August 26, 2014
TROUBH HEISLER, PA, Plaintiff
DANIEL G. LILLEY, P.A., and JOHN FLYNN, III, Defendants
DECISION AND ORDER
Joyce A. Wheeler, Justice.
Pending is Troubh Heisler's (TH) motion for summary judgment in this action regarding the division of attorney's fees received pursuant to a contingent fee in a medical malpractice lawsuit (" Paige action or lawsuit"). According to TH, the parties entered into a written contract in February 2009 (" 2009 Agreement or MOA") that is unambiguous and obligates the defendants to pay TH 33% of any fee received by them on account of the Paige lawsuit. TH asserts that Lilley received $172, 906.86 in attorney's fees, paid John Flynn $50, 000 in legal fees for the Paige action but that neither Lilley nor Flynn has paid the 33% of those fees owed to TH pursuant to the 2009 Agreement. TH relies, in part, on the court's decision in Troubh Heisler, PA v. Daniel Lilley, P.A., et al ., Docket No. CUM-CV-2012-103, in which the court found that the defendants Lilley and Flynn breached the 2009 MOA with TH involving another lawsuit.
Flynn filed an opposition and continues to contend that the Separation Agreement between him and Troubh Heisler goes part-and-parcel with the Memorandum of Agreement executed by him, Troubh Heisler and Daniel Lilley (" Lilley"). Flynn contends the two documents form an integrated agreement: the return of Flynn's capital account and the fee sharing in cases leaving Troubh Heisler were part of the same negotiations and integral parts of the same agreement, even though Lilley was not a party to the Separation Agreement. Flynn argues there are material facts at issue concerning his capital account that prevent summary judgment with respect to the MOA.
Lilley filed an opposition on the basis that James Howaneic's separate motion for summary judgment is pending and argues that Lilley can not be responsible to pay a referral fee to both TH and Howaniec. Lilley cannot owe 30% to Howaniec and 33% to TH. According to Lilley, the Howaniec claim must be resolved before TH's claim can be resolved. Howaniec has a separate action pending before this court and his claims against Flynn and Lilley are resolved today.
STATEMENT OF UNDISPUTED FACTS
The parties' statements of material facts and applicable summary judgment law permit the court to find the following undisputed facts, unless stated otherwise.
From November 12, 1996 through January 31, 2009, Flynn conducted his practice at TH. (THSMF ¶ 3.) On or about January 2002, TH undertook the representation of a medical malpractice plaintiff, Pam Paige. William McKinley was the first attorney to represent Paige at TH. Shortly thereafter, Flynn took on the representation of Paige while he was at TH.
On or about January 31, 2009, Flynn resigned from TH and entered into an employment arrangement with Lilley. (THSMF ¶ 4.) Prior to Flynn's resignation from TH, Flynn became the primary attorney working on the Paige case for TH. When Flynn left TH to practice with Lilley, the client Paige and her case went with Flynn. (THSMF ¶ 7.)
On February 5, 2009, TH, Flynn and Lilley executed the MOA related to several cases that went with Flynn at the time of his transition to Lilley, including the Paige action. (SMF ¶ 8.) The MOA states that for those clients who decided to have their cases transferred to Lilley with Flynn,
it is the parties' intention that Flynn and Lilley will pay a referral fee to TH if and when any legal fees are paid to Flynn and/or Lilley.
For each case, the referral fee paid to TH will be equal to a percentage of the total fees received by Flynn and/or Lilley on that case. The percentage referral fee for each case is listed in the right-hand column of the attached page.
(SMF ¶ 11.) For the Paige action, the amount shown on the attached page to the MOA for the referral fee to be paid to TH is 33% of the total fees received by Flynn and/or Lilley on that case. (THSMF ¶ 11.)
Flynn successfully tried the Paige case while at Lilley's office and, after verdict and with court approval, Lilley and Flynn received a total fee in the amount of $172, 906.86. (THSMF ¶ 10.) Defendants have reimbursed TH for costs but have not paid TH the referral fee of 33% of $172, 906.86, that remains due and owing. (THSMF ¶ 13.) The fees were collected through Lilley's office. Flynn, who has since departed from Lilley's office, was paid by Lilley $50, 000 for his share of the attorney's fees in the Paige lawsuit. Flynn demanded that Lilley pay TH but neither Lilley nor Flynn has paid TH its referral fee. That referral fee due to TH under the MOA is $57, 059.26.
