Fee-sharing agreement only goes so far 

Lawyer lacks recourse against his former co-counsel for statements she made to their clients

Posted: 7:00 pm Sun, March 21, 2010
By Caryn Tamber
Daily Record Legal Affairs Writer

It started off as a routine referral and fee-sharing arrangement between two attorneys who had worked together before.

Last week, the Court of Appeals had to step in to resolve the mess that resulted from the agreement between lawyers William J. Blondell and Diane M. Littlepage.

In a case of first impression, the 6-1 top court held that where two lawyers agree to joint representation of a client, they owe one another only limited duties. The opinion affirms a decision of the Court of Special Appeals.

“We shall hold that Littlepage, on the well-pleaded facts, did not breach the express or implied terms of the contract in question; that the fee sharing agreement in issue, as a matter of law, did not give rise to actionable tort duties of consultation, communication, and disclosure between Littlepage and Blondell; and finally, that Littlepage, as a matter of law, could not tortiously interfere with a contractual or economic relationship to which she was a party,” Judge Lynne A. Battaglia wrote.

According to the opinion, Lois and Hugh Corbin retained Blondell to represent them in a medical malpractice lawsuit against a doctor who, they alleged, missed signs of Lois Corbin’s breast cancer.

Blondell referred the case to Littlepage; the Corbins signed a fee-sharing agreement acknowledging that Littlepage would take primary responsibility for the case and that the two lawyers would split the fee. Blondell had no further contact with the Corbins and did not participate in the case.

The doctor raised a statute of limitations argument on his motion for summary judgment, which was denied. However, a settlement judge told the parties that the doctor’s argument was compelling.

The Corbins settled the case for $225,000. While damages are not included in the malpractice claim, Blondell told the court that Littlepage’s initial demand for the Corbins sought $1 million and the settlement judge suggested $350,000.

Littlepage remitted half her fee to Blondell, as required by the contract. She also suggested to the Corbins that they consult a legal malpractice attorney about a possible claim against Blondell, which they did. (That case never went anywhere.)

Blondell sued Littlepage for fraudulent concealment, breach of contract, breach of fiduciary duty and negligence, alleging that she undermined him to the Corbins and froze him out of settlement negotiations.

Baltimore County Circuit Court Judge Mickey J. Norman threw the case out on summary judgment, and the Court of Special Appeals affirmed.

The Court of Appeals held that there was no breach of contract because Littlepage paid Blondell his share of the fee, thus fulfilling her end of the contract. There was no joint venture or partnership between the two, Battaglia wrote.

Blondell could not sustain his negligence or fraudulent concealment claims because Littlepage owed him no duty that would require her to compensate him for financial loss.

“The agreement among the parties directly contradicts the existence of those duties, because Littlepage unilaterally was to determine whether to request Blondell’s services …,” Battaglia wrote.

Chief Judge Robert M. Bell dissented, writing that the majority opinion sets a bad precedent for the relationship between co-counsel lawyers.

“[I]f the majority is correct, an attorney, without fear of consequences and with impunity, may undermine his or her co-counsel’s relationship with the clients and denigrate, without fear of retribution, not simply his or her legal competence but any other attribute or quality upon which a client reasonably relies and without which the client is not likely to be willing to trust,” he wrote.

“This would be a troubling outcome, especially in a profession where an attorney’s livelihood largely rests upon his reputation.”

R. Scott Krause of Eccleston and Wolf P.C., who represented Littlepage, did not return a call for comment.

Nathaniel C. Fick of Fick & May, one of Blondell’s lawyers, praised Bell’s dissent and expressed worry that in the future, the majority opinion will be interpreted as allowing shady dealing between co-counsel attorneys, negatively affecting the relationship between the client and one of the lawyers.

“Here, Judge Bell recognizes clearly the co-counsel relationship doesn’t negate the dyad, the singleness and separateness of the relationship between an attorney and a client,” Fick said.