Richard D. Tucker er al. v. Daniel G. LIlley Troubh Heisler, P.A. v. Daniel G. Lilley Law Offices, P.A.

2015 ME 36

• Court: Supreme Judicial Court of Maine
• Decided: March 24, 2015
• Status: Published

Opinion

MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2015 ME 36 Docket: Cum-13-584; Cum-13-594 Argued: September 4, 2014 Decided: March 24, 2015

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HJELM, JJ.*

RICHARD D. TUCKER et al.

v.

DANIEL G. LILLEY et al.

*****

TROUBH HEISLER, P.A.

DANIEL G. LILLEY LAW OFFICES, P.A. et al.

MEAD, J.

[¶1] In these related cases, all parties are practicing Maine attorneys or

Maine law firms. In both matters, (1) complaints, cross-claims, and counterclaims

were filed in the Superior Court (Cumberland County, Wheeler, J.) asserting

various theories of entitlement to all or part of a $1.24 million attorney fee

generated in a civil judgment in another matter; (2) the court denied the motion of

Daniel G. Lilley and Daniel G. Lilley Law Offices, P.A., to consolidate the matters

for trial; and (3) the court proceeded to dispose of the cases through summary * Silver, J., sat at oral argument and participated in the initial conference but retired before this opinion was adopted. 2

judgment on some claims, and dismissal or severance of others. Because we

conclude that, with one exception, the court erred in denying the motion to

consolidate the claims, we vacate the judgments except for that single claim and

remand for further proceedings.

I. BACKGROUND

A. Tucker v. Lilley et al.

[¶2] The summary judgment record in Tucker v. Lilley et al. supports the

following facts. Richard D. Tucker, John P. Flynn III, and Daniel G. Lilley are

practicing Maine attorneys. In 2005, Paula Braley (now DeKeyser) met with

Tucker to discuss a potential lawsuit following the death of her husband at Eastern

Maine Medical Center. Tucker obtained medical records and investigated the

claim. In 2006 he consulted with Flynn, then a member of the law firm of Troubh

Heisler, P.A. (Troubh), concerning the possibility of Flynn becoming lead counsel

in the case, which Flynn ultimately agreed to do.

[¶3] Tucker and Flynn stated by affidavit or in deposition that at a

September 27, 2006, meeting with Braley and her brother at Tucker’s office,

Braley agreed to a fee-sharing arrangement between Tucker and Flynn that would

keep both attorneys involved in her case for the same total fee. The attorneys

stated that their agreement was for Tucker to receive 25% of any contingent fee

earned in return for his referral and continued involvement in the case. Braley 3

executed an affidavit that does not reference the 25% figure, but states that she

consented to the fee-sharing arrangement and that she signed a contingent fee

agreement with Flynn. Lilley disputes the existence of the contingent fee

agreement because neither an original nor a copy bearing the parties’ signatures

has been produced in this litigation.

[¶4] In 2009, Flynn left Troubh to join Daniel G. Lilley Law Offices, P.A.

(LLO). Braley elected to have Flynn continue as her attorney following the move

and signed a contingent fee agreement with LLO. In June 2011, while Flynn was

working for LLO, Braley’s case went to trial with Flynn acting as her sole trial

counsel, resulting in a large jury verdict for Braley.

[¶5] Flynn left LLO in July 2011 to open his own practice. Braley again

followed Flynn and signed a new contingent fee agreement with him that provided

for a 40% contingent fee. In April 2012, the Superior Court granted a petition

brought by Braley and Flynn for approval of the agreed-upon 40% attorney fee.

