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Mainor v. Nault11/22/2004
Appellants and cross-respondents W. Randall Mainor and Richard A. Harris, individually, as professional corporations and as a partnership, appeal from the district court's entry of final judgment pursuant to a jury verdict against Mainor and Harris. Respondents and cross-appellants Philip Nault and Wendy Nault, as co-guardians of the person and estate of Jason Nault, cross-appeal from a district court order offsetting the final judgment by $400,000 from a prior settlement with another attorney involved in the underlying case. We conclude that insufficient evidence supports the jury's verdict and therefore reverse the district court's judgment.
FACTUAL AND PROCEDURAL HISTORY
Jason Nault, a Southwest Airlines baggage handler, was rendered in a permanent vegetative state after anesthesia equipment failed during his hernia surgery. His pregnant wife, Louise Nault, brought a medical malpractice claim on behalf of herself and Jason. Louise sought the advice of attorney Joe Rolston, for whom she had worked as a secretary. Rolston agreed to assist Louise but advised her that, as medical malpractice was outside of his area of expertise, she should hire an attorney with experience in this area. Louise and Rolston entered into a contingency fee agreement.
After Louise and Rolston interviewed several personal injury attorneys, Louise decided to retain W. Randall Mainor and the law firm of Mainor & Harris. On June 13, 1994, Louise, Mainor and Richard A. Harris signed a contingency fee agreement, which established that Mainor and Harris would receive 33.3 percent of the gross recovery prior to suit and 40 percent after suit was filed. The agreement incorporated the previous retainer agreement with Rolston.
On June 16, 1994, before the family court had granted guardianship of Jason to Louise, Mainor filed a lawsuit on behalf of Jason and Louise, seeking damages for Jason's injuries and Louise's loss of consortium. In March 1996, after nearly two years of contentious litigation, the parties participated in a full-day settlement conference during which the mediator valued the case at $6-7 million. The case settled for approximately $17 million.
After settlement, the parties held a meeting to allocate the $17 million. Louise insisted that Jason's needs were the first priority. Attorney Jamie Chrisman, who represented the workers' compensation division for Southwest Airlines, was primarily responsible for monitoring Jason's medical care and medical bills. The estimated cost for all of Jason's needs, including twenty-four-hour nursing care, physical therapy and all other medical needs, was $20,000 per month. Because the persons attending the meeting desired a large financial cushion for Jason, they decided on payments of $32,000 per month that would automatically increase by 2 percent every year for Jason's life. They determined to use the settlement proceeds to purchase an annuity for Jason to pay a guaranteed stream of tax-free money. Any remaining settlement money was to be used to provide for Louise and Louise and Jason's baby, Rene.
The attorney fee agreements provided for fees totaling 40 percent of the settlement, or approximately $6.8 million. Southwest Airlines had a workers' compensation lien on the settlement for approximately $600,000. Jason's annuity cost $2,503,470 and was expected to pay approximately $39 million if Jason lived a full life expectancy. Louise's annuity cost $4,081,142.53 and had an expected payout of $24.8 million. Even though Rene had no claim, an annuity was also purchased for her at a cost of $437,348, with payments beginning when Rene reached age eighteen and an expected lifetime payout of $7.4 million. The diff
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