STEPHEN HORNER v. JEFFREY BAGNELL, SC 19700

Judicial District of Stamford/Norwalk

       Attorney’s Fees; Whether Judgment Awarding Attorney Share of Contingency Fees Collected by Former Partner After Dissolution of Parties’ Law Firm Violates Prohibition on Division of Fees Between Attorneys Without Client Consent.  The plaintiff and the defendant were partners in a law firm that was dissolved in 2006.  Three clients with cases and contingency fee agreements with the dissolved firm retained the defendant’s new firm, and the defendant collected contingency fees in the cases.  The plaintiff brought this action seeking to recover a share of the contingency fees recovered by the defendant.  The trial court found that the defendant had been unjustly enriched and rendered judgment for the plaintiff for $116,000.  The defendant appeals, claiming that the trial court wrongly invoked equitable principles and the parties’ expired partnership agreement as authority for awarding the plaintiff contingency fees earned by the defendant after the dissolution of the partnership.  The defendant claims that the award of a portion of the contingency fees to the plaintiff was prohibited by Rule 1.5 (e) of the Rules of Professional Conduct, which permits a division of fees between lawyers who are not in the same firm only if the client is advised in writing of the fee sharing agreement and does not object to it.  The defendant contends that the clients did not consent to any sharing of the contingency fees here and that there is no dispute that the fees were “earned” by the defendant’s firm alone because the fees were realized or collected after the dissolution of the partnership.  The defendant argues that contingency fee cases are owned by the clients, not the lawyers, and that the judgment here undermined Rule 1.5 (e) by effectively conferring ownership of the contingency fees on the attorneys.  Finally, the defendant claims that the trial court’s ruling will discourage attorneys from taking a case where a predecessor attorney was involved for fear of a protracted dispute over entitlement to any contingency fee that is ultimately earned in the case.