Fee Sharing Contract Between Lawyers Does Not Create Contractual Liability of Recipient Lawyer to Referring Lawyer

Published on Mar 16, 2010 at 3:40 pm in General Blogs.

In May of 2000, attorney, William J. Blondell, was retained by certain clients (the Corbins) to pursue a possible medical malpractice claim in connection with a missed breast cancer diagnosis due to a misread of a mammogram study. On January 23, 2003, Blondell filed a claim against the physician. He subsequently referred the case to another attorney, Diane M. Littlepage. The client endorsed an “Acknowledgment and Consent to Fee-Sharing Agreement,” which stated that Blondell and Littlepage would share in any fee based upon the “anticipated division of services to be rendered,” that Littlepage would assume “primary responsibility” for prosecuting the Corbins’ claims, and that Blondell would act as “co-counsel,” performing services “as requested” by Littlepage.

One the eve of trial, Littlepage attended a pretrial conference where the presiding judge opined that the physician’s argument that the medical malpractice lawsuit was filed too late and should be dismissed was “compelling” and that the Corbins would likely lose their claims before a jury could render a verdict.Littlepage therefore advised the clients that the settlement value of their claims was diminished by, among other things, Blondell’s alleged delay in filing suit. Littlepage therefore suggested that the clients settle the medical malpractice claim for an amount significantly lower than full value, and to pursue a potential legal malpractice action against Blondell. The medical malpractice case was eventually settled for $225,000 and Littlepage paid Blondell one-half of the fee earned in that case despitehis alleged legal malpractice. It appears the legal malpractice claim was pursued by the Corbins.

Blondell subsequently filed a lawsuit against Littlepage alleging various legal theories premised on his assertion that Littlepage failed to consult with him before recommending settlement to the clients and that Littlepage caused him “economic and noneconomic harm” by advising the Corbins that Blondell may have committed malpractice by not filingsuit earlier, He allegedvarioustheories premised on breach of contract and tort claims for fraud, breach of express and implied duties of good faith, fair dealingand disclosure,and interference with an existing usiness relationship.

The Court of Appeals of Maryland held that Littlepage did not breach any express or implied terms of the contract in question; that the fee sharing agreement as a matter of law did not give rise to actionable tort duties of consultation, communication, and disclosure between Littlepage and Blondell; andthat Littlepage, as a matter of law could not tortuously interfere with a contractual or economic relationship to which she was a party.

Chief Judge Bell dissented, stating that “if the majority is correct, an attorney, without fear of consequences and with impunity, may undermine his or her co-counsel’s relationship with the clients and denigrate, without fear of retribution, not simply his or her legal competence but any other attribute or quality upon which a client reasonably relies and without which the client is not likely to be willing to trust. This would be a troubling outcome, especially in a profession where an attorney’s livelihood largely rests up on his reputation.”



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