IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE FILED August 12, 1999
LATRICIA MCGEE and husband, ) Cecil Crowson, Jr. CECIL MCGEE, ) Appellate Court Clerk ) Plaintiffs/Appellees, ) ) Appeal No. ) 01-A-01-9810-CV-00539 VS. ) ) Davidson Circuit ) No. 95C-3787 GUY MAYNARD and FLEET ) TRANSPORT COMPANY, INC., ) ) Defendants/Appellants. )
APPEALED FROM THE CIRCUIT COURT OF DAVIDSON COUNTY AT NASHVILLE, TENNESSEE
THE HONORABLE THOMAS W. BROTHERS, JUDGE
JOSEPH K. DUGHMAN 315 Deaderick Street 2075 First American Center Nashville, Tennessee 37238-2075 Attorney for Plaintiffs/Appellees
JOLADE A.O. MOORE 1815 Jefferson Street, #204 Nashville, Tennessee 37208 Attorney for Defendants/Appellants
AFFIRMED AND REMANDED
BEN H. CANTRELL, PRESIDING JUDGE, M.S.
CONCUR: KOCH, J. CAIN, J.
OPINION The question presented in this appeal is the proper amount of an
attorney’s fee where the attorney was discharged prior to the termination of the case
below. The Circuit Court of Davidson County awarded the lesser of the contract
amount or quantum meruit. The appellant asserts that the contract amount should
have included one-third of an additional $15,000. We affirm the decision of the trial
court in rejecting the appellant’s contention.
I.
The appellant represented the plaintiffs in a personal injury action. After
the completion of discovery the appellant and her clients had a disagreement over the
value of the claim. At the plaintiffs’ request, the appellant withdrew as counsel and
filed a notice of a lien on the right of action pursuant to Tenn. Code Ann. § 23-2-102,
103. The notice stated that the lien was based on quantum meruit. The appellant
attached an exhibit reflecting an expenditure of time and expenses in the amount of
$8,576.50. With new counsel, the plaintiffs settled the case and the court set a
hearing on the amount of the appellants lien.1 After the hearing the court entered the
following order:
This cause came to be heard before the Honorable Thomas W. Brothers on the 9th day of August, 1998, upon the motion of Jola Moore to determine attorney fees, testimony of the Plaintiff, Affidavit of Jola Moore, statements of counsel, and the record as a whole, from all of which the Court is of the opinion as follows:
1. The Court finds that Plaintiffs were justified in discharging Jola Moore, and the Court finds that Jola Moore was terminated with cause.
2. Jola Moore is awarded an attorney fee based upon the lesser of quantum meruit or contract. The Court finds there was a $10,000.00 offer made by the Defendants at the time that Jola Moore was discharged. The Court finds that Jola Moore is entitled to a fee of
1 No issue aros e in this cas e ove r the p rope r proc edu re fo r the d eterm inatio n of a n atto rney’s lien under Tenn. Code Ann. § 23-2-102, 103. We would point out that the process is fairly complicated, and we refer interested parties to our opinion in Starks v. Browning, App. No. 01A01-9801-CV-00038, filed at Nashville Aug. 3, 1999.
-2- $3,333.33, and further awards $64.00 in expenses, for a total of $3,397.33.
3. The Court further finds that the balance of the money held in escrow shall be paid to the Plaintiffs.
The appellant filed a “Motion to Stay Execution of Order and For
Review” which the court treated as a Rule 59.04 Motion to Alter or Amend. According
to the motion the offer made to the plaintiffs while they were represented by the
appellant included $15,000 in medical bills in addition to the $10,000 found by the
court. Therefore the appellant sought an additional $5,000 for her fee. The court
overruled the appellant’s motion.
II.
Both sides agree that the controlling authority is Adams v. Mellen, 618
S.W.2d 485 (Tenn. App. 1981). The trial judge correctly held that where a client
discharges an attorney for cause, the attorney is entitled to recover the lesser of the
contract price or quantum meruit. In Adams, this court said:
We are of the opinion that the better rule is that a client’s discharge of his attorney after refusing a settlement offer in a contingency fee case, unless done in bad faith, is not a breach; and that where there is no breach, the proper measure of recovery is the lesser of quantum meruit or the contract price.
618 S.W.2d at 488. See also Crawford v. Logan, 656 S.W.2d 360 (Tenn. 1983).
“For cause,” therefore, includes a disagreement over the value of the
claim; it does not necessarily suggest bad faith, incompetence, or neglect. It is based
on the peculiar nature of the contract between an attorney and client, which includes
the client’s right to discharge the attorney whenever the client ceases to have absolute
-3- confidence in the relationship. See Chambliss, Bahner and Crawford v. Luther, 531
S.W.2d 108 (Tenn. App. 1975).
Thus, we conclude that the trial judge correctly found that the appellant
was discharged for cause. Her recovery, therefore, is governed by the lesser of the
contract price or quantum meruit.
