Student Name: Kristina Mitton
Link for opinion: http://www.morelaw.com/verdicts/case.asp?n=09-2426&s=MO&d=44296
Title: Two Missouri law firms argue over attorney referral fees

Patrick Eng, an attorney for Eng & Woods, filed a declaratory judgment against Cummings, McClorey, Davis and Acho, (CMDA) a law firm based in Missouri that specializes in employment, commercial and personal injury law. Eng states that James Acho of (CMDA) believes his firm is owed one-third of the attorney fees that Eng recovered from a wrongful death suit that his client, Michael Richina filed in his parents’ accidental death.
In November 2006, Ernie Fazio, a long-time client of attorney James Acho called to inform Acho, that his sister-in-law and her husband had been killed in a car accident. The purpose of the phone call was to request that CMDA represent the former client’s niece and nephew in case a lawsuit was to arise because of the accident. The client’s nephew, Richina suggested that either CMDA represent them or that they refer them to another Missouri firm. After researching possible firms, Acho found Eng & Woods and suggested them to Richina. Acho then contact Eng, a partner in Eng & Woods and the two agreed that Eng would handle the case. According to Acho, the two agreed that CMDA would receive one-third of the firm’s attorney fees from the recovery of the case. This amount would be CMDA’s referral fees. Eng & Woods dispute that this agreement was ever made official.
On December 1, 2006, Acho sent Eng a letter stating that it would serve as a follow-up of the conversations between the two over the previous two weeks. According to Acho, the letter summarized the events and conversations that had taken place. After reading the letter, Eng took no action in informing Acho that he didn’t agree with the statements made in the letter.
Eng & Woods pursued the wrongful death claim in Missouri state court. Occasionally, Acho received updates on the case and informed Richina of what was going on. In December 2007, the case was settled and Richina and his sister each received $562, 500, for a total award of $1,875,000. Both Richina and his sister paid $187,500 in attorney fees, for a total of $375,000. Richina asked Eng if Acho would be receiving a portion of the fee and Eng told him that Acho would get one-third of the total.
In January 2008, Acho heard that the case had been settled. He then contacted Eng to discuss payment of his portion of the attorney fees. They discussed this over the phone and Acho sent a letter date January 22, 2008. Acho states that Eng agreed to the fee arrangement. The same day that Eng received the letter, Woods, Eng’s partner sent a check to Acho in the amount of $18,562.50; which is 5% of Eng & Woods fee from the case.
After an argument over the amount of the check, Eng put a stop on the check. In May 2008, Eng & Woods filed a declaratory judgment action against CMDA in federal court. They sought a declaration that CMDA had no right to any portion of the attorney’s fees recovered by Eng & Woods. CMDA then counter-claimed for breach of contract, fraud and misrepresentation, unjust enrichment, and bad faith breach of duty.
Issue
Does CMDA have rights to a portion of Eng & Woods recovered attorney fees under Mo. Sup. Ct. R. 4-1.5(e) (2006).6?
If two attorneys from different firms wish to share the fees generated from a single case, they may do so “only if based on a sharing of services or responsibility.” This principle is stated in Missouri Rule of Professional Conduct 1.5(e), which, at the time this alleged agreement between Acho and Eng was made, provided:
A division of fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer or, by written agreement with the client, each lawyer assumes joint responsibility for the representation;
(2) the client is advised of and does not object to the participation of all the lawyers involved; and
(3) the total fee is reasonable.
Mo. Sup. Ct. R. 4-1.5(e) (2006).6 The Rule “permits the lawyers to divide a fee . . . by agreement . . . if all assume responsibility for the representation as a whole and the client is advised and does not object.” Id. cmt. “Rule 4-1.5 has the force and effect of law in Missouri.”
According to Rule 4-1.5(e) of the Missouri Rule of Professional Conduct, the court determined that because there was no written agreement, CMDA is not entitled to a portion of the attorney fees that were awarded to Eng & Woods.