ANALYSIS OF SEPTEMBER 8, 2018 SUPREME COURT OPINION

(Posted September 8, 2018) The phrase penny-wise and pound-foolish came to mind as I read today’s lone published opinion from the Supreme Court of Virginia. Roberts v. State Bar is a disciplinary appeal that traces its origin to the princely sum of a hundred and forty-three dollars. We begin with a personal-injury claim. The client hired a lawyer, signing an agreement that provided for a contingent legal fee. The agreement also required the client to deposit into the lawyer’s trust account $150, from which the lawyer could bill for expenses. If the client fired the lawyer before the end of the case, “the law firm will be entitled to a fee quantum merit [sic] for services rendered. Client agrees that the reasonable value of the services rendered to it by the law firm shall not be less than the fees set forth in this Agreement.” The client became dissatisfied with the lawyer and fired him after eight months, before any resolution of the claim. She demanded a return of her $150, and instructed the lawyer to forward her file to her new counsel. The lawyer complied with the latter request, and billed $6.70 to reimburse the mailing cost. Instead of refunding the remaining $143.30, the lawyer transferred it to his operating account, reasoning that the quantum-meruit value of his services easily exceeded that sum. The client eventually filed a Bar complaint. During the disciplinary hearing, the client agreed with certain charges on the lawyer’s bill that totaled about $500. The lawyer then turned to the District Committee and insisted that he had done nothing wrong; the agreement gave him the right to transfer money from his trust account to his operating account for unpaid legal fees whenever the client terminated the representation. The Committee disagreed and found that the lawyer had violated rules relating to safekeeping property, imposing a public reprimand with terms. The lawyer appealed to the Disciplinary Board, but got the same outcome. That generated this trip to Ninth and Franklin. The justices today unanimously affirm. That may seem incongruous, since everybody knows that the lawyer performed $500 or so in legal services, so he should be able to offset that by the $143, right? Except the client had a plausible argument that that quantum meruit fee should be contingent, since that’s the basic fee arrangement. She had not recovered anything at any time while this disciplinary case made its way through the system. The Supreme Court finds that that made the ownership of the $143 a disputed matter, so the lawyer had no right to summarily “adjudicate” ownership of the money in his own favor. If the new counsel had secured a recovery for the client, either by collected judgment or settlement, this might be a different matter. But the question whether a termination automatically converts a contingent fee to a fixed fee is still debatable, and the lawyer acted hastily in grabbing this small sum.