Levine v. Haralson et al. (CA1 1/25/18)

This was an attempt to use equity to enforce an unwritten agreement to split a contingent fee.

Plaintiff, a lawyer, was asked by another lawyer to work on a personal-injury case. They agreed to split the fee but put nothing in writing. Eventually the clients fired Plaintiff. They later fired the other attorney and hired Defendant, who settled their claim. Plaintiff demanded part of the fee; Defendant refused. Plaintiff sued in quantum meruit. (The opinion includes a footnote defining quantum meruit. We wonder what other obscure legal terms the court will from now on think it necessary to define — “statute” perhaps.) The trial court dismissed the Complaint.

The Court of Appeals affirms. The ERs require both contingent fees and fee splits to be in writing. The court explains why this is a good thing. Equity won’t enforce a contract that is against public policy. Plaintiff had a California case but “[n]either the interpretation and application of the Arizona Rules of Professional Conduct, nor this state’s public policy is subject to meaningful analysis by applying the law of other jurisdictions.” (This is of course throw-away rhetoric that our courts will ignore when foreign precedent supports their policy views.) Plaintiff also argued that prior Arizona cases had involved violation of statutes, not just ethical rules. But public policy has “the same force and effect” as a statute.

Plaintiff and the lawyer who brought him into the case were buddies who would have split the fee without a writing. Instead of being embarrassed by that Plaintiff insists on it. The moral is that friends don’t let friends act unethically.

(Opinion: Levine v. Haralson, Miller, Pitt et al.)