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Law Offices of J.E. Losavio v. Law Firm of Michael W. McDivitt11/15/1993
This action involves a dispute between attorneys over a contingency fee. Plaintiff, the Law Offices of J. E. Losavio, Jr. (Losavio), appeals from an order of the trial court confirming the apportionment of the fee between Losavio and the defendant, the law firm of Michael W. McDivitt (McDivitt), in accordance with the findings and order of the probate magistrate. We reverse and remand for additional findings.
The client in the underlying action, Christopher A. Arguello, employed counsel to represent him after he sustained injuries in a traffic accident. His counsel withdrew during the initial phase of trial preparation, and McDivitt took the case over pursuant to a one-third contingent fee agreement. The claims of the first attorney are not at issue in this matter.
McDivitt continued to prepare the case and, in the month prior to the date of trial, received a settlement offer from the opposing side in the amount of $300,000. At that time, the client exhibited paranoid behavior and made violent threats to several of the individuals associated with the case. His actions prompted the opposing side to file a Suggestion of Incompetency which put into question the client's capacity to accept an offer of settlement. McDivitt also moved for appointment of a legal representative. A guardian ad litem was appointed and the trial court subsequently approved the settlement.
Shortly thereafter, the client discharged McDivitt and retained Losavio pursuant to a contract for hourly fees related to the resolution of his status as a protected person and a one-third contingency fee agreement for any recovery in the personal injury action. Losavio entered an appearance for the client and filed a motion to set aside the settlement, contending that the client was competent and that the proceedings determining his incapacity were procedurally deficient. The trial court agreed that the proceedings were flawed, but did not enter a finding as to the client's competency. It ordered that the settlement offer could be withdrawn and directed the parties to reset the matter for trial.
A second settlement offer of $300,000 was made several months later. The offer was accompanied by the filing of a motion for protective orders and for the appointment of a conservator. Upon approval of the parties, the trial court granted the motions and appointed a conservator. The conservator filed a report recommending that the offer be approved. Losavio then filed a motion for approval of the settlement. The trial court granted its approval and the personal injury action was dismissed. However, the trial court retained jurisdiction in the conservatorship case to determine the issues surrounding the distribution of the contingency fee.
The matter was referred to the probate magistrate and an evidentiary hearing was conducted. McDivitt and Losavio both stipulated that their combined claims to the contingent fee were limited to $100,000. The magistrate apportioned the fees based on the ratio of costs advanced by each attorney which resulted in an award to Losavio of $18,000 and $82,000 to McDivitt. The trial court confirmed the magistrate's order and this appeal followed.
I.
Losavio seeks reversal of the fee division arguing that the magistrate erred by apportioning the fee based only on the costs advanced by each attorney. We agree with that contention and further hold that this matter must be remanded for additional findings on several issues not considered in the original order.
An attorney who withdraws for justifiable reason or is terminated by a client without cause is entitled to compensation for the services rendered. Jenkins v. District Court,
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