Dennis D. Carlson, Plaintiff-appellee, v. Nopal Lines, T. Smith and Sons, Inc., Defendants-appellees,george W. Reese, Intervenor-appellant, 460 F.2d 1209 (5th Cir. 1972)

The appellant is an attorney who was employed under a Louisiana statutory contingent fee contract. He appeals from a decree declining to award him compensation under the contract and instead granting him compensation on a quantum meruit basis. The District Court reached its conclusions on the basis of erroneous legal standards, so we vacate the judgment and remand for further proceedings.

By written contract dated November 27, 1970, the appellant George Reese, an attorney at law in Louisiana, was retained to represent Dennis Carlson in the prosecution of Carlson's then-pending suit in the Eastern District of Louisiana for injuries sustained while working as a carpenter on a ship moored at a wharf in the Port of New Orleans.¹  The contract provided, first, that Carlson granted to Reese a one-third interest in any judgment that might be obtained and, second, that neither party would settle or dispose of the case without the consent of the other. The Louisiana statute permits attorneys to "acquire as their fee an interest in the subject matter of the suit . . . whether [it] be for money or for property." L.S.A.-R.S. 37:218.² 

Carlson became dissatisfied with Reese's services, and in a letter of June 18, 1971, dismissed Reese as his lawyer. Reese wrote in reply to Carlson on June 22, acknowledging receipt of the letter of dismissal and asserting a willingness to perform under the contract and an intention to enforce its provision for the contingent fee. Carlson then wrote a letter asking Reese to with of record in Carlson's pending federal case, and Reese filed a motion to withdraw on June 24, 1971.

Reese then filed a motion to intervene in the pending suit, seeking enforcement of the contingent fee contract. The motion was granted, and a hearing was held before the District Court, sitting without a jury, to determine the nature of Reese's rights, if any, to attorney's fees. The Court found that the "employment contract between the plaintiff [Carlson] and Mr. Reese was valid as complying with the provisions of L.S.A.-R.S. 37:218," but went on to hold "that the withdrawal of Mr. Reese as counsel of record-albeit pursuant to the request of plaintiff-constituted an exception to the provisions of the revised statutes regulating an attorney's acquisition of an interest in a lawsuit, and that that action by Mr. Reese invalidated the one-third interest in the plaintiff's suit allegedly claimed by Mr. Reese." The Court did grant Reese the right to recover "on a quantum meruit basis" for services rendered, in an amount not to exceed $1,200, but any such recovery was to be "pursuant to the original contingency aspects of the employment contract. . . ." Reese appeals from this decision.

While we agree with the District Court that the contingent fee contract complied with L.S.A.-R.S. 37:218,³  we find no authority to support the holding that Reese's purely formal act of withdrawal as counsel of record automatically cut off his right to enforce the contract. A client may discharge his attorney, even a contingent fee attorney, and the attorney may not then insist that the attorney-client relationship continues after discharge. But the power to discharge, and the fact of discharge, are not determinative of the discharged attorney's rights under a Louisiana statutory contingent fee contract. The lawyer's rights under such a contract turn at least in part on whether the lawyer's performance gives the client good cause for dismissal or whether the dismissal frustrates what had been satisfactory performance of the attorney's obligations. See Acadian Production Corp. of Louisiana v. Land, 136 F.2d 1, 3 (5th Cir. 1943); United Gas Public Service Co. v. Christian, 186 La. 689, 173 So. 174 (1937). Because the District Court erroneously based its decision on Reese's withdrawal of record after the dismissal by Carlson, we vacate the judgment and remand the cause for further proceedings. We express no opinion as to the ultimate merits of appellant's claim for a contingent share of any recovery Carlson might win in his personal injury suit and, if appellant is held not entitled to recovery under the contract, of the extent of quantum meruit compensation.

Vacated and remanded for further proceedings not inconsistent with this opinion.

Costs are taxed against plaintiff-appellee.