What if you are injured, hire a lawyer, and that lawyer fails to sufficiently work on your case? Outrage ensues and you may choose to fire that lawyer and hire a second. But is that first lawyer entitled to payment if you happen to win and receive an award in your case? In a recent Louisiana case, the Fifth Circuit Court of Appeals decided that the answer can be in the affirmative.
After David Corey was the injured, he hired Salvador Brocato and Lionel Hutton to handle his personal injury lawsuit. In the two years that Mr. Brocato and Mr. Hutton handled Mr. Corey’s case, the attorneys did little work on his case: failing to hire an investigator, failing to adequately prepare Mr. Corey for his deposition, and failing to hire experts as well as other faults. Mr. Corey fired Mr. Brocato and Mr. Hutton and subsequently hired Arnold & Itkin, LLP, to handle his case. Arnold & Itkin worked on Mr. Corey’s case, and eventually secured a settlement of $2,187,500, with $875,000 awarded in attorneys’ fees. Mr. Brocato and Mr. Hutton intervened seeking a share of the amount of the attorneys’ fees awarded for the work they had done on Mr. Corey’s case prior to termination. The United States District Court for the Eastern District of Louisiana awarded Mr. Brocato and Mr. Hutton 20% of the awarded attorneys’ fees. The judge calculated the percentage based on the principles of quantum meruit: generally expressed as the actual value of the services performed. In this case, the amount of work completed before termination was calculated at 20%. Contending that to award the 20% would be an improper and illegal award of a contingency fee to lawyers who did not have a contingency fee agreement, Arnold & Itkin appealed to the United States Court of Appeals for the Fifth Circuit.
Louisiana fee awards in quantum meruit are calculated by factors set out by the Louisiana Supreme Court. See State, Dep’t of Transp. & Dev. v. Williamson, 597 So. 2d 439 (La. 1992). There are ten factors, including the ultimate result, obtained, the importance of litigation, the amount of money involved, the extent of the work performed, skill and diligence of the attorneys, the number of appearances made, intricacies of the facts, and the court’s own knowledge. Courts may consider these factors in the quantum meruit analysis when a contingency fee agreement has been discharged or when a contingency fee agreement was never involved. See City of Alexandria v. Brown, 740 F.3d 339 (5th Cir. 2014). The factors sometimes referred to as “Saucier Factors” are applied even when the attorney was discharged either with or without cause, although courts must reduce the award of an attorney discharged for cause according to the gravity of cause for discharge. Saucier v. Hayes Dairy Product, Inc., 373 So. 2d 102 (La. 1978).
The Fifth Circuit, in this case, found that the District Court did not err in utilizing the Saucier Factors or by awarding a percentage despite the absence of a contingency fee. The Fifth Circuit noted that although the absence of a fee arrangement requires any award to be based on the principles of quantum meruit, the Saucier Factors are very similar to the same inquiry under quantum meruit. The District Court considered Mr. Brocato and Mr. Hutton’s positive contributions to Mr. Corey’s case. These included filing the lawsuit, participating in discovery, discovering three additional defendants through discovery and joining them to the suit, and defending Corey at his deposition, all of which “advanced the lawsuit to some degree.” The 20% represented the value of the work performed by Mr. Brocato and Mr. Hutton in the context of the entire case. The Fifth Circuit found the District Court was not required to calculate the award based on the number of hours and the hourly rate, but that those items are merely factors in determining the overall award. And while the lawyers were discharged “for cause”, this again is just one factor in determining the overall award. The Fifth Circuit did not find that the District Court erred in awarding 20% to Mr. Brocato and Mr. Hutton and refused to reduce the award.
Despite poor representation, the terminated lawyers still received payment for their work in this case. While no one may want to pay for substandard work, a Louisiana Court may have the power to order payment. This is why it is important to hire the best attorney possible to handle your case from the start.
Written By Berniard Law Firm Blog Writer: Declan Chandler McGinty
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