Opinion
No. C4-00-1625.
Filed February 20, 2001.
Appeal from the District Court, Hennepin County, File No. EM961314.
Frederick E. Finch, Aklilu D. Dunlap, (for appellant)
John S. Hughes, (for respondent)
Considered and decided by Crippen, Presiding Judge, Harten, Judge, and Hanson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant law firm disputes the percentage of a contingency fee that the district court awarded to respondent (previously appellant's employee) and asks this court to determine the appropriate division of the fee. Because we see no abuse of discretion in dividing the fee but find that the actual percentages used are not supported by the record, we affirm as modified.
FACTS
In March 1995, a client was referred to respondent attorney Sonja Peterson, then an employee of appellant Horton Associates, P.A. (HA). The client signed a contingency fee representation agreement. Following trial, Peterson left HA and set up her own practice. The client discharged HA and elected to have Peterson continue representing him, again on a contingency fee basis. HA filed an attorney lien. The client prevailed in district court and on appeal to this court.
See Kohn v. City of Minneapolis Fire Dept., 583 N.W.2d 7 (Minn.App. 1998), review denied (Minn. Oct. 20, 1998).
Following a hearing to determine the quantum meruit value of the attorney's lien, the district court awarded Peterson 64% and HA "the remainder," i.e., 36%, of the total attorneys' fees. HA appealed; this court reversed and remanded for the district court to make appropriate findings. Horton Assocs., P.A. v. Peterson, No. CX-99-1279 (Minn.App. Mar. 14, 2000). On remand, the district court again awarded Peterson 64% and HA 36%. HA challenges this fee division, contending that it is unsupported by the record.
DECISION
De novo review is appropriate when the question on appeal is the legal standard to apply to calculate the fees of competing attorneys. See In re L-tryptophan Cases, 518 N.W.2d 616, 619 (Minn.App. 1994), cited in Ashford v. Interstate Trucking Corp. of Am., Inc., 524 N.W.2d 500, 502 (Minn.App. 1994).
Caselaw sets out six factors for courts to consider in dividing fees: (1) the length of time each firm spent on the case; (2) the proportion of funds invested by each firm; (3) the quality of representation; (4) the result of each firm's efforts; (5) the viability of the claim at transfer; and (6) the amount of recovery realized. Ashford, 524 N.W.2d at 503 (citing L-tryptophan, 518 N.W.2d at 621).
Following remand, the district court considered these factors and found, among other things, that (1) Peterson prepared the case and tried it to the court; (2) after the case was submitted, Peterson resigned from HA and started her own practice; (3) the viability of the case at the time of transfer was unknown; (4) the client terminated HA and retained Peterson to continue his lawsuit; (5) the client was happy with the quality of Peterson's representation, both before and after she left HA (6) Peterson "was the [a]ttorney who produced the excellent result" while HA provided only administrative support; (7) 57% of the hours on the case were worked while Peterson was employed by HA and 43% were worked while she was self-employed; (8) the client received a judgment of $405,240 plus interest; (9) Peterson deposited $180,937, or 40% of the client's recovery, "in court," i.e., with the court administrator; and (10) HA asserted a lien only on this amount.
The district court actually found that "The percentage division of hours Ms. Peterson spent on the case at HA is 57% and 43% at her own law firm" but the record reflects that Peterson in an affidavit said "As far as the attorneys' fees from billable hours performed on the case, the percentage division is: 57% HA, and 43% at my own firm." Respondent's brief at A-21. Thus, the 57% is the total hours worked by HA employees, not just those worked by Peterson.
Some of what the district court denominated "conclusions of law" are actually findings of fact, but the distinction in labeling is irrelevant. See Morton v. Board of Comm'rs, 301 Minn. 415, 425, 223 N.W.2d 764, 769 (1974).
Notwithstanding these district court findings of fact and conclusions of law, the district court did not address one essential point: Peterson received compensation as an HA employee during 57% of the time she spent on this case. Finding that Peterson prepared and tried the case and produced the excellent result while HA provided only administrative support ignores the employer-employee relationship that existed between HA and Peterson during that time. The work Peterson did as HA's employee was not done by Peterson; it was done by HA through Peterson. Thus, there is nothing in the findings or conclusions to explain why the district court originally, and again on remand, allocated HA only 36% of the fee after finding it had worked 57% of the hours.
After due consideration, we modify the judgment to award HA 57% and Peterson 43% of the $180,937 total attorney fees plus accumulated interest. See Ashford, 524 N.W.2d at 503 (awarding each of two firms fees in proportion to their contribution to the final result of the case).
Affirmed as modified.