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12/30/92 JOSEPH H. GREEN v. LOUIS FIREISON &

December 30, 1992

JOSEPH H. GREEN, JR., APPELLANT
v.
LOUIS FIREISON & ASSOCIATES, APPELLEE



Appeal from the Superior Court of the District of Columbia; (Hon. Richard A. Levie, Motions Judge)

Before Terry, Associate Judge, and Reilly and Gallagher, Senior Judges.

The opinion of the court was delivered by: Reilly

REILLY, Senior Judge: Before us is an appeal from a judgment adopting an order imposing sanctions against appellants, Joseph H. Green and Kenneth Shepherd, in the amount of $2,550.15 because Green's complaint in an action for damages to recover a contingent fee from his former client, had joined as a co-defendant the law firm (Fireison) which had replaced him. *fn1 In granting Fireison's motion, contending that the complaint was filed and signed in violation of Rule 11 (Super. Ct. Civ. R. 11), the Judge's order stated that it appeared "that this action was not well grounded in fact or law formed after reasonable inquiry." He ordered the movant to file an itemized list of fees and costs incurred and gave the opposing parties two weeks after such filing to respond to the itemization. Appellants elected instead to file a request for reconsideration of the original order, supported by a memorandum citing authorities in other jurisdictions which recognized similar claims for relief by lawyers against lawyers who had replaced them in litigation which they had originally been authorized to undertake. The Judge (adhered to his original Conclusion, and stating that no objection had been made to any of the items on movant's list, ordered payment of the entire sum. We reverse.

I.

The events which culminated in the challenged order for sanctions may be briefly summarized as follows.

On May 27, 1986, appellant Green was retained by Mrs. Janet Isaacs to prosecute a claim for damages for injuries incurred in an automobile accident the week before, assertedly caused by the negligence of the driver of the other vehicle. She signed a contract captioned "Agreement with Attorney for Contingent Fee" which assigned a "lien of one third [of any recovery] if settled and or 40 percent if litigated." [R. 221]

Green conducted an investigation, looking into police, hospital, and medical records, and interviewing possible witnesses. Learning that the other vehicle involved in the accident was covered by liability insurance, he then negotiated directly with agents of the carrier, Montgomery Mutual Insurance Co., which eventually on June 15, 1987, offered to settle the claim for $23,000. Dissatisfied with this offer, Mrs. Isaacs rejected it. Two weeks later she notified Green that he was discharged and instructed him to turn over his file to Fireison, the law firm she retained to replace him. More than a year later, Fireison informed her that the carrier had raised its offer to $30,000. Mrs. Isaacs accepted, and sometime in December 1988, the carrier disbursed the agreed-upon amount.

Before such disbursement, Green having been unsuccessful in persuading Mrs. Isaacs, the insurance company, and Fireison to recognize that the fee to which he claimed he was entitled constituted a lien against the proceeds of the impending settlement, commenced an action against Mrs. Isaacs in the Superior Court on November 15, 1988, by filing a complaint captioned "Complaint for Breach of Contract." This pleading, citing the contingent fee contract with Mrs. Isaacs, and the settlement offer he had obtained from the insurance carrier, alleged that she had rejected plaintiff's lien and right to compensation. The complaint also joined as defendants Fireison and Montgomery Mutual. It alleged that Fireison in succeeding plaintiff as counsel for Isaacs was "bound by the contract and obligated to honor plaintiff's lien," and that notwithstanding its previous negotiations with Green, resulting in a settlement offer to be paid by a "draft drawn to the order of Isaacs and . . . Green, her counsel," it was now repudiating plaintiff's lien. The concluding sentence demanded judgment against the joint defendants "joint and severally in the amount of $7,660, plus costs." *fn2

In its answer, the insurance carrier conceded that it had dealt with Green concerning the Isaacs claim, and had offered to settle it for $23,000. It also admitted that Green had notified it of his alleged lien, but that it refused to recognize such a claim, contending that no such lien exists by common law or statute. About a month later the carrier followed up this contention by filing a motion for judgment on the pleadings on the ground that it was not bound by the contingent fee contract between Green and Isaacs, and therefore the complaint had not stated a cause of action against the company. The supporting memorandum cited Lyman v. Campbell, 87 U.S. App. D.C. 44, 182 F.2d 700 (1950), for the proposition that no lien attached to money obtained by a client unless it was in the possession of the claiming attorney or was the subject of a judgment which the court could hold as security upon motion of the claimant.

The memorandum also noted -- relying on the caption of the complaint -- that Green was suing for breach of contract, but was not alleging any contract between himself and the insurance company. Instead of opposing the motion, Green filed a praecipe dismissing this particular defendant. Entry of the dismissal order enabled the carrier to disburse the settlement money without regard of the plaintiff's claim.

Some two months later, Fireison having staved off his obligation to answer the complaint by filing a motion to quash service against him -- denied by Judge Fauntleroy -- decided to follow the example of his codefendant, the insurance carrier, by moving for judgment on the pleadings. *fn3 To support the motion for dismissal as a codefendant, Fireison filed a memorandum advancing the same arguments the insurance carrier had put forward, viz.: that (1) there was no breach of contract as Green had not alleged any contract between Fireison and him, and (2) no lien existed. As support for the latter contention, Fireison copied five paragraphs, which included the citation of authorities, from the text of the codefendant's memorandum, without acknowledging the source (cf. R. 35-36 with R. 55-57). This time the motion was referred to another member of the trial bench, Judge Murphy, who granted Fireison's motion, noting that it was unopposed. *fn4

Fireison's next step was to file a motion for sanctions under Rule 11, supra, against Green and his counsel, arguing that it was "unconscionable for two members of this Court to burden this Court with a law suit in which plaintiff could have no possible hope of prevailing. That plaintiff himself recognized this is demonstrated by his failure to oppose a motion for judgment. . . . This is a law suit which should never have been brought in the first place." (R. 65)

Green responded with an opposition, pointing out that Fireison knew of the contingent fee contract with Isaacs, and the services that Green had performed for her, citing a letter from Fireison written after the case file was turned over to him in which he stated that in the event of a settlement or verdict they would "work this out in an amicable manner." He argued that notwithstanding this commitment, Fireison kept all of the attorney fees thereby becoming "unjustly enriched and now seeks the aid of this honorable Court for further unjust enrichment."

These pleadings were referred to a third motions Judge, Judge Levie. In a summary order granting the motion, he noted "it further appearing that this action was not well grounded in fact or law formed after reasonable inquiry." (Emphasis supplied; Order of June 20, 1989, R. 75). The order then required the movant to submit an itemized list of fees and costs by July 3, 1989, and another two weeks for plaintiff and his counsel to respond to the itemization. Fireison filed the itemization which asserted a "usual and customary rate of $150 per hour," listed other time spent on 15 different occasions, and money expended, claiming a total of $2550.15. Instead of filing specific objections to any of these items, Green responded with a memoranda arguing that Judge Levie's previous order was erroneous. This time he argued that not only was the right of a discharged attorney to sue a former client for breach of contract well established by law in this jurisdiction (citing decisions of this Court), but also that other courts which have considered the issue, have held that the discharged attorney is entitled to share in the fee paid to his successor, drawing to the motions Judge's attention decisions in three other jurisdictions -- New York, Florida, and the Court of Appeals ...


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