(251) 299-0101

LEGAL MALPRACTICE - BARNEY V. BELL

Barney v. Bell, [Ms. 2121048, Oct. 10, 2014] __ So. 3d __ (Ala. Civ. App. 2014). Maurice Bell and William Clay Teague represented Arthur Barney to pursue a worker's comp claim and a third-party action. From the settlement of the worker's comp claim, Bell and Teague received $6,375 as a 15% fee. The carrier reserved its reimbursement right against the third-party action. From a $45,000 settlement of the third-party action, Bell and Teague retained their 50% fee and forwarded the remaining $22,500 to the worker's comp carrier. Barney sued Bell and Teague, alleging that they retained an excessive fee out of the third-party settlement and that they should have returned the $6,375 fee from the worker's comp action. The circuit court entered summary judgment for Bell and Teague on both aspects of the claim. The Court of Civil Appeals affirms as to the first aspect and reverses as to the second aspect. On the first issue, Barney argued that the comp carrier agreed to accept $22,500 as an accord and satisfaction for its $65,000 reimbursement claim, so Bell and Teague were entitled only to an $11,250 fee. The Court of Civil Appeals holds that the carrier did not agree to reduce its reimbursement interest in the third-party action, but, rather, agreed to pay its proportionate share of attorney fees on the full $45,000 recovery. The Court holds that the settlement reduced the comp carrier's liability by $45,000 and it paid the $22,500 fee out of that reduction of its liability. The Court holds that, regarding retaining the $6,375 fee, the claim falls under the Alabama Legal Services Liability Act and the question thus is whether Bell and Teague breached the standard of care by retaining that fee. They presented no evidence that they did not breach the standard of care, so they did not make a prima facie showing in support of their summary-judgment motion, and the circuit court erred in entering a summary judgment in their favor on this aspect of the claim. In support of his motion for summary judgment on this issue, Barney submitted an affidavit of a lawyer who said that retaining both the $22,500 fee and the $6,375 fee constituted a forbidden "double fee." Because Bell and Teague did not present any evidence in contradiction of this affidavit, the circuit court erred in denying Barney's motion for summary judgment on this aspect of the claim. The Court of Civil Appeals remands the case for further proceedings including the assessment of any further compensatory or punitive damages to which Barney might be entitled. The Lesson: if your client sues you for collecting or retaining an excessive fee, it is a legal services liability action, and you must present expert evidence that you did not breach the standard of care by collecting or retaining the fee.

Related Documents: 101014_barney_v_bell

Categories: