Attorney referral fees; Whether summary disposition before discovery was premature; Prejudice; Whether the objection to the referral fee was timely made; MRPC 1.5(e); Law Offices of Jeffrey Sherbow, PC v Fieger & Fieger

The court held that the grant of summary disposition for defendants “was premature as discovery had not begun in earnest” and that the trial court erred to the extent it determined an objection to the attorney referral fee at issue was timely. Thus, the court reversed and remanded. According to the complaint, plaintiff and defendant-attorney Herman “had a professional relationship wherein plaintiff would send Herman client referrals in exchange for a referral fee.” In 2018, plaintiff had a meeting with nonparty-P, who was seeking to begin a medical malpractice claim. On or about the same day, plaintiff referred P to defendants. When it became clear they were not going to pay the referral fee, plaintiff asserted they breached their agreement. The court held that the “trial court erred when it granted summary disposition under MCR 2.116(C)(10) because a decision under that subrule was premature and prejudiced plaintiff. Defendants based their motion on testimony that contradicted allegations in plaintiff’s complaint that plaintiff did not have an opportunity to challenge. As the trial court recognized, there was a potential that further discovery could reveal evidence that would rebut [P’s] testimony, such as written evidence of her agreeing to plaintiff’s fee. Indeed, such a document was in defendants’ possession but was not produced to plaintiff, despite being the subject of a document request, before plaintiff filed his response brief. Once the trial court recognized this fact, it should have denied defendants’ motion under MCR 2.116(C)(10).” As to the trial court’s determination that P’s 2022 objection to the referral fee was timely made, the court was “bound to follow Sherbow’s holding that ‘the clients must have objected at the time they were informed of the agreement in order for there to be a violation of MRPC 1.5(e).’” It found that while P’s “objection at the settlement hearing was not completely irrelevant, it was not sufficient to render the purported referral fee agreement unenforceable under MRPC 1.5(e)[.]”