“[T]o the extent that plaintiff elected to do business with a lawyer, plaintiff thereby exposed herself to the machinations of the rules that govern that profession.”
– Court of Appeals Judges Deborah A. Servitto, Richard A. Bandstra and Karen M. Fort Hood, explaining why a nonlawyer plaintiff who said she was drumming up business for a lawyer could not enforce an alleged contract to split the resulting attorney fees.
Shalaan D. Fisher thought she had a good deal going with attorney Patrick Carron.
Look how wrong you can be.
Fisher’s complaint alleged that since 1995, Carron had been assuring her that it was completely above-board for an attorney, such as himself, to share legal fees with a nonlawyer, such as herself, in exchange for case referrals.
From the COA’s opinion in Fisher v. Carron:
Plaintiff alleged that she referred several clients to defendant under those terms, including the victim of a serious automobile accident. The complaint asserts that defendant subsequently informed plaintiff the latter’s case was settled for a certain amount and tendered payment to plaintiff of an amount allegedly reflecting her share of his contingency fee. Plaintiff subsequently learned that the settlement and defendant’s fee was actually much higher.
Fisher sued, claiming that Carron stiffed her. Fisher wanted contract damages and equitable relief.
Nothing doing. “I cannot make a lawyer pay a non-lawyer legal fees,” said Wayne County Circuit Court Judge Wendy M. Baxter.
Absolutely correct, said Servitto, Bandstra and Fort Hood.
MRPC 5.4(a) states that, but for exceptions not here at issue, “A lawyer or law firm shall not share legal fees with a nonlawyer.’ …
Because MRPC 5.4(a) prevents defendant from making payments in accord with an agreement to share a fee with a nonlawyer, that rule prevents plaintiff from collecting that share by way of an enforcement action.
But what about equitable estoppel? Fisher argued that:
because defendant had earlier assured her that their fee sharing arrangements were legal, he should be estopped from changing positions now in defense of her claim for proceeds due from such an agreement.”
The COA panel had a quick response:
[P]laintiff identifies no prejudice from having been misled to believe that the fee-sharing agreement was enforceable, other than her assertion that she has been underpaid according to that agreement.
However, not receiving the balance of a share of a lawyer’s contingency fee where she was not legally entitled to receive anything in the first place hardly qualifies as prejudice.
Further, the doctrine that an unethical contract is unenforceable would mean little if such a contract could be rendered enforceable upon a showing that one contract partner misled the other.