another gain, solicit may personal for person in other a represent person the lawyer to retain a sue or sense, than the statute broader important one lawsuit. offense, a single instance proscribes it even the common law as Hawkins, supra, whereas, that was of as noted solicitation Special Appeals the at As Court not the case common law. Serv., Medical-Legal v. Con. Schackow pointed out however, (1980), 179, 193-94, 416 A.2d Md.App. the solicitation under barratry the statute “is essence claim____” in this undisputed It is litigious to make a another Son) (or Mr. Park did not solicit Ms. Son record that Ms. claim, sue, It was lawyer. or to retain a litigious a make own, who, that she properly determined quite on her Ms. Son finding Ms. Park for assistance lawyer needed a and called from that arising If there kind of solicitation one. contact, part of Ms. Son. on the legitimate it a solicitation Ms. Park’s to find an unlawful solicitation on

Mr. Son seeks rather from call his wife but part telephone herself out alleged fact that Ms. held fee, who, regularly assisted a community person a which, claims, he amounts to people finding lawyers, Korean advantage take solicitation of Ms. Son to constructive service, fee once Ms. actively soliciting Ms. Son point arguments made the initial contact. Both miss relevant, and, antecedent extent the statute up, med- stirring common law. The thrust of the offense is has in, no maintaining litigation person which dling interest, meddling The personal gain. officious elements, be and both must satis- personal gain separate are fied. is There no evidence that Park engaged Ms. proscribed meddling, generally either or specifically. There is in this nothing record to indicate that Ms. Park ever solicited maintain, people bring, or defend lawsuits which she had no interest or that being she ever held herself out as willing to do so. The most that the record reveals she ever did was what did in she this case—assist members of the Korean who community already had that they determined needed or lawyer wanted a in finding one. people, Those had they known about the service and been able effectively to communi- it, cate persons with the operating could as easily, appro- priately, have by received same kind of a calling assistance lawyer referral service operated by a local bar association. That is not what Legislature intended make criminal.

It is true that Park after Ms. a began charging fee for service, coupled at least when with other services ren- her, but, dered although the of personal gain element suffices unlawful, to make the meddling officious it does not make permissive a barratry. service of Special Court Appeals in holding was correct there was no unlawful solicitation Ms. Park. 10—604(a)(2), noted,

Section deals with the conduct not, A lawyers. lawyer may for personal gain, solicit another or person lawyer to sue to retain the to represent person Stein, a lawsuit. There no evidence that Mr. or anyone firm, in his engaged that conduct. Ms. Park Stein; brought a potential case he did not solicit Ms. Ms. or Son to suit or bring to retain him or his firm 10-604(a)(2) bring a lawsuit. Section also prohibits a lawyer from or employing a compensating person to solicit clients lawyer. for the no There is evidence of activity; nothing in Stein, this record even suggests anyone that Mr. firm, in his ever paid solicit clients. Finally, the lawyer statute prohibits representing a person retained “as result solicitation prohibited under section.” this prohibited There no being such solicitation evident this

461 by lawyer the record, Mr. and Ms. Son of representation not unlawful. was defendants Policy

Public is whether the chose to address issue we expanded arising Mr. Stein and arrangement between a viola- agreements, constituted and Retainer Consulting the void as was, for that reason 5.4 or 7.2 tion of MLRPC arrange- that the Although recognizing policy. against public rules, of Special those the Court have” violated “may ment supra, 112 in v. opinion Bregman, Post relying its Appeals, 665, of that the violation 738, concluded Md.App. 686 A.2d of a contract.” a for voidance “do not basis provide those rules 219, A.2d at 689 at Md.App. 114 Margolius, supra, v. (1998), A.2d 806 349 Md. 707 Bregman, In Post v. Appeals of Special of the the Court judgment we reversed (1) of a statement that MLRPC constituted and held that case law, force and effect of having this Court policy public subject lawyers agreement between fee-splitting that a 1.5(e), Rule MLRPC with and must be conformance enforce agreements, kinds of dealing with those 1.5(e) fee-sharing holding agree extend to “may ment of Rule unenforcea [the rule] violation of flagrant ments in clear and that the A.2d at 818. We concluded 349 Md. at ble.” defense, other rendering unenforceable per rule not a se rule of violations agreements “because fee-sharing wise valid technical, incidental, or when or unsubstantial merely that are enforce inequitable unfair and manifestly it would be a under that with defense agreement.” presented When circumstances, including, rule, to all look the court must violation, how it came things, the nature of the among other faith, good about, acted parties extent to which the importance, public particular violation has some whether the client, be harmed particular, would and whether of that the Court Id. It is evident enforcing agreement. Rules of MLRPC 5.4 and that a violation Special Appeals view fee-sharing contract is voiding cannot serve as a basis 7.2 cannot, v. holding Bregman our Post inconsistent with therefore, need, then, be sustained. to engage We in the Post v. Bregman. analysis required by here, With exceptions, three none which are relevant 5.4(a) lawyer MLRPC Rule firm provides “[a] or law shall legal not share a nonlawyer.” fees with Rule 7.2(c)—part dealing the rule advertising—provides lawyer “[a] anything shall not give person value for recommending services, lawyer’s except lawyer may that a pay the advertising reasonable cost written communication per- mitted by may this Rule and pay charges usual a not- for-profit lawyer or legal referral sendee organi- other service zation.” indicated,

