Pierce Couch Hendrickson Baysinger & Green v. Freede

936 P.2d 906, 1997 WL 109299
CourtSupreme Court of Oklahoma
DecidedMarch 20, 1997
Docket84946
StatusPublished
Cited by32 cases

This text of 936 P.2d 906 (Pierce Couch Hendrickson Baysinger & Green v. Freede) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pierce Couch Hendrickson Baysinger & Green v. Freede, 936 P.2d 906, 1997 WL 109299 (Okla. 1997).

Opinion

HODGES, Justice.

The issues in this case are (1) whether the trial judge properly construed the contract for attorney fees and costs in the underlying case, (2) whether the costs incurred in the underlying ease were reasonable, (3) whether the attorneys fee incurred by the plaintiff law firm in the present case were reasonable, and (4) whether the trial judge erred in awarding prejudgment interest.

I. Facts

The plaintiff in this case is the law firm of Pierce, Couch, Hendrickson, Baysinger & Green (law firm), and the defendant is Dr. Henry J. Freede, a client of the law firm. The law firm represented Dr. Freede in a ease filed in federal court against Texas Oil & Gas Corporation (TXO) (ease I). The appeal now before this Court (case II) involves the litigation costs incurred by the law firm on behalf of Dr. Freede while representing him in the TXO case (case I). An understanding of the disputes involved in this appeal is dependent on the facts regarding the plaintiffs and defendant’s agreements in the TXO case (case I) and their unusual professional relationship.

Dr. Freede was a close friend of Mr. Couch and Mr. Hendrickson, two of the partners in the law firm. Also Dr. Freede’s daughter worked for the law firm. Because of his daughter’s employment with the law firm, Dr. Freede hired the firm to represent him in a case known as the Sante Fe ease. The parties orally agreed on a contingent fee arrangement in which the costs of the litigation were paid, then the parties divided the remaining recovery, one third to the firm and the other two thirds to Dr. Freede. The matter was settled, and Dr. Freede received about $19,000 as his share.

Through his daughter, Dr. Freede invited the law firm to take the TXO case (case I) on the same basis as the Sante Fe case. The issues in the TXO case (case I) were similar to those in the Sante Fe case. Dr. Freede believed TXO was not paying him as much money as they should for his interest in certain wells operated by TXO. The law firm agreed to represent Dr. Freede. Once again the agreement was oral.

Mustang Production Company (Mustang) had interests in these same wells and believing that it, like Dr. Freede, had not received the full amount to which it was entitled, wished to enter the suit between Dr. Freede and TXO. The law firm sent Mustang a letter stating that it would represent Mustang on a contingent fee arrangement for one-third of the recovery after expenses and that Mustang would have to share in the cost of the suit if allowed to enter even if there was no recovery. Mustang countered with a letter setting out the following terms. 1 In *909 exchange for the firm representing Mustang and for Dr. Freede allowing Mustang to enter the ease, the costs would first be paid from any recovery, then the firm would receive one-third of the remainder of the recovery, and the remaining two-thirds would be divided 70.14 percent to Mustang and 29.86 percent to Dr. Freede. 2 If the recovery were insufficient to cover the costs, Mustang would pay 70.14 percent of the costs of the litigation. Dr. Freede, a representative of Mustang, and a representative of the law firm signed the letter agreement. The agreement did not state what would happen should one of the plaintiffs settle, leaving the other as the sole remaining plaintiff.

In December 1988, Mustang settled with TXO for what is believed to be $75,000. The firm, without consulting Dr. Freede, accepted Mustang’s payment of $25,000. Of the payment, $10,481.04 was applied to expenses, and the firm retained the remaining $14,-518.96 as attorney fees. Dr. Freede did not receive any funds from the settlement. On December 20, 1988, after Mustang settled, the firm sent Dr. Freede a statement showing costs of $10,481.04. At the time, Dr. Freede did not dispute any of this bill.

Before the statement of December 20, 1988, the firm had requested Dr. Freede pay a bill of $7,926.08 directly to Waterman & Company Oil and Gas Consultants for expert witness and consulting fees. Without protest, Dr. Freede paid this bill on February 19, 1988. This expense was not included in Dr. Freede’s statement of December 1988, in the calculation of expenses prior to Mustang’s settling, or in the calculation of Mustang’s share of the expenses.

The only costs that Dr. Freede questioned before being sent the final statement was that of Ken Manes, a consultant. Sometime before July 22, 1991, Dr. Freede requested that the law firm dismiss Ken Manes because Dr. Freede thought his testimony was dupli-cative. The law firm did not dismiss Mr. Manes. The costs for Mr. Manes after the date that Dr. Freede sought his dismissal were $1,000 and $1,800 for a total of $2,800. Other than this request, Dr. Freede did not question or protest the costs while they were being incurred.

The litigation continued with only Dr. Freede as the plaintiff. The matter went to trial in federal court. After the evidence was presented, the law firm requested the judge lift the cap on the punitive damages. The trial judge refused. Until this refusal both Dr. Freede and the law firm anticipated the recovery of substantial punitive damages. In fact, plaintiffs exhibit 5, which is plaintiffs response to Dr. Freede’s interrogatories, shows TXO offered Dr. Freede $85,000 to settle the case. The attorneys for TXO stated they would recommend $100,000 as a settlement to TXO. In anticipation of a large punitive damage recovery, Dr. Freede countered with an offer of $250,000. TXO did not respond to this counteroffer. The matter went to trial, and the jury found for TXO, resulting in no recovery by Dr. Freede.

There was a great deal of discovery after Mustang was dismissed from the suit including 27 depositions. During this time, the law firm rented a “war room” at a cost of $560.00. About one year and nine months after the close of the litigation, the firm billed Dr. Freede $26,285.54 for the costs of *910 the litigation incurred alter Mustang settled. These costs were in addition to the $21,-956.42 3 which Dr. Freede had paid directly to the providers without protest.

When presented with a statement from the law firm for costs incurred by them, Dr. Freede refused to pay, arguing he was responsible for only 29.86 percent of the costs. Thereafter, the law firm brought this action (case II) against Dr. Freede seeking to recover $26,285.54. The trial judge, the Honorable Bryan C. Dixon, found that the law firm had neglected to include the February 19,1988, payment to Waterman made directly by Dr. Freede when calculating Dr. Free-de’s pro rata share of the costs before Mustang settled. Because of this error, the trial judge found Dr. Freede was entitled to a credit of $2,429.71. 4 The trial judge also found that the $560.00 for a “war room” was not necessary. Recalculating the costs, the trial judge found Dr. Freede had a balance of $23,295.83 owing to the law firm and entered judgment against Dr. Freede and for the law firm.

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Bluebook (online)
936 P.2d 906, 1997 WL 109299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pierce-couch-hendrickson-baysinger-green-v-freede-okla-1997.