U.S. First Circuit - The FindLaw 1st Circuit Court of Appeals News and Information Blog

Trouble in Paradise: Lawyers go to Court in Fee Dispute

As New England begins to crawl out of one of its worst winters on record, it's easy to forget that Yanks' circuit court includes the tropical climes of Puerto Rico. But it does, given the First Circuit occasion to rule on a lawyer-on-lawyer fee dispute arising from the Estado Libre Asociado.

The dispute arose following successful representation in a personal injury case and ended in a (metaphorical) court room brawl between lawyers, as the esquires battled not only over their fee sharing agreement, but even over who actually represented the client.

Just Your Run of the Mill Local Counsel Dispute

After downed power lines shocked Orlando Alejandro-Ortiz, he contacted Texas firm Matthews & Fullmer and sued the Puerto Rico Electric Power Authority. Fullmer entered into agreement with David Efron who was to perform local counsel duties in exchange for 20 percent of the fees.

Efron tried the case and won a judgment of over $2 million, later cut in half by the district court. After the judgment, the honeymoon between Fullmer and Efron ended. Then things got crazy: Fullmer fired Efron; Efron got the clients to fire Fullmer; Fullmer convinced them to switch once again. Efron filed a motion for 80 percent of attorneys' fees based on an alleged, unwritten agreement with Fullmer.

When the court brought the dueling lawyers before it, it ruled that Fullmer would continue to represent the plaintiffs and ordered Efron to have no more contact with them. It also found Fulmer to be "not credible" and noted that he had made several mislead statements -- moving, for example, from a claim that his payment agreement was explicitly renegotiated to arguing that there was an "implicit" agreement that he receive "the lion's share."

Not Credible, but Take a Double Fee Anyway

Though Efron was prevented from contacting plaintiffs and was no longer their lawyer, he was awarded 40 percent of the attorneys' fees, finding that while the lawyers had agreed 20 percent, and had not modified that payment, Efron was entitled to more on a quantum meruit basis.

That wasn't good enough for Efron, who sued, objecting both to the 40 percent fee and the finding that he was not credible. The First Circuit was unswayed by his complaints, noting that as both party and witness to the dispute, he was bound to have his credibility evaluated. As for his claims that he is entitled to a greater share of the fee, he provided no ground to support this, the First Circuit ruled, and should be happy with his share.

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