As we the circuit court did not accompany its grant summary judgment of with either an or oral written and it explanation, findings therefore articulated no with re- 5.4(a) 7.2(c). to spect Rules There evidence in the record, however, when in a light viewed most favorable to Mr. Son, that a support would conclusion either both that or rules were violated. course,

A lawyer may, authorized, if properly pay money otherwise to a judgment due the client from a settlement to person third on the client’s behalf. The settlement sheet not this case such many payments. shows a lawyer may What 5.4(a), do under Rule unless one of exceptions the three applies, part is share of his or her own fee with a non-lawyer. The question, regard, $242,500 that is whether the payment to Ms. category Park falls within the first or the second. There is evidence payment that the to Ms. Park pursuant was an to arrangement made between her and Ms. that Mr. and, part November, Stein had no it at until least details, that, unaware its prior at some point to the settle- ment, Mr. Son was made aware arrangement it, that if agreed it, even he was not aware Ms. Son was behalf, of it act authority aware and had on his and that the payment was therefore authorized one behalf of made on If the Sons. the court were those findings, to make it could properly conclude that not payment did constitute the contra attorney’s fee and was therefore sharing of an 5.4(a).6 of Rule vention sufficient, however, contrary to lead a also

The record is from that Mr. Stein aware There is evidence conclusion. percentage share Ms. Park was receive beginning to come and that her share was or settlement judgment credited, if testimony, deposition Park’s from his fee. Ms. expectation of of her that Stein was aware to show suffices November, Consulting the outset. payment her in the clearly he interest signed, which reveals Agreement, part to be of his is her fee was A conclusion that litigation. First, are the four facts. there a number of supported by reciting a different attor agreements, each different retainer two, in this are last regard fee. relevant ney’s Most one Consulting Agreement, just three weeks after signed showing a fee of 23.5%. the other calling for fee of 28.5% and client, lawyer and arrangement normal between That is not a that the difference more than mere coincidence may and it be agreed paid equals the fee to be percentages two between the could be drawn Mr. Stein Park. A fair inference to Ms. 28.5% fee with Ms. was, effect, part of his agreeing share the further facts supported by inference is Park. That prepared by option analysis on both the settlement November, 1993, and on the settlement sheet actual Stein on no deduction is shown for signed December Park, (2) documents, Mr. on both of those payment to Ms. (3) 28.5%, to Ms. payments as and the Stein’s fee is shown approximately firm for were two Park and to the its fee made A trier of fact signed.7 the settlement sheet was weeks after if, substance, arrangement improper not constitute an 6. Even the did split, wholly inappropriate for not the Mr. Stein to reveal fee it was payment on to Ms. Park the settlement sheet. payments might insignificant be but the fact delay The in these were disbursements that the record does not indicate whether all drawn, contrary delayed. absence of inference could be in the A fair evidence, shown settlement sheet would the disbursements on the that settlement; only day that occurred and be made or so of the if within 28.5%, could well conclude that Stein’s fee represented, was as and payment that the 5% to Ms. sharing Park constituted a A that trier of fee. fact could also credit Mr. Son’s statement unaware, that he throughout, that Ms. Park was to he, therefore, receive a share of recovery his and that never the payment authorized to her. Son’s lack

