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Howaniec v. Lilley

Superior Court of Maine, Cumberland

August 26, 2014



Joyce A. Wheeler, Justice.


This case involves the manner in which trial counsel, John Flynn (" Flynn"), and referring counsel, James Howaniec (" Howaniec"), shall share fees, if at all, when trial counsel leaves the first firm, Troubh Heisler (" TH"), with whom the referral agreement was struck and tries the case while at second firm, Daniel G. Lilley, P.A. (" Lilley"), that does not have an agreement with referring attorney. Howaniec filed a motion for partial summary judgment against Flynn and Lilley for recovery of a sum he asserts he is owed as a referral fee in the matter of Paige v. Maine Medical Center .[1]

Howaniec contends that his client signed a referral agreement entitling him to a share in the gross fees paid to the attorneys. He asserts that because the total attorney's fees generated in the case and paid to Lilley amounted to $172, 906.86 that he should be paid thirty percent (30%) of the gross fee, which he calculates to be a sum of $51, 872.06.

Howaniec referred the Paiges' medical malpractice case to William McKinley (" McKinley") at TH. TH agreed in 2002 to pay Howaniec a 30% referral fee. TH does not contest that there was a fee sharing arrangement under which TH was to pay Howaniec 30% of attorney's fees received. Subsequently, when Flynn who had become the primary attorney on the Paige case moved from TH to Lilley's office, TH, Flynn and Lilley signed a memorandum of understanding for the sharing of fees in the Paige case.

Howaniec filed a five-count complaint seeking a declaratory judgment, equitable accounting, breach of contract, conversion, and unjust enrichment to collect his share of the attorneys' fees. Howaniec's partial motion for summary judgment on Counts I, IV and V seeks a declaration that his portion of the contingency fee in the amount of $51, 872.06 is his property, that Lilley and Flynn have converted his property to his detriment and refuse to pay the fee, and Lilley and Flynn have been unjustly enriched and it is unjust and inequitable for Lilley and Flynn to retain the entire fee without paying him his share of the contingency fee. For his claims against Lilley and Flynn, Howaniec relies on the 2002 fee sharing agreement that TH had with Paige and a 2009 memorandum of understanding between Flynn and Lilley and a 2009 agreement between Flynn, Lilley and TH concerning the sharing of fees in the Paige case.

Lilley filed a cross-claim against Flynn and TH and opposed Howaniec's motion, stating that he never signed an agreement with Howaniec and is entitled to be indemnified from Flynn and TH. Lilley also asserts that Howaniec has failed to produce any admissible evidence of a fee sharing agreement. (LSMF ¶ 4.) According to Lilley, Howaniec cannot make his case that there was a fee sharing agreement by relying on inadmissible evidence, including (1) a letter from William McKinley, one of Flynn's former partners at TH, (2) an unsigned contingent fee agreement generated from TH's computer files or (3) an e-mail to Flynn from McKinley. In any case, Lilley argues that Howaniec's dispute is with TH and not him.

Flynn filed an answer and cross claim against Lilley and TH, opposed Howaniec's motion, and filed a cross motion requesting summary judgment against TH and Lilley, claiming that Flynn never entered into any agreement with Howaniec and that Howaniec's remedy is against TH. Flynn, like Lilley, argues that there is no signed contingency fee agreement between TH and Paige or Howaniec. In light of the evidence discussed below, the court finds this argument disingenuous.

TH filed an answer with defenses and a counterclaim, alleging that it only agreed to pay Howaniec on a 30% basis of any fee amount received by TH and then only on a pay-when-paid basis. TH states that it has never been paid and it seeks payment in TH's separate motion for summary judgment. TH seeks a declaratory judgment that it is only obligated to pay Howaniec 30% of net cash after fees and expenses actually received by TH from either or both of Lilley or Flynn. Later in the case, TH altered its position, arguing that Howaniec had an agreement with Flynn through TH and with the client Pam Paige. TH argues that the Howaniec-Flynn-Paige agreement was not altered or affected in any way when Flynn relocated his practice to Lilley's office. According to TH, Howaniec is due 30% of the Paige fee from Flynn as originally agreed, and that sum is $51, 872.06. According to TH, it is entitled to a separate fee of $57, 059.26 under the 2009 agreement between Flynn, Lilley and TH.

The only questions raised by this motion are whether Flynn or Lilley owe a referral fee to Howaniec. There are no material facts in dispute regarding the original fee sharing agreement because Flynn and Lilley have not properly controverted the factual allegations concerning the fee sharing agreement related to Howaniec. In any event, neither Flynn nor Lilley were a party to the original fee sharing agreement.


The parties' statements of material facts and the applicable rules of summary judgment practice permit the court to find the following facts as undisputed, unless otherwise stated.

Beginning on or about January 2002, TH undertook the representation of a medical malpractice plaintiff, Pam Paige. On or about March 12, 2002, McKinley sent an engagement letter to his client, Pam Paige, asking her to sign and return the letter to TH. The letter states,

I wanted to outline exactly where we are going with this case. Obviously, I will take this matter on a contingency fee basis. This should also confirm our understanding that we will split my firm's fee with Jim Howaniec. We will split the fee on a 70-30 basis, with my ...

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