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Johnson v. Hunter11/30/1999
This appeal is a dispute between two attorneys over attorney's fees incurred in a contingency fee personal injury and product liability lawsuit. The plaintiff attorney associated the defendant attorney for the product liability aspect of the lawsuit. The plaintiff attorney withdrew before the Conclusion of the case and sought half of the attorney's fees. Finding that the attorneys had entered into a joint venture, the trial court awarded the plaintiff attorney one-third of the contingency fee. The defendant attorney appeals. We find that the law of joint venture is inapplicable because the contract between the attorneys is unenforceable for lack of agreement on an essential term, and reverse and remand for an award of attorney's fees based on the theory of quantum meruit.
In September 1994, Richard Johnson was severely injured in an automobile accident. The driver of the other car, Stoney Hunter, was driving a Camaro with a T-top roof at the time of the accident. In the accident, one of the T-tops dislodged, traveled through the open window of Johnson's truck, and pierced the left side of his skull.
Richard Johnson's wife, Jennifer Johnson, worked as a bookkeeper for the Nashville law firm of Cheatham and Palermo. The Johnsons asked one of the partners in the firm, plaintiff attorney Denty Cheatham ("Cheatham") to represent Richard Johnson ("Johnson"). Cheatham filed suit against Stoney Hunter ("Hunter"). In the course of discovery, Cheatham investigated the policy limits of Hunter's insurance carrier. Cheatham found that the policy had a liability limit of only $50,000. Consequently, Cheatham filed a product liability action against General Motors, the maker of Hunter's Camaro; Libbey Owen's Ford, the manufacturer of the T-top glass panels; and Pittsburgh Plate Glass Industries, the manufacturer of the rear window glass. Cheatham had had limited previous experience with product liability cases, so he contacted defendant attorney Patrick M. Ardis ("Ardis") of the Wolff Ardis law firm in Memphis. Ardis' law firm specialized in automobile glass cases.
Ardis and Cheatham agreed to associate under a contingency fee contract. The Johnsons agreed to this arrangement. The contract among the Johnsons, Cheatham, and Ardis provided that the attorneys would receive a 33 1/3 % contingency fee if the case were settled before trial, and a 35% contingency fee if the case went to trial. The division of fees between the two attorneys was left as "a matter to be agreed between WOLFF ARDIS and CHEATHAM & PALERMO." Ardis testified that he and Cheatham agreed on a 50/50/50 split: each party would do 50% of the work, they would split the expenses 50%, and split the fee 50%. Cheatham denied any agreement to pay 50% of the expenses, and testified that the parties agreed only to a 50/50 split: the parties would split the work 50% and split the fees 50%. Ardis and Cheatham agreed that Cheatham would handle the medical and damages aspects of the case and ready the case for trial, and Ardis would handle the product liability aspect of the case.
Relations between the attorneys began to disintegrate in early 1997. On February 7, 1997 Ardis wrote Cheatham a letter asking Cheatham to pay one-half of the outstanding expenses. On April 1, 1997, Ardis sent Cheatham another letter requesting that Cheatham pay one-half of the expenses, which by this time totaled approximately $100,000. A third letter dated July 7, 1997 requested more money for expenses from Cheatham. Cheatham responded by letter on July 10, 1997. In this letter, Cheatham denied agreeing to share the expenses incurred by Ardis' firm. He explained that in the twenty-four year history of his law firm, the firm had never advanced
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