KEVIN W. CECIL v. ELI GEORGE
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RENDERED: OCTOBER 4, 2002; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-002819-MR
KEVIN W. CECIL
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE JAMES M. SHAKE, JUDGE
ACTION NO. 96-CI-005167
v.
ELI GEORGE
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUDGEL, JOHNSON AND TACKETT, JUDGES.
JOHNSON, JUDGE:
Kevin Cecil has appealed from an order entered
by the Jefferson Circuit Court on November 6, 2000, which denied
him relief on his motion challenging the propriety of the
attorney’s fees charged him pursuant to an employment contract.
Having concluded that the trial court’s factual findings were not
clearly erroneous and that its legal conclusions were correct, we
affirm.
This case arose out of a dispute between Cecil and his
former attorney Eli George concerning the attorney’s fee that
Cecil owed George for George’s representation of Cecil in a
personal injury action seeking damages as the result of an
automobile accident.
Cecil filed a lawsuit against Eck Miller
Transportation Corporation following an accident in which his
vehicle was struck by a truck driven by an employee of Eck
Miller.
Cecil was originally represented by attorney Richard
Breen; and he had a written “Attorney-Client Agreement” with
Breen which called for an attorney’s fee of “a sum equal to onethird (1/3) of any recovery” plus reimbursement of “all expenses
advanced[.]”
During the pendency of his personal injury lawsuit,
Cecil became dissatisfied with Breen’s representation and
replaced him with George.
Breen then filed an attorney’s lien in
the lawsuit to protect his contract claim against Cecil.
Subsequently, Breen, Cecil, and George agreed that Cecil would
pay George an attorney’s fee based on “38 1/2% of all sums
recovered[;]” and that George and Breen would divide the
attorney’s fee equally.
These terms were contained in the new
written “Employment Agreement” signed by Cecil and George.
George and Breen agreed between themselves to accept as their
individual share of the attorney’s fee a sum equal to 19 1/4% of
“any recovery.”
On December 23, 1999, Cecil signed a document
authorizing George to settle his claim “for the total sum of
$369,000.00" and to disburse the settlement proceeds by paying
the two attorneys a total fee of $142,065.00, and reimbursing
them $43,545.62 for expenses.
On June 20, 2000, attorney Cecil
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A. Blye filed a motion to enter his appearance on behalf of
Cecil; and on July 27, 2000, Blye filed a motion for a hearing on
Cecil’s claim that he had been coerced into accepting the
settlement.
On October 30, 2000, the Jefferson Circuit Court
held a hearing on this motion; and on November 6, 2000, the trial
court entered an order denying Cecil relief on this motion and
dismissing Cecil’s case “as settled”.
The trial court stated:
The record clearly indicates that counsel for
the plaintiff, The Hon. Eli George, had
actual authority from the plaintiff to settle
this case for those sums, and for that
reason, the terms of the settlement must be
enforced and the above-styled action is
dismissed as settled.
This appeal followed.
Cecil claims that he was coerced into signing the
settlement agreement; and that the attorney’s fees were
miscalculated because they were calculated as 38 1/2% of the
gross settlement amount instead of 38 1/2% of the net settlement,
i.e., the settlement proceeds remaining after the case-related
expenses had been deducted.
A trial court’s factual findings
“shall not be set aside unless clearly erroneous, and due regard
shall be given to the opportunity of the trial court to judge the
credibility of the witnesses.”1
A factual finding is not clearly
erroneous if it is supported by substantial evidence.2
1
Kentucky Rules of Civil Procedure (CR) 52.01. See also
Lawson v. Loid, Ky., 896 S.W.2d 1, 3 (1995); A & A Mechanical,
Inc. v. Thermal Equipment Sales, Inc., Ky.App., 998 S.W.2d 505,
509 (1999).
2
Owens-Corning Fiberglas Corp. v. Golightly, Ky., 976 S.W.2d
(continued...)
