LOFTON (RODGER W.) VS. FAIRMONT SPECIALTY INSURANCE MANAGERS, INC. D/B/A, ET AL.
Annotate this Case
Download PDF
RENDERED: OCTOBER 15, 2010; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-001631-MR
RODGER W. LOFTON
v.
APPELLANT
APPEAL FROM MCCRACKEN CIRCUIT COURT
HONORABLE R. JEFFREY HINES, SPECIAL JUDGE
ACTION NO. 07-CI-01120
FAIRMONT SPECIALTY
INSURANCE MANAGERS,
INC., D/B/A FAIRMONT
SPECIALTY GROUP AND
D/B/A FAIRMONT SPECIALTY
P & C; DENISE MAXEY;
AND DELBERT K. PRUITT
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: TAYLOR, CHIEF JUDGE; COMBS AND THOMPSON, JUDGES.
TAYLOR, CHIEF JUDGE: Rodger W. Lofton brings this appeal from an August
3, 2009, order of the McCracken Circuit Court setting forth Findings of Fact and
Conclusions of Law awarding Lofton $3,628 for expenses incurred in his legal
representation of Denise Maxey on a personal injury claim but denying Lofton’s
claim for attorney’s fees. We affirm.
Lofton is an attorney licensed to practice law in this Commonwealth
and was retained by Maxey to represent her in a personal injury action arising from
injuries she suffered in a pedestrian/motor vehicle accident in July 2004. Lofton
and Maxey executed a written contract for legal services. The contract contained a
contingency fee agreement and specifically provided, in relevant part, as follows:
RODGER W. LOFTON is to perform all of the services
as attorney in making of said settlement and prosecution
of said suit, or to have same done, and is to receive as
attorney, a sum equal to 33 1/3% of whatever sum may
be finally recovered, which shall be payment in full for
all of his services. Provided however, in the event
recovery is effected by an appeal by either party, then
said fee shall be 40% of any sum recovered.
CLIENT [Maxey] agrees to pay any court costs
incurred and any out-of-office expenses, such as the costs
of hospital records and doctors’ reports and depositions,
long distance telephone calls, travel and investigative
expenses, court reporters’ fees, etc.
It is agreed that no settlement will be made without
the consent of CLIENT [Maxey], and that this agreement
is binding on the heirs or assigns of CLIENT [Maxey].
Lofton subsequently filed an action in Ballard Circuit Court styled
Mary Denise Maxey v. New Commonwealth Natural Gas Co. and Robert Walters
(Action No. 05-CI-00085). Following mediation, Maxey was offered $25,000 to
settle her claims by New Commonwealth’s insurance carrier, Fairmont Specialty
Insurance Managers, Inc., (Fairmont). Despite Lofton’s advice to the contrary,
-2-
Maxey refused the settlement offer. Consequently, Lofton “concluded that he
could not represent [Maxey] to her satisfaction” and filed a motion for leave to
withdraw as her attorney. The circuit court granted the motion.
Following Lofton’s withdrawal as counsel, Lofton filed an Attorney’s
Lien.1 Maxey subsequently retained substitute counsel, Delbert K. Pruitt. After a
second mediation, Fairmont again offered Maxey $25,000 to settle her claims;
Maxey accepted the settlement offer. Lofton attempted to obtain attorney’s fees
from Pruitt. Pruitt, however, sent Lofton a check for reimbursement of his
expenses only in the amount of $3,628.02. Lofton did not cash the check.
Instead, in October 2007, Lofton filed a complaint against Fairmont in
the McCracken Circuit Court seeking payment of attorney’s fees and expenses
related to his legal representation of Maxey. Fairmont filed a third-party complaint
against Maxey and Pruitt for indemnification. Following a hearing, the circuit
court concluded that Lofton breached his contract with Maxey and was not entitled
to recover attorney’s fees. The court did award Lofton his expenses ($3,628)
associated with his legal representation of Maxey. This appeal follows.
Lofton contends that the circuit court erred by failing to award him
attorney’s fees in connection with his legal representation of Maxey. For the
reasons hereinafter expounded, we disagree.
1
On May 5, 2006, Rodger W. Lofton filed an Attorney’s Lien pursuant to Kentucky Revised
Statutes (KRS) 376.460 in the Ballard Circuit Clerk’s Office. Lofton attached thereto an
affidavit setting out the hours of work (40.40) performed by Lofton, a list of expenses totaling
$3,628.02, and a copy of the contract between Lofton and Denise Maxey.
-3-
After denying Lofton’s motion for summary judgment, the circuit
court subsequently tried all issues raised in this action without a jury; thus, our
review proceeds under Kentucky Rules of Civil Procedure 52.01. Thereunder, the
circuit court’s findings of fact will not be disturbed unless clearly erroneous.
Monin v. Monin, 156 S.W.3d 309 (Ky. App. 2004). Nonetheless, our review of the
circuit court’s conclusions of law proceeds de novo.
