Attorneys’ liens; George v. Sandor M Gelman, PC; Principle that before an attorney is entitled to payment for services rendered, an attorney-client relationship must be established by contract; Plunkett & Cooney, PC v. Capitol Bancorp Ltd.; Principle that equity will not generally take jurisdiction of cases where a suitor has a full, complete, & adequate remedy at law; Madugula v. Taub; Principle that an attorney on a contingent fee arrangement who is wrongfully discharged, or who rightfully withdraws, is entitled to compensation for the reasonable value of his services based upon quantum meruit & not the contingent fee contract; Ambrose v. Detroit Edison Co.; Reynolds v. Polen; Principle that a claim in quantum meruit is equitable in nature; Morris Pumps v. Centerline Piping, Inc.

Holding that the trial court abused its discretion by extinguishing the appellant-law firm’s attorneys’ lien on any proceeds obtained in plaintiff’s underlying case, the court reversed the trial court’s order and remanded. Appellee-attorney, who was employed by appellant, represented plaintiff in the underlying employment action against defendant. During the case, plaintiff terminated his relationship with appellant and asked appellant to turn his file over to appellee, who left the firm shortly thereafter. Appellant then sought and received a lien on any proceeds obtained in the action. Before the case settled, the trial court granted appellee’s motion to extinguish the lien. On appeal, the court agreed with appellant that this was an abuse of discretion. It noted that because plaintiff “signed a contract with appellant” he “‘had the contractual obligation to pay [appellant] for services rendered.’” The trial court “incorrectly concluded that appellant’s separate civil suit with appellee could calculate the value of appellant’s lien in this case and provide appellant with its entitled remedy against plaintiff.” Because “only plaintiff, and not appellee, had an obligation to pay appellant for the services that appellant rendered in the underlying case, the trial court’s decision that appellant could receive its remedy in its separate civil suit with appellee was outside the range of reasonable and principled outcomes.” Further, “based on Ambrose, appellant’s remedy could not be based on its contingent-fee contract with plaintiff, but rather could only be based upon quatum meruit, and ‘a claim in quantum meruit is equitable in nature.’” As such, appellee’s argument that appellant had an adequate remedy at law was meritless. The court directed the trial court on remand to “determine the reasonable amount owed appellant for the services it rendered” in the underlying case and, if necessary, to “conduct an evidentiary hearing to determine the reasonable amount owed.”