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Connecticut Legal Ethics
1.5:100 Comparative Analysis of Connecticut Rule
Section (a) of Conn. Rule 1.5 simply requires that the lawyers fees be ňreasonable”. Whereas the comparable Model Rule requires that ňa lawyer shall not make an agreement for, charge, or collect an unreasonable fee or unreasonable amount for expense.” The listed factors (1 through 8) to be considered in determining reasonableness, however, are identical to the Model Rule.
Section 1.5(b) of the Conn. Rule requires a written statement of the hourly rate or other basis of the fee when the ňlawyer has not regularly represented the client”. MR 1.5(b), however, states that a writing is preferable, but not required, in these circumstances. In addition, the Conn. Rule states that the requirement that the fee agreement be in writing shall not apply to public defenders or in situations where the lawyer will be paid by the court or a state agency. The Model Rule 1.5(b) is devoid of such a requirement.
Section 1.5(c), addressing contingent fees, is substantially similar to the Model Rule. The Connecticut rule, however, does not specifically require that the contingency agreement be signed by the client and that the agreement ňclearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party.”
Section 1.5(d) is identical to the Model Rule.
Section 1.5(e) of the Conn. Rule, addressing the division of fees, is significantly different from Model CodeŃs 1.5(e). The Connecticut Rule is less explicit than its Model Rule counterpart in describing what the client must be told about a proposed division of fees, and does not require that this information be conveyed in writing. Additionally, the Conn. Rule does not require that in order to share a fee, a lawyer provide services proportionate to the fee sought or assume responsibility for the representation.
DR 2-106(A) prohibited illegal or clearly excessive fees.
Conn. Rule 1.5(a) shifts the standard from illegal or excessive, to reasonable.
The factors for determining reasonableness, however, are substantially the same
as those in DR 2-106(B) for determining excessiveness. The requirement of a
writing, in paragraph (b) of Conn. Rule 1.5 with respect to clients not regularly
represented, and in paragraph (c) of both
the Conn. and the Model Rule
1.5:200 A Lawyer's Claim to Compensation
Although both this Rule and General Statutes„52-251c require contingent fee agreements to be in writing, the absence of such a writing will not bar the attorneyŃs collection action for a fee under theories of quantum meruit and unjust enrichment. Gagne v. Vaccaro, 255 Conn. 390, 408, 766 A.2d 416 (2001), overruling Alan E. Silver, P.C. v. Jacobs, 43 Conn. App. 184, 682 A.2d 551 (1996), Perkins & Mario v. Annunziata, 45 Conn. App. 237, 694 A.2d 1388 (1997), and Brunswick v. Safeco Ins. Co., 48 Conn. App. 699, 711 A.2d 1202, cert. den. 247 Conn. 923,719 A.2d 1168 (1998).
Where the court determines that the client, ňknew of and assented to the terms of the [fee] agreement and understood his personal obligation for the bill for legal services to be rendered . . . Rule 1.5 does not require that the agreement be signed.” Updike, Kelly & Spellacy, P.C. v. Shore, No. 960556987S, 1997 WL 466504 (Conn.Super. July 31, 1997).
The Committee, in Informal Opinion 94-13 (1994), addressed the issue of whether ňvalue-added billing” was ethical. In this case, the attorney wanted to include in its general terms for legal services a provision which stated, ň[t]he hourly rate quoted in the letter may be departed from and a «value-added billingŃ used, for example, when there is a particularly satisfactory or quickly arrived at solution, which may result in a fee in excess of the straight hourly charge.” The Committee advised that, although Rule 1.5 does not necessarily prohibit such billing, ň[i]t only should be utilized after the clientŃs consent is obtained, after the client has been advised of the services performed and the reason for the deviation . . . .” The Committee reasoned that, some courts treat with great suspicion ňpost-inception contract changes which increase lawyerŃs remuneration. Such changes could be regarded as presumptively fraudulent.” Furthermore, the Committee noted that in DiFrancesco v. Goldman, the Connecticut Supreme Court held that fee arrangements made during the existence of the relationship will be scrutinized with great care and if there are doubts they will be resolved in favor of the clients. (Citing DiFrancesco v. Goldman, 127 Conn. 387, 392 (1940)). Consequently, the Committee stated that the attorneyŃs letter properly advises the client that there may be occasions when value added billing may be utilized, but ňthe letter itself is not advance consent to any particular invoice using that method.”
In Informal Opinions 82-10 (1982), the committee advised that Rule of Professional Conduct 1.5(b) prohibits an attorney from charging interest on outstanding accounts receivable from a client unless such interest charges have been agreed to in advance of the performance of the attorney's services as part of the initial retainer agreement. See also Informal Opinions 99-26 (1999).
ňIf the amount of the fee was not controlled by contract, the appellant [is] only entitled to receive fair and reasonable compensation.” Appeal of Ennis, 84 Conn 610, 612, 80 A. 772 (1911).
1.5:230 Fees on Termination [see 1.16:600]
In Burton v. Browd, No. CV 950320691, 1999 WL 509802 (Conn.Super. July 7, 1999), the court held that even though the plaintiff attorney was discharged prior to trial, and therefore was unable to fulfill the terms and conditions of the contingency agreement, her right to recover was not eliminated. Id. at *2. The Court reasoned that when a lawyer is discharged, she still may be able to recover under a theory of quantum maruit. The Court stated that although a client should be able to terminate the services of an attorney, even without just cause, because of the highly confidential relationship they have, the attorney ňshould [still] receive reasonable compensation for the work he has done up to that point. . . . .” Id. See also Cole v. Myers, 128 Conn. 223, 21 A.2d 396 (1941) and Riscassi & Davis P.C. v. Peck, 1991 WL 204477 (Conn. Super. 1991).
