MARILYN HANISH, EXECUTRIX OF ESTATE OF SIDNEY HANISH, DECEASED v. DON E. KEBSCH AND MARK JOSEPH SMITH MARILYN HANISH, EXECUTRIX OF THE ESTATE OF SIDNEY HANISH, DECEASED v. MANOLA FORD, INDIVIDUALLY AND AS NEXT FRIEND OF KOTONIA FORD, AN INFANT AND MARK JOSEPH SMITH
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RENDERED:
October 19, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-003023-MR
MARILYN HANISH,
EXECUTRIX OF ESTATE
OF SIDNEY HANISH, DECEASED
v.
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE LISABETH ABRAMSON, JUDGE
ACTION NO. 95-CI-005544
DON E. KEBSCH AND
MARK JOSEPH SMITH
AND
APPELLEES
2000-CA-000133-MR
MARILYN HANISH,
EXECUTRIX OF THE ESTATE
OF SIDNEY HANISH, DECEASED
v.
MARILYN HANISH,
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN RYAN, JUDGE
ACTION NO. 98-CI-002190
MANOLA FORD, INDIVIDUALLY
AND AS NEXT FRIEND OF KOTONIA FORD,
AN INFANT AND MARK JOSEPH SMITH
AND
APPELLANT
2000-CA-000649-MR
APPELLEES
EXECUTRIX OF THE ESTATE
OF SIDNEY HANISH, DECEASED
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE JUDITH McDONALD-BURKMAN, JUDGE
ACTION NO. 97-CI-006040
AMANDA PECKHAM AND
MARK JOSEPH SMITH
AND
APPELLEES
2000-CA-000975-MR
MARILYN HANISH,
EXECUTRIX OF THE ESTATE
OF SIDNEY HANISH, DECEASED
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE THOMAS B. WINE, JUDGE
ACTION NO. 98-CI-000135
GREGORY FOW AND
MARK JOSEPH SMITH
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER, COMBS, AND TACKETT, JUDGES.
BARBER, JUDGE:
Appellant, Marilyn Hanish, Executrix of the
Estate of Sidney Hanish, deceased (“Appellant”), asks us to
review orders from four divisions of the Jefferson Circuit Court
ruling upon motions to set aside attorney fee liens filed by
Sidney Hanish (“Hanish”).
In each of the four cases, Hanish
alleged that he had an oral agreement with the Appellee, Attorney
Mark Joseph Smith (“Smith”), for 50% of any attorney fee
recovered.
In two of the cases, the circuit court determined
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that Hanish was entitled to a reduced fee; in two remaining
cases, the circuit court denied Hanish’s claim for a fee in its
entirety.
Finding no error, we affirm.
The underlying circuit court cases.
1.
In Hanish v. Ford, No. 2000-CA-00133-MR (“Ford”),
the trial court held that: “Mr. Hanish is in fact entitled to
some proceeds from the contract.
The court hereby sets that
amount at twenty-five (25) percent of the attorney fees involved
in the settlement.”
2.
In Hanish v. Kebsch, No. 1999-CA-003023-MR
(“Kebsch”), the trial court ordered that: Hanish’s “lien shall be
enforceable only to the extent of 5% any attorney fee realized by
Plaintiff’s current counsel, whether through settlement or trial
of this case.
This sum represents a proper division of the fee
in proportion to the services performed.
3.
SCR 3.130 (1.5).”
In Hanish v. Peckham, No. 2000-CA-000649-MR
(“Peckham”), the trial court explained that it must determine
whether the lien is valid based upon the alleged agreement of
Smith and Sidney Hanish, KRS 376.460, and the law of this
Commonwealth.
The court found that the attorneys had “shared an
office relationship” from 1995 until September of 1997.
They
apparently divided all fees earned on cases on an equal basis.
Peckham had signed a contract for representation on July 16,
1997; the contract contained the name of Peckham, as one party
and Sidney Hanish and Mark Smith as the attorney parties.
Peckham and Smith had signed the contract.
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Smith left the firm in September 1997; he filed
Peckham’s civil suit against William Humphrey on October 21,
1997.
Thereafter, he executed another contract with Peckham
identical to the previous one, “yet devoid of the name of Sidney
Hanish.”
Sidney Hanish claimed he was entitled to 50% of the
attorney fees based upon his prior oral agreement with Smith.
The trial court stated:
KRS 376.460 allows an attorney to have a lien
upon all claims which are put into his hands
for suit or collection for an amount of fee
agreed upon by the parties or, in the absence
of such an agreement, for a reasonable fee.