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Substantial evidence is evidence of substance and relevant
consequence sufficient to induce conviction in the minds of
reasonable people.3
“It is within the province of the fact-finder
to determine the credibility of witnesses and the weight to be
given the evidence.”4
However, “[t]he construction and interpretation of a
contract, including questions regarding ambiguity, are questions
of law to be decided by the court.”5
“The cardinal rule of
contract interpretation is that all words and phrases in the
contract are to be given their ordinary meanings.”6
Under
Kentucky law, contracts should be interpreted according to the
parties’ mutual understanding at the time they entered into the
contract and “‘[s]uch mutual intention is to be deduced, if
possible, from the language of the contract alone.’”7
Thus, as to
2
(...continued)
409, 414 (1998); Uninsured Employers’ Fund v. Garland, Ky., 805
S.W.2d 116, 117 (1991); Faulkner Drilling Co., Inc. v. Gross,
Ky.App., 943 S.W.2d 634, 638 (1997).
3
Golightly, supra at 414; Janakakis-Kostun v. Janakakis,
Ky.App., 6 S.W.3d 843, 852 (1999)(citing Kentucky State Racing
Commission v. Fuller, Ky., 481 S.W.2d 298, 308 (1972)).
4
Garland, supra at 118.
5
First Commonwealth Bank of Prestonsburg v. West, Ky.App.,
55 S.W.3d 829, 835 (2000)(citing Hibbitts v. Cumberland Valley
National Bank & Trust Co., Ky.App., 977 S.W.2d 252, 254 (1998)).
6
Fay E. Sams Money Purchase Pension Plan v. Jansen, Ky.App.,
3 S.W.3d 753, 757 (1999)(citing O’Bryan v. Massey-Ferguson, Inc.,
Ky., 413 S.W.2d 891 (1966)).
7
Nationwide Mutual Insurance Co. v. Nolan, Ky., 10 S.W.3d
129, 131-32 (1999)(quoting Simpsonville Wrecker Service, Inc. v.
Empire Fire & Marine Insurance Co., Ky., 793 S.W.2d 825, 828-29
(continued...)
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the trial court’s factual findings, we are limited in our review
to determining whether a finding is clearly erroneous; but as to
any legal issue involved in the interpretation of the employment
agreement, our review is de novo, and we need not give any
deference to the trial court’s legal conclusions.
We have reviewed the entire hearing held on October 30,
2000, and we cannot say that the trial court’s factual finding
that Cecil did not sign the settlement under duress was clearly
erroneous.
Cecil admitted that he was not under duress when he
originally hired Breen or George, but he claimed that he felt
threatened by the December 22, 1999, letter that George sent to
him.
The letter stated:
I cannot and will not be responsible for
some of the decisions you make which
jeopardize the amount of your recovery. In
other words, I do not want to be your
attorney if you make decisions which cause
you to lose the discounts I have negotiated.
Norton’s has advised us that you will lose
the discount if they do not receive their
check by December 31, 1999. That means I’ll
have to withhold the full amount from your
settlement.
If it is necessary for me to withdraw as
your attorney, I will also ask the Court for
permission to negotiate the check and receive
my fee and expenses and the fee and expenses
I am required to pay Mr. Breen. I will make
separate checks to you and the medical
providers and let you handle your own dispute
over payment or pay another lawyer to do so.
I will file a Motion and ask the Court to
hear the matter on January 4, 2000 at 1:00
p.m. You should be present to protect your
7
(...continued)
(1990)).
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own interest and I would recommend you employ
your own attorney.
While you may not care about getting
your money, I do care about getting what I’m
entitled to under our contract, and I intend
to ask the Court for permission to take that
money.
The undisputed background to this letter is that George
had negotiated discounts on the charges from several of Cecil’s
medical providers.
The Norton’s discount referenced in the
letter amounted to $7,154.05 that would have been lost if the
payment had not been made before the end of the year.
As of the
date of the letter, George had nine days to send Norton’s the
payment to guarantee that Cecil would receive the agreed upon
discount.
The letter merely stated the simple fact that Cecil
had a deadline to meet if he wanted to guarantee that he would
receive the discount.
“For actionable civil duress to have occurred, there
must be ‘an actual or threatened violation or restraint on a
man’s person, contrary to law, to compel him to enter into a
contract or discharge one.’”8
While Cecil testified at the
hearing that he was under duress, it was within the purview of
the trial court as the fact-finder to judge the credibility of
the witnesses and to weigh the evidence.