Although only advisory in nature, the Comment to Rule 1.5 states that, ň[i]f a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established by the bar, the lawyer should conscientiously consider submitting to it.”
In Statewide Grievance Committee v. Brown, 67 Conn.App. 183, 786 A.2d 1140 (Conn.App. 2001), defendant appealed a Superior CourtŃs suspension for failing to submit to fee arbitrations arguing that such a requirement is unconstitutional. Id. at 187. Defendant argued that Practice Book „ 2-37(a)(6), the provision pursuant to which the Grievance Committee had ordered him to submit to arbitration, is unconstitutional because it denies him the right to a jury trial. Id. The Appellate Court, however, refused to address the issue holding that the defendant had failed to file an objection within the allotted time and therefore, ňwaived the right to contest the order . . . by knowingly ignoring the established procedure for its review.” Id. at 188.
The court, in Cheverie v. Ashcraft & Gerel, 65 Conn.App. 425, 783 A.2d 474 (Conn.App. 2001), held that Rule 1.5(a), addressing the reasonableness of attorneyŃs fees, does not implicate a legitimate public policy, and therefore the trial court properly refused to conduct a de novo review of an arbitration award. Id. at 433. The court reasoned that, ň[a] public policy challenge to an arbitration award is rooted in the principle that the parties cannot expect conduct which is illegal or contrary to public policy to receive judicial endorsement . . . .” Id. at 432. The court , however, concluded that the reasonableness of attorneyŃs fees does not, ňrise to the level of a well defined public policy,” necessary for a court to review an arbitration proceeding de novo. Id.; see also Brown v. Loomis, No. CV 990088096, 2000 WL 1196425 (Conn.Super. July 27, 2000) (holding that a violation of Rule 1.5(b) does not rise to the level of a sufficient public policy violation necessary to support a CUTPA claim).
In Informal Opinion 97-5 (1997), the Committee was asked to address the issue of ňwhether there is any ethical prohibition or limitation against a mandatory arbitration of fee dispute provision in an engagement letter.” In response, the Committee unequivocally stated that, ň[n]o provision of the Rules of Professional Conduct specifically prohibits retainer agreements providing for mandatory arbitration of fee disputes between lawyer and client.” In fact, the Committee continued by noting that, ň[t]he final Comment to Rule 1.5 recommends that lawyers consider submitting to arbitration or mediation of fee disputes where procedures have been established by the Bar.” The Committee, however, ended by stating that, ň[i]n light of the significance of this provision, it may be better that the lawyer inform the client in writing and the client consents in writing to the mandatory arbitration.”
In the case of Beckman v. Gwiazda, No. CV 90-0439394S, 1991 WL 158156, *5 (July 31, 1991), court determined that the fee charged by the attorney was unreasonable under Rule 1.5 due to attorney's minimal and inadequate services, and consequently ordered fee returned.
ňIn presentment proceedings, the statewide grievance committee must prove by clear and convincing evidence that the attorney misconduct it alleges has occurred.” Statewide Grievance Committee v. Whitney, 227 Conn. 829, 823, 633 A.2d 296 (1993). ňClear and convincing evidence is that which is strong, positive, free from doubt, and full, clear and decisive.” Wenc v. Statewide Grievance Committee, No. CV92703470, 1993 WL 137719, at *5 (Conn.Super. May 24, 1993) (citing Dacey v. Connecticut Bar Association, 170 Conn. 520, 368 A.2d 125 (1976)).
1.5:300 Attorney-Fee Awards (Fee Shifting)
Fee shifting is a subject not addressed by Conn. Rule 1.5, which deals only with the propriety of fees, not with who pays them. Rather, fee shifting is governed by the common-law American Rule, which requires litigants to pay their own attorney's fees, and by the common-law and statutory exceptions to the Rule.
In the heavily cited case of Fleischmann Distilling Corp. v. Maier Brewing Co., 87 S.Ct. 1404 (1967), the United States Supreme Court asserted the primacy of the American rule by holding that, ňattorneyŃs fees are not ordinarily recoverable in absence of statute or enforceable contract providing therefor.” Id. at 1407. Furthermore, the Supreme Court reiterated the rule in Summit Valley Industries, Inc. v. Local 112, United Brotherhood of Carpenters & Joiners, 456 U.S. 717 (1982), when it held that attorneyŃs fees cannot be awarded in the absence of a common-law exception, or an express statutory provision authorizing such fees.
As the United States Supreme Court noted in Summit Valley Industries, while the general American rule is that attorneyŃs fees are not ordinarily recoverable as costs, both courts and Congress have developed exceptions to this rule for situations in which overriding considerations indicated need for such recovery. See Mills v. Electric Auto-Light Co., 90 S.Ct. 616 (1970). In the case of Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), the Supreme Court recognized several of these common-law exceptions. First, the common-benefit or common-fund exception allows, ňa party preserving or recovering a fund for the benefit of others in addition to himself, to recover his costs, including attorneyŃs fees, from the fund or property itself or directly from the other parties.” Id. at 257. Second, attorneysŃ fees can be equitably assessed for ňwillful disobedience of a court order . . . as part of the fines to be levied.” Id. at 258 (quoting Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 426-428 (1923). Lastly, the Court acknowledged that a statute or a provision of a contract may provide for fee shifting. Id. at 257.
