Saturday, November 14, 2009
The Alaska Supreme Court affirmed the grant of summary judgment to a law firm in a dispute over the modification of a fee agreement. The clients were injured when the stairs to their rooms at a resort collapsed. They entered into a contingent fee agreement with the law firm. The agreement provided for a 25% fee if the matter was resolved before a complaint was filed, 33% after the complaint and 40% after the filing of an appeal.
The case was complicated by the bankruptcy of the defendant. The clients and law firm entered into a modified fee agreement and the case eventually settled for slightly over $1.231 million. The clients and law firm had a substantial disagreement over the computation of the fee. As required by ethics rules, the law firm paid the undisputed portion of the client's share and retained the disputed amount in a trust account. The trial court found for the law firm.
Here, the court rejected claims that the amended agreement was improper and violated the rules of professional conduct. The trial court had properly resolved any contract ambiguities against the law firm in awarding judgment and was not clearly erroneous in its interpretation of the phrase "further substantial litigation" in the modified agreement. (Mike Frisch)