Christensen v. Eggen

577 N.W.2d 221, 1998 Minn. LEXIS 172, 1998 WL 175609
CourtSupreme Court of Minnesota
DecidedApril 16, 1998
DocketC5-96-2275
StatusPublished
Cited by25 cases

This text of 577 N.W.2d 221 (Christensen v. Eggen) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Christensen v. Eggen, 577 N.W.2d 221, 1998 Minn. LEXIS 172, 1998 WL 175609 (Mich. 1998).

Opinion

OPINION

TOMLJANOVICH, Justice.

This case involves Minn. R. Prof. Conduct 1.5(e), which governs the splitting of fees between attorneys of different firms. We hold that public policy is clearly set forth by Minn. R. Prof. Conduct 1.5(e), and that fee-splitting agreements between attorneys of different firms must comply with all of the requirements of the rule to be deemed enforceable and consistent with public policy.

Fred Hollender is the deceased husband of the respondent, Christine Hollender Christensen. Prior to his death, Hollender was an attorney and sole shareholder of his firm, Fred Hollender, Attorney-at-Law, P.A. James Koch knew Hollender and had previously used Hollender’s legal services for business purposes. James and Kathy Koch consulted with Hollender regarding a potential medical malpractice claim on behalf of their son, Jeffrey Koch. Hollender then referred the potential malpractice claim to Brad Eggen, a solo practitioner, whom Hol-lender believed to be a more experienced personal injury attorney than himself. Initially, they planned to share responsibility on the Koch case, with Hollender acting as a consulting attorney during the potential litigation. They agreed that Hollender would receive a third of the total fees that Eggen received from the case. Eggen admits that Hollender had “referred” at least two other cases to Eggen in the past, in which Hollen-der remained active throughout the cases and they shared fees. 1

*223 In a letter to Eggen dated April 6, 1989, Hollender attempted to put their fee agreement in writing. Hollender wrote: “I want to confirm in writing my understanding that I am entitled to a 1/3 referral fee of the amount of your fees in the Koch [e]ase — if we get it. Please let me know if I can do anything to help sew the ease up.” This fee-splitting arrangement was not included in the client’s retainer agreement; however, Eggen did inform the Koch family of Hollender’s potential involvement with Jeffrey’s case through two letters dated April 3, 1989, and October 24, 1989. 2 Hollender died on June 30, 1992, before the majority of the pretrial work was done and two years prior to the actual trial. All parties acknowledge that Hollender performed no actual work on the case, other than making the referral. Eggen was the only attorney of record throughout the court proceedings and on August 9,1994, the jury awarded Koch a judgment in the amount of $1,390,914, which was appealed to the court of appeals.

In April 1995, Hollender’s widow, Christensen, filed an attorney’s, lien in Anoka County in an attempt to recover a third of Eggen’s fees from the Koch ease pursuant to Eggen and Hollender’s agreement. A third of Eggen’s total fee was $132,120.85. On February 22,1996, after the court of appeals affirmed the judgment for Koch, Christensen filed a declaratory judgment action in Anoka County to enforce the fee-splitting agreement between Hollender and Eggen. Eg-gen’s motion for a change of venue to Henne-pin County was granted. The attorney’s lien was dismissed on April 11, 1996, pursuant to a stipulation by the parties in which Christensen discharged and released all parties from any liability for the attorney’s hen.

Eggen moved for summary judgment in the declaratory judgment action. In granting summary judgment for Eggen, the district court held that Christensen either could have intervened in the Koch matter by filing the attorney’s hen or instituted an independent action to seek her remedy, but that the doctrine of election of remedies prevented her from attempting to do both. The district court determined that Christensen had elected her remedy by filing the attorney’s hen and that she waived her claim by agreeing to the stipulation, which resulted in the dismissal of the attorney’s hen. The district court further held that the fee-sphtting arrangement was contrary to pubhc pohcy, because it did not conform to the requirements of the Minnesota Rules of Professional Conduct, and that whatever contract Hollender may have had with Eggen necessarily terminated upon Hollender’s death, because it was a contract to perform personal services.

It was from this judgment that Christensen appealed to the court of appeals, which reversed and remanded the case. First, the court of appeals held that Christensen’s attorney’s hen action did not implicate the election of remedies doctrine and that “the trial court erred in concluding that the doctrine of election of remedies barred Christensen’s declaratory judgment action on the fee-sharing contract.” Second, the court held that a balancing test should be employed in determining whether the agreement violated pubhc pohcy, and while the Minnesota Rules of Professional Conduct may evidence pubhc pohcy, there was no violation of pubhc pohcy because there was no issue of great pubhc importance implicated in this case which outweighed the pohcy favoring freedom in negotiating contracts. More simply stated, “failure * * * to comply precisely with the professional rules on splitting fees did not render [Hollender and Eg-gen’s] agreement unenforceable as a matter of law.” Christensen v. Eggen, 562 N.W.2d 806, 812 (Minn.App.1997).

*224 This case sets forth two basic issues: (1) whether Christensen’s declaratory judgment action is barred by the election of remedies doctrine; and (2) whether a fee-splitting agreement between attorneys from different firms violates public policy when it does not strictly comply with Minn. R. Prof. Conduct 1.5(e). 3 This case comes to us pursuant to a grant of summary judgment and involves questions of law, which we review de novo. See Dairyland Ins. Co. v. Starkey, 535 N.W.2d 363, 364 (Minn.1995).

I.

The election of remedies issue can be easily disposed of, because it is clear that this particular case does not fall within the bounds of the doctrine:

The doctrine of election of remedies requires a party to adopt one of two or more coexisting and inconsistent remedies which the law affords the same set of facts. The purpose of the doctrine is not to prevent recourse to any particular remedy but to prevent double redress for a single wrong.
However, if inconsistent remedies are sought and it is doubtful which one will bring relief, a party may claim either or both alternatively until one remedy is pursued to a determinative conclusion. Therefore, a party should not be bound by an election unless he has pursued the chosen course to a determinative conclusion or has procured advantage therefrom, or has thereby subjected his adversary to injury.

Vesta State Bank v. Independent State Bank, 518 N.W.2d 850, 855 (Minn.1994) (internal quotation and citations omitted; emphasis added).

The attorney’s lien action filed by Christensen was not pursued to a determinative conclusion.

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Cite This Page — Counsel Stack

Bluebook (online)
577 N.W.2d 221, 1998 Minn. LEXIS 172, 1998 WL 175609, Counsel Stack Legal Research, https://law.counselstack.com/opinion/christensen-v-eggen-minn-1998.