As recently at 1997, the Connecticut Supreme Court in Rizzo v. Pool Co. v. Del Grosso, 240 Conn. 58, 689 A.2d 1097 (1997), reaffirmed ConnecticutŃs adherence to the United States Supreme CourtŃs formulation of the modern American Rule and the exceptions as laid out in Alyeska Pipeline Service Co. v. Wilderness Society. Id. at 72; see also Brookfield v. Candlewood Shores Estates, Inc., 201 Conn. 1, 14, 513 A.2d 1218 (1986).
Bad Faith or Oppressive Litigation
The most commonly invoked exception to the ňAmerican Rule” is that for litigation brought in ňbad faith, vexatiously, wantonly or for oppressive reasons.” Lee v. Palumbo, No. CV970349352S, 2001 WL 1178336, at * 1 (Conn.Super. Aug. 30, 2001). Furthermore, this bad faith exception applies not only to the filing of an action, but also in the conduct of the litigation. Id. Additionally, it applies to both to the party and his counsel. Id. In the case of Habetz v. Condon, 224 Conn. 231, 618 A.2d 501 (1992), the Connecticut Supreme Court noted that ňwhile the term «bad faithŃ can have varying meanings depending on the context in which it is used, it has generally been defined as, the conscious doing of a wrong because of a dishonest purpose, interest or sinister motive.” Id. at 237.
In the case of Lee v. Palumbo, No. CV970349352S, 2001 WL 1178336 (Conn.Super. Aug. 30, 2001), the court held that a pro se litigant can be held liable for a bad faith assertion of claims. Id. at * 2. The court stated that, ňwhile a pro se litigant cannot be expected to adhere to the same high standards of performance of a practicing attorney he is required to comply with our Connecticut Rules of Practice” and in this case he willfully abused these rules. Id. at 1.
Wrongful Involvement in Litigation
There appear to be no pertinent Connecticut court decisions, and therefore no common law, on this subject.
Common Fund or Common Benefit
Although the court in Jacobson v. Security ≤CT Life Ins. Co., 1999 WL 732588 (Conn.Super. Sep. 02, 1999), acknowledged the common law right to attorneyŃs fees in common fund cases, it questioned the use of the ňlodestar” method of calculating reasonable attorneyŃs fees, arguing that the method was too labor intensive. See id. at *3. The Court, however, ultimately acquiesced and used the lodestarŃs twelve factor method in its determination. See id.
Disobedience of a Court Order
There appear to be no pertinent Connecticut court decisions, and therefore no common law, on this subject.
Valid Contractual Provision
The Connecticut Supreme Court, in Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 245, 440 A.2d 306 (1982), held that a specific contractual term may provide for the recovery of attorneyŃs fees and costs. In this case, the parties had entered into a contract which provided that, ňthe plaintiff was entitled to an attorneyŃs fee which it had incurred without express regard to its reasonableness.” The court reasoned that, ňwe have long held that «proof of the expenses paid or incurred affords some evidence of the value of the services, and if unreasonableness in amount does not appear from other evidence or through application of the trierŃs general knowledge of the subject-matter, its reasonableness will be presumed.” Id. at 246 (citation omitted). Therefore, the court was ňpersuaded that a contract clause calling for the reimbursement of fees «incurredŃ by the plaintiff permits the recovery of such fees upon the presentation of an appropriate bill . . . .” Id.
ňAttorneyŃs fess are typically not recoverable absent statutory or contractual authorization, although attorneyŃs fees may be awarded as a component of punitive damages where a defendant engaged in reckless indifference to the rights of others or an intentional and wanton violation of those rights.Ń” Vaillancourt v. Town of Southington, No. X3CV010510816S, 2002 WL 1041381 (Conn.Super. April 26, 2002).
Many jurisdictions have numerous statutes which provide for fee shifting, and in most, if not all, the common element among statutory provision providing for fee shifting is the intention of encouraging individuals to act for the public good by lessening the personal financial burden of litigation. Connecticut is no exception.
The examples that follow address only Connecticut fee-shifting statutes, not federal ones. Additionally, because the Connecticut General Statutes provide for fee shifting in many circumstances, this list is not meant to be exhaustive.
Although Connecticut has utilized the incentives created by fee shifting in multiple statutes seeking to protect civil rights of its citizens, there is one over arching provision. Connecticut Statute „ 46-58 (in conjunction with „ 52-25b) provides that attorneys fees may be awarded to the prevailing party for a suit to recover damages as a result of discriminatory practices. Specifically, it provides attorneyŃs fees when a person establishes a ňdeprivation of any rights, privileges or immunities, secured or protected by the constitution or laws of this state or of the United States, on account of religion, national origin, alienage, color, race, sex, blindness or physical disability.” Conn. Gen. Stat. „ 46-58.
Real property and housing-related proceedings are particularly rife with inequality that fee shifting attempts rebalance. For example, Connecticut General Statute „ 8-12 provides for fee shifting when a court finds that a person willfully violated any municipalityŃs zoning regulations.
Furthermore, in a case where a land lord fails to provide essential services, such as heat and hot water, and the tenant is forced to find suitable substitute housing, Connecticut General Statute „ 47a-13, provides that the tenant may recover actual costs for such substitute housing, and attorneyŃs fees for obtaining such costs.
Connecticut even has a statute protecting the rights of mobile home users. Connecticut General Statute „ 21-82 provides if an owner of a mobile home property unlawfully enters the property or makes repeated demands for entry that are otherwise lawful, but which have the effect of unreasonably harassing the resident, the resident may recover actual damages not less than an amount equal to one monthŃs rent and reasonable attorneyŃs fees.
