Appeal from Superior Court of King County. Docket No: 93-2-04997-8. Date filed: 06/02/95. Judge signing: Hon. Nancy A. Holman.
Petition for Review Denied July 8, 1997,
Authored by H. Joseph Coleman. Concurring: C. Kenneth Grosse, Mary K. Becker.
The opinion of the court was delivered by: Coleman
COLEMAN, J. -- John Taylor discharged his attorney, Fred Zeder, in a personal injury action nine days before trial and after Zeder had negotiated a settlement offer of $225,000. Taylor claims the trial court erred in concluding that Zeder substantially performed the contingency fee contract entitling him to a one-third share of the settlement offer. We hold that Zeder is entitled to the contingency fee because he substantially performed the contract.
On February 10, 1993, Taylor was hit by a car driven by Pauline Shigaki. Shigaki carried an automobile insurance policy with American States Insurance Company, providing a $300,000 liability limit as well as personal injury protection for medical expenses and wage loss.
As a result of the collision, Taylor suffered numerous injuries, including partial loss of use of his right thumb. Taylor hired Zeder to handle his claim against Shigaki. Zeder filed a summons and complaint on February 25, 1993, and the case of Taylor v. Shigaki was scheduled for trial on September 21, 1994.
On February 28, 1993, Taylor and Zeder negotiated a contingency fee contract. The contract provided in part: "Clients will make the final determination in accepting any monies in settlement or compromise; however, no settlement or compromise will be made in such a way as to exclude the attorneys from their contingent fee and repayment of costs advanced." Another paragraph of the agreement provided that "if Clients . . . discharge Attorney, Clients agree to pay Attorneys a reasonable fee for services performed at the rate of $200 per hour, plus any costs or expenses incurred by or on behalf of the Clients."
In April 1993, Zeder went on a six-month sabbatical and assigned Taylor's case to his associate, Faye Freedman. During Zeder's sabbatical, Freedman submitted Taylor's medical bills to American States for payment under Shigaki's PIP coverage and collected the checks for Taylor. She negotiated a settlement of Taylor's property damage claim. Freedman also spoke with Taylor on numerous occasions, answering his questions about the case, and attended Taylor's deposition.
When Zeder returned from his sabbatical on October 1, 1993, Taylor told Zeder that he was not happy with Freedman and that he wanted Zeder to handle his case. Zeder agreed and, besides conducting discovery, attended Taylor's medical examination by Dr. Alfred Blue, a respected hand doctor, who suggested that Taylor's thumb injury was permanent. Zeder presented Dr. Blue's Conclusions to Taylor's treating physician, who was persuaded that Taylor's thumb injury was more serious than he had previously thought.
On May 10, 1994, Zeder sent a letter to James McGowan, in-house counsel at American States, demanding Shigaki's liability policy limits. On May 11, 1994, Taylor called Zeder to complain that he did not have a chance to review the letter and compare the numbers to his damage estimates. But the letter did prompt Shigaki to retain her own lawyer, who sent a "hammer letter" pressuring American States to pay their policy limits or risk a bad faith claim.
By this time, many disagreements had developed between Taylor and Zeder over how the case should be presented and handled. On May 16, 1994, Zeder wrote to Taylor stating that Taylor had the right to fire his attorney at any time. On May 24, Zeder sent a second letter, informing Taylor that if he discharged Zeder's firm, Taylor would be responsible under their agreement for paying $200 per hour for services rendered. Taylor did not fire his attorneys at this time.
On August 25, 1994, American States' adjuster David Boyer contacted Zeder and offered to settle Taylor's claim for $225,000. Taylor rejected the offer and stated that nothing less than the policy limit was acceptable. On August 30, 1994, Zeder obtained a summary judgment establishing Shigaki's liability to Taylor.
Taylor then began looking for another lawyer, but he was not able to find a firm that would accept the case. On September 6, 1994, Taylor called Boyer on his own initiative to schedule a meeting. Boyer advised Taylor that he could not talk with him alone while he was represented by an attorney and advised Taylor to have Zeder schedule the meeting. When Taylor asked Zeder to do this, Zeder advised against it, reasoning ...