Thursday, March 12, 2009
This has been a day for interesting legal profession cases from the Indiana Supreme Court. The court ordered a public reprimand of two law partners who had represented a client in a suit against two insurance carriers which had denied the client's fire loss claim. A first retainer obligated the client to make an initial $3,000 payment against bills to be charged at $150 per hour. One of the lawyers arranged a "focus group" to evaluate the case that indicated "they did not like" the client and might award from $0 to $300,999 as damages. The client rejected a $100,000 setlement offer.
As the case got closer to trial, the lawyers were concerned that their hourly charges might exceed the award. As a result, they proposed a new contingency agreement for 1/3 of any gross recovery. The client "was not happy with changing contracts..." but discussed it with his girlfriend and reluctantly agreed. As sometimes happens, the case went to a jury, which returned a verdict for $1,000,000. The insurance carrier paid the judgment and, as sometimes happens, lawyers and client had a fee dispute.
The court affirmed findings of misconduct in that the lawyers had failed to determine and disburse to the client the "minimum amount Client was indisputably due under either contract." The lawyers did not fail to provide an accounting. The revised contract did not violate Rule 1.8 (business transactions with client). Reprimand was appropriate as the attorneys had acted in good faith and cooperated with the disciplinary process. (Mike Frisch)