Under Connecticut General Statute „ 22a-16, ňany political subdivision of the state, any instrumentality or agency of the state or of a political subdivision thereof, any person, partnership, corporation, association, organization or other legal entity may maintain an action in the superior court . . . for the protection of the public trust in the air, water and other natural resources of the state from unreasonable pollution, impairment or destruction . . . .” Furthermore, in order to empower such actions, Conn. Gen. Stat. „ 22a-18 provides the court with the power to award any party who obtains declaratory or equitable relief, ňreasonable costs for witnesses, and a reasonable attorneyŃs fee.”
Connecticut General Statutes „ 48-17a protects individuals against unnecessary actions by the state for condemnation by providing for reimbursement of attorneyŃs fees and costs when the state fails to acquire the real property, or when the proceeding is abandoned by the state. See cf. Citino v. City of Hartford Redevelopment Agency, No. CV 950545209S, 1997 WL 53318 (Conn.Super. Jan. 30, 1997) (rejecting an argument for attorneyŃs fees under „ 48-17a due to the specific factual circumstances).
In the case of an ineffective attachment, Connecticut General Statutes „ 49-8 provides that the plaintiff or the plaintiffŃs attorney shall execute and deliver a release within sixty days from the date of the request. Furthermore, to empower action, Section 49-8 states that the mortgagee or plaintiff shall be liable for damages to any aggrieved, plus the costs and reasonable attorneyŃs fees.
A variety of fee shifting provisions pertain to child custody proceedings. Under Connecticut General Statutes „ 46b-62, a court may appoint an attorney to represent a child in custody proceedings and may then order ňthe father, mother, or an intervening party, individually or in any combination, to pay the reasonable fees of the attorney . . . .” Furthermore, under the same statute, a court may order either parent to pay reasonable attorneyŃs fees in accordance with their respective financial abilities, simply ňif such proceedings concerns the custody, care, education, visitation or support of a minor child.”
Additionally, Connecticut General Statutes „ 46b-87 provides that when a person is found in contempt for failure to comply with order to support a child or spouse, the court may award to the petitioner reasonable attorneyŃs fees when action is take to recover such monies. See Esposito v. Esposito, 2002 WL 1920515 (Conn.App. Aug. 27, 2002).
ConnecticutŃs general provision „ 52-256b generally allows for attorneyŃs fees when a person is held in civil contempt. Although it is not specifically a family related provision, it has been effectively asserted in family proceedings. See In re Jeffrey C., 261 Conn. 189, 802 A.2d 772 (2002) (upholding a lower courtŃs award of attorneyŃs fees under Conn. Gen. Stat. „ 52-256b for not complying with several court orders).
Connecticut Unfair Trade Practices Act (CUTPA) „ 42-110g(d) provides for attorneyŃs fees for the successful pursuit of CUTPA claims. Section 42-110g(d), however, expressly provides that attorneyŃs fees are not to be based on the outcome of the case, and therefore, contingency fee arrangements should not be considered as a significant factor. See, e.g., Steiner v. J. & S. Builders, 39 Conn.App. 32, 38-39 (1995).
Additionally, attorneyŃs fees may also be awarded to the prevailing party in product liability actions under Connecticut General Statutes „ 52-240a.
The employment and labor area is yet another area where courts have been concerned with unequal bargaining positions and with disparities in the wealth of parties. The numerous fee-shifting statutes in this field illustrate this concern. For example, under Conn. Gen. Stat. „ 31-290a, retaliation by an employer for having brought a workersŃ compensation claim is prohibited, and requires the imposition of ňreasonable attorneyŃs fees” and costs in favor of the prevailing plaintiff. See Arnone v. Town of Enfield, No. CV960558333S, 2001 WL 1218741 (Conn.Super. Sept. 13, 2001).
Similarly, under Conn. Gen. Stat. „ 31-72, the Labor Commissioner may bring a legal action necessary to recover twice the full amount of unpaid wages, payments due to an employee welfare fund or arbitration award, and the employer shall be required to pay, ňthe costs and such reasonable attorneyŃs fees as may be allowed by the court.”
Sections 31-51m and 31-51q, of the Connecticut General Statutes, provide for the allowance of ňreasonable attorneyŃs fees” and costs for the prevailing plaintiffŃs in suits against employers for retaliation in response to ňwhistle-blowing.” In Arnone v. Town of Enfield, No. CV960558333S, 2001 WL 1218741 (Conn.Super. Sept. 13, 2001), a Superior Court addressed the issue of whether, under Conn. Gen. Stat. „„ 31-51m and 31-51q, the existence of a one-third contingency fee agreement eliminated the need to award fees on the basis of the amount of time spent on the file. The court held that, ň[w]here a contingency fee agreement exists, the questions for resolution are whether the fee agreement is reasonable and, if the trial court does not enforce the fee agreement, whether the trial court properly exercises discretion in departing from the terms of the agreement.” Id. at 1 (citing Sorentino v. All Seasons Services, Inc., 245 Conn. 756, 774 (1998)).
Under Connecticut General Statutes „ 42-133g, any franchisor who terminates, cancels, or fails to renew a franchise, except for good cause, may be liable for damages and reasonable attorneyŃs if the franchisee prevails in the action.
Connecticut General Statutes „ 36a-717, provides that any mortgage service company that violates „ 36a-716, which provides for funds to be held in escrow for taxes and insurance premiums, shall be liable for, among other things, attorneyŃs fees for any successful action to enforce compliance.
Connecticut General Statutes „ 9-7b(2) provides that the State Elections Enforcement Commission shall have the power to level civil penalties, and in the event that such penalties are not paid within 30 days, may apply to the Superior Court for compliance and reasonable attorneyŃs fees.