Notwithstanding alleged knowledge, Mr. if the trier of fact were to conclude that Ms. Son acted properly that, his and agent behalf, on his behalf and her own had payment a 5% to Ms. fee it could on authorized basis, that payment conclude that the was not in contravention 5.4(a). however, of Rule problem, is that there is also sufficient evidence legitimate whether, to create a dispute by agreements consulting time the and the rest of the written agreements signed, by were and certainly the time the settle- occurred, ment Ms. Son continued to act as her husband’s whether, agent contrast, Stein, then, Mr. directly dealing Perhaps with Mr. Son. cogent the most any agency formerly evidence that existed had ended was that Mr. fact Stein had both sign Mr. Son Ms. Son settlement sheet. In his complaint, Mr. Son asserted that Stein explained him, had new analysis settlement just that, Son. If Ms. a trier fact were to conclude November, 1993, dealing directly Mr. Stein was as a principal, no longer regarded her Son as hus- band’s he agent, could conclude that a duty Stein had assure that Mr. Son understood and authorized the arrange- ment with Ms. Park and Stein’s failure to do so evidence did, arrangement indeed, with Ms. Park constitute a fee-splitting agreement in contravention of Rule 5.4.

If a trier fact were conclude the evidence that Mr. Stein indeed agreed pay, pay, and did a part Ms. Park fee, of his firm’s the trier of fact could also find payment services,” was made “for recommending lawyer’s 7.2(c). which would constitute a violation of Rule attorney’s payment the delayed, fee and the to Ms. Park were the payments further inference drawn could be that the two were related. conclusions, necessary it will be of these light (1) make proceedings further to conduct circuit court evidence, and disputed findings of fact from appropriate men findings, the factors (2) consider upon those depending 142, 707 A.2d 806 supra, Md. Bregman, in v. tioned Post be seem, the focus should (1998). regard, that It in this would than on rather $242,500 payment Both Margolius firm. Mr. $1,139,750 fee retained amount, and in that a fee at least clearly assented to Ms. Son such a fee was suggest that in the record nothing there is record, we can this On appropriate. not earned and disgorge firm requiring no basis equitable find found to be fee, to Ms. were payment even if the whether, if the 7.2. issue of Rule 5.4 Rule violation Rule, violation either Park did constitute to Ms. payment amount required pay firm should be and the Mr. Stein it not have been ground that should on the in the first instance. deducted AF- APPEALS OF SPECIAL

JUDGMENT OF COURT REVERSED; I CASE COUNT JUDGMENT ON FIRMING JUDG- TO VACATE REMANDED WITH INSTRUCTIONS THAT COUNT AND TO ON MENT OF CIRCUIT COURT PRO- COURT FOR FURTHER REMAND TO CIRCUIT I IN WITH ACCORDANCE CEEDINGS ON COUNT IN II V AND ON COUNTS THROUGH THIS OPINION SPE- COURT OF ACCORDANCE WITH OPINION OF IN APPEALS; IN COURT AND COSTS THIS CIAL RE- BE PAID BY APPEALS TO COURT OF SPECIAL SPONDENTS.

CHASANOW, J., concurring opinion files which J., CATHELL, joins.

CHASANOW, concurring. Judge, are material facts judgment I concur in the there to the trial needs to be remanded dispute and that case court, opinion portion I concur in the Court’s explained my dissent “Barratry.” For reasons headed 466 v.

