Barrett v. Freise

82 P.3d 1179, 119 Wash. App. 823, 2003 Wash. App. LEXIS 2740
Court of Appeals of Washington·Decided November 24, 2003·No. No. 49432-5-I·Published·Cited by 9 cases

Opinion

Kennedy, J.

After Jeffrey Barrett and his limited guardian, John Barrett, Jr., sued Eric Freise and his law firm for legal malpractice, breach of fiduciary duty, negligent misrepresentation, and violations of the Consumer Protection Act, chapter 19.86 RCW, as well as for disgorgement of legal fees paid and costs reimbursed from the settlement of Jeffrey Barrett’s underinsured motorist claim, Freise countersued for recovery of unpaid legal fees and costs pursuant to the parties’ contingency fee agreement that was executed at the outset of the representation. The trial court dismissed all of the Barretts’ liability and disgorgement claims on summary judgment. Following a trial on Freise’s counterclaim, the court awarded Freise and his law firm a money judgment against the proceeds of Jeffrey’s recovery from American States Insurance Company, in the sum of $146,666.67 plus court costs and prejudgment interest. The Barretts appeal the dismissal of [827]*827their claims and the money judgment in favor of Freise. We affirm.1

FACTS

The Motor Vehicle Accident

On October 11,1995, a serious motor vehicle accident left Jeffrey Barrett with devastating physical and mental injuries. Ned Maher, the at-fault driver, had been drinking before the accident. Jeff was airlifted to Harborview Medical Center, where he was treated for two weeks. He then was treated for two months at Providence Hospital in Everett.

Jeff’s automobile insurance policy with Perneo provided policy limits of $100,000 in underinsured motorist (UIM) coverage for bodily injuries, $10,000 in Personal Injury Protection (PIP) medical benefits, and some wage loss coverage. The drunk driver had policy limits of $500,000 in liability coverage with American States Insurance Company. The Lucky 7 Saloon, where Maher had been drinking before the crash, carried a liability insurance policy with Crusader Insurance having policy limits of $1,000,000. Jeff also carried medical insurance with King County Blue Shield through his employment at The Boeing Company.

JoLynn Barrett Retains Freise’s Law Firm to Pursue Personal Injury Claims

Jeff’s wife, JoLynn, contacted Eric Freise’s law office on October 24, 1995. On November 30, 1995, she spoke with David Mulholland, then an associate in Freise’s firm. Mulholland prepared a durable power of attorney and a fee agreement. On December 1, 1995, Freise and Mulholland met with JoLynn and Jeff at Providence Hospital. JoLynn, on behalf of her husband, her children, and herself, ex[828]*828ecuted the fee agreement retaining Freise to pursue the familys personal injury claims. The fee agreement allowed for an election between an hourly rate of $150 for attorney time or a one-third contingency fee. JoLynn elected the contingency fee by writing into a margin of the agreement: “I [prefer] the 331/3 contingency /s/ JoLynn Barrett 12-1-95.” Clerk’s Papers at 88. Freise and Mulholland left the unsigned durable power of attorney with JoLynn.

On December 27, 1995, Jeff was transferred to the Delta Rehabilitation Center. The head nurse there advised JoLynn to obtain a durable power of attorney so that she could arrange for Jeff’s care. Jeff signed one that day, before a notary public who worked at the center.

Once the contingency fee agreement was signed, Freise’s office began to obtain medical records, investigate the facts of the case, and notify insurers about the claims. On February 5, 1996, Freise, his legal assistant Cindy McWilliams, and Melonie Heaton, a registered nurse and case manager with expertise in head injury cases, visited the Delta Rehabilitation Center and met with Jeff and JoLynn. Because Heaton advised that Jeff was in need of more intensive therapy than was available at Delta, Freise contacted Jeff’s medical insurer and persuaded the insurer to pay for Jeff’s care at Mediplex — which was not one of the insurer’s preferred providers.

On February 16, 1996, Jeff was transferred to Mediplex. Jeff’s medical insurer eventually began to balk at paying Mediplex, however, so Jeff’s treating physician, at Freise’s request, wrote a letter to the insurer, stating that “[d] espite his improvement [Jeff] is still unsafe in the home without supervision” and requesting coverage for “an additional two weeks of treatment to see if we can transition him safely into his home.” Clerk’s Papers at 690.

On April 22, 1996, Freise obtained a policy limits offer of $100,000 from Perneo, the UIM carrier. Freise met with Jeff and JoLynn at the Mediplex facility and explained the offer, as well as the effect of signing a release for the UIM claim. Freise also explained that under the contingency fee agree[829]*829ment, he would be retaining $33,333 and that he would also be reimbursing his law firm for costs advanced to the date of the settlement, leaving a net of some $64,000 to be paid to Jeff and JoLynn. With the approval of Jeff and JoLynn, the offer was accepted. After the release was signed and the settlement draft deposited, the UIM settlement proceeds were disbursed as above described, on May 8, 1996.

In the meantime, on May 1, 1996, Jeff returned home because the medical insurer refused to pay anything more for his care at Mediplex. Within days, it became apparent that Jeff required professional care and treatment that JoLynn, who was also responsible for the care of the parties’ two young children, simply could not provide. Accordingly, Jeff moved to the home of his parents. He remained there until June 1, 1996, when JoLynn was able to arrange for him to enter New Beginnings, a group home for brain-injured men that was located near Jeff’s parents’ home. There, Jeff was to learn how to do various activities of daily living and to commence a vocational assessment program.

In late May 1996, Freise obtained an agreement from King County Blue Shield to waive its $155,452 medical subrogation lien. On June 14, 1996, in response to Freise’s requests, American States allowed Freise to depose Maher. The deposition was helpful to Freise’s investigation of the dram shop claim against the tavern and provided evidence to rebut a number of defenses that Freise had anticipated might arise.

On June 20, 1996, JoLynn told Freise’s legal assistant that although she still loved Jeff, and wanted to be his friend and supporter, it was doubtful that she could stay married to him. She said that she anticipated filing for a divorce by the end of the summer.

The American States’ Offer

On June 24,1996, as a result of Freise’s efforts, the drunk driver’s insurer, American States, offered its $500,000 policy limits in exchange for a release of the drunk driver. Freise and JoLynn met with the American States adjuster [830]*830and an American States structured settlement person. Freise did not counsel immediate acceptance of the offer because it was apparent that a $500,000 settlement would not be sufficient to provide for the needs of Jeff and the parties’ minor children. Freise assessed the total value of the family’s claims to be in the $3 million range. Based on his legal research, he was concerned that it would not be possible to preserve joint and several liability as against Maher and the tavern, if the family were to accept the policy limits offer before determining whether they could settle with or would be required to sue the tavern.

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Barrett v. Freise, 82 P.3d 1179, 119 Wash. App. 823, 2003 Wash. App. LEXIS 2740 (Wash. Ct. App. 2003).

82 P.3d 1179 (Barrett v. Freise) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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