Schumacher Law Corp. v. Taylor

667 So. 2d 1121, 95 La.App. 4 Cir. 0654, 1995 La. App. LEXIS 3224, 1995 WL 708062
CourtLouisiana Court of Appeal
DecidedNovember 30, 1995
DocketNo. 95-CA-0654
StatusPublished
Cited by2 cases

This text of 667 So. 2d 1121 (Schumacher Law Corp. v. Taylor) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schumacher Law Corp. v. Taylor, 667 So. 2d 1121, 95 La.App. 4 Cir. 0654, 1995 La. App. LEXIS 3224, 1995 WL 708062 (La. Ct. App. 1995).

Opinion

IxBARRY, Judge.

The Schumacher Law Corporation (Schu-macher) sued for legal fees and costs under a contingency contract. The trial court ruled that Schumacher was entitled to legal fees, but the amount claimed under the alleged contract was excessive. Schumacher appeals. We affirm.

Facts

On March 19, 1990 Ms. Elizabeth Taylor’s estranged husband, Michael Gray, assaulted and seriously injured her at their home in Colorado. Mrs. Carol Taylor, Liz’s mother, travelled from New Orleans to Colorado. Mrs. Taylor testified that Carl Schumacher, a cousin and part owner of Schumacher Law Corporation, travelled to Colorado to offer support. Mrs. Taylor was appointed legal guardian while her daughter was incapacitated.

On April 25, 1990 Mrs. Taylor (as legal guardian for her daughter and grandchildren) and Carl Schumacher executed a contingent fee contract to retain the Schumacher’s law firm:

... as their attorneys regarding all claims arising from Elizabeth’s marriage to Michael Gray and from the incident on or about March 19, 1990 ... and Schumacher Law Corporation, Ltd. agrees to represent the clients in these legal matters on the schedule of fees and charges_ [Emphasis added.]

The contract provides a 25% contingency fee if recovery is made before suit is filed; 331/3% for recovery after suit; 40% if there is an appeal.

Carl and David Schumacher, Carl’s son and law partner, envisioned three aspects of the case: the domestic case between Ms. Taylor and Michael Gray; the personal injury claim against Gray; and the criminal case against Gray. Carl testified that when the contingent fee contract was executed he explained to Mrs. Taylor that the domestic case would be billed at a reduced rate of $75.00 per hour, and the personal injury case would be on contingency. Mrs. Taylor disagreed. Carl testified that he decided in February 1991 that services for the criminal matter would be split between the domestic and personal injury claims. The separate arrangement for domestic and criminal work was not documented.

In June 1990 Ms. Taylor signed the contingent contract although her mother remained her legal guardian. David Schumacher testified that he explained the personal injury case would be on a contingency fee and the domestic case by an hourly fee. Ms. Taylor said David never explained the arrangement and testified that she believed Schumacher’s role was limited to securing Colorado counsel.

Neither Carl nor David Schumacher was licensed to practice law in Colorado. The prosecution of Michael Gray was handled by the district attorney in Colorado.1

The record establishes that Schumacher was instrumental in securing local counsel for Ms. Taylor. The Denver firm Sherman & Howard agreed to represent Ms. Taylor in the domestic case but postponed whether to work on the personal Iginjury case. A deposition of Michael Williams, attorney with Sherman & Howard, states their engagement letter was drafted in August 1990. Correspondence establishes Sherman & Howard refused Carl Schumacher’s proposal to share a contingency fee in the personal injury case. Williams stated that he believed there was a conflict of interest to represent Ms. Taylor in the personal injury case on contingency and in the domestic case on an hourly basis due to the overlap of services. An October 6, [1123]*11231990 letter from Williams to David Schu-macher assumed that as of that date Sherman & Howard represented Ms. Taylor in the domestic matter on an hourly basis and Schumacher represented her in the personal injury ease under the contingency contract.

On November 12, 1990 Carl wrote to Williams and requested that Williams pursue a global settlement of all claims but that he segregate the domestic from the personal injury. That letter states, ‘Your hourly fee for this service is acceptable.” However, David Schumacher testified Schumacher did not intend to pay Sherman & Howard’s fee to negotiate the global settlement that included the personal injury claim.

Settlement negotiations proceeded. Williams stated in his deposition that Schu-macher did not participate in negotiations for the global settlement but he did provide (unspecified) information from New Orleans. A March 1, 1991 letter from Carl Schumacher to Ms. Taylor recommended against a proposed settlement for over $1,600,000, but he accepted the “very undervalued” $500,000— $600,000 attributed to the personal injury claim for purposes of the contingency contract.

David Schumacher was admitted to the Colorado Bar in early 1991 and filed the tort claim before the statute of limitations expired March 19, 1991. Shortly | thereafter Sherman & Howard finalized the $1,600,000 global settlement of all claims, both domestic and personal injury.

Schumacher claimed 25% of $550,000, the amount which Schumacher attributed to the personal injury portion of the settlement, $30,000 for the domestic case, plus costs. Liz tendered $80,000 for Schumacher’s fees and costs. Schumacher refused the tender and filed suit.

The petition prays for $137,500 under the contingent fee contract for the personal injury case, $30,000 for the domestic case, and $11,030.92 for costs.

The trial court rendered judgment for Schumacher and awarded:

Legal fees: $50,000.00

Expenses: 12,966.45

Reimbursement for fees to 2,500.00 Co-counsel:

The court found: 1) the fee arrangement was not clearly explained to Ms. Taylor or her mother; there was no written contract distinguishing the personal injury contingency from the domestic hourly, the hourly rate for the domestic ease was not documented until October 1990, and no time sheets were kept; 2) Schumacher’s acceptance of the personal injury case on a contingency and the domestic case on an hourly basis presented a conflict of interest; 3) the fees charged by Schumacher were excessive and unreasonable; 4) $50,000 is a fair and reasonable sum.

Schumacher’s appeal contends that each finding is erroneous and, if this Court finds Schumacher is entitled to the amount alleged, then attorney fees for this litigation should be awarded under La.R.S. 9:2781.2

_J6Excessive and Unreasonable Fee

The trial court concluded that the fee arrangement was not explained to the Taylors, and simultaneous representation on related cases under different billing systems created a conflict of interest. However, the determinative issue is the reasonableness of the fee. The trial court’s finding that the fee is excessive and unreasonable was not clearly erroneous.

Rule 1.5 of the Rules of Professional Conduct, La.R.S. 37, Ch. 4 App., Art. 16 prohibits an excessive fee and provides factors to determine the reasonableness of a fee: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to properly perform the legal service; (2) the likelihood, if apparent to the client, that other employment by the lawyer will be precluded; (3) the customary fee in the locality for similar legal services; (4) the amount involved and the results obtained; (5) time limitations imposed by the client or [1124]*1124circumstances; (6) the nature and length of the professional relationship with the client; (7) the attorney’s experience, reputation, and ability; and (8) whether the fee is fixed or contingent.

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Bluebook (online)
667 So. 2d 1121, 95 La.App. 4 Cir. 0654, 1995 La. App. LEXIS 3224, 1995 WL 708062, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schumacher-law-corp-v-taylor-lactapp-1995.