O'ROURKE v. Cairns

683 So. 2d 697, 1996 WL 681395
Supreme Court of Louisiana·Decided November 25, 1996·No. 95-C-3054·Published·Cited by 56 cases

Opinion

683 So.2d 697 (1996)

Intervention in Shannon O'ROURKE, wife of/and George O'Rourke
v.
Mark CAIRNS, D.D.S.

No. 95-C-3054.

Supreme Court of Louisiana.

November 25, 1996.
Rehearing Denied December 13, 1996.

*698 Stephen Barnett Murray, New Orleans, for Applicant.

Don Carsten Gardner, Harahan, Michael Alexander Fenasci, New Orleans, for Respondent.

KIMBALL, Justice.[*]

We granted certiorari to determine the standard by which attorney fees are to be apportioned among discharged and subsequent counsel when the client dismissed counsel for cause in a contingency fee case which was successfully prosecuted to judgment. The district court conducted a hearing to determine the proper allocation of fees, and held that dismissed counsel had been discharged for cause. From a stipulated amount of fees at stake, the court awarded discharged counsel a sum based on an hourly rate, the remaining portion granted to subsequent counsel. The court of appeal affirmed the judgment in all respects.

FACTS

The instant dispute arises from a medical malpractice action between Shannon and George O'Rourke against Mark Cairns, D.D.S. Succinctly, the O'Rourkes claimed Dr. Cairns negligently performed dental treatment on George O'Rourke, which included substandard root canal work and excessive prescription of pain medication causing addiction. In pursuit of this claim, the O'Rourkes hired Roland Belsome, an attorney then practicing with the New Orleans law firm of Wiedemann & Fransen. The written contingency fee contract between the O'Rourkes and Belsome, dated February 17, 1986, provided for a fee of thirty-three and one-third percent of whatever sums were *699 recovered without the necessity of filing a lawsuit, and forty percent if filing was necessary. For the next several months, Belsome conducted expansive discovery which included requests for admissions, depositions, interrogatories, and document production. Thereafter, Belsome prepared a medical review panel submission, which panel found that Dr. Cairns failed to comply with the appropriate standard of care in Mr. O'Rourke's case.[1] Following this favorable ruling, Belsome filed suit in the Twenty-Fourth Judicial District Court on February 3, 1989.

In March 1991, Dr. Cairns filed for bankruptcy. Following this, Belsome moved for relief from the automatic bankruptcy stay. On April 29, 1991 the stay was lifted, allowing the medical malpractice suit to proceed in state court.[2] Shortly after the stay was lifted, Dr. Cairns' insurer removed the case to federal court, relying on federal bankruptcy jurisdiction. The case was subsequently remanded to state court;[3] however, these delays necessitated the second of two trial date continuances in the O'Rourke lawsuit. On July 15, 1991, Belsome moved to set the O'Rourke matter for trial for the third time. Ten days later, George O'Rourke discharged Belsome as his attorney in the case.

After dismissing Belsome, George O'Rourke entered into a written contingency fee arrangement with attorney Michael Fenasci. The contract between George O'Rourke and Fenasci reflected identical fee percentages as the Belsome contract. With O'Rourke's approval, Fenasci engaged Don Gardner as co-counsel in the matter.[4] Fenasci and Gardner pursued the case through pre-trial motions, bench trial, a positive judgment for the client, and post-judgment settlement with Dr. Cairns and the Louisiana Patient's Compensation Fund. Fenasci and Gardner secured judgment exceeding one million dollars, which, pursuant to the statutory cap on medical malpractice damages, the district court reduced to $500,000. Subsequent negotiations produced a settlement of $65,000 from Dr. Cairns and $500,000 from the Compensation Fund.

Following his dismissal, Belsome intervened in the O'Rourkes' suit seeking recovery of fees and costs owed him under the contingency fee contract of February 1986.[5] At trial on the intervention, the district court received testimony and evidence to determine the proper allocation of fees between Belsome and subsequent counsel. The parties stipulated the fees in dispute amounted to $206,000.[6] The trial judge, who presided over the case from its inception, accepted this stipulation as a reasonable fee under Louisiana law.[7] The court then began to analyze what fee, if any, Belsome was due for his work in the case. In Reasons for Judgment, the court observed several instances in which Belsome and George O'Rourke's testimony conflicted. The court found O'Rourke to be a particularly credible witness in testifying to reasons for Belsome's dismissal. These reasons included communication problems, misrepresentations, and Belsome's confessed lack of experience and practice in the medical malpractice area. Among other things, these actions contributed to a general lack of confidence by George O'Rourke in his attorney.

*700 In contrast, the court found Belsome's testimony lacked credibility. Notably, the trial judge found Belsome inflated time records, which were reconstructed for the intervention trial,[8] and overstated the nature of work that the court characterized as superfluous and representative of a learning experience. The trial court referred to key aspects of Belsome's representation—the medical review panel submission and lifting the bankruptcy stay—as noteworthy examples of Belsome's exaggeration. In both, the court found the effort and time involved to be overstated. These findings, together with the client's testimony regarding reasons for dismissal, led the court to find Belsome's discharge to be for just cause. Moreover, the court found the discharge effected before the fee was earned led to revocation of the attorney's mandate and dissolution of the fee contract. Relying on this court's pronouncement in Saucier v. Hayes Dairy Products, Inc., 373 So.2d 102 (La.1979), the trial judge relegated Belsome to a quantum meruit recovery. Applying the Saucier factors, the court awarded Belsome $25,000 in attorney fees, computing the remuneration on an hourly basis only. The court made a finding that Belsome spent approximately two hundred hours in the matter, and multiplied that number by an hourly rate of $125 per hour. Consequently, the court awarded Fenasci and Gardner the remaining $181,000 as their fee in equal proportions.

The Court of Appeal, Fifth Circuit affirmed the district court's judgment in all respects. O'Rourke v. Cairns, 95-381 (La. App. 5th Cir. 11/28/95), 666 So.2d 345. We granted Belsome's application for certiorari, O'Rourke v. Cairns, 95-3054 (La.3/14/96), 668 So.2d 1149, because the case presented a significant unresolved issue of law for which this court should provide guidance to lower courts and litigants. La.Sup.Ct.R. X, § 1(a)(2).

LAW

Under its inherent judicial power and its original jurisdiction, the Supreme Court of Louisiana has exclusive authority to regulate the practice of law in this state. La. Const. art. V, § 5(B); Mire v. City of Lake Charles, 540 So.2d 950 (La.1989). This broad grant of regulatory power includes the responsibility to exert control by adjudicatory means of individual cases as they arise, including those relative to discharge of counsel and regulation of fees, whether by contingency contract or otherwise. Saucier, 373 So.2d at 118.

The instant case requires this court to review t

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O'ROURKE v. Cairns, 683 So. 2d 697, 1996 WL 681395 (La. 1996).

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