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Issues: Action by the plaintiff (a nonlawyer) to recover from the defendant-attorney under an alleged agreement to compensate plaintiff for a referral via a share of the resulting legal fees earned; MRPC 5.4(a); Whether plaintiff could enforce the alleged contract; Unenforceable unethical contracts; Evans & Luptak, PLC v. Lizza; A contract to split legal fees between a lawyer and a nonlawyer; Morris & Doherty, PC v. Lockwood; Equitable estoppel; Adams v. Detroit; Misrepresentation; Breach of a fiduciary relationship. Unjust enrichment
Court: Michigan Court of Appeals (Unpublished)
Case Name: Fisher v. Carron
e-Journal Number: 45340
Judge(s): Per Curiam - Servitto, Bandstra, and Fort Hood
The trial court properly refused to enforce the alleged fee-sharing agreement between the plaintiff-nonlawyer and the defendant-attorney because MRPC 5.4(a) prevented defendant from making payments pursuant to the alleged agreement. Plaintiff sued to recover amounts allegedly due from defendant under an agreement to compensate plaintiff for a referral via a share of the resulting legal fees incurred. Plaintiff asserted defendant had assured her Michigan law, including the MRPC, allowed an attorney to share legal fees with a nonlawyer for referral matters and she had referred several clients to him under those terms, including the victim of a serious automobile accident. The complaint alleged defendant told plaintiff the auto accident victim's case settled for a certain amount and tendered payment to plaintiff, which allegedly reflected her share of defendant's contingency fee, but she later learned the settlement and defendant's fee were actually much higher. Plaintiff sought to recover the remainder of her share of the fee under theories of, inter alia, breach of contract. Defendant moved for summary disposition and the trial court declared the contract unenforceable. MRPC 5.4(a) states except for inapplicable exceptions, a "lawyer or law firm shall not share legal fees with a nonlawyer . . . ." Plaintiff argued she should be able to enforce her alleged contract because the Legislature did not prohibit her action. However, legislation is "but one of several sources of law. Others include the common law, and regulation," including the Michigan Supreme Court's rules governing the practice of law. The court held the "regulatory and common-law rules against fee sharing of the sort that this case involves" were properly applied "in the absence of superior authority to the contrary." A contract calling for violating the MRPC is an unethical one, and unethical contracts are unenforceable because they violate public policy. While plaintiff argued MRPC 5.4(a) should not bar her claim because it applies to lawyers and she was not a lawyer, to the extent she "elected to do business with a lawyer," she "exposed herself to the machinations of the rules" governing the profession. The court also rejected her equitable estoppel claim, concluding she did not identify any prejudice apart from her contention she was underpaid according to the alleged fee-sharing agreement. "However, not receiving the balance of a share of a lawyer's contingency fee where she was not legally entitled to receive anything in the first place hardly qualifies as prejudice." Affirmed.
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