Connecticut, like other defendants, is not exempt from fee shifting, particularly in the important context of information provision. Persons prevailing in an action to compel disclosure of documents requested under the ConnecticutŃs Freedom of Information statute, Conn. Gen. Stat. „1-206(e) (200), may be awarded attorneys' fees by the Superior Court.
Section 35-53 of the Connecticut General Statutes, provides that, ňif the court finds willful and malicious misappropriation [of trade secrets], the court may award punitive damages . . .and may award reasonable attorneyŃs fees to the prevailing party.”
ConnecticutŃs Common Interest Ownership Act „ 47-270, through remedies such as fee-shifting, attempts to, ňprovide unit owners and their associations with consumer protection rights, as well as to afford developers, lenders and title insurers with flexibility and certainty in establishing common interests communities . . . .” Linden Condominium Associations, Inc. v. McKenna, 247 Conn. 575, 578, 726 A.2d 502 (1999). Specifically, to accomplish this objective section 47-278 provides that, ňif a declarant . . . fails to comply with any of its provisions . . . [t]he court may award [punitive damages,] court costs [and] reasonable attorneyŃs fees.” Id.
Connecticut General Statutes „ 52-256b is a general provision that provides for the award of attorneyŃs fees, ňwhen any person is found in contempt of any order or judgment of the superior court”. See In re Jeffrey C., 261 Conn. 189, 802 A.2d 772 (2002) (upholding a lower courtŃs award of attorneyŃs fees under Conn. Gen. Stat. „ 52-256b for not complying with several court orders).
1.5:340 Financing Litigation [see 1.8:600]
1.5:400 Reasonableness of a Fee Agreement
Č Primary Connecticut References:
CT Rule 1.5(a)
Č Background References: ABA Model Rule 1.5(a), Other Jurisdictions
Č Commentary: ABA/BNA „ 41:301, ALI-LGL „ 34, Wolfram „ 9.3.1
Č Connecticut Commentary:
In evaluating the reasonableness of an attorneyŃs fee, a court may look to the factors set forth in Rule 1.5. See Southport Manor Convalescent Center. v. Kundrath, CV91-0284958, 1994 WL 621895, *6 (Conn.Super. November 2, 1994). Courts may also rely on their general knowledge of what has occurred in the cases before them. See Bizzoco v. Chintz, 193 Conn. 304, 310, 476 A.2d 572 (1984). If the court then determines that the fee charged was unreasonable, and therefore in violation of Rule 1.5(a), the court has authority to reduce the amount of fee charged. See Beckman v. Gwiazda, No. CV 90-0439394S, 1991 WL 158156, *5 (July 31, 1991) (court determined that the fee charged by the attorney was unreasonable under Rule 1.5 due to attorney's minimal and inadequate services and ordered fee returned).
In reviewing a challenge to a Superior CourtŃs award of attorneyŃs fees, the Connecticut Supreme Court in Andrew v. Gorby, 237 Conn. 12, 675 A.2d 449 (1996), held that, ň[t]ime spent [on the case] is but one factor in determining the reasonableness of an attorneyŃs fee.; . . . Although the better practice is for an attorney . . . to maintain time records, the failure to do so does not preclude the court from determining and awarding an attorneyŃs fee.” Id.
In Riscassi and Davis P.C. v. Peck, No. CV 89-369798, 1991 WL 204477 (Conn.Super. November 4, 1991), the court dealt with a dispute between two law firms which had both worked on a case and decided to apportion the fee based upon a theory of quantum meruit or the reasonable value of the services rendered by each. In evaluating the reasonableness of the fees, the court ruled that in addition to the hours spent by each, the factors to be taken into consideration included the factors set forth in Rule 1.5(a) of the Rules of Professional Conduct.
The Connecticut Supreme Court, in the case of Bizzoco v. Chinitz, 193 Conn. 304, 476 A.2d 572 (1984), held that an award of attorney fees under a clause in a promissory note expressly authorizing recovery of such fee, still ňrequires an evidentiary showing of reasonableness.” Id. at 310 (citing Appliances, Inc. v. Yost, 186 Conn. 673, 680, 443 A.2d 486 (1982)).
In Informal Opinion 94-24 (1994), the Committee advised that ňthe overriding limitation of reasonableness in Rule 1.5 also applies to the manner of charging for administrative expenses and disbursements.” (citing Formal Opinion 93-379 (1993)). The Committee reasoned that, ň[a]s [costs] will differ for each case, a flat administrative fee for each different file is arbitrary, unless, in a particular case the lawyer and client agree after full disclosure that a flat administrative fee may be imposed, provided they have mutually determined the fee to be reasonable for the specific expenses described in the agreement.”
In Informal Opinion 94-23 (1994), the Committee addressed the issue of whether ňYellow Page Coupons” were ethical. In terms of Rule 1.5, the Committee stated that, ň[a]n attorney is under no ethical obligation to determine the amount of his or her charges in the same manner from one client to the next, so long as the fee in all cases is reasonable.”
Informal Opinion 93-22 (1993), advised that the Rules of Professional Conduct do not prohibit an attorney from attempting to renegotiate a fee agreement, provided that the fee is reasonable in accordance with the factors set forth in 1.5(a).