See 24 M.R.S. § 2961(3) (2014). Through an agreement among Tucker, Flynn,

Lilley, and Troubh, $1,240,000 in attorney fees was deposited in an escrow

account pending the outcome of this and related cases. Relevant to this case,

Tucker asserts that he is entitled to 25% of the escrowed amount, or $310,000, and

Flynn concurs. Lilley asserts that his firm is entitled to the entire $1.24 million. 4

[¶6] In February 2012, Tucker filed a complaint against Lilley, LLO, and

Flynn, seeking either a declaration that he is owed 25% of any contingent fee

received in the Braley matter or a judgment for that amount. Lilley moved to

consolidate the complaint with several other cases involving disputes over the

division of attorney fees resulting from Flynn’s representation of Braley and other

clients; the court denied the motion after a hearing. Lilley then moved for

summary judgment, as did Tucker. In July 2013, the court entered a decision

denying Lilley’s motion and granting Tucker summary judgment against Flynn,

Lilley, and LLO in the amount of $310,000 plus interest. Following Flynn’s

voluntary dismissal of his cross-claims against Lilley, the court entered a final

judgment pursuant to M.R. Civ. P. 54(b)(1).

B. Troubh Heisler, P.A. v. Lilley Law Offices, P.A. et al.

[¶7] Troubh’s complaint against LLO also arises from Flynn’s

representation of Braley, and it concerns the same $1.24 million in attorney fees

held in escrow. When Flynn left Troubh to join LLO, he negotiated a separation

agreement (SA) with Troubh containing terms concerning the return of his share of

the firm’s capital. The SA was signed by Flynn and Troubh. Separately, Troubh,

Flynn, and LLO negotiated a memorandum of agreement (MOA), signed by those

three parties, concerning referral fees due Troubh in Flynn’s cases that moved with 5

him to LLO. The MOA lists a 20% fee in the Braley case. The SA explicitly

incorporates the MOA; the MOA, however, is silent as to the SA.

[¶8] Following the Braley judgment, Troubh asserts that, pursuant to the

MOA, it is entitled to 20% of the total attorney fees in escrow; LLO asserts that it

is entitled to the entire amount; and Flynn, contending that Troubh breached the

SA by failing to return his full capital share and thereby nullified the MOA, asserts

that Troubh is owed nothing, or, alternatively, is owed 20% of the escrowed fees

remaining after Tucker takes 25%.

[¶9] In March 2012, Troubh filed a complaint against LLO and Flynn

alleging breach of contract and seeking a judgment against them jointly and

severally for 20% of $1.24 million ($248,000). LLO’s answer included a

cross-claim against Flynn, asserting that Flynn was obligated to pay any fee due

Troubh. Flynn’s answer included a similar cross-claim against LLO, and also

included a counterclaim against Troubh, asserting in part that Troubh had

fraudulently induced Flynn to agree to the MOA by promising him that he would

be paid his full capital share upon leaving the firm. LLO again moved to

consolidate the complaint with several other cases involving the division of

attorney fees awarded in Flynn’s cases, including Tucker’s claim to 25% of the

Braley fee; Flynn agreed to consolidation and Troubh objected to it. Following a

hearing, the motion was denied. 6

[¶10] Troubh moved for summary judgment and to sever Flynn’s

counterclaim. LLO cross-moved for summary judgment. After hearing, the court

entered an order (1) granting Troubh summary judgment for $248,000 against LLO

and Flynn, jointly and severally, together with interest and costs; (2) denying LLO

summary judgment; (3) dismissing Flynn’s cross-claim against Lilley; and

(4) severing and setting for trial Flynn’s counterclaim against Troubh.

II. DISCUSSION

A. Tucker’s Claim Against Flynn

[¶11] The standard of review on a grant of summary judgment is well

established:

Summary judgment is properly granted if the record reflects that there is no genuine issue of material fact and the movant is entitled to a judgment as a matter of law. We review de novo whether, on a motion for summary judgment, a dispute of material facts exists and whether the entry of a summary judgment was proper as a matter of law. For purposes of this review, we consider the evidence in the light most favorable to . . . the party against whom judgment has been entered.