This was a contingency fee contract. The
relationship between Mr. Hanish and Mr. Smith
dissolved in September, 1997. The question
. . . becomes whether or not Mr. Hanish is
entitled to have his fee honored and to
receive fifty (50%) percent of the attorney
fees. In Labach v. Hampton, Ky., 585 S.W.2d
434 (1979), a client was alleged to have
wrongfully discharged an attorney who had
done considerable work under a contingency
fee contract. The Court held in that case
that the attorney would be entitled to a lien
upon the initial recovery equal to the
percentage in the contract less the
reasonable value of the work of the successor
attorney required to bring the matter to a
successful completion . . . . Regardless of
whether or not the Court were to find a
binding contract between Mr. Hanish and Mr.
Smith of a 50-50 split on all cases . . . ,
this matter is still dictated by Supreme
Court Rule 3.130(1.5) with respect to
attorney’s fees. That Rule states that a
lawyer’s fee shall be reasonable. Further,
. . . Labach speaks to that reasonableness in
a contingency fee contract in a situation
where the attorney claiming the lien had
performed substantial work for the client.
That attorney was allowed fees less the
reasonable value of the work of the successor
attorney . . . .
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When the Court considers all of the above, it
is clear that Mr. Smith did 100% of the work.
. . . any fee that Mr. Hanish would claim
must be reasonable to the services performed.
This the Court cannot do. The proof of the
relationship between these two attorneys and
any fee agreement they had is not firm
Regardless of that, this Court finds that Mr.
Smith performed all of the services . . . as
such Mr. Hanish is entitled to none of the
attorneys fees in her case. (Emphasis
added.)
4.
In Hanish v. Fow, No. 2000-CA-000975-MR (“Fow”),
the trial court granted Smith’s motion and released Hanish’s
lien, in an opinion and order entered March 27, 2000:
A hearing was held . . . on [Smith’s] motion
. . . that any liens by . . . Hanish on
settlement monies in this case be released.
The Court, having considered the arguments of
counsel . . . hereby finds:
1. The original signed contract and fee
arrangement between Mark Smith and Gregory
Fow did not include the signature of the
Honorable Sidney Hanish. Said signature was
added.
The client, Gregory Fow, came to Mr. Smith
independent of the business relationship
between Smith and Hanish.
There is no signed contract between Smith and
Hanish detailing a fee split arrangement, nor
one with Fow approving such a fee split
arrangement. SCR 3.310(1.5).
For the above stated reasons, Smith’s motion
is GRANTED, and any lien against the
settlement monies shall be released. This is
a final and appealable order, with no just
cause for delay. (Emphasis original.)
By order of this Court, entered April 20, 2000, the
Executrix of Hanish’s estate was substituted as the appellant,
herein.
By order entered June 26, 2000, this Court granted
Appellant’s motions to consolidate to the extent that the above
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appeals shall be heard together and assigned to the same threejudge panel for consideration on the merits.
On October 31,
2000, this Court entered an order granting Appellant’s motion to
file one brief for all the appeals.
In her statement of the case, Appellant contends that
Hanish began a “business relationship” with Smith in 1994 -Hanish referred cases to Smith as co-counsel after contracting
with the client, with the client’s consent.
Appellant maintains
that Hanish assumed “joint liability” [sic] for the litigation
with Smith; further Hanish provided office space, equipment,
advertising, bookkeeping, professional advice, and monitored the
progress of cases.
Appellant explains that the agreed
compensation between Hanish and Smith was a 50/50 split of the
earned attorney fees.
There was no written agreement.
In his counterstatement, Smith asserts that he and
Hanish had an office sharing relationship from 1995 until 1997,
when Hanish forced him to leave, that they were not partners and
that there was no written agreement of partnership or joint
venture.
Smith contends that he maintained his own office, paid
rent, hired and paid his own secretary, and all other expenses
incidental to the operation of an “independent” law office,
separate and apart from Hanish’s practice.
Smith also contends
that Hanish did no work toward the completion of the cases sub
judice. [We note that the record contains a copy of a “Verified
Petition” Hanish filed against Smith in another division of the
Jefferson Circuit Court, Claim No. 98-CI-01779.
In that
petition, Hanish alleged that he had orally leased premises to
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Smith on a month-to-month basis and that Smith owed him rent for
July -- December 1997.]
Appellant argues that in two of these consolidated
cases, the trial courts “felt Supreme Court Rule 3.180(1.5)(e)1
applied and denied Appellant any fee.
Both these courts did not
realize [sic] that the rule applies only when the division of a
fee is between lawyers not in the same firm.”
Appellant also
maintains that the courts’ reliance upon Labach, supra, is in
error.
Appellant would have us believe that it was
“uncontroverted that the parties had a business relationship”
which they conducted as a “partnership or joint venture.”
