Barney v. Bell, [Ms. 2121048, Oct. 10, 2014] __ So. 3d __ (Ala. Civ. App. 2014). Maurice
Bell and William Clay Teague represented Arthur Barney to pursue a worker's
comp claim and a third-party action. From the settlement of the worker's
comp claim, Bell and Teague received $6,375 as a 15% fee. The carrier
reserved its reimbursement right against the third-party action. From
a $45,000 settlement of the third-party action, Bell and Teague retained
their 50% fee and forwarded the remaining $22,500 to the worker's
comp carrier. Barney sued Bell and Teague, alleging that they retained
an excessive fee out of the third-party settlement and that they should
have returned the $6,375 fee from the worker's comp action. The circuit
court entered summary judgment for Bell and Teague on both aspects of
the claim. The Court of Civil Appeals affirms as to the first aspect and
reverses as to the second aspect. On the first issue, Barney argued that
the comp carrier agreed to accept $22,500 as an accord and satisfaction
for its $65,000 reimbursement claim, so Bell and Teague were entitled
only to an $11,250 fee. The Court of Civil Appeals holds that the carrier
did not agree to reduce its reimbursement interest in the third-party
action, but, rather, agreed to pay its proportionate share of attorney
fees on the full $45,000 recovery. The Court holds that the settlement
reduced the comp carrier's liability by $45,000 and it paid the $22,500
fee out of that reduction of its liability. The Court holds that, regarding
retaining the $6,375 fee, the claim falls under the Alabama Legal Services
Liability Act and the question thus is whether Bell and Teague breached
the standard of care by retaining that fee. They presented no evidence
that they did not breach the standard of care, so they did not make a
prima facie showing in support of their summary-judgment motion, and the
circuit court erred in entering a summary judgment in their favor on this
aspect of the claim. In support of his motion for summary judgment on
this issue, Barney submitted an affidavit of a lawyer who said that retaining
both the $22,500 fee and the $6,375 fee constituted a forbidden "double
fee." Because Bell and Teague did not present any evidence in contradiction
of this affidavit, the circuit court erred in denying Barney's motion
for summary judgment on this aspect of the claim. The Court of Civil Appeals
remands the case for further proceedings including the assessment of any
further compensatory or punitive damages to which Barney might be entitled.
The Lesson: if your client sues you for collecting or retaining an excessive
fee, it is a legal services liability action, and you must present expert
evidence that you did not breach the standard of care by collecting or
retaining the fee.
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