A fact is material if it has the potential to affect the outcome of the suit, and a genuine issue of material fact exists when a fact-finder must choose between competing versions of the truth, even if one party’s version appears more credible or persuasive. The nonmoving party is given the full benefit of all favorable inferences that may be drawn from the facts presented.

Angell v. Hallee, 2014 ME 72, ¶¶ 16-17, 92 A.3d 1154 (citations and quotation

marks omitted). 7

[¶12] Here, Flynn answered Tucker’s complaint by admitting that several

years before Flynn joined LLO, “Tucker had an enforceable contractual

relationship with Flynn . . . under which Tucker was to receive 25% of any

contingent fee earned in the Braley matter.” This aspect of Flynn’s answer to the

complaint by itself establishes these facts as to Flynn. See M.R. Civ. P. 8(d).

Additionally, Flynn later averred that he “agreed to a 25% fee share of the fees

recovered to attorney Tucker because, in part, [Tucker] would remain involved in

the litigation.” Braley’s affidavit confirmed her understanding that Flynn and

Tucker would divide any contingent fee earned. The Superior Court correctly

found that as to Flynn there was no material dispute of fact concerning the

existence and provisions of the agreement because there is no dispute as to its

evolution or terms among the three parties who created it. Lilley had no personal

knowledge from which to deny that the agreement existed, and in fact he did not,

instead denying that he was “aware” of any agreement. See M.R. Civ. P. 56(e)

(requiring that “affidavits shall be made on personal knowledge”).

[¶13] The 2006 fee-splitting agreement was a fully established contract

among Braley, Tucker, and Flynn well before Flynn went to LLO. The fact that

Flynn brought his client with him when he joined LLO does not extinguish that

contract as it pertains to Tucker, nor is its validity determined by whether Lilley or

any other third party was aware of it. Lilley’s lack of awareness might well be an 8

issue in separate litigation between Lilley and Flynn in determining who ultimately

pays Tucker’s fee, but it is irrelevant to the question of whether the agreement that

Tucker was due a fee existed and, if so, its terms. For these reasons, we affirm the

court’s entry of summary judgment on Tucker’s claim against Flynn.

B. Tucker’s Claim Against Lilley and LLO

[¶14] The same result does not follow concerning Tucker’s separate claim

against Lilley and LLO, however, because, notwithstanding the established

fee-sharing agreement between Tucker and Flynn, a genuine dispute of material

fact remains concerning (1) whether, when Flynn joined LLO, Lilley also agreed to

pay Tucker a fee, and (2) if he did agree, whether he agreed to a 25% fee or a

lesser amount. The unresolved factual disputes are illustrated by a letter that

Flynn, after beginning work at LLO, sent Tucker, confirming that Tucker would be

entitled to 25% of any fee Flynn received in the Braley matter, and a contrasting

email that Flynn sent Lilley, which discussed the preexisting fee-division

arrangements in Flynn’s cases and advised Lilley that “in a couple of instances

there is also a referral fee to an outside attorney who referred the case to me in the

beginning. In other words, an additional 20% fee . . . [in] Braley . . . .” Although

Tucker was entitled to his judgment against Flynn, the contrasting letter to Tucker

and email to Lilley that Flynn sent generates a genuine issue of material fact that

precludes entry of summary judgment against Lilley. 9

[¶15] Because resolving these disputes will require a fact-finder “to choose

between competing versions of the truth at trial,” McClare v. Rocha, 2014 ME 4,

¶ 10, 86 A.3d 22 (quotation marks omitted), the court erred in entering summary

judgment on Tucker’s claim against Lilley and LLO.

C. Consolidation

[¶16] By rule, “[w]hen actions involving a common question of law or fact

are pending before the court . . . it may order all the actions consolidated . . . .”

M.R. Civ. P. 42(a). “[T]he power to order consolidation is within the [c]ourt’s

discretion.” Maietta v. Int’l Harvester Co., 496 A.2d 286, 291 (Me. 1985).