Appellant states that, at various times, the parties referred to
their relationship as, “the firm”; however, the only reference to
the record is the “Hanish deposition.”
No reference to the
particular circuit court case is provided.
Nor is any reference
provided that the issue on appeal was preserved for review as
required by CR 76.12(4)(c)(v).
Smith responds that there was clearly no partnership
between the parties, and that the findings of the four trial
courts are correct.
1
The Supreme Court Rule provides, in pertinent part:
(1.5)(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(1)(a) The division is in proportion to the services performed by each lawyer or,
(b) By written agreement with the client, each lawyer assumes joint responsibility for the
representation; and
(2) The client is advised of and does not object to the participation of all the lawyers involved; and
(3) The total fee is reasonable.
-7-
By way of reply brief, Appellant argues that “up to
this point” all four of the trial courts and the Appellee have
“either failed to address . . . or fully understand and
implement” SCR 3.130(1.5)(e) because the rule applies only to
division of fees between lawyers who are not in the same firm.
Appellant insists that Hanish and Smith were in the same firm;
thus, the rule does not apply.
Appellant makes the curious
observation that “to argue whether Mr. Hanish’s firm was a
partnership, as opposed to a joint venture, . . . or any other
business form is an exercise in semantics and sophistry and is
unnecessary to the case at hand.”
We agree, but note that
Appellant is the one who engaged in that exercise, not Smith.
Appellant also argues, in her reply brief, that the
obligation to share fees survives the dissolution of the business
relationship between Smith and Hanish; further, that Kentucky
recognizes the concept of “special partnership” where attorneys
employ others to assist in litigation.
Appellant fails to
provide at the beginning of these arguments any reference that
the issues were preserved for review as required by CR
76.12(4)(c)(v).
Thus, we decline to consider them.
In Ford and Kebsch, the trial court allowed Hanish a
fee, but less than the 50% requested.
In Ford, the trial court
determined that Hanish was entitled to “some proceeds” under the
contract, and set that amount at 25%.
Although Appellant now
argues that Supreme Court Rule 3.130(1.5)(e) does not apply
because Hanish and Smith were lawyers in the same firm, that
argument does not appear to have been made in the trial court.
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At the hearing on Smith’s motion to set aside Hanish’s
attorney fee lien, Hanish argued that there was an ongoing (oral)
contractual relationship between the two lawyers to split fees.
Hanish argued that the existence of the contract was proven by
three years’ course of dealing, and he recited the fees paid to
Smith for the years 1995, 1996, and 1997.
Hanish contended that
the client came into his office, and he referred her to Smith.
Smith contended that although Hanish’s preprinted name appeared
on a client contract, Hanish had not signed it.
The record
contains a letter from the client advising that she wanted Smith
to handle the case and did not want Hanish to represent her in
any capacity.
There does not appear to be any dispute that Smith
performed essentially all of the actual work on the case, after
whatever relationship he had with Hanish had ended.
Where an
attorney is employed under a contingent contract and is
discharged without cause before completion of the contract, the
attorney cannot rely on the contract to collect a full fee but
must deduct from the contract fee the reasonable cost of services
of other attorneys required to complete the contract.
Labach,
supra. Under the circumstances, we cannot say that the trial
court committed reversible error in awarding 25% of the fee
recovered to Hanish.
In Kebsch, evidence was presented that Smith was with
the law firm of Napier and Napier when he began representing
Kebsch, after the termination of the attorney-client relationship
between Kebsch and Hanish.
Hanish had no personal recollection
of any services he may have rendered to Mr. Kebsch.
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In Peckham, the trial court was not persuaded that
Hanish and Smith were in the same firm.
The court determined
that Hanish had not performed any of the work; therefore, the
court concluded that Hanish was not entitled to any of the fee.
In Fow, the trial court disallowed Hanish’s claim for a
fee because it found that Fow was Smith’s client, independent of
any relationship between Smith and Hanish.
The trial court also
found that Hanish’s signature was not on the attorney-client
contract between Fow and Smith but had been “added” after the
fact.
In each of these cases, the essential facts were in
dispute.
Where the facts are tried by the trial court without a
jury, the findings of fact 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.
CR 52.01.
Based upon our review of the record, the respective trial courts’
decisions are supported by the substantial evidence of record and
are not clearly erroneous.
We affirm.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF AND ORAL ARUGMENT FOR
APPELLEES:
Edwin Cohen
Cohen & Cohen
Louisville, Kentucky
Mark Joseph Smith
Louisville, Kentucky
Michael F. Lawrence
Goldberg & Simpson
Louisville, Kentucky
ORAL ARGUMENT FOR APPELLANT:
Peter L. Ostermiller
Louisville, Kentucky
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