In its Findings of Fact and Conclusions of Law, the circuit court
specifically determined:
Rodger Lofton breached his contract with Denise
Maxey when he voluntarily terminated his representation
of her. As a result, he is not entitled to recover anything
under quantum meruit.
The circuit court concluded that Lofton “breached” his contract with Maxey by
voluntarily terminating his legal representation of her and essentially walking away
from the case. However, the contract between Lofton and Maxey, drafted by
Lofton, does not address or provide for Lofton to terminate the contract and still
collect a fee. Because Lofton breached the contract by voluntarily withdrawing
from the case, the circuit court concluded that he could not recover attorney’s fees
under the doctrine of quantum meruit or under his contingency fee agreement with
Maxey.
We think it beyond cavil that Lofton may not recover attorney’s fees
under the contingency fee agreement after voluntarily withdrawing from the case.
In his brief, Lofton does not even argue that he is entitled to a contingency fee
-4-
under the agreement but only argues entitlement to a fee under the doctrine of
quantum meruit. Lofton effectively concedes that he has no claim for fees under
the contract with Maxey. Thus, the troublesome question presented is whether
Lofton may recover attorney’s fees per quantum meruit from Fairmont. Upon
review of the complaint, the only basis for Lofton’s claim against Fairmont looks
to the attorney fee lien claim, which was served on Fairmont after Lofton withdrew
from the case. The attorney fee lien claim is based primarily upon the contingent
fee agreement Lofton entered into with Maxey. Since Lofton has not sued Maxey
in this action, and the sole basis argued for his claim in this appeal is based on
quantum meruit, we have considerable reservation that any claim could be
maintained against Fairmont.2 Fairmont’s only relationship to this claim arises
from being the insurance company for the tortfeasor in the Ballard Circuit Court
action and certainly is not in privity with Maxey or Lofton as concerns the
contingency fee agreement. The only nexus between Lofton and Fairmont is the
attorney fee lien claim, which as noted, is premised upon the contract between
Lofton and Maxey.
Notwithstanding, to answer the quantum meruit question, both parties
advance arguments concerning applicability and proper interpretation of the
Supreme Court case of Baker v. Shapero, 203 S.W.3d 697 (Ky. 2006).
2
This Court is puzzled why Fairmont Specialty Insurance Managers, Inc. did not file a Kentucky
Rules of Civil Procedure (CR) 22 interpleader action upon Maxey settling with the tortfeasor,
given that Fairmont had been served with an attorney fee lien claim by Lofton pursuant to KRS
376.460.
-5-
Accordingly, our analysis shall initially focus upon Baker, its direct predecessors,
and eventually upon the proper rule of law dispositive of our case.
Historically, an attorney discharged without cause could recover
compensation for services rendered in accordance with a previously executed
contingency fee agreement with the client. LaBach v. Hampton, 585 S.W.2d 434
(Ky. App. 1979) overruled by Baker v. Shapero, 203 S.W.3d 697 (Ky. 2006). In
2006, the Supreme Court reversed course when it rendered the case of Baker v.
Shapero, 203 S.W.3d 697. Therein, the Supreme Court held that an attorney
discharged without cause under a contingency fee agreement could only recover
compensation for services rendered under the doctrine of quantum meruit.
However, in our case, Lofton was not discharged by Maxey; rather, Lofton
voluntarily withdrew from representing Maxey. This distinguishing fact is pivotal
and renders Baker simply inapposite.
The prevailing view is that an attorney who voluntarily withdraws
from representing a client under a contingency fee agreement is entitled to
remuneration for services rendered under the doctrine of quantum meruit if the
withdrawal was with just cause.3 7A C.J.S. Attorney & Client § 360 (2004);
George L. Blum, J.D., Circumstances Under Which Attorney Retains Right to
Compensation Notwithstanding Voluntary Withdrawal From Case, 53 A.L.R.5th
287 (1997). Conversely, if the withdrawal was without just cause, the attorney is
3
The prevailing view also comports with the Supreme Court’s recent pronouncement in Baker v.
Shapero, 203 S.W.3d 697 (Ky. 2006), which held that an attorney may recover attorney’s fees
under quantum meruit if discharged without cause by the client.
-6-
not entitled to fee compensation under quantum meruit or otherwise. Id. Thus,
resolution of this appeal turns upon whether Lofton’s voluntary withdrawal was
with or without just cause.
It is clear from the record that the catalyst for Lofton’s withdrawal
was a profound disagreement between Lofton and Maxey concerning the
reasonableness of the settlement offer versus the potential value of the case. And,
Lofton testified that this settlement offer was at least $5,000 less than what he had
valued the case. As noted, the contract between Lofton and Maxey did not address
this scenario. While a client’s failure to follow an attorney’s advice concerning
acceptance of a settlement offer may constitute just cause under some
circumstances, it is our opinion that Lofton’s voluntary withdrawal does not
constitute just cause under the facts sub judice. 7A C.J.S. Attorney & Client § 268
(2004).
