Rules Of Professional Conduct And Wording Of Retainer Agreement Guided The Result.
Both ex-attorneys and ex-client took draconian positions in a case involving what fees were owed by ex-client under a flat fee retainer agreement involving criminal and divorce proceedings. Attorneys claimed they were entitled to the whole $350,000 retainer even though they did not complete all specified work under the retainer agreement before withdrawal from representation. On the other side, ex-client claimed the whole $350,000 was subject to disgorgement based on $425,000 in fees he paid to replacement attorneys. Neither side got what they wished for in Noell v. Kenner & Greenfield, Case No. B316818 (2d Dist., Div. 1 Mar. 22, 2024) (unpublished).
The retainer agreement contained a flat fee provision, a statement of Attorneys’ hourly rates, a specification of the work to be performed by Attorneys, and a clause indicating that the agreement allowed Attorneys to receive all fees, costs and expenses for services rendered up to and including the date of dismissal. The lower court, in a bench trial, found that ex-client had overpaid $52,750 because certain tasks were not completed by ex-attorneys, but rejected disgorgement of the entire $350,000 retainer. However, the trial judge did not accept ex-attorneys’ claim that they could keep the entire flat retainer, reasoning that the retainer agreement allowed for payment of fees and other items rendered through the date of dismissal. Both sides appealed.
The 2/1 DCA affirmed, especially given the lack of a reporter’s transcript of the bench trial testimony. Rule 1.16 of the State Bar Rules of Professional Conduct provides that upon termination for any reason, a lawyer shall refund any part of a fee or expense paid in advance that the lawyer did not earn or incur—which resolved ex-attorneys’ appeal. On ex-client’s cross-appeal, the appellate court decided the retainer agreement allowed ex-attorneys to charge for fees and expenses before termination or dismissal and further did not make ex-attorneys responsible for future relationships with new attorneys.
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