Miller v. JACOBS & GOODMAN, PA

699 So. 2d 729, 1997 Fla. App. LEXIS 8497, 1997 WL 413809
CourtDistrict Court of Appeal of Florida
DecidedJuly 25, 1997
Docket96-480
StatusPublished
Cited by9 cases

This text of 699 So. 2d 729 (Miller v. JACOBS & GOODMAN, PA) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller v. JACOBS & GOODMAN, PA, 699 So. 2d 729, 1997 Fla. App. LEXIS 8497, 1997 WL 413809 (Fla. Ct. App. 1997).

Opinion

699 So.2d 729 (1997)

Brent C. MILLER, et al., Appellants,
v.
JACOBS & GOODMAN, P.A., Appellee.

No. 96-480.

District Court of Appeal of Florida, Fifth District.

July 25, 1997.

*730 Marcia K. Lippincott, P.A., Maitland, for Appellants.

Michael R. Levin and Christopher T. Hill of Rumberger, Kirk & Caldwell, A Professional Association, Orlando, for Appellee.

PETERSON, Judge.

Brent Miller, Charles Rand, and Miller & Rand, P.A., ("M & R"), appeal the trial court's allocation of attorney's fees earned from clients that were initially represented by Miller and Rand when they were associates with appellee law firm, Jacobs & Goodman, P.A., ("J & G"), and who subsequently chose to continue with M & R. The trial court based its allocation of attorney's fees on the terms of the parties' employment agreements. M & R contest the validity of those employment agreements with J & G and the preliminary and permanent injunctions granted thereunder. Alternatively, M & R argues J & G failed to establish any breach of contract. M & R further contests the award of attorney's fees.

FACTUAL BACKGROUND

J & G is a plaintiff's personal injury law firm representing clients for a contingency fee. Brent Miller and Charles Rand are lawyers that were employed by J & G under identical written employment agreements that were re-executed annually. The agreements governed financial aspects of associates' active and post employment relationships with the firm. The much-contested agreements provide that an associate will not solicit clients upon departing the firm, and provide for a procedure to notify clients of the departure. If a client follows a departing associate, J & G is to receive 75% of the fees earned from that client. Fees and costs earned from these cases are to be deposited into an interest bearing account subject to withdrawal only upon the written consent of both parties. The agreements also provide for the possibility of injunctive relief being used to enforce its terms, and for reimbursement of attorney's fees expended on enforcement.

Miller's and Rand's last annual agreements were scheduled to expire on June 30, 1992 and August 31, 1992, respectively. On June 23, 1992, however, Miller's and Rand's employment with J & G terminated. J & G alleged that, for approximately one month before their departure, M & R engaged in a variety of activities to establish their own *731 personal injury law firm. During this period prior to their termination, M & R allegedly solicited J & G clients without J & G's knowledge. J & G further alleged that at a meeting held with M & R on June 23, 1992, the latter informed the former that they would not comply with the fee apportionment provision of their contracts, based upon their view that such provision was unenforceable and unethical in light of a then-recent Ninth Circuit Court decision, Ohio Casualty Company v. Jacobs & Goodman, et. al., Case No. CI 92-11963.

J & G first instituted this action for injunctive relief against M & R to require all fees and costs earned on cases in which the clients followed M & R to be held by the court and distributed pursuant to the terms of the parties' employment agreement. Following a hearing on J & G's request for an injunction, an order granting preliminary injunction was entered. This order provided the funds must be placed in a separate federally insured bank account.

In July of 1993, M & R unsuccessfully moved to dissolve the preliminary injunction which was denied. M & R appealed the denial and this court affirmed on procedural grounds. Miller v. Jacobs & Goodman, P.A., 639 So.2d 1088 (Fla. 5th DCA 1994). The trial court next entered a partial summary judgment in favor of J & G in March, 1995 finding the parties' employment agreement to be valid and enforceable, and striking all of M & R's affirmative defenses to the contrary. Accordingly, the trial court ruled that the only issue to be decided at trial was whether the defendants breached their agreement, and the amount of damages incurred.

For purposes of trial, the parties divided the cases in dispute into three categories. Category I cases were defined as those in which clients that were represented by Miller or Rand as employees of J & G on June 23, 1992, continued to be represented by M & R after termination. M & R conceded that these clients fell within the scope of the employment contract. Category II cases were cases which M & R contended fell outside the scope of the agreement because these clients initially chose continued representation by J & G, and only later, after becoming dissatisfied, retained M & R. Category III cases involved clients who left J & G and followed M & R but for whom no fee had yet been generated.

The trial court found that the evidence established an anticipatory and material breach of the parties' agreement by M & R. The trial court determined that as to Category I and II clients, J & G was entitled to 75% of the fees generated by those cases. The trial court further found that a case referred to as the Lambertson case did not fall within the scope of the parties' employment agreement. Nevertheless, on its own initiative, the trial court granted J & G a quantum meruit award for the Lambertson case in the amount of $99,990. As to Category III cases, the trial court ordered that any future sums earned as fees should be deposited in the checking account established by the preliminary injunction, with no monies to be distributed without order of court or written stipulation of the parties. Additionally, the trial court assessed attorney's fees against M & R in the amount of $235,000. This appeal followed the denial of M & R's motions for new trial and rehearing.

VALIDITY OF EMPLOYMENT AGREEMENT

M & R argues that the parties' employment agreement is unenforceable because it violates public policy and because it places an economic burden upon a client's freedom to choose legal representation. M & R's rationale seems to be that while "financial disincentive provisions," like J & G's 75%/25% split provision for their departing associates, are intended to protect the employing firm from serious financial detriment resulting from the loss of clients and goodwill, these provisions have the effect of restricting the practice of law and thereby limit a client's choice of counsel. In other words, by forcing lawyers to choose between compensation and continued service to their clients, financial disincentive provisions may encourage lawyers to give up their clients, thereby interfering with the lawyer client relationship, and more importantly, with clients' free choice of counsel. Thus, the economic consequence *732 restricts the practice of law and ultimately harms clients that must be turned away.

With the exception of the circuit court decision in Ohio Casualty Co. v. Jacobs & Goodman, et. al., Case No. CI 92-11963, however, no opinion in this state appears to exist which finds that post termination client fee allocation provisions are unenforceable as against public policy. To the contrary, Florida courts' are uniform in enforcing such fee splitting arrangements between lawyers and law firms. See Hessen v. Kaplan, 564 So.2d 184, 185 (Fla. 3d DCA 1990) (case involved one law firm that divided into two, court interpreted and ratified payment of the 40%/60% fee recovery formula).

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Bluebook (online)
699 So. 2d 729, 1997 Fla. App. LEXIS 8497, 1997 WL 413809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-v-jacobs-goodman-pa-fladistctapp-1997.