Testator's Intent for Attorney's Fees
In the case of Wolfgang v. Cowell, appellants objected to the reasonableness of the executorŃs attorney fees as established by an interim accounting by the Probate Court, although the compensation was specifically specified in the will. Wolfgang v. Cowell, No. CV89 0084829 S, 1990 WL 283131, at * 1 (Conn.Super. Oct. 30, 1990). In dismissing the appeal, the Court held that ňa testator may specify the executorŃs compensation in the will, and that the testatorŃs intent is to be followed where it can be determined from the will.” Id. at *2 (citing DiSesa v. Hickey, 160 Conn. 250, 264-266 (1971)). The Court reasoned that, ňunless the executor has failed to complete his duties or committed a breach of trust, the weight of authority directs that the executor trustee should be compensated in accordance with the intent of the testator as fixed by the instrument in issue.” Id. Furthermore, the Court stated that ň[o]nly were the applellants able to prove that [the executor] did not perform its duties . . . , or that its fees were so outrageous as to divate from any reasonable standard of measure, could this court question whether a pubic policy had been offended.” Id. (emphasis in original). Consequently, although the Court determined that the fee was in fact reasonable, it concluded that, ňit would be more offensive to public policy to undermine the testamentary intent that is clearly expressed,” than to uphold a fee that could be determined to be unreasonable. Id. at *3.
The Connecticut Supreme Court, in Andrews v. Gorby, 237 Conn. 12, 675 A.2d 449 (1996), addressed the same issue as the one presented in Wolfgang v. Cowell, but with one key factual distinction. In Andrews, the executor and the drafter of the will were the same attorney, and because of this fact, along with the close relation between the testator and the executor, the Court stated that, ň[t]he necessity for heightened scrutiny is highlighted.” Id. at 21. Therefore, after reviewing the facts of the case, the Court held that ňas a matter of public policy, an attorney who drafts a will that names the attorney as executor and contains a fee schedule for his compensation as executor is limited to reasonable compensation, irrespective of the schedule.” Id. at 22. Consequently, the Court remanded the case to the Superior Court to determine the reasonableness of the asserted fees. See id. at 25.
The court in Gordon & Scalo v. Ashton, No. CV950320592S, 1995 WL 128303 (Conn.Super. Mar. 17, 1995), held that the billing of a client for one-tenth of an hour, or ($22.50), for reviewing the Appellate Court calendar, for reviewing an order denying a motion to reconsider en banc, or for attempted telephone call to client, was ňmanifestly excessive”. Id. at 4. The Court reasoned that, although appellate litigation is a particularly labor-intensive endeavor, ň«all of the time a lawyer spends on a case is not necessarily the amount of time for which he can properly charge his client.Ń” Id. at 3 (quoting The Florida Bar v. Richardson, 574 So.2d 60, 63 (Fla. 1990)).
Informal Opinion 00-12 (1992), addressed the issues of whether a clientŃs retainer or advance may be ňnonrefundable.” The Committee advised that, although nonrefundable fees were not necessarily unethical, and in fact justifiable in some situations, the use of such term ňneither adds to nor subtracts from the ethical nature of the fee. Whether or not a fee or a fee arrangement is ethical depends upon the factors proscribed in Rule 1.5.”
See Section 1.5:420.
1.5:500 Communication Regarding Fees
Č Primary Connecticut References:
CT Rule 1.5(b)
Č Background References: ABA Model Rule 1.5(b), Other Jurisdictions
Č Commentary: ABA/BNA „ 41:101, ALI-LGL „ 38, Wolfram „ 9.2.1
Č Connecticut Commentary:
Generally, ňan attorney is not prohibited from contacting with his client respecting his fees. . . .” Difrancesco v. Goldman, 127 Conn. 387, 392-93 (1940). ňIndeed, before or within a reasonable time after commencing representation, a lawyer is expected to communicate to a client, in writing, the basis or rate of the fee to be charged. . . .” Pantaleo v. Delmonico, No. CV 98 0413631, 1999 WL 1207131 (Conn.Super. Dec. 1, 1999) (citing Connecticut Rules of Professional Conduct, Rule 1.5(b)). ňThe agreement should not be set aside or the agreed compensation withheld unless fraud has been perpetrated, undue influence exerted, material facts affecting the subject matter misrepresented or suppressed or advantage taken of a position of confidence and trust to obtain an unconscionable advantage over the party.” Id. at *3 (citing Difrancesco, 127 Conn. at 393).
The court in the case of Whitman Breed Abbott & Morgan, LLP v. Heithaus, No. CV 0001778265, 2000 WL 1340186 (Conn.Super. Sept. 5, 2000), dealt with the issue of, ňwhether the plaintiffŃs failure to abide by the Rules of Professional Conduct, Rule 1.5(b) will bar any recovery . . . if it were to be found that a contract between the parties existed and the fees charged were reasonable.” Id. at *1. In examining the issue, the court first noted that the Appellate Court, in the case of Silver v. Jacobs, 43 Conn.App. 184, 682 A.2d 551 (1996), held that the failure to enter into a written contingency fee agreement with a client violated a similar provision in Conn. Gen. Stat. „ 52-251c, and precluded recovery of fees, either on the basis of express contract or quantum meruit theory. Id. at *1. The court then reasoned that considering that both Conn. Gen. Stat. „ 52-251c and Rule 1.5(b) deal with the same issue, ňit would be problematic why, under any analysis, the word «shallŃ in 52-251c should be read differently than the «shallŃ in Rule 1.5b.” Id. Therefore, the court held that the term ňshall” within Rule 1.5(b) connotes that a written agreement is mandatory rather than discretionary and a failure to abide by the rule bars any recovery. But see Gagne v. Vaccaro, supra, at 1.5:210.
The court in Patchell v. Heffernan, No. 425945, 2000 WL 177197 (Conn.Super. Feb. 1, 2000), reiterated the fact that when an attorney is acting pursuant to appointment by a court, Rule of Professional Conduct 1.5(b) does not require that the lawyer communicate their legal fees in writing. Id. at *3. The Court stated that, ňthe reasonableness of the fee [is] a matter to be determined by the court rather than by written agreement with the client.” Id.
