sunEthics

First DCA interprets contingent fee contract in favor of clients in breach of contract action against former lawyer.  [Added 1/20/10]

    Clients were represented by Lawyer in a personal injury matter.  Lawyer filed a complaint and engaged in "protracted settlement negotiations."  The defendants in the case never filed an answer.  Lawyer obtained a recovery for Clients.  Lawyer charged 40% of the recovery as his fee, but Clients asserted that he was entitled to only 33 1/3 % under the representation contract.

    The contract provided in pertinent part:  "As compensation for services, I agree to pay said attorney a contingent fee computed as follows: (1) 33 1/3% of any recovery up to $1 million through the time of filing of an answer or the demand for appointment of arbitrators; (b.) 40% of any recovery up to $1 million through the trial of the case; (c.) 30% of any recovery between $1-2 million; (d.) 20% of any recovery in excess of $2 million; (e) if all defendants admit liability at the time of filing an answer and request a trial only on damages; (I) 33 1/3% of any recovery up to $1 million through trial; (ii) 20% of any recovery between $1-2 million; (iii) 15% of any recovery in excess of $2 million; (f) an additional 5% of any recovery after notice of appeal is filed or post-judgment relief or action is required for recovery on the judgment."  Clients sued Lawyer, alleging that Lawyer breached the contract.  The trial court entered a judgment for Lawyer, finding "that 'the language in the contract ‘through the time of filing of an Answer’ deals with a time frame and does not require the actual filing of an Answer to bring the 40% provision into effect. . . .'  Thus, the trial court found that [Lawyer] did not breach the contract."

    Clients appealed.  The First DCA reversed.

    Even though no answer was filed in the underlying case, Lawyer contended that "a 40 percent contingency fee would be authorized under rule 4-1.5(f)(4)(B), Rules Regulating the Florida Bar, which governs contingency fee contracts, and that the subject contingency fee contract should be interpreted in accordance with the rule."  The court noted that, under this rule, "a contingent fee agreement may provide for a contingent fee of 40 percent of any recovery if no answer is filed and the time period for filing an answer has expired.  If the contract here had adopted the language of the rule, we would agree with [Lawyer]’s argument.  The contract before us, however, differs from the rule.  The representation agreement provides that [Lawyer] will be paid '33 1/3% of any recovery . . . through the time of filing of an answer. . . .'  The agreement does not provide for the situation in which no answer is filed, but the time period for filing an answer has expired.  Accordingly, under the unambiguous language of the contract, because no answer was filed, [Lawyer]’s fee was limited to 33 1/3 percent of the recovery."  Rose v. Steigleman, __ So.3d ___ (Fla. 1st DCA, No. 1D09-1068, 1/15/2010).

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