Watson v. Pietranton

364 S.E.2d 812, 178 W. Va. 799
CourtWest Virginia Supreme Court
DecidedDecember 18, 1987
Docket17193
StatusPublished
Cited by16 cases

This text of 364 S.E.2d 812 (Watson v. Pietranton) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Watson v. Pietranton, 364 S.E.2d 812, 178 W. Va. 799 (W. Va. 1987).

Opinions

BROTHERTON, Justice:

Dolores K. Pietranton, as executrix of the estate of her deceased husband, Frank A. Pietranton, an attorney, appeals a summary judgment in which the Circuit Court of Hancock County held that the deceased attorney’s fee agreement with another attorney was void as against public policy because the fee agreement violated DR2-107 of the West Virginia Code of Professional Responsibility.

Frank A. Pietranton practiced law for many years in the northern panhandle of West Virginia. In about 1978 Mr. Pietran-ton became ill and was unable to actively practice law. As a result of his illness, Mr. Pietranton associated with William T. Fa-hey, a young attorney practicing in the same locale, to assist him with several cases. Mr. Fahey and his law firm, Barnes, Watson, Cuomo, Hinerman & Fa-hey, associated with Mr. Pietranton in approximately thirty-five cases. There was an oral agreement between Mr. Pietranton and Mr. Fahey as to how fees received from these thirty-five cases were to be shared.

Mr. Pietranton died on June 23, 1980, before all of the thirty-five cases had been completed. In all of the cases resolved before Mr. Pietranton’s death, the fees generated from the shared cases were divided equally between Mr. Pietranton and Mr. Fahey.

After Mr. Pietranton’s death, Mrs. Piet-ranton continued to turn over to Mr. Fahey cases which were in Mr. Pietranton’s office at the time of his death. Mrs. Pietranton continued to receive fees from these cases, as well as from those cases which were referred to Mr. Fahey earlier but remained unresolved at the time of Mr. Pietranton’s death, according to a fee schedule arbitrarily determined by Mr. Fahey. These fees were in amounts ranging from twenty percent to fifty percent of the total fees realized in the cases. Mrs. Pietranton never received any breakdown of the fees when she received her check.

The cases in which Mr. Pietranton asked Mr. Fahey to participate included a case involving the wrongful death of two children of Royal and Kelly Sayre in a mobile home fire. By letter to Mr. Fahey dated January 30, 1980, Mr. Pietranton forwarded the Sayre file to Mr. Fahey. The letter contained a synopsis of the investigation in the Sayre matter as reported by Attorney Dean DeLaMater,1 as well as references to Mr. Pietranton’s interview with Mrs. Sayre. The record reveals also that Mr. Pietranton entered into a fee agreement with the Sayres dated January 30, 1980. Apparently Mr. Fahey told Mr. Pietranton that the wrongful death claim would be brought most properly as a products liability action against the mobile home manufacturer. Mr. Pietranton agreed to assist Mr. Fahey in getting the name of the mobile home manufacturer because he knew where the burned wreckage had been taken. In addition, Mr. Pietranton agreed to pursue, along with his investigator, certain other information and to deliver that information to Mr. Fahey for preparation of a complaint.

[801]*801Before this work could be performed, however, Mr. Pietranton died. Mr. Fahey then contacted the Sayres regarding their claim and informed them that his law firm had the Sayre file. Mr. Fahey told the Sayres that his firm was willing to handle the claim if the Sayres desired, or that the Sayres could take their file to another attorney. The Sayres’ only inquiry concerned fees. The Sayres asked Mr. Fahey whether they would be required to pay two fees. Mr. Fahey told the Sayres that they would have to pay only one fee. Subsequently, the Sayres came to Mr. Fahey’s office and entered into a fee contract with his law firm. Mr. Fahey and his law firm filed suit on behalf of the Sayres against the Tenneys, in Sayre v. Tenney, No. 81-C-49 R (Cir.Ct. Hancock County 1981), which resulted in a jury verdict of approximately $800,000 in August, 1982.

Mrs. Pietranton, as executrix of her husband’s estate, wrote a letter to Mr. Fahey requesting her one-half share of the fee generated by Sayre v. Tenney. Mr. Fa-hey’s law firm then filed a declaratory judgment action in the Circuit Court of Hancock County, seeking a determination as to the amount, if any, to which Mr. Pietranton’s estate was entitled from Sayre v. Tenney. Mrs. Pietranton filed an answer and counterclaim seeking a judgment of $200,000, or fifty percent of the fee. Mr. Fahey’s law firm moved for summary judgment, arguing that the fee-splitting agreement was unethical under DR2-107 2 and was therefore unenforceable.

The Circuit Court of Hancock County granted summary judgment in favor of the law firm, holding that the fee agreement violated public policy since the arrangement violated DR2-107 of the West Virginia Code of Professional Responsibility.

Although Mr. Pietranton and Mr. Fahey did not execute an express fee agreement, the remuneration to Mr. Pietranton or Mr. Pietranton’s estate of one-half of the fee obtained in the thirty-four or so cases prior to Sayre v. Tenney evidences a fifty percent fee-splitting agreement between Mr. Pietranton and Mr. Fahey.

DR2-107(A)(1) prohibits division of fees among lawyers unless “[t]he client consents to employment of the other lawyer after a full disclosure that a division of fees will be made.” Mr. Fahey testified that the Sayres inquired whether they would be required to make any payment to Mr. Pietranton. Mr. Fahey testified that he told the Sayres that there would be only one fee for representation in the matter. The record contains no evidence that Mr. Fahey disclosed to the Sayres that a percentage of any fee obtained in the case would be paid to Mr. Pietranton.3

The appellant argues that the Sayres had notice of the association between Mr. Piet-ranton and Mr. Fahey and that consent was given by the Sayres when they signed the new contract with Mr. Fahey for his continued representation. Knowledge of the fee-splitting arrangement, however, cannot be inferred from knowledge of the association. DR2-107 requires disclosure of the fee-splitting agreement. Therefore, absent the Sayres’ consent after full disclosure, an agreement to pay one half of the $400,000 fee obtained in Sayre v. Tenney to Mr. [802]*802Pietranton’s estate violates DR2-107. See Fleming v. Campbell, 537 S.W.2d 118, 119 (Tex.Civ.App.1976) (referral fee contract void and unenforceable unless client’s consent is obtained after full disclosure).

Having established that DR2107(A)(1) prohibits the fee-splitting agreement, the question, then, is whether we should allow Mr. Fahey’s law firm to raise that prohibition as a bar to payment of fifty percent of the fee in Sayre v. Tenney to Mr. Pietranton’s estate. We think not.

In Informal Opinion No. 870, the ABA Committee on Professional Ethics addressed a similar issue. There, the Committee responded to a law firm’s request concerning a fee-splitting agreement between the law firm and a “forwarding attorney” under Canon 34 of the Canons of Professional Ethics from which DR2-107 is derived.4 The letter explained that the law firm had entered into an arrangement with an attorney in a nearby community pursuant to which the law firm was to pay one-third of a fee in a case pending in the law firm’s office to the attorney as “forwarding attorney.” The law firm stated further that a $40,000 fee was expected and noted that the “forwarding attorney” performed no more than two percent of the work in the case.

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Bluebook (online)
364 S.E.2d 812, 178 W. Va. 799, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watson-v-pietranton-wva-1987.