1. Standard of Review
Summary judgment should be granted if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. M.R. Civ. P. 56(c). An issue of " fact exists when there is sufficient evidence to require a fact-finder to choose between competing versions of the truth at trial." Inkell v. Livingston , 2005 ME 42, ¶ 4, 869 A.2d 745 (quoting Lever v. Acadia Hosp. Corp ., 2004 ME 35, ¶ 2, 845 A.2d 1178).
In considering a motion for summary judgment, the court should consider the facts in the light most favorable to the non-moving party, and the court is required to consider only the portions of the record referred to and the material facts set forth in the parties' Rule 56(h) statements. E.g., Johnson v. McNeil , 2002 ME 99, ¶ 8, 800 A.2d 702, 704. Rule 56(h) requires a party that is opposing a motion for summary judgment to support any qualifications or denials of the moving party's statement of material facts with record citations. Levine v. R.B.K. Caly Corp ., 2001 ME 77, ¶ 6 n.5, 770 A.2d 653.
" All facts not properly controverted in accordance with this rule are deemed admitted." Rogers v. Jackson , 2002 ME 140 ¶ 7, 840 A.2d 379 ( citing M.R. Civ. P. 56(h)(4)).
2. Parties' Dispute
In summary, Flynn, while at TH, began representation of Ms. Paige in 2002 and worked on the case until Flynn left TH and took Ms. Paige's case with him to Lilley's office. When Flynn left TH to go to Lilley, TH, Flynn and Lilley negotiated and signed the MOA, an agreement that addressed how the fees would be handled in the Paige case. TH has not been paid its share of those fees, even though Lilley received $172, 906.86 in attorney's fees for the Paige case and paid $50, 000 to Flynn. Flynn also argues that factual issues in dispute on his counterclaim prevent summary judgment pursuant to the MOA.
(a) Memorandum of Agreement
Troubh Heisler contends that the MOA is a valid, enforceable and unambiguous contract, and that Troubh Heisler is entitled to judgment as a matter of law. The court agrees with TH on this point. The Paige case was listed on the page attached to the MOA, and stated a thirty-three percent (33%) share of total attorneys' fees " received by Flynn and/or Lilley" on that case were to be paid to TH as a referral fee. Lilley received $172, 906.86 in fees as a result of the Paige case. Therefore, Lilley and Flynn owe TH $50, 059.26.
Flynn and Lilley argue that TH's calculation of entitlement to fees of $57, 059.26 neglects the fact that Howaniec claims a referral of 3 0% of the total attorneys' fee generated in the Paige matter. As a result, they argue that Howaniec's fees will be deducted and paid to Howaniec and this would reduce the calculation of TH's fees. The court rejects this argument because the MOA expressly states " that the referral paid to TH will be equal to a percentage [33%] of the total fees received by Flynn or Lilley on that case." The MOA acknowledges that if any legal fees are paid to Lilley and/or Flynn, as their interests may appear between themselves, they are then jointly and severally obligated to pay to TH the percentage referral fee of 33% " of the total fees received by Flynn and/or Lilley" . The MOA does not address Howaniec's referral fees or authorize the subtraction of Howaniec's referral fee from TH's referral fee. The rights, if any, of TH and Howaniec to a share of attorneys' fees related to the Paige action are separate and distinct and covered by different agreements.
(b.) Flynn's Counterclaim
The disputed facts relative to Flynn's counterclaim are not material to TH's claim of breach of the MOA. The material facts with respect to the contract claim are not in dispute. All of the material facts cited in Flynn's additional statement of material facts relate to his counterclaim and whether he is entitled to additional funds for his capital share. Even if Flynn wins some additional funds on his counterclaim this would have no effect on TH's claim for 33% of the Paige attorney's fees pursuant to the MOA. The only condition precedent to payment under the MOA is receipt by Flynn/Lilley of a fee. Accordingly, the counterclaim will be tried separately and does not prevent summary judgment on TH's claim for payment of a referral fee pursuant to the MOA.
The entry is:
1. Summary judgment GRANTED to Troubh Heisler in the amount of $57, 059.26 on the Complaint against Lilley and Flynn, jointly and severally, together with interests and costs.
2. Clerk shall schedule Flynn's counterclaim on next available trial list.