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Texas Plaintiffs' Lawyers Win $21M in Fees From Non-Paying Client

January 30, 2012 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Dispute, Fee Request, Unpaid Fees

A Texas Lawyer story, “BAM! Counsel Win $21 Million in Fees From Clients Who Wouldn’t Pay” reports that three Dallas plaintiffs lawyers and their firms won a judgment ordering wealthy former clients to pay more than $21 million in legal fees.  But the attorneys didn’t win the full amount they sought.  The Jan. 10 judgment in Campbell Harris & Dagley, et al. v. Albert G. Hill, et al. arises from a lengthy and complicated fee dispute.  The lawyers and firms that wanted to be paid were Lisa Blue of Baron and Blue; and Charla G. Aldous of the Aldous Law Firm; and Stephen F. Malouf of the Law Offices of Stephen F. Malouf – collectively known as BAM in the judgment.

BAM had represented Albert G. Hill, Erin Nance Hill and their minor children (collectively Hill III) in the 2010 settlement of Hill v. Hunt, et al.  But Hill III refused to pay BAM.  Hill III alleged BAM wanted millions “in attorney fees for no more than six months work.”  The court severed the attorneys’ fee dispute from Hunt after Hill challenged the validity of the contingent fee agreements with BAM and the amount owed.  Both parties agreed to have U.S. Magistrate Judge Renee Harris Toliver hear the case.

Toliver entered findings of fact and conclusion of law that BAM’s fee agreement with Hill III was valid and binding and that Hill III had breached the agreement.  Toliver also wrote that the fair market value of Hill III’s “gross affirmative recovery” in the Hunt settlement was $113,357,232, of which BAM was entitled to a 30 percent contingency fee totaling $33,707,232.  Both sides objected to Toliver’s conclusions.  U.S. Distrcit Judge Reed O’Connor reduced the attorneys’ fees recovery to $21,942,961 after sustaining some of Hill III’s objections regarding the contingent fee.

In his Jan. 10 judgment (pdf) O’Connor gave Hill III 30 days to either pay BAM 30 percent of the fair market value of their gross affirmative recovery in the trust dispute settlement in Hunt or pay BAM 30 percent of the amounts that Hill III receives from the Hunt settlement as Hill III receives them.  Alan Loewinsohn, representing BAM explains that the Hill III defendants likely are better off choosing O’Connor’s first payment option “because there was a determination as to the current fair market value to the settlement [Hill III] obtained."