Linscott v. Shasteen
Annotate this CaseMartin Linscott, Rolf Shasteen and Tony Brock formed the law firm Shasteen, Linscott & Brock (SLB). Linscott drafted a proposed shareholder agreement contemplating that if a shareholder left the firm, he would receive one-third of all fees from existing in-process cases. After Linscott left the firm, Linscott brought suit individually and derivatively on behalf of SLB against Shasteen and Brock seeking to recover one-third of attorney fees recovered from the SLB cases that existed at the time he withdrew as a shareholder. The district court ultimately concluded (1) the agreement was unenforceable under the statute of frauds; (2) the “unfinished business rule” had no application to this case; and (3) therefore, Linscott was not owed any attorney fees. The Supreme Court reversed, holding that the district court erred in (1) determining that the absence of any definition of the term “net fees” prevented the formation of an implied in fact contract; and (2) determining that the statute of frauds rendered any implied contract void. Remanded.
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