Clark v. General Motors, LLC

161 F. Supp. 3d 752, 2015 U.S. Dist. LEXIS 179106, 2015 WL 11023441
CourtDistrict Court, W.D. Missouri
DecidedDecember 9, 2015
DocketNo. 6:14-CV-03413-DGK
StatusPublished
Cited by3 cases

This text of 161 F. Supp. 3d 752 (Clark v. General Motors, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark v. General Motors, LLC, 161 F. Supp. 3d 752, 2015 U.S. Dist. LEXIS 179106, 2015 WL 11023441 (W.D. Mo. 2015).

Opinion

FINAL ORDER REGARDING SETTLEMENT AND ATTORNEYS’ FEES

GREG KAYS, CHIEF JUDGE, UNITED STATES DISTRICT COURT

This order arises from the Court’s approval of a wrongful death settlement. Plaintiff Jennifer Clark alleges a defective ignition switch in the 2005 Chevrolet Cobalt her husband was driving caused his fatal automobile crash. The case was filed in Missouri state court, removed to this Court, transferred to the multidistrict litigation court (“MDL”) presiding over all General Motors ignition switch litigation, and then transferred back to this Court for approval of the parties’ settlement. Previously, the Court conditionally approved the settlement, withholding approval of the attorneys’ fees provision until Plaintiffs counsel submitted supplementary briefing demonstrating that the attorneys’ fee and fee contract complied with Missouri Rule of Professional Conduct 4-1.5(a)-(c). J. and Order Conditionally Approving Settlement (Doc. 18) at 5-6. The Court also ordered that all attorneys’ fees be paid into the Court’s registry pending resolution of this issue. Id. at 5.

Now before the Court is Plaintiffs Response to the Court’s Order Requesting Supplemental Briefing (Doc. 19). The Court finds the Fee Agreement charging a forty percent contingent fee, or $1,527,728.00, was unreasonable at its inception and when the fee was quantified at the conclusion of the case as judged by the eight factors enumerated in Missouri Rule of Professional Conduct 4-1.5(a). Consequently, the Fee Agreement is void and unenforceable. Plaintiffs counsel are, however, entitled to a recovery in quantum meruit of a reasonable attorneys’ fee, which the Court finds is $945,000.00. After paying this award and reimbursing counsel their reasonable costs and expenses, the Court orders that the funds remaining in [755]*755the registry, $583,238.68, be distributed as follows: Plaintiff Jennifer Clark shall receive $466,590.94, and decedent’s parents, Ms. Matney and Mr. Clark, shall each receive $58,323.87.

Background and Procedural History

On January 12, 2011, Nathan A. Clark (“Decedent”) died when the 2005 Chevrolet Cobalt he was driving lost power and careened into a rocky embankment. In April of 2014, his widow, Jennifer Clark1 (“Plaintiff’), contacted James Rogers (“Mr. Rogers”) of the law offices of James S. Rogers (“the Rogers firm”) in Seattle, Washington, about representing her in this case.

On April 1, 2014, Defendant General Motors, LLC (“GM”) announced that it had hired Kenneth Feinberg (“Feinberg”) to advise it on how to handle the ignition-switch defect. See, e.g., Neal Boudette, GM Hires Victims’ Compensation Expert Feinberg to Advise on Defect’s Impact, Wall Street J. (Apr. 1, 2014, 3:50 PM), http://www.wsj.com/news/articles/SB10001 4240527023041 57204579475661462153986. GM subsequently employed Feinberg to administer a no fault, non-adversarial, voluntary compensation program (“the Compensation Fund”) to settle defective ignition switch claims.

On May 17, 2014,2 Plaintiff signed a fee agreement (“the Fee Agreement”) with the Rogers firm. In relevant part, the Fee Agreement provides that the attorneys “shall receive as their fee forty ,percent

(40%) of all money recovered.” This forty percent was to be calculated on the gross recovery, before deduction of “unpaid costs, medical expenses or payment of subrogation interest.” Fee Agreement (Doc. 19-4) at ¶ 1. In the event an appellate specialist would be needed, the Fee Agreement reserves the right to charge an appellate fee of up to an additional five percent. Id. at ¶ IB.