Although this standard of review is deferential, it does not give a trial court

unfettered discretion to separate cases, or parts of cases, when closely-related

claims, counterclaims, and cross-claims among the parties directly affect what any

particular party may eventually be awarded and which party will be required to pay

those awards.

[¶17] Here, in its summary judgment order, the court adjudicated several of

the interrelated contract claims, yet several important claims and issues in the two

cases remain unresolved. They include (1) whether Lilley (as opposed to Flynn)

owes Tucker no fee, as Lilley claims; 25%, as Tucker and Flynn claim; or 20%, as

Flynn’s email to Lilley states; (2) whether Flynn’s claim that Troubh breached the

SA and thereby nullified its entitlement to a fee under the MOA will be successful, 10

with the potential result that Troubh is owed nothing; and (3) whatever the fees due

Tucker and Troubh may prove to be, which party has to pay them as between

Flynn and LLO.1 We conclude that, with the exception of Tucker’s claim against

Flynn, these disputes must be resolved in one consolidated action before a single

fact-finder, and therefore it was an abuse of discretion for the court to decide some

claims, but not others, in piecemeal fashion.2 See Bank of Me. v. Peterson,

2014 ME 155, ¶ 8, 107 A.3d 1122 (stating that review of an exercise of discretion

includes an assessment of “whether the court’s weighing of the applicable facts

and choices was within the bounds of reasonableness”). Lilley’s motions to

consolidate should have been granted. To that end, we vacate the remaining

judgments and dispositions in these two cases.

[¶18] Finally, to the extent that the court’s judgment against Flynn may

suggest that Tucker is entitled to immediate payment from the attorney fees held in

escrow, we make clear that these actions are not in rem proceedings against the

money held in escrow. Rather, they are disputes arising from a series of contracts

that may—or may not—be related to each other. The escrowed proceeds may—or

may not—be sufficient to satisfy any liabilities created by the judgments to be

1 Although not directly related to these appeals, we note that separate litigation between Flynn and Lilley is currently on appeal to this Court as Daniel G. Lilley Law Office, P.A. v. Flynn, Cum-14-333. 2 Because they are not before us, we do not decide whether other cases cited in Lilley’s motion not involving the Braley matter should also be consolidated. 11

entered in these actions. Accordingly, our opinion should not be construed to

suggest that the aggregation of judgments that may result from these actions is

limited to the amount of attorney fees now held in escrow. Similarly, whatever

other avenues Tucker may have to collect on the judgment against Flynn, any

distribution of the escrowed funds, which may or may not prove to include the

amount that Flynn owes Tucker, must await resolution of the consolidated cases.

The entry is:

Summary judgment on Tucker’s complaint against Flynn affirmed. All other judgments and dispositions of claims vacated. Remanded with instructions to grant the motions to consolidate and for further proceedings.

On the briefs:

Walter F. McKee, Esq., and Matthew D. Morgan, Esq., McKee Billings, LLC, P.A., Augusta, for appellants Daniel G. Lilley and Daniel G. Lilley Law Offices, P.A.

Mark V. Franco, Esq., and Jason P. Donovan, Esq., Thompson & Bowie, LLP, Portland, for appellant John P. Flynn III

Julian L. Sweet, Esq., Berman & Simmons, P.A., Lewiston, for appellee Richard D. Tucker

Gerald F. Petruccelli, Esq., Petruccelli, Martin & Haddow, LLP, Portland, for appellee Troubh Heisler, P.A. 12

At oral argument:

Walter F. McKee, Esq., for appellants Daniel G. Lilley and Daniel G. Lilley Law Offices, P.A.

Mark V. Franco, Esq., for appellant John P. Flynn III

Julian L. Sweet, Esq., for appellee Richard Tucker

Gerald F. Petruccelli, Esq., for appellee Troubh Heisler, P.A.

Cumberland County Superior Court docket numbers CV-2012-75 and 103 FOR CLERK REFERENCE ONLY