Thursday, April 15, 2021

Remand In Fee Dispute Between Attorneys

The Washington State Court of Appeals Division One remanded a fee dispute between two attorneys

Two attorneys, Harish Bharti and Stephen Teller, associated to represent Ruhul Kayshel on a discrimination case and a wage and contract class action case against Kayshel’s employer. Bharti and Teller entered into a one-page, handwritten fee division agreement. Teller withdrew prior to the class case reaching settlement. After the class case settled, Bharti and Teller disputed how to share their portion of the court-approved contingency fees in the class case. The trial court disagreed with Bharti that Teller should receive nothing and awarded Teller a percentage of the fees based on the fee division agreement and Bharti’s promises to Teller that Bharti would honor that agreement. Because the fee division agreement fails to satisfy the requirements of the Rules of Professional Conduct (RPC) 1.5(e)(1)(ii), we reverse and remand.

The court

As the Preamble to the RPCs states, one of the purposes of the RPCs is to regulate attorney conduct in order to protect public interest. And, the purpose of RPC 1.5(e)(1)(ii)’s requirement that the client confirm the agreement in writing is to ensure “the client received a reasonable and fair disclosure of material elements of the fee agreement.” RPC 1.5(11). Nothing in the record supports a finding that Kayshel agreed in writing to the Bharti/Teller Agreement despite Bharti’s assurances that he would obtain Kayshel’s agreement in writing. Thus, the Bharti/Teller Agreement violates public policy, is unenforceable as a matter of law, and cannot be the trial court’s basis for determining what fees to award Teller.

However, unlike in Belli where Tonkoff, Goldstein, and the client entered into a new contingency fee agreement completely excluding Belli, here, Kayshel approved in writing the Bharti/Friedman Rubin Agreement that would award Teller fees out of Bharti’s 35 percent of the contingency award. 98 Wn.2d at 571- 72. It is for the trial court to determine what that provision of the Bharti/Friedman Rubin Agreement allows.

We reverse and remand to the trial court to consider the parties’ legal theories and evidence in determining an equitable resolution in light of our ruling.

(Mike Frisch)

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