LaFond v. SweeneyAnnotate this Case
The issue this case presented for the Supreme Court's review centered on the question of who in a dissolved limited liability company("LLC") is entitled to the profits from a successful contingent fee case that was pending upon the dissolution of the company. Attorneys Richard LaFond and Charlotte Sweeney formed LaFond & Sweeney, LLC ("L&S") in 1995 pursuant to Colorado's Limited Liability Company Act ("LLC Act"). L&S had several cases pending when it dissolved in 2008, including the subject of this action, the "Maxwell" case. LaFond and Sweeney were unable to reach an agreement on how to divide the profits that could come from the successful completion of the case. Sweeney filed an attorneys' lien on any profits derived from the case. LaFond then brought suit against Sweeney seeking a declaratory judgment for the full amount of the contingent fee. Sweeney filed a counterclaim to enforce the attorneys' lien. In the declaratory judgment suit, the trial court found that the Maxwell case was an asset of L&S and valued it using a quantum meruit approach based upon the number of hours L&S had worked on the case pre-dissolution, multiplied by L&S's hourly fee rate. The trial court concluded that Sweeney could only recover half of this amount in accordance with LaFond and Sweeney's profit sharing agreement. Sweeney appealed, and the court of appeals reversed, concluding that the Maxwell case was unfinished business of the LLC and all profit derived therefrom belonged to the LLC subject to division according to LaFond and Sweeney's profit sharing agreement. LaFond appealed. After review, the Supreme Court affirmed the court of appeals: any profit derived from the Maxwell case belonged to L&S and should have been divided between LaFond and Sweeney according to their profit sharing agreement. LaFond was not entitled to additional compensation for his post-dissolution work on the case.