Morrison Mahoney Partner Steven J. Bolotin won an appeals court ruling that overturned a trial court judgment denying a seven-figure legal fee to an attorney who withdrew from litigation. The attorney had represented his client under a contingent fee agreement in the same case for over 17 years, successfully trying it twice (and obtaining a judgment worth $8 million) before the rulings were overturned on appeal based upon an incorrect jury instruction.
During that 17 years, the client regularly criticized, berated, and insulted the attorney over the speed with which the litigation progressed and the theories of the case to be pursued. The client also hired co-counsel for the attorney, rejecting the attorney’s proposed attorney (who would work on a contingent fee basis as well) and instead hiring his own choice of counsel who was paid hourly. The issues between the attorney and the client came to a head following an appeals court argument. The client accused the attorney of intentionally not following the client’s instructions to argue for a new trial on increased damages in order to pursue the “ulterior motive” of preserving the existing judgment so he could get his fee without doing more work. After the appeals court ruling overturning the verdict, the attorney and client met to further discuss how to proceed. The attorney sought an advance on fees to continue to prosecute the case. The client responded by again accused the attorney of a lack of diligence, and stating that he had to pay co-counsel an excessive amount because the attorney had not done his job. The attorney then withdrew from the case.
Following a further trial with his other counsel, the client obtained a significant verdict ($28 million). However, the client refused to compensate the attorney for the years of work he had put in, saying that his withdrawal was voluntary and therefore he was not entitled to any fee. After a one week trial, the court ruled that the attorney’s subjective belief was that the case was not likely to be won in a further trial and that was why he withdrew. As a result, he was not entitled to a fee.
The appeals court, however, reversed, accepting the argument we made to the judge that whether an attorney may withdraw from representation and still preserve a fee is based on an objective rather than subjective standard. As such, the issue is not why the attorney chose to withdraw when he did, but whether the facts sufficiently demonstrated a lack of trust and confidence required of an attorney/client relationship such that the attorney was permitted to withdraw. Applying this correct standard, the appeals court ruled that the facts introduced at trial, when viewed objectively, clearly demonstrated such a breakdown, and therefore the attorney was permitted to withdraw and still maintain a fee claim.
