Son v. Margolius, Mallios, Davis, Rider & Tomar

709 A.2d 112, 349 Md. 441, 1998 Md. LEXIS 242
CourtCourt of Appeals of Maryland
DecidedApril 17, 1998
Docket33, Sept. Term, 1997
StatusPublished
Cited by26 cases

This text of 709 A.2d 112 (Son v. Margolius, Mallios, Davis, Rider & Tomar) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Son v. Margolius, Mallios, Davis, Rider & Tomar, 709 A.2d 112, 349 Md. 441, 1998 Md. LEXIS 242 (Md. 1998).

Opinions

WILNER, Judge.

On August 5, 1992, Danny Son was severely injured in an automobile accident. While helping to change a flat tire on the shoulder of the Capital Beltway, he was struck by a tractor-trailer. The accident left Mr. Son in a comatose condition for several weeks, and he remains a quadriplegic. With the assistance of an intermediary,, Jennifer Park, Son’s then-wife, Tae Yon Son, employed Gary A. Stein, a partner in the law firm of Margolius, Mallios, Davis, Rider & Tomar, to represent her husband and her in obtaining compensation for their respective injuries. Mr. Stein commenced litigation, which, on December 30, 1993, was settled for $4,850,000.

The issues now before us arise from the manner and circumstances under which the settlement proceeds were distributed, in particular from the fact that, although Mr. Stein showed on the settlement sheet an attorney’s fee of 28.5%, amounting to $1,382,250, and no amount paid to Ms. Park, the firm actually kept as an attorney’s fee only $1,139,750—23.5% of the settlement amount, and paid Ms. Park $242,500, constituting an additional 5% of the settlement amount. Contending that he had never authorized any payment to Ms. Park and that he was unaware that such a payment had been made until nine months later, Mr. Son filed suit in the Circuit Court for Montgomery County against Stein, the firm, the other partners in the firm, Park, and Park’s corporation, seeking to recover the $242,500 paid to Park, the $1,139,750 retained by [444]*444the firm as an attorney’s fee, and other compensatory and punitive damages.

In Count I of his complaint, Mr. Son claimed that Ms. Park solicited Ms. Son to retain Stein and Stein’s firm in violation of the State Barratry Law (Maryland Code, § 10-604(a)(l) of the Business Occupations Article (1995 Repl.Vol.)), that the payment to Ms. Park was an unlawful referral fee, that the disbursements by Stein implemented an illegal fee-splitting agreement that was in contravention of the public policy of Maryland, and that the defendants should not be permitted to retain any of the benefits from the agreement. Counts II through V charged a variety of torts, all based principally on the asserted concealment from Son of the allegedly illegal agreement. In Count II, he charged the defendants with civil conspiracy to enter into the unlawful agreement and to conceal it from him; Count III charged the firm and its partners with constructive fraud by deceiving Son with respect to the fee-splitting agreement; Count IV charged them with actual fraud in failing to disclose the agreement to compensate Ms. Park; and Count V charged the firm and its partners with negligence in failing to disclose the agreement.

Mr. Son filed a motion for summary judgment with respect to Count I of his complaint. Ms. Park and her corporation filed a cross-motion for summary judgment as to Counts I and II—the only ones that applied to them. The lawyer-defendants moved for summary judgment on all five counts. In their respective cross-motions, the defendants assumed that the sole basis of Son’s complaint was his assertion that the conduct of Ms. Park or the lawyers constituted barratry, in violation of § 10-604 of the Business Occupations Article. They posited that, as a matter of law, that was not the case and that, as a result, none of the counts applicable to them sufficed to constitute a cause of action. In December, 1995, the court, in two brief orders assigning no reasons, denied Son’s motion, granted those filed by the defendants, and entered judgment in favor of the defendants.

[445]*445The Court of Special Appeals affirmed the summary judgments entered on Count I, but reversed those entered on the other four counts and remanded the case for further proceedings as to them. Son v. Margolius, 114 Md.App. 190, 689 A.2d 645 (1997). With respect to Count I, the court concluded (1) that the alleged arrangement between Ms. Park and the lawyers would be voidable because of illegality only if the arrangement proceeded from conduct that amounted to barratry under the Maryland statute, and (2) that it would be voidable on other public policy grounds only if it amounted to a violation of Rule 5.4 or Rule 7.2 of the Maryland Lawyer’s Rules of Professional Conduct (MLRPC) and those rules constituted a sufficient statement of public policy to render void any contract in violation of them. The court held that, because there was no evidence to indicate that Ms. Park ever solicited Mr. or Ms. Son to employ Mr. Stein or his law firm and because solicitation was a requisite element of barratry under the Maryland statute, the conduct complained of by Mr. Son did not constitute barratry. Based on its recent holding in Post v. Bregman, 112 Md.App. 738, 686 A.2d 665 (1996), the court further concluded that, even if the alleged arrangement amounted to a violation of MLRPC Rule 5.4 or 7.2, the violation of those rules “do not provide a basis for voidance of a contract.” Son v. Margolius, supra, 114 Md.App. at 219, 689 A.2d at 659. Accordingly, it held, as a matter of law, that Son was not entitled to void the agreements made by him or on his behalf based on illegality or violation of public policy.

The other counts, the appellate court noted, did not depend on whether the agreement to pay Ms. Park a 5% fee constituted an illegal fee-splitting arrangement, but rested instead on the assertion that the parties had concealed that agreement from Mr. Son and had thereby misrepresented Ms. Park’s status and the true fee agreement with the lawyers. The court concluded that although the matter was in dispute, there was evidence in the record from which a trier of fact could find that a fee-splitting agreement did exist between Ms. Park and the lawyers, and that there was a dispute of fact as to whether Ms. Park and the lawyers concealed the arrangement from [446]*446Mr. Son and misrepresented the actual fee arrangement. In this latter regard, the court concluded that (1) the impact of any constructive knowledge that Mr. Son had of any such agreement was not raised in the circuit court, and (2) there was a genuine dispute of fact as to whether a power of attorney that Mr. Son gave to his wife, that might have provided a basis for her to agree to a fee-splitting arrangement between Ms. Park and the lawyers, was valid. The lack of a barratry violation, the court held, did not, of itself, suffice to render the four tort actions non-viable. The factual disputes, moreover, made summary judgment on the four tort counts impermissible.

Son apparently acquiesced in the appellate court’s conclusion that Count I could not be founded upon a violation of MLRPC Rules 5.4" or 7.2, and the defendants apparently acquiesced in that court’s decision as to the other counts, for no petitions for certiorari were filed as to those matters. Son filed a petition for certiorari limited to a narrow issue regarding the offense of barratry—whether the element of solicitation is satisfied when “there is no dispute that the alleged barrator engaged in constructive solicitation by regularly holding herself out to the public as one who engages in the practice of charging a fee for selecting a lawyer, and when contacted in this case demanded a fee before selecting the lawyer.”

This Court granted the petition and, on November 10, 1997, heard argument on the limited issue raised in the petition.

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Bluebook (online)
709 A.2d 112, 349 Md. 441, 1998 Md. LEXIS 242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/son-v-margolius-mallios-davis-rider-tomar-md-1998.