If there was no recovery, the attorneys would receive no fee. Plaintiff, however, was still responsible for all costs and expenses: “If there is no money received on behalf of the Client by settlement or judgment, the Attorneys shall receive nothing for their time and services, but shall be reimbursed for expenses and costs advanced.” Id. at ¶ ID (emphasis added). “Regardless of whether there is any recovery by settlement or judgement, the Client agrees to pay the pre-trial and trial costs and expenses that may be incurred to properly and adequately investigate and prepare” the case for trial. Id. at ¶ 2 (emphasis added). These costs include, but are not limited to, expert witness fees, travel expenses, deposition costs, and investigation fees. Id.

The Fee Agreement also provides that,

If the Client elects at any time to abandon this claim or to discharge Attorneys, then in either event Client agrees to pay the law firm at the time and prior to release of the Client’s file3 in this matter, a reasonable fee [756]*756for services performed to date of such discharge or abandonment, which shall be computed at the rate of up to Four Hundred and Ninety-Five Dollars ($495.00) per hour for services rendered by James S. Rogers, up to Three Hundred and Twenty-Five Dollars ($325.00) per hour for services rendered by associate attorneys, up to One Hundred Seventy-Five Dollars ($175.00) per hour for services rendered by paralegals, and to reimburse . all costs and expenses advanced by Attorneys in connection with Client’s claim. Client hereby grants Attorneys a lien on Client’s claim and causes of action, and any proceeds in any judgments or settlements under it in an amount equal to the sums incurred as Attorneys’ fees, costs and disbursements.

Id. at ¶ 10 (emphasis added).

On June 30, 2014, the Compensation Fund released the final protocol it would use to review and analyze claims. Among other things, it stated that claims must be filed between August 1 and December 31, 2014, and that a claimant had to submit documentation demonstrating causation and damages, and it specified the acceptable documentation. Final Protocol for Compensation (Doc. 14-1) at 4, 7-10. It also specified the acceptable documentation for a claim. Id. at 7-9.

On August 4, 2014, Plaintiff signed an addendum to the contract adding Robert Palmer (“Mr. Palmer”), an attorney with the PalmerOliver, P.C. (“PalmerOliver”) law firm in Springfield, Missouri, as local counsel. The addendum confirmed that the fee was a forty percent contingency fee, with seventy-five percent going to the Rogers firm and twenty-five percent to PalmerOliver. Addendum (Doc. 19-4) at 4.

Plaintiff signed both the original agreement and the addendum on behalf of herself and Decedent’s parents, Kathy Matney (“Ms. Matney”) and Albert Allen Clark (“Mr. Clark”). Plaintiff confirmed during the May 29, 2015, settlement hearing that she, Ms. Matney, and Mr. Clark (all ’three collectively “the Claimants”) all understood and agreed to this fee.

Represented by the Rogers firm and PalmerOliver, Plaintiff sued GM in Missouri state court on August 8, 2014. Shortly after filing suit, Plaintiffs counsel submitted a claim to the Compensation Fund. To support it, they submitted police reports from the accident and expert reports suggesting that the ignition switch more likely than not caused the accident. The Compensation Fund twice rejected Plaintiffs claim, stating that there was insufficient documentation to prove causation. In response, her attorneys located the Cobalt’s previous owner and police reports proving the Cobalt had previously experienced ignition switch issues. The Compensation Fund approved Plaintiffs claim on March 18, 2015, offering a gross settlement of $3,819,320.00.

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Bluebook (online)
161 F. Supp. 3d 752, 2015 U.S. Dist. LEXIS 179106, 2015 WL 11023441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-v-general-motors-llc-mowd-2015.