Despite the plaintiffŃs assertions, the court in Woolf v. Statewide Grievance Committee, No. 980492717, 1999 WL 185144 (Conn.Super. Mar. 23, 1999), held that ňRule 1.5(a) . . . does not require the statewide grievance committee to make a finding of unconscionability in order to find a violation of Rule 1.5. Unconscionability is simply not one of the factors enumerated for determining the reasonableness of a fee.” Id. at *3.
In Informal Opinion 00-22 (2000), the Committee was asked to address, ňwhether a lawyer has violated Rule 1.5 of the Rules of Professional Conduct in failing to enter into a written fee agreement with a client (a bank) whom the lawyer has represented over a number of years, and where the lawyer's fee at issue is in accord with his past practice with that client.” The Committee advised that, in this specific case, a written fee agreement was not necessary. It reasoned that, ň[w]hile this committee has «encourage[d] adherenceŃ to the recommendation of Rule 1.5 that a lawyer have a written fee agreement with a client, Informal Opinion 91-16, the rules do not require that a lawyer enter a written fee agreement or communicate in writing to a client whom the lawyer has already «regularly representedŃ at the time he was retained on the matter at issue.” Consequently, the Committee stated that, ň[o]n the facts present[ed], the lawyer here had regularly represented the client by the time he was retained to advise it in this matter. . . . Accordingly, it is the opinion of this committee that the lawyer has not violated Rule 1.5(b).” The Committee ended, however, by stating that, [w]hether an attorney is entitled to be paid a fee in absence of written agreement is a matter of law on which this committee does not opine.” See also Informal Opinion 01-09 (2001) (discussing what it means to ňregularly represent” a client in the context of Rule 1.5(b)).
Interplay of Rules 1.5(b) and (c)
In Statewide Grievance Committee v. Dixon, 62 Conn.App. 507, 772 A.2d 160 (Conn.App. 2001), defendant appealed the Superior CourtŃs ruling that he had violated disciplinary rule requiring that a contingent fee agreement be in writing. Id. at 509. The defendant argued that since he had regularly represented the clients in question, and therefore they had an understanding about his fee structure, he did not have to provide a redundant agreement in writing. Id. The Appellate Court, however, disagreed with the defendantŃs argument holding that Rule 1.5(b), ňdoes not exempt the defendant from obtaining a written fee agreement as required by Rule 1.5(c) for contingency matters.” Id. at 510. The court reasoned that although Rule 1.5(b) states in part that, ň[w]hen the lawyer has not regularly represented the client, the basis or rate of the fee . . . shall be communicated to the client . . .”, Rule 1.5(c) still applies. Id.
1.5:600 Contingent Fees
Č Primary Connecticut References:
CT Rule 1.5(c)
Č Background References: ABA Model Rule 1.5(c), Other Jurisdictions
Č Commentary: ABA/BNA „ 41:901, ALI-LGL „„ 34, 35, Wolfram „ 9.4
Č Connecticut Commentary:
The Connecticut Supreme Court, in Gagne v. Vaccaro, 255 Conn. 390, 766 A.2d 416 (2001), held that failure to comply with Rule of Professional Conduct 1.5(c) does not prevent a lawyer from recovering counsel fee from successor attorney under the doctrines of quantum meruit or unjust enrichment. The Court reasoned that the Rules of Professional Conduct, ňare designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability.” Id. at 403. Consequently, the court held that, ňnothing in the Rules should be deemed to augment any substantive legal duty of lawyers or the extra-disciplinary consequences of violating such a duty.” Id.
The Appellate Court, in Statewide Grievance Committee v. Timbers, 70 Conn.App. 1, 796 A.2d 565 (2002), held that a six month suspension from the practice of law for violation of Rule 1.4(a) and 1.5(c), was not excessive where the trial court found as aggravating factors that the attorney had previously been disciplined by the statewide grievance committee, had acted in a selfish manner, and had been a member of the state bar for approximately nineteen years.
In Statewide Grievance Committee v. Gifford, No. CV000800490S, 2002 WL 237821 (Conn.Super. Jan. 23, 2002), the Statewide Grievance Committed filed presentment against the defendant alleging, among other things, that defendant failed to put contingency fee agreement in writing in accordance with Rule 1.5(c). Id. at 2. Although the defendant did dispute this fact, he argued that no written agreement is necessary when, as here, no fee was collected or charged. The court, however disagreed holding that, ň[t]he plain language of the rule makes clear that the requirement that «[a] contingent fee shall be in writingŃ does not contain an exception for unsuccessful cases. Id. (quoting Conn. Rule of Prof. Conduct 1.5(c)). The court reasoned that, ň[t]he requirement of a writing in unsuccessful contingent fee cases serves the important purpose of documenting that a client does not owe attorney fees when he has not prevailed in the case.” Id. Consequently, the court rejected the defendantŃs argument and found that he violated Rule 1.5(c).
In Rohan v. Rosenblatt, No. 930116887S, 1999 WL 643501 (Conn.Super. Aug. 13, 1999), plaintiff brought an action against the defendant to recover allegedly unreasonable and excessive legal fees. The defendant had charged a one-third contingency fee to collect the proceeds of a $100,000 life insurance policy. In finding the contingency fee to be unreasonable violation of Rule 1.5(a) and (c), the court held that, ň[a] contingent fee is appropriate only where there is a genuine risk whether the attorney will be able to bring an asset into the clientŃs possession. If there is no significant risk with regard to the representation, a contingency fee agreement is not appropriate.” Id. at *3. The court reasoned that similarly to the case at bar, ň[t]he clear case where there would be an absence of real risk would be a case in which an attorney attempts to collect from a client a supposedly contingent fee for obtaining insurance proceeds for a client when there is no indication that the insurer will resist the claim.” Id. (emphasis in original).