The appellant insists that even under this rule she is entitled to
$8,333.33 (the contract price) because it is less than $8,576.50 (the total of her time
and expenses, her version of quantum meruit). The trouble with this argument is the
complete absence of proof to support either figure. Apparently the appellant’s
contract with the plaintiffs was for one-third of the recovery, and the offer over which
the parties disagreed was an offer by the defendant to pay the plaintiffs $10,000 “plus
one-half of the medical expenses.” The plaintiffs concede that much, but there is no
proof of the amount of the medical expenses. At the hearing, the parties talked in
general terms about the medical expenses, but there is no proof from which we could
infer that the figure the defendant was willing to pay for medicals was $15,000 (based
on a total of $30,000 in medical expenses).
With respect to quantum meruit, the only proof in the record is the
appellant’s affidavit showing the hours she spent on the case and her hourly rate. A
recovery in quantum meruit, however, is not measured by the detriment to the plaintiff
but by the benefit conferred on the defendant. Castelli v. Lien, 910 S.W.2d 420
(Tenn. App. 1995). The two are obviously not the same. In Skeens v. Rust
Engineering Company, 1989 WL 70739, at * 3 (Tenn. App. June 30, 1989), this court
referred to the factors that bear on a “reasonable” fee in determining the amount of
recovery based on quantum meruit. The time devoted to performing the legal service
is only one factor in an extensive list. See Rules of the Tennessee Supreme Court,
Rule 8, Code of Professional Responsibility, DR 2-106(B).
-4- The appellant also argues that the only reason the trial judge denied any
fee for the medical expenses was the fact that at the first hearing she did not have the
executed contracts with the medical providers showing that they had employed her
to pursue their subrogation interests. She produced the contracts at the hearing on
the motion to alter or amend, and now asserts that she is automatically entitled to a
fee based on the $15,000 she asserts was included in the offer.
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IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE FILED August 12, 1999
LATRICIA MCGEE and husband, ) Cecil Crowson, Jr. CECIL MCGEE, ) Appellate Court Clerk ) Plaintiffs/Appellees, ) ) Appeal No. ) 01-A-01-9810-CV-00539 VS. ) ) Davidson Circuit ) No. 95C-3787 GUY MAYNARD and FLEET ) TRANSPORT COMPANY, INC., ) ) Defendants/Appellants. )
APPEALED FROM THE CIRCUIT COURT OF DAVIDSON COUNTY AT NASHVILLE, TENNESSEE
THE HONORABLE THOMAS W. BROTHERS, JUDGE
JOSEPH K. DUGHMAN 315 Deaderick Street 2075 First American Center Nashville, Tennessee 37238-2075 Attorney for Plaintiffs/Appellees
JOLADE A.O. MOORE 1815 Jefferson Street, #204 Nashville, Tennessee 37208 Attorney for Defendants/Appellants
AFFIRMED AND REMANDED
BEN H. CANTRELL, PRESIDING JUDGE, M.S.
CONCUR: KOCH, J. CAIN, J.
OPINION The question presented in this appeal is the proper amount of an
attorney’s fee where the attorney was discharged prior to the termination of the case
below. The Circuit Court of Davidson County awarded the lesser of the contract
amount or quantum meruit. The appellant asserts that the contract amount should
have included one-third of an additional $15,000. We affirm the decision of the trial
court in rejecting the appellant’s contention.
I.
The appellant represented the plaintiffs in a personal injury action. After
the completion of discovery the appellant and her clients had a disagreement over the
value of the claim. At the plaintiffs’ request, the appellant withdrew as counsel and
filed a notice of a lien on the right of action pursuant to Tenn. Code Ann. § 23-2-102,
103. The notice stated that the lien was based on quantum meruit. The appellant
attached an exhibit reflecting an expenditure of time and expenses in the amount of
$8,576.50. With new counsel, the plaintiffs settled the case and the court set a
hearing on the amount of the appellants lien.1 After the hearing the court entered the
following order:
This cause came to be heard before the Honorable Thomas W. Brothers on the 9th day of August, 1998, upon the motion of Jola Moore to determine attorney fees, testimony of the Plaintiff, Affidavit of Jola Moore, statements of counsel, and the record as a whole, from all of which the Court is of the opinion as follows:
1. The Court finds that Plaintiffs were justified in discharging Jola Moore, and the Court finds that Jola Moore was terminated with cause.
2. Jola Moore is awarded an attorney fee based upon the lesser of quantum meruit or contract. The Court finds there was a $10,000.00 offer made by the Defendants at the time that Jola Moore was discharged. The Court finds that Jola Moore is entitled to a fee of
1 No issue aros e in this cas e ove r the p rope r proc edu re fo r the d eterm inatio n of a n atto rney’s lien under Tenn. Code Ann. § 23-2-102, 103. We would point out that the process is fairly complicated, and we refer interested parties to our opinion in Starks v. Browning, App. No. 01A01-9801-CV-00038, filed at Nashville Aug. 3, 1999.
