White v. McBride

Brief Fact Summary.

An attorney entered into to contingent fee agreement to "force probate" of a client's wife's estate.  The validity of the contingency fee was at issue.

Synopsis of Rule of Law.

"[A]n attorney who enters into a fee contract, or attempts to collect a fee, that is clearly excessive under DR 2- 106 should not be permitted to take advantage of the [rule allowing recovery despite innocent violations of rules]."

Facts.

The Plaintiff, Frank White (the "Plaintiff"), was a friend of Kasper McGrory ("Mr. McGrory"), and his wife Ruby Leigh Anglin McGrory ("Ms. McGrory") (collectively referred to as the "McGrorys").  The Plaintiff, in the early 1970's, assisted the McGrorys in drafting their wills leaving each of their assets to the surviving spouse.  The McGrorys' relationship became sour and in the fall of 1990, Ms. McGrory wrote a holographic will, which failed to mention Mr. McGrory.  The will was placed in her safe, which contained other valuables.  Ms. McGrory's brother, Roma Anglin ("Mr. Anglin"), with the Plaintiff's assistance, procured a durable power of attorney from Ms. McGrory.  Pursuant to his power of attorney, a few days before Ms. McGrory's death, Mr. Anglin inventoried the contents of the safe and placed the contents in a safe deposit box.  Copies of the holographic will were sent to Mr. McCrory and Mr. White.  Ms. McGrory died on December 22, 1990, and after her death on February 28, 1991, Mr. McGrory retained the Plaintiff "to force the probate of Leigh McGrory's estate in Shelby County, Tennessee to ascertain assets, 1/3 of which belong to the husband, in order to recover same."  After Mr. McGrory's death, Mr. Anglin took the holographic will and the contents of the safe deposit box to Texas, where he lived.  Mr. McGrory died on July 22, 1992, and as of then, none of Ms. McGrory's assets had been distributed. 
•    Mr. McGrory left a will bequeathing virtually his entire estate to the Catholic Diocese of Memphis.  The executor of Mr. McGrory's estate hired an attorney, James Bland ("Mr. Bland"), to represent the estate.  Mr. Bland wrote the Plaintiff a letter on October 27, 1992, relieving him of his "representation of [Mr. McGrory's] interest in [Ms. McGrory's] estate".  Mr. Bland offered to pay the Plaintiff a reasonable fee for the work that he did.  The Plaintiff refused to accept this proposal citing the February 28, 1991 contingency fee agreement.  The Plaintiff filed a claim against Mr. McGrory's estate for $108,291.00, representing "one-third of $349,000, the amount of Leigh's estate to which Kasper was entitled by law." The probate court held the fee the Plaintiff sought was excessive and unreasonable pursuant to DR 2-106, but found that the Plaintiff could recover under a theory of quantum meruit.  The Plaintiff was awarded $12,500 or 114 hours at $150 per hour.

Issue.

"[W]hether the contingency fee contract between White and McGrory is 'clearly excessive' under Disciplinary Rule 2-106 of the Code of Professional Responsibility, Tenn. Sup.Ct. R. 8, and is, thus, unenforceable?"
•    "[I]f the contingency fee contract is unenforceable, whether White may, nevertheless, recover attorney's fees on a quantum meruit basis?"

Held.

Yes.  The court first lays out DR 2-106 and then recognizes its factors are "to be used as guides", but "ultimately the reasonableness of the fee must depend upon the particular circumstances of the individual case."  The court recognized that the matter at issue was not very difficult or novel, the Plaintiff did not advertise himself as a probate specialist, there was no evidence that this matter took up so much time the Plaintiff could not work on other clients matters, and finally the results obtained by the Plaintiff were not particularly good.  Most importantly, if the Plaintiff were to have been paid the fee he was requesting, he would be earning $950 per hour.  Far in excess of the "fee customarily charged in the locality for similar legal services." 
•    No.  The court agreed "attorneys should not be penalized for innocent snafus, such as an oversight in drafting that might render their fee contracts unenforceable. To do so would be unfair to the lawyer who had otherwise diligently pursued the client's interests, and it would result in a windfall to the client who had benefitted from these services."  On the other hand however, "an attorney who enters into a fee contract, or attempts to collect a fee, that is clearly excessive under DR 2- 106 should not be permitted to take advantage of the [rule allowing recovery despite innocent violations of rules]."  The court reasoned, "[a] violation of DR 2-106 is an ethical transgression of a most flagrant sort as it goes directly to the heart of the fiduciary relationship that exists between attorney and client. To permit an attorney to fall back on the theory of quantum meruit when he unsuccessfully fails to collect a clearly excessive fee does absolutely nothing to promote ethical behavior. On the contrary, this i
nterpretation would encourage attorneys to enter exorbitant fee contracts, secure that the safety net of quantum meruit is there in case of a subsequent fall."

Discussion.

Quantum meruit relief is not available to attorney's who charge their client's excessive fees in violation of the rules of professional responsibility.