52 RI Bar J., No. 3, Pg. 11 (November, 2003). Sharp Quillets and Fee Arrangements.

• Author: Edward John Mulligan, Esq.

Rhode Island Bar Journal

Volume 52.

52 RI Bar J., No. 3, Pg. 11 (November, 2003).

Sharp Quillets and Fee Arrangements

Sharp Quillets and Fee ArrangementsEdward John Mulligan, Esq.Edward John Mulligan practices law in Rhode Island and Massachusetts.It is a rule of practice in Rhode Island, under the Rules of Professional Conduct (RPC), that fee arrangements must be in writing in the absence of a well-established existing relationship between the attorney and his/her client. (fn1)

Long preceding the present protreptic practice RPC rule on representation and fee arrangements, legal experience has for centuries shown that representation agreements which have "[h]onest plain words best pierce the ear of grief." (fn2)

In the matter of "honest plain words," there is no question that since the attorney draws-up the representation agreement, then the contract will be construed against the attorney, the architect of the contract, (fn3) no matter how sharp the counselor may be.

Dodson and Fogg were a couple of sharp lawyers in a law firm that was created by Dickens in Pickwick, and "while their practice was said to be of the sharpest (they were) clever enough to keep inside the line." (fn4) Withal, Dodson and Fogg were still in business at the end of his last chapter "from which they realize[d] a large income, and in which they are universally considered the sharpest of the sharp." (fn5)

Thus, one can see that being called a sharp lawyer may have a good connotation (one with a keen edge or with unusual skill) or a bad connotation (a cheat or swindler).

However, a sharp-eyed split can been seen amongst the federal court panel, as to whether or not the lawyer-querens were "clever enough to keep inside the line" and "from which they realized a large income," (fn6) in the case of Farmers Insurance Exchange v. Law Offices of Conrado Joe Sayas, Jr. (fn7)

The Sayas case, which was decided under California law, illustrated how sharp differences can arise under the preparation, carrying out and construction of a contingent fee agreement and its potential for an untoward result, especially in the arena or multiple representation.

Sayas dealt with a reverse twist to the concept of multiple representation. Generally, multiple representation deals with representing more than one client.

In Sayas, there was one client who was jointly represented by two law firms for an action in bad faith against an insurance company. Rhode Island, as does California and other states, allows joint representation and a fee division, provided the client agrees. (fn8)

The case of bad faith arose out of a 1994 Northbridge earthquake that damaged the Santa Monica, California rental property owned by Narendra and Bela Desai (Desai), which was partially insured by Farmers Insurance Exchange (Farmers). As a result of the earthquake, the Desai's rental property was damaged by fire.

Since the property was damaged, in part as a result of the earthquake, the federal government and local municipality sprang to their aid by providing disaster loans via the United States Small Business Administration (SBA) and the city of Santa Monica (City). In addition to the disaster loans, Desai tried, without success, to shake some aid from Farmers under their coverage policy.

Thereupon, a dispute chasm opened between Desai and Farmers over the scope of the benefits due their contract. Not being able to close the chasm because of the deaf ear seemingly shown to their grief, Desai hired Sayas to represent them.

Sayas, in turn, hired Quisenberry & Kabatack (Quisenberry) to be co-counsel in the Farmers claim. A written representation agreement (agreement) was entered into. That agreement provided for a 40% contingency fee to be equally divided among the two conjunctive law firms in this venture along with cost provisos.

In the agreement with Desai, the contract provided: "In any dispute between Lawyers and the Client, the prevailing party will be entitled to reasonable attorneys fees." The reasonable attorney fee proviso seemed to fly in the face of existing California law, under the holding of Trope v. Katz, (fn9) that an attorney who litigates in propria persona cannot recover attorney fees. Moreover, California law also provided that in those actions where the statute...