-2- $3,333.33, and further awards $64.00 in expenses, for a total of $3,397.33.
3. The Court further finds that the balance of the money held in escrow shall be paid to the Plaintiffs.
The appellant filed a “Motion to Stay Execution of Order and For
Review” which the court treated as a Rule 59.04 Motion to Alter or Amend. According
to the motion the offer made to the plaintiffs while they were represented by the
appellant included $15,000 in medical bills in addition to the $10,000 found by the
court. Therefore the appellant sought an additional $5,000 for her fee. The court
overruled the appellant’s motion.
II.
Both sides agree that the controlling authority is Adams v. Mellen, 618
S.W.2d 485 (Tenn. App. 1981). The trial judge correctly held that where a client
discharges an attorney for cause, the attorney is entitled to recover the lesser of the
contract price or quantum meruit. In Adams, this court said:
We are of the opinion that the better rule is that a client’s discharge of his attorney after refusing a settlement offer in a contingency fee case, unless done in bad faith, is not a breach; and that where there is no breach, the proper measure of recovery is the lesser of quantum meruit or the contract price.
618 S.W.2d at 488. See also Crawford v. Logan, 656 S.W.2d 360 (Tenn. 1983).
“For cause,” therefore, includes a disagreement over the value of the
claim; it does not necessarily suggest bad faith, incompetence, or neglect. It is based
on the peculiar nature of the contract between an attorney and client, which includes
the client’s right to discharge the attorney whenever the client ceases to have absolute
-3- confidence in the relationship. See Chambliss, Bahner and Crawford v. Luther, 531
S.W.2d 108 (Tenn. App. 1975).
Thus, we conclude that the trial judge correctly found that the appellant
was discharged for cause. Her recovery, therefore, is governed by the lesser of the
contract price or quantum meruit.
The appellant insists that even under this rule she is entitled to
$8,333.33 (the contract price) because it is less than $8,576.50 (the total of her time
and expenses, her version of quantum meruit). The trouble with this argument is the
complete absence of proof to support either figure. Apparently the appellant’s
contract with the plaintiffs was for one-third of the recovery, and the offer over which
the parties disagreed was an offer by the defendant to pay the plaintiffs $10,000 “plus
one-half of the medical expenses.” The plaintiffs concede that much, but there is no
proof of the amount of the medical expenses. At the hearing, the parties talked in
general terms about the medical expenses, but there is no proof from which we could
infer that the figure the defendant was willing to pay for medicals was $15,000 (based
on a total of $30,000 in medical expenses).
With respect to quantum meruit, the only proof in the record is the
appellant’s affidavit showing the hours she spent on the case and her hourly rate. A
recovery in quantum meruit, however, is not measured by the detriment to the plaintiff
but by the benefit conferred on the defendant. Castelli v. Lien, 910 S.W.2d 420
(Tenn. App. 1995). The two are obviously not the same. In Skeens v. Rust
Engineering Company, 1989 WL 70739, at * 3 (Tenn. App. June 30, 1989), this court
referred to the factors that bear on a “reasonable” fee in determining the amount of
recovery based on quantum meruit. The time devoted to performing the legal service
is only one factor in an extensive list. See Rules of the Tennessee Supreme Court,
Rule 8, Code of Professional Responsibility, DR 2-106(B).
-4- The appellant also argues that the only reason the trial judge denied any
fee for the medical expenses was the fact that at the first hearing she did not have the
executed contracts with the medical providers showing that they had employed her
to pursue their subrogation interests. She produced the contracts at the hearing on
the motion to alter or amend, and now asserts that she is automatically entitled to a
fee based on the $15,000 she asserts was included in the offer.
We have already noted the defects in the proof about the medical
expenses. The trial judge alluded to the lack of proof at the conclusion of the second
hearing. Viewing the proof at both hearings, we cannot conclude that the trial judge
would have awarded the appellant an extra $5,000 if only she had introduced the
agreements at the first hearing.
We are also of the opinion that the appellant has confused the nature
of her motion to fix the amount of her lien. She was asking the court to fix the amount
owed to her by the plaintiffs. It does not appear why the plaintiffs would be
responsible to the appellant for a fee on the amount recovered for the insurance
companies. We realize that plaintiffs’ lawyers often represent other parties who have
subrogation rights, but great care must be exercised to avoid the inevitable conflicts
that arise when the claim is settled.
The appellees assert that this is a frivolous appeal. Tenn. Code Ann.
§ 27-1-122. We are not persuaded that the appeal was taken solely for delay or was
otherwise frivolous.
We affirm the judgment of the trial court. The cause is remanded to the
Circuit Court of Davidson County for any further proceedings necessary. Tax the
costs on appeal to the appellant.
-5- _________________________________ BEN H. CANTRELL, PRESIDING JUDGE, M.S.
CONCUR:
_____________________________ WILLIAM C. KOCH, JR., JUDGE
_____________________________ WILLIAM B. CAIN, JUDGE
-6-