Post Bregman, 142, 349 (1998), however, Md. 707 A.2d 806 I disagree in Post to the application holding with the the The majority instant case. remands this case for trial the if judge determine is an there ethical violation by the and, so, defendant firm if to apply equitable law test and “ the ‘technical, reduce fee 5% unless the ethical violation is incidental, or 349 [insubstantial’.’’ Md. 709 122 A.2d Post, 819-20). (quoting atMd. 707 A.2d at is no my There reason to objections reiterate to the Court’s vague, amorphous equitable weighing test to determine which ethical violations void fee contracts which should be Post, ignored. I stated in this .As Court apply should settled law to resolve fee contract disputes. contract The issue is whether there a agreement was valid fee for a settlement, any fee of 28.5% of a valid agreement for a fee of settlement, of any 23.5% or a fraudulent misrepresentation agent that the agreed when, fact, to a 28.5% fee Mr. Son’s agent agreed to a a 23.5% fee with 5% concealed kickback. If facts the show the firm defendant law a agreement had valid Mr. represent with Son to him a fee of 28.5% of the tort settlement, agreement between Mr. Son and the firm law improper, is not and what the firm does its validly earned simply fee is of no concern to Mr. Son. unethically If the firm used 5% of its earned pay fee to Ms. Park unethically or used some even of its fee to a pay illegal gambling all bribe or debt, that should be the between firm and bar counsel and should not constitute a windfall to If Mr. Son. the facts show that Mr. agreed Son to a fee voluntary 23.5% and also made a assignment Park, of 5% settlement recovery Ms. the firm assignment law should honor that without into inquiry adequacy Son’s motives the of the consideration for assignment. hand, On the if other Mr. Son prove could firm, law Park, assisted Ms. Son and Ms. defraud- ed Mr. Son by claiming the contract negotiated by Mr. Son’s wife his behalf was for fee of a 28.5%- shown fraudulent fee agreement when the fee charged actual only 23.5% as shown in a agreement, secret attempt defraud Mr. Son 5% of recovery his could render the fee to Mr. exhibited fraudulently If firm contract voidable. on Mr. by his wife signed agreement written fee a false fraudulently concealed of 28.5% and for a fee behalf Son’s ($242,500) “kickback” to really a 5% the fee part of might fee attorney’s negotiated fraud as to such fee fraudulent repudiate the request Mr. Son’s justify to prove for Mr. Son difficult may quite it be While contract. does, kickback, if this Court he fraudulently concealed byit and reduce agreement simply reform should 5%, repudiate Mr. Son to permit it should fraudulent meruit quantum attorney limit the contract and fraudulent Tradi- dispute. a contractual case is recovery. The instant created Neither court applied. law should be tional contract balancing should be “equitable” any vague nor “public policy,” principles. contractual for established substituted of action has no cause that Mr. Son majority The concludes settlement any that 5% of agreed if Mr. Son against Mr. Stein out payable it was to be to Ms. recovery go would this recovery. agreement I in full his share am on to majority goes then opinion. of the Court’s part apply of action to has a cause conclude that Mr. Son in Post if paid the 5% test devised amorphous equitable vague, recovery. of the of Mr. Stein’s share to Ms. Park came out Park 5% from paid if Stein Ms. According majority, to the then recovery, of the of from Mr. Son’s share his fee instead This cause against lawyer. of action his Mr. Son has a cause fee which agreed if to the 28.5% of action exists even Mr. Son This cause quite I is reasonable. majority recognize that Ms. agreed if knew of and of action exists even Mr. Son attorney paid if attorney’s fee or get Park would 5% of to Mr. Son. saying anything Park out of his fee without Ms. lawyer’s of action would be the basis for this cause The sole Rules of Professional Maryland Lawyers’ violation of the rules). (ethical Conduct is that majority opinion troubling is most about

What rules it enforce ethical has concluded that should the Court holds Mr. Son rules. The Court violating the same flagrantly some to recover back against of action Mr. Stein has a cause fee, portion of the if agreed fee, 28.5% even he to that if the evidence shows the lawyer violated ethical rules 5.4 or 7.2 paying an improper referral to Park. The sole basis Mr. Son to recover part agreed of the fee he to is an implied cause of action for the client against lawyer solely based lawyer’s violation of the ethical rules. In creating this action, cause of this Court violates provision another of the rules that expressly directed to scope courts. The provision of the ethical rules expressly provides in pertinent part: A lawyer’s responsibilities.

“Preamble:

Scope Violation a Rule should give rise to a cause action nor should it create presumption legal that a duty has been breached. The designed Rules are to provide guidance lawyers and to provide a structure for regulat- ing through conduct disciplinary agencies. They are not designed added). to be a liability.” basis for civil (Emphasis This Court encourage does not respect for the rules by using parts of the ethical imply rules to cause action that violates an express provision of the ethical rules. The decision in the Post, instant case is a further unwarranted extension of case, supra. the Court said a violation of the ethical rules could void a contract attorneys. between two In the case, instant goes and, the Court much further in clear violation of the express language rules, of the ethical this Court creates a new civil cause of action for the client to recover back a part the fee earned attorney agreed If the client. agreed to and paid 28.5% if fee and there was no fraud by lawyer, Mr. Son should right have no to recover any part back of that fee solely because lawyer spent it in an unethical manner. Although rules, this adopted Court the ethical we are not free disregard will, them at and even absent the lan- express guage rules, of the ethical we should avoid creating civil new causes of action for violations of Court directives. joins to state that he authorized me has

Judge CATHELL concurring opinion. in this expressed in the views 709 A.2d 125 K. MARTIN Sandra

v. COUNTY, Maryland. HOWARD Term, 13, Sept. No. 1996. Appeals Maryland.

Court May

Case Details

Case Name: Son v. Margolius, Mallios, Davis, Rider & Tomar

Court Name: Court of Appeals of Maryland

Date Published: Apr 17, 1998

Citation: 709 A.2d 112

Docket Number: 33, Sept. Term, 1997

Court Abbreviation: Md.