Malonis v. Harrington
442 Mass. 692, 816 N.E.2d 115, 2004 Mass. LEXIS 673 (2004)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A discharged attorney is entitled to recover in quantum meruit for the reasonable value of their services. A successor attorney who takes over a contingent fee case may be held liable for the discharged attorney's fees if the successor's conduct creates a reasonable expectation among the parties that they will pay, in order to prevent unjust enrichment.
Facts:
- Marc J. Loiselle was injured in a motor vehicle accident involving an employee of Browning-Ferris Industries, Inc. (BFI) and retained attorney George C. Malonis on a one-third contingent fee basis.
- Malonis represented Loiselle for over three years, investigating the case, handling discovery, obtaining PIP benefits, and rejecting two settlement offers from BFI ($7,500 and $30,000).
- Based on a medical report from a surgeon recommended by Malonis, BFI internally decided to increase its settlement offer to $57,500, but did not communicate this to Malonis.
- On September 14, 1994, Loiselle discharged Malonis and retained attorney Robert W. Harrington under a similar one-third contingent fee agreement.
- Harrington settled Loiselle's case with BFI for $57,500.
- During the settlement process, Harrington assured BFI's counsel that he "would take care of Mr. Malonis" regarding the payment of his fees.
- Harrington received the settlement funds, paid Loiselle's wife her portion, retained a $17,500 fee for himself, and refused to pay Malonis for his services or expenses.
Procedural Posture:
- Malonis filed a complaint in Superior Court against Loiselle, BFI, and Harrington.
- The Superior Court dismissed the claims against BFI and remanded the remaining case to the District Court.
- The District Court judge found in favor of Harrington, holding he was not obligated to share his fee.
- The Appellate Division affirmed the District Court's judgment.
- The case was retransferred to the Superior Court at Malonis's request and submitted as a 'case stated'.
- The Superior Court judge found Harrington liable to Malonis for his reasonable fees and expenses.
- Harrington appealed the Superior Court's judgment, and the Supreme Judicial Court transferred the case on its own motion for review.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is a successor attorney, who takes over a case on a contingent fee basis and settles it, liable to the discharged predecessor attorney for the reasonable value of the predecessor's services when the parties shared a reasonable expectation that the successor attorney would pay from their own fee?
Opinions:
Majority - Greaney, J.
Yes. A successor attorney is obligated to compensate the discharged attorney in quantum meruit when the reasonable expectations of the parties establish that the successor attorney assumed the responsibility to pay. A client has the right to discharge an attorney, which terminates the attorney's right to recover on a contingent fee contract; however, the discharged attorney is entitled to compensation for the fair value of services rendered to prevent unjust enrichment. In this case, the record clearly establishes that all parties—the client (Loiselle), the defendant (BFI), and the attorneys—reasonably expected Harrington to pay Malonis from the contingent fee he received. Harrington's explicit assurance to BFI's counsel that he would "take care of" Malonis, Loiselle's understanding that Harrington would handle the payment at no cost to him, and Harrington's own requests for an itemized bill all demonstrate this shared expectation. Allowing Harrington to retain the entire fee, when Malonis performed approximately 80% of the work that led to the settlement, would constitute unjust enrichment. The court further advised that, to avoid future disputes, successor counsel should execute a written agreement with the client that unambiguously identifies who is responsible for paying former counsel's reasonable fees.
Analysis:
This decision clarifies that the burden of paying a discharged attorney's quantum meruit fees can shift from the client to the successor attorney, particularly when the successor's actions create an expectation of payment. It establishes a strong equitable principle against the unjust enrichment of a successor attorney who benefits from the substantial work of a predecessor. Furthermore, the ruling imposes a de facto professional duty on successor attorneys to proactively address and formalize in writing how a prior attorney's fees will be handled, thereby protecting clients from potential double liability and promoting transparency in contingent fee arrangements.
