Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

CA Appeals Court Approves Fee Award That's Greater Than Damages

September 7, 2010 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Award, Fee Award Factors, Fee Dispute, Fee Dispute Litigation / ADR, Fee Issues on Appeal, Fee Jurisprudence

A recent law.com story, “Calif. Appeals Court Approves Contingency Fee Greater Than Client Award” reports that a California appeals court in San Francisco sided with Cotchett, Pitre & McCarthy in a dispute over a novel contingency fee agreement that called for more legal fees than the amount of money the client recovered.  In Cotchett Pitre & McCarthy v. Universal Paragon Corporation, the California Appeals Court upheld the $7.5 million fee award, rejecting arguments that the fee award – based on a contingency fee of 16 percent of the client’s estimated damages – was unconscionable.  “Although the fee agreement in this case was somewhat unusual, it reflected an attempt by equally sophisticated parties to share the risk of complicated litigation,” justices wrote in their published opinion.  “This was a private business transaction between equally matched parties, pure and simple,” the justices added.

The contingency fee agreement provided that if UPC acquired a contaminated factory site, the Cotchett firm would be paid an amount equal to the value of the property, or 16 percent of the cost of cleaning up the site, whichever was greater.  The case ultimately settled with UPC acquiring the property – valued at $1.8 million before cleanup – along with $6 million in cash.  The Cotchett firm demanded more than $19 million in fees based on an estimate of the cleanup costs.  The case ended up in front of JAMS arbitrator Rebecca Westerfield, who awarded the Cotchett firm about $8 million in fees based on a damage estimate of $50 million.  The amount was upheld by San Francisco Superior Court Judge Peter Busch.