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Law Firm’s Contingency Fee Upheld on Appeal

May 25, 2016 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Award, Fee Issues on Appeal, Quantum Meruit

A recent Legal Intelligencer story, “Erie Law Firm’s Contingency Fee Upheld on Appeal” reports that an Erie law firm's contingency fee award from a settlement it reached with an insurer on behalf of an injured client has been ­affirmed by the Pennsylvania Superior Court.

In a memorandum opinion, a unanimous three-judge panel found that Quinn, Buseck, Leemhuis, Toohey & Kroto had been given authority by Jodie Cooper and her husband to negotiate a settlement following their motor vehicle accident, ­affirming a trial court ruling that gave the firm a $20,000 fee for its work.

Cooper had argued that, although she ­received a copy of a settlement demand draft letter from the firm, a question of material fact remained as to whether the firm had her authorization to reach an agreement with State Farm Insurance for $100,000.

"[Cooper's] claim that she did not ­authorize [Quinn Buseck] to settle her claim with State Farm is specifically belied by the precise language of the demand letter, and her concession that she returned the red-lined copy effectively admits [Quinn Buseck's] allegations," Judge Jacqueline O. Shogan wrote for the court.  "Accordingly, [Cooper's] claim that an outstanding issue of fact precluded entry of judgment for [Quinn Buseck] is without merit."

Following an April 20, 2012, accident, the Coopers retained Quinn Buseck regarding a bodily injury claim, Shogan said.  The couple signed a contingency fee agreement providing that if the law firm secured a settlement without filing a lawsuit, it would receive 20 percent of the total.  The firm pursued a settlement with State Farm for $100,000, representing the Coopers' policy limits, and drafted a demand letter that it sent to Jodie Cooper, asking her to review and send back any changes.

Cooper did so, noting in an email that she had marked her changes, and the firm proceeded to reach a settlement with the insurer, at which point it forwarded a release to Cooper for her signature, Shogan said.  Less than six weeks after the agreement was reached, Cooper sent the firm a discharge letter, and the firm responded by sending attorney lien letters to Cooper and State Farm regarding its $20,000 contingency fee.  Cooper did not execute the release or pay the firm its share of the settlement amount, Shogan said.

Quinn Buseck brought suit, claiming breach of contract and demanding ­judgment for the unpaid amount, plus attorney fees and costs.  In an answer and new matter, Cooper denied receiving a copy of the draft letter, but admitted responding with a revised version, Shogan said.  Cooper denied authorizing the firm to settle her claim and contended that the firm should be limited to quantum meruit recovery.

The trial court determined there was no language in the correspondence between Cooper and the firm that indicated a lack of express authority to settle.

On appeal, Cooper argued that the trial court erroneously drew inferences and ­conclusions from documents in the record that should not have been considered, and impermissibly inferred from the draft demand letter and her response that she had authorized the settlement.  Quinn Buseck asserted that there was no issue of fact remaining as to the validity of the demand letter and Cooper's approval of it.

Shogan agreed with Quinn Buseck that the trial court was correct in its conclusion that Cooper failed to raise any genuine issue of fact.

The court also rejected Cooper's ­argument that the trial court wrongly ordered her to sign the release settling her claim, finding that the trial court did no such thing.  Further, Shogan rejected the quantum ­meruit issue because it was not raised in Cooper's 1925(b) statement.