This letter did not
constitute evidence that could be deemed sufficient to have
required the trial court to find that George had misrepresented
8
Boatwright v. Walker, Ky.App., 715 S.W.2d 237, 243
(1986)(citing Bond State Bank v. Vaughn, 241 Ky. 524, 44 S.W.2d
527, 528 (1931); and Fratello v. Fratello, 118 Misc. 584, 193
N.Y.S. 865 (1922)).
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the facts or that he was threatening Cecil so as to have
compelled Cecil to enter into the settlement.
Since there was
substantial evidence to support the trial court’s findings, we
cannot hold the findings to be clearly erroneous.
Cecil also contends that the attorney’s fee claimed by
George is not reasonable and that it was not calculated properly.
Cecil’s employment agreement with George, which was signed by
Cecil and George on July 27, 1998, stated:
I, Kevin Cecil, employ Eli George Law
Office to represent me in any and all claims
I may have against Mr. Harper and Eck Miller
because of injuries I received in the
truck/auto accident on June 15, 1995 in
Louisville, Kentucky.
I agree to pay my attorney thirty eight
and one-half percent (38 1/2%) of all sums
recovered. On February 7, 1996 I employed
Richard Breen to represent me for injuries
received in the accident. I agreed to pay
Mr. Breen one-third (1/3) of any sums
recovered. Mr. George agrees to pay all sums
due Mr. Breen by reason of the contract from
his thirty eight and one-half percent (38
1/2%) fee.
I will reimburse Mr. Breen for his
expenses from my portion of the recovery, as
agreed to in the Agreement. I will also
reimburse Eli George Law Office for court
costs and expenses advanced from my portion
of the amount recovered [emphasis added].
It is agreed that if nothing is
recovered my attorney will receive nothing
for his services and my attorney will waive
reimbursement of any expenses he advances.
The gross settlement with Eck Miller was for
$369,000.00, and the total attorney’s fee of $142,065.00 was
based on 38 1/2% of that amount.
Cecil claims that the itemized
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expenses should have been subtracted from the total settlement
before the attorney’s fees were calculated.
Since the itemized
expenses were $43,545.62, the net settlement would have been
$325,454.38 before the deduction of attorney’s fees.
The
attorney’s fees calculated on the net settlement would have been
$125,299.94 or $16,765.06 less.9
Cecil has failed to cite this Court to any authority
that would support his claim that the attorney’s fee agreement is
unfair or unreasonable.
The only case cited by Cecil is Cox v.
Cooper,10 which is not on point.
In Cox, the former Court of
Appeals of Kentucky held that unless the parties otherwise
agreed, a contingent fee contract is based on the amount of the
recovery and not the amount of the verdict.
Unlike the present
case, Cox involved a situation in which a portion of the total
jury verdict was not recoverable.
The Court stated that a
contingent attorney’s fee must be based on the amount actually
recovered by the client and not the total amount of a verdict,
part of which is unrecoverable.
While Cox does not address the
issue before this Court (whether it is permissible for the
parties to agree that a contingent attorney’s fee will be based
on the gross settlement rather than the net settlement) it can be
argued that Cox actually supports George’s position since the
Court stated that “[a] contingent fee contract is based on the
9
In his brief, Cecil claims the difference is $18,393.00,
but he has apparently made a calculation error.
10
Ky., 510 S.W.2d 530, 538 (1974).
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recovery[.]”
That is exactly how George computed the contingent
attorney’s fee herein - on the actual settlement recovery of
$369,000.00.
Furthermore, “[a]bsent an agreement as to the amount of
the fee before the services were rendered, the law implies an
agreement that the attorney will be reasonably compensated.”11
In
the case sub judice, the parties did in fact enter into an
agreement as to attorney’s fees.
We are not aware of any case
law that would support the conclusion that the agreement in the
present case was unfair or unreasonable.
The terms of the
agreement were not ambiguous and the contract clearly stated that
the case expenses would be paid from Cecil’s portion of the
recovery.
Accordingly, the disbursements of the attorney’s fees
and the case-related expenses were fair and reasonable and the
disbursements were calculated correctly.
For the foregoing reasons, the order of the Jefferson
Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Cecil A. Blye
Louisville, Kentucky
Eli George
Louisville, Kentucky
11
Daniels v. May, Ky., 467 S.W.2d 372, 373 (1971)(citing
Garnett v. Walton, Ky., 242 S.W.2d 107 (1951)).
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