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Levine v. Haralson, Miller, Pitt, Feldman & McAnally, P.L.C.

Court of Appeals of Arizona, First Division

January 25, 2018

JACK LEVINE, an individual, Plaintiff/Appellant,
HARALSON, MILLER, PITT, FELDMAN & McANALLY, P.L.C., a professional association, Defendant/Appellee.

         Appeal from the Superior Court in Maricopa County No. CV2016-001518 The Honorable Lori Horn Bustamante, Judge

          Robbins & Curtin, PLLC, Phoenix By Joel B. Robbins Counsel for Plaintiff / Appellant

          Udall Law Firm, LLP, Tucson By Michele G. Thompson Counsel for Defendant / Appellee

          Presiding Judge Kenton D. Jones delivered the Opinion of the Court, in which Judge Jon W. Thompson and Judge Patricia A. Orozco [1] joined.


          JONES, JUDGE

         Â¶1 Appellant appeals the dismissal of his complaint seeking recovery for the quantum meruit value of legal services he provided pursuant to a non-written contingent fee agreement. We hold that, in the absence of a written fee agreement, an attorney may not recover the quantum meruit value of his services because unwritten contingent fee agreements are void as against public policy. Accordingly, we affirm.


         ¶2 This case arises from Appellant's representation of the Erhardts (the Clients) from 2011 to 2013 in a personal injury matter. The Clients were initially represented by Attorney Jerry Krumwiede, who then sought Appellant's assistance with an understanding that Appellant would ultimately become primary counsel. Appellant and the Clients never executed a written contingent fee agreement, and Appellant and Krumwiede never entered into a written agreement to divide fees. Following a falling out between Appellant and Krumwiede, the Clients dismissed Appellant as their attorney. Appellant asserts that while involved with the Clients' case, he engaged in "vigorous legal representation of [the Clients]" and performed 428.5 hours of work on their behalf.

         ¶3 The Clients eventually also fired Krumwiede and retained Appellee, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C. (Haralson), to represent them. Haralson ultimately settled the Clients' claims. Appellant, who had previously notified all parties he had placed a charging lien against any recovery obtained as compensation for his work, then demanded payment. When Haralson refused, Appellant sued, alleging unjust enrichment and seeking quantum meruit damages.[2]

         ¶4 Haralson moved to dismiss Appellant's complaint, arguing Appellant's claims failed as a matter of law because he: (1) did not allege the existence of a written contingent fee agreement with the Clients, in violation of the Arizona Rules of Professional Conduct, see Ariz. R. Sup. Ct. 42, ER 1.5(c) (providing that "[a] contingent fee agreement shall be in a writing signed by the client"), [3] and (2) failed to allege the legal representation had been terminated without justification, which, Haralson asserted, was a prerequisite to recovery in quantum meruit. The trial court accepted the parties' stipulation to stay discovery pending resolution of the motion.

         ¶5 In response to the motion to dismiss, Appellant admitted he had no written contingent fee agreement but claimed he "entered into an oral agreement for a division of contingency fees recovered upon success of [the Clients'] suit." Appellant also argued that because his claims "sound in equity, " they "survive irrespective of the validity or enforceability of any oral contract between himself and [the Clients]." At a hearing on the motion to dismiss, Appellant's counsel explained:

[W]ell, the [C]lients knew about it and the other attorney obviously knew about it, but . . . Mr. Krumwiede and [Appellant] were in the same office, they felt like there was a relationship that - that permitted their - to have a trusting relationship without, you know, without obviously informing the clients they knew that [Appellant] was one of their lawyers and they didn't go through the formality of putting it in writing.

         Appellant's counsel stated Krumwiede had a written fee agreement with the Clients and asserted Appellant "would have been operating under that as an associate counsel, " but, again, "that part wasn't written, the fee-sharing part wasn't written."

         ¶6 The trial court dismissed Appellant's complaint, reasoning: (1) Appellant did not allege the existence of a written fee agreement with either the Clients or Krumwiede, and (2) Appellant's failure to comply with ER 1.5 barred recovery in quantum meruit as a matter of public policy. Although Appellant explicitly conceded in his pleadings and at oral argument that he had no written agreements, he then filed a motion for reconsideration alleging discovery would show Appellant "had Krumwiede's assurance that such written consent had been obtained." The trial court denied the motion for reconsideration and entered final judgment in ...

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