The contract executed by Lofton and Maxey provides that “no
settlement will be made without the consent of the CLIENT.” In light thereof,
Lofton was contractually bound to accept Maxey’s decision as to any possible
settlement offer. It is simply incongruous for Lofton to agree to such contractual
provision and then to withdraw when Maxey exercised her right under the contract.
Lofton could easily have included language reserving his right to withdraw if the
client refused to accept a reasonable offer. Hence, considering the particular facts
-7-
herein, we conclude that Lofton’s withdrawal was without just cause and that he
was not entitled to any fee compensation.4
In sum, we are of the opinion that the circuit court’s findings are not
clearly erroneous nor did the court commit reversible error in denying Lofton’s
claim for attorney’s fees. Lofton argues that the circuit court failed to make a
finding of fact regarding Lofton’s quantum meruit claim. It is well-established that
a judgment will not be reversed because of the circuit court’s failure to make a
finding of fact on an essential issue unless the failure is brought to the circuit
court’s attention by a written request for such finding or by a motion pursuant to
CR 52.02. CR 52.04.5 If the failure to make adequate findings of fact is not
brought to the circuit court’s attention as required by CR 52.02 or CR 52.04, the
issue is waived. Cherry v. Cherry, 634 S.W.2d 423 (Ky. 1982). In this case,
Lofton did not make a request pursuant to CR 52.02 or CR 52.04 for more definite
findings of fact on the quantum meruit issue. Thus, even if he had presented a
valid argument to support this theory of recovery against Fairmont, he waived the
same.
For the foregoing reasons, the order of the McCracken Circuit Court is
affirmed.
4
Our holding should not be misconstrued as concluding Lofton’s expenses were not recoverable.
In fact, the circuit court awarded Lofton $3,628 for expenses incurred during his representation
of Maxey. This award of expenses has not been challenged on appeal.
5
This is distinguished from a case where a court fails to make any findings of fact pursuant to
CR 52.01, which is reversible error. Brown v. Shelton, 156 S.W.3d 319 (Ky. App. 2004). Here,
the circuit court made sufficient findings of fact to trigger CR 52.04.
-8-
COMBS, JUDGE, CONCURS.
THOMPSON, JUDGE, CONCURS AND FILES SEPARATE
OPINION:
THOMPSON, JUDGE, CONCURRING: I concur with the majority
opinion because the burden of proof was upon appellant to prove that the
termination of the contract was with good cause. However, I disagree with the
majority’s statement that “we have considerable reservation that any claim could
be maintained against Fairmont. Fairmont’s only relationship to this claim arises
from being the insurance company for the tortfeasor in the McCracken Circuit
Court action.” In dicta, the majority suggests that the lack of privity precludes
Lofton from recovering attorney’s fees against Fairmont. Even a cursory review of
the applicable law disproves the majority’s position.
KRS 376.460 provides:
If the action is prosecuted to a recovery of money
or property, the attorney shall have a lien upon the
judgment recovered, legal costs excepted, for his fee. If
the records show the name of the attorney, the defendant
shall be deemed to have notice of the lien.
When a case is resolved by settlement between a plaintiff and defendant without
the knowledge of the plaintiff’s attorney, an attorney’s lien is not dissolved. To the
contrary, if not satisfied from the settlement proceeds, defendant is not absolved
from liability for the attorney’s fees. The rule was explained in Jellico Coal
Mining Co v. Pope, 292 Ky. 171, 166 S.W.2d 287, 289 (1942):
-9-
It is said in 7 C.J.S., Attorney and Client, § 231, p. 1181,
that a settlement made without the consent of an attorney
will not be permitted to affect the existing lien of such an
attorney, and that the defendant who settles with the
plaintiff, without his attorney's knowledge, does so at his
own risk as to the attorney's lien, especially, where a
cause of action actually existed between the parties to the
cause and there was notice of the attorney's lien.
As was noted long ago in Jellico Coal, the rule recited is one recognized by this
Commonwealth and embedded in American jurisprudence.
Fairmont could have avoided this litigation by the simple act of
depositing the funds into the court under a constructive trust for distribution.
Fairmont was timely notified of the filing of the lien and I believe they had an
absolute duty not to distribute funds and ignore the lien. However, because the fee
has not been allowed and because the advanced costs have been repaid, this issue is
moot.
-10-
BRIEFS AND ORAL ARUGMENT
FOR APPELLANT:
Rodger W. Lofton
Paducah, Kentucky
BRIEF FOR APPELLEE FAIRMONT
SPECIALTY INSURANCE
MANAGERS, INC.:
Charles D. Walter
S. Scott Marcum
Paducah, Kentucky
ORAL ARGUMENT FOR
APPELLEE FAIRMONT
SPECIALTY INSURANCE
MANAGERS, INC.:
S. Scott Marcum
Paducah, Kentucky
BRIEF AND ORAL ARGUMENT
FOR APPELLEE DENISE MAXEY:
W. Fletcher McMurry Schrock
Paducah, Kentucky
BRIEF AND ORAL ARGUMENT
FOR APPELLEE DELBERT K.
PRUITT:
Delbert K. Pruitt
Paducah, Kentucky
-11-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.