In Informal Opinion 99-24 (1999), the Committee was asked to address whether a combined hourly/ contingency fee arrangement violated Rule 1.5. The Committee advised that, ň[n]othing in the face of the rule suggests that combined hourly/contingency fee arrangements are not permissible.” Furthermore, the Committee stated that, ňnor do we find anything in our law that bars it. Other state ethics committees that have considered similar inquiries have found the arrangement permissible.” (citing ALA/ABA, Lawyer's Manual on Professional Conduct, 901:5601 (Nevada Opinion 4, 6/16/87); 901:7905 (South Carolina Opinion 87-7)).
The Committee, in Informal Opinion 96-3 (1996), stated that a lawyer may charge the cost of computer-assisted research in contingency fee cases, without violating Rule 1.5, if such costs have been specifically set forth in the fee agreement. The Committee noted, however, that a lawyer may not charge the cost of common overhead incurred in the practice of law, which includes legal research using CD-Rom technology, where there is no additional on-line expense once the disk has been purchased.
Several special requirements regarding fees are set out in the text of Connecticut Rule of Professional Conduct 1.5(c): The fee agreement must be in writing and must state the method by which the fee is to be determined, including the percentage(s) of the recovery in the event of settlement, trial or appeal, and what expenses paid by the lawyer are to be deducted from the recovery. It must also include whether such expenses are deducted before or after the fee is calculated. Finally, at the conclusion of the matter, the lawyer must provide the client with a written statement delineating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
[The discussion of this topic has not yet been written.]
1.5:700 Unlawful Fees
Conn. Rule 1.5(d)(2) specifically prohibits a lawyer from entering into an arrangement for, charging, or collecting a contingent fee for representing a defendant in a criminal case.
Conn. Rule 1.5(d)(1) prohibits a lawyer from entering into an arrangement for, charging, or collecting, ň[a]ny fee in a domestic relations matter, the payment of amount of which is contingent upon the securing of a dissolution of marriage or upon the amount of alimony or support, or property settlement in lieu thereof.”
In Informal Opinion 87-17 (1987), the Committee was asked to address the propriety of a contingent fee in a partition action where two parties live together, but are not married. The Committee held that, 1.5(d)(1) does not prohibit a contingency fee in such a circumstance. The Committee, however, further noted that the reasonableness of a contingent fee in this context must still be addressed. The Committee stated that, in the context of 1.5(a), the ňreasonableness of the fee arising from a contingency formula is more subject to scrutiny as one diverges from the conventional setting for the use of such an arrangement: where the client has no prospect of paying for the services unless there is a recovery, and the possibility of recovery is at risk.” Consequently, although the Committee advised that the, ňcontingency fee arrangement in the instant partition case is not interdicted, in many situations a carefully spelled out fee arrangement based on the considerations listed in 1.5(a)(1) is preferred.”
There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.
1.5:800 Fee Splitting (Referral Fees)
The court in Pinney, Payne, Van Lenten, Burrell, Wolfe, & Dilamn, P.C., v. Heering, No. CV980332191S, 2000 WL 1475548 (Conn.Super. Sept. 21, 2000), held that, when a client knows and consents to a fee sharing arrangement between attorneys at the onset of representation, she can no longer object to such arrangement claiming a violation of Rule of Professional Conduct 1.5(e). Id. at *2. It reasoned that, unlike the Model Rule, ConnecticutŃs Rule 1.5(e) does not require that a lawyer provide services proportionate to the fee sought or assume responsibility for the representation. Rather, ň[t]he primary thrust of Rule 1.5(e) is to assure that the client understands and agrees which attorneys will be participating in her representation and how the compensation for such representation will be apportioned.” Id. Therefore, under Rule 1.5(e) referral fees can be paid when the client knows about the arrangement and consents to such an arrangement. Id.
In Falvey v. OŃBrien, Shafner, Stuart, Kelly & Morris, P.C., No. 543675, 1998 WL 811576 (Conn.Super. Nov. 12, 1998), defendants moved to strike plaintiffŃs complaint for breach of contract. Plaintiff Falvey had entered into a contract with the defendants, OŃBrien, Shafner, Stuart, Kelly & Morris, P.C. (ňOSSKM”), wherein the plaintiff would refer personal injury clients to OSSKM in return for fifty percent of all legal fees received for each case. Id. at 1. The plaintiff alleged that he was never paid for twelve such referrals. The defendant, however, argued that an attorney cannot recover fees from a successor attorney in the absence of a written contingency fee agreement between the original attorney and the client. Id. The court held that although it is not ňinherently unethical for the plaintiff to receive payment under the referral fee arrangement,” the client still must be informed of such an arrangement and must not object. Id. *2. Consequently, the Court disallowed the fees. Id.
In Informal Opinion 99-27 (1999), the Committee was asked to address ňwhether the Rules of Professional Conduct require an attorney to have some form of written agreement with a client if that client came to the attorney by a referral from a lawyer referral service.” After reviewing the particular circumstances, the Committee advised that it would not. It reasoned that ňthe fees go to benefit the lawyer referral service which in turn benefits the other lawyers who are members of that service and/or the bar association itself.” Therefore, the Committee concluded that, ň[w]hile the fee would thus benefit other «lawyers who are not in the same firmŃ [as defined by 1.5]. . . the result is [not] within the intention of Section (e).”