Gillespie v. Seymour

39 P.3d 61, 272 Kan. 1387, 2002 Kan. LEXIS 18
CourtSupreme Court of Kansas
DecidedFebruary 1, 2002
DocketNo. 86,431
StatusPublished
Cited by3 cases

This text of 39 P.3d 61 (Gillespie v. Seymour) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gillespie v. Seymour, 39 P.3d 61, 272 Kan. 1387, 2002 Kan. LEXIS 18 (kan 2002).

Opinion

The opinion of the court was delivered by

Six, J.:

This is a post-settlement controversy, initially between two sibling plaintiffs, Warren Brown Gillespie (Warren) and Polly [1388]*1388G. Townsend (Polly). With the death of the sibling plaintiffs in 1998, the controversy has become a battle between Warren’s estate (Warren) administered by his son James Gillespie, executor, and the Polly G. Townsend Revocable Trust (Polly). Warren and Polly disagree on who is responsible for litigation expenses incurred in a contingent fee case resulting in a $2,250,000 settlement recovery. The district court ruled that the expenses should be shared equally and ordered the disputed funds held in escrow distributed to Warren’s Estate. Polly, objecting to the sharing decision, appeals.

Our jurisdiction is under K.S.A. 20-3018(c) (a transfer from the Court of Appeals on our own motion).

Polly advances the following issues in her appeal:

Whether the district court: (1) was an appropriate forum for determining the sibling dispute under Kansas Rules of Professional Conduct (KRPC) 1.5(e) (2001 Kan. Ct. R. Annot. 346), (2) erred in finding that the KRPC were, as a matter of law, incorporated into Polly’s contingent fee agreement, (3) erred in finding that Warren and Polly reached an oral agreement to share litigation expenses on an equal basis in the event of recovery, and (4) erred in finding that Polly was responsible for attorney fees and expenses incurred in the bankruptcy litigation.

We reverse, holding that: (1) the district court, under the guise of a KRPC 1.5(e) fee dispute, was not the proper forum to resolve the controversy here, and (2) one client under KRPC 1.5 has no standing to test the reasonableness of another client’s separate attorney fee contract. Our forum resolution negates the need to address the other issues raised by Polly.

The Gillespie family litigation has had an extensive history. See Gillespie v. Seymour, 250 Kan. 123, 823 P.2d 782 (1991) (Gillespie I); 253 Kan. 169, 853 P.2d 692 (1993); 255 Kan. 774, 877 P.2d 409 (1994); 263 Kan. 650, 952 P.2d 1313 (1998) (Gillespie IV). The factual background of the family controversy is set forth in Gillespie I, 250 Kan. at 125-29. More recently, we found a lack of appellate jurisdiction in Gillespie IV, because of an improper and untimely interlocutory appeal involving the current dispute. 263 Kan. at 656-57. The other Gillespie appeals involved issues unrelated to the sibling controversy presented here.

[1389]*1389FACTS

Warren and Polly, as remainder beneficiaries, under a trust established by their grandfather in the mid-1950’s, sought an accounting including punitive damages against co-trustees (and others). The litigation also concerned various breach of trust allegations. Warren and Polly were represented by Glenn Young and Jerry Bogle of the law firm Young, Bogle, McCausland, Wells, & Clark, P.A. (Young, Bogle), of Wichita. Each client entered into a separate and different contingent fee agreement with the firm.

The separate contingent fee agreements differed in two respects. First, Pofiy had crossed out and initialed the phrase, “but [Young, Bogle] shall be reimbursed for all out-of-pocket expenses incurred in die prosecution of said suit and claim.” Second, Young, Bogle’s contingent share of any recovery was 45% in Warren’s agreement and 50% in Polly’s.

On March 13, 1988, Polly signed her crossed-out contingency fee contract and mailed it back to Bogle. After receiving the modified contract, Bogle met with Warren and Warren’s son James. It was agreed that Warren would enter into a separate contract providing a contingent fee percentage of 45% if the case was tried and appealed. Warren requested a lower fee scale in return for his agreeing to advance the expenses of the lawsuit. During litigation, Warren paid $480,521.09, the total of all costs and expenses in the state litigation and later bankruptcy proceeding. The commitment to advance expenses was not in Warren’s fee agreement; however, the agreement provided that Warren would reimburse expenses in the event there was no recovery. Neither fee agreement specified how any recovery would be divided between the two siblings. Warren signed his agreement on April 11, 1988.

The damage claim against the co-trustees and related parties for investment losses incurred by the trust was eventually tried. Warren and Polly were awarded judgment in December 1990 in excess of $4,000,000. Liability and the compensatory damage awards were upheld in Gillespie I. 250 Kan. at 128. The individual defendants filed bankruptcy. Young, Bogle secured an oral agreement from Warren to pursue recovery of the judgment in the bankruptcy lit[1390]*1390igation on an hourly basis. Apparently, Young, Bogle made no separate agreement with Polly regarding the bankruptcy. The parties settled the litigation with the underlying defendants for $2,250,000. Young, Bogle contended that its bankruptcy fees became expenses of litigation under the contingent fee agreements. However, the bankruptcy fees were not deducted from the recovery as expenses before calculating Young, Bogle’s contingent fee.

Young, Bogle sought to divide the settlement proceeds between Warren and Polly. A dispute arose concerning die payment of litigation expenses. Polly observed that her fee agreement contained no provision for reimbursement of out-of-pocket expenses incurred by Young, Bogle. Young, Bogle, on behalf of Warren, asserted Polly had agreed to share one-half of the “out-of-pocket” litigation expenses. The amounts not in controversy'were distributed. Polly received $395,243; however, she claims she is entitled to $562,500 (50% of $1,125,000). Young, Bogle holds the difference, $167,257, and interest, in escrow. Warren claims that the $167,257 is his as reimbursement of Polly’s share of the litigation costs and expenses that he paid. (The record is silent on why Warren’s claim is only for $167,257, as one-half of the total expenses, $480,521.09, is $240,260.54.)

Warren, with Young, Bogle as his counsel, filed a motion under KRPC 1.5(d) (2001 Kan. Ct. R. Annot. 345), requesting that the district court divide the litigation expenses between himself and Polly. It appears that the motion should have referenced KRPC 1.5(e). Warren alleged that Polly had orally agreed that she would share the litigation expenses equally with him in the event of an ultimate recovery (although she would not be responsible for any expenses if there was no recovery.) Polly, now represented by a different firm, responded to the motion by alleging: (1) she had not agreed to share responsibility for any litigation expenses; (2) a KRPC 1.5(d) motion was not proper for resolving her alleged fee dispute; (3) the controversy did not involve a fee dispute between an attorney and client, but rather an alleged oral contract between two clients; (4) she had not requested the district court under KRPC 1.5(e) to review her fee contract with Young,Bogle; (5) Warren’s motion did not allege any fee dispute between her and Young, [1391]

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Related

Cooke v. Gillespie
176 P.3d 144 (Supreme Court of Kansas, 2008)
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242 F.R.D. 606 (D. Kansas, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
39 P.3d 61, 272 Kan. 1387, 2002 Kan. LEXIS 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gillespie-v-seymour-kan-2002.