Session March 10, 2015
Appeal from the Circuit Court for Shelby County No. CT00578309 Donna M. Fields, Judge
William R. Bruce, Memphis, Tennessee, for the appellant, Janice Bunch.
Jeremy G. Alpert, Memphis, Tennessee, for the appellees, Oscar C. Carr, III and Glankler Brown, PLLC.
KENNY ARMSTRONG, J., delivered the opinion of the court, in which ARNOLD B. GOLDIN, J., and Brandon O. Gibson, J., joined.
KENNY ARMSTRONG, JUDGE
On March 18, 2009, Glankler Brown, PLLC ("Glankler") and Oscar C. Carr, III (together with Glankler, or "Appellees") entered into an engagement letter with the Appellant Janice Burch. Pursuant to the letter, Appellees agreed to represent Ms. Bunch in a personal injury lawsuit against Tiffany Jones. The underlying lawsuit arose from a December 15, 2008 automobile accident. Concerning Appellees attorney's fees, which are the subject of the instant appeal, the engagement letter provides, in pertinent part, that Appellees' attorney's fees would be "a contingency fee equal to one-third (1/3) of the gross recovery made by you on your behalf." The letter goes on to define "gross recovery" to include recovery by "settlement."
On December 11, 2009, Appellees filed suit against Tiffany Jones on Ms. Bunch's behalf. Following discovery, the parties agreed to mediate the case. The mediation was conducted on May 12, 2011. At some point during the mediation, Appellees offered to modify their attorney's fee agreed to in the engagement letter. The agreement to modify the fee schedule was set out in a May 13, 2011 letter from Mr. Carr to Ms. Bunch, stating, in relevant part: "This will also confirm that yesterday [at the mediation], in order to get the case settled, I agreed to reduce our firm's fee from 33 1/3% to 10% of the total gross recovery." Apparently, in reliance on Appellees' agreement to lower its fee to 10%, at the end of the May 12, 2011 mediation, Ms. Bunch signed the "Agreement of Essential Terms of Settlement, " which provides: "If Defendants will pay $52, 000 in full settlement of all claims and pay the entire mediator's fee, Plaintiff will accept it and will give a full release of all claims." Mr. Carr's May 13, 2011 letter further notes that "today [the mediator] left [Mr. Carr] a telephone message that the case had been settled for the amount you agreed to accept yesterday which was a total of $52, 000 . . . ."
On July 25, 2011, unnamed defendant, GEICO General Insurance Company, filed a motion to enforce the mediation agreement/settlement, wherein it stated that "[t]his case was settled at the May 12, 2011 [mediation]. The terms of the settlement were that the Defendant Tiffany Jones . . . would pay the sum of $45, 000.00 and the Plaintiff's uninsured motorist carrier GEICO . . . would pay $7, 000 . . . for a total settlement of $52, 000.00." Both tort defendants performed pursuant to the settlement agreement. On May 23, 2011, counsel for Ms. Jones tendered $45, 000, which was received by Appellees on behalf of Ms. Bunch on May 24, 2011. Counsel for GEICO tendered $7, 000 on May 25, 2011. Both tort defendants included releases and orders of dismissal with prejudice with their tender of these payments. Following receipt of the settlement funds by Appellees, Appellant never responded to Appellees' request to come into the office to sign the checks and the releases.
On July 27, 2011, Appellees filed a motion to withdraw as Ms. Bunch's counsel and for stay of proceedings. Therein, Appellees stated that "the interests of attorney and client have become adverse to such an extent that [Appellees] are no longer able to render effective representation." By order of September 9, 2011, the trial court allowed Appellees to withdraw. Thereafter, on October 21, 2011, Appellees filed a notice of attorney's lien pursuant to Tennessee Code Annotated Section 23-2-102, which provides that "[a]ttorneys . . . of record who begin a suit shall have a lien upon the plaintiff's . . . right of action from the date of the filing of the suit." In its notice of attorney's lien, Appellees argue, in relevant part, that:
With regard to attorney fees incurred by Glankler Brown . . . Glankler Brown and Plaintiff Janice L. Bunch entered into a written engagement agreement on or about April 7, 2009. Pursuant to the agreement, Glankler Brown . . . was to be paid a contingency fee equal to one-third (1/3) of the gross recovery made by Plaintiff . . . . At the May 12, 2011 mediation of this action, Oscar C. Carr, III of Glanker Brown . . . agreed to discount the firm's legal fees from the one-third (1/3) contingency fee agreement very substantially which agreement was contingent upon Plaintiff's agreement to accept the defendants' settlement offer resulting from mediation. Mr. Carr's agreement to do so was made in a good faith attempt to obtain for Plaintiff a larger net settlement. Because Plaintiff refused to accept a settlement of the case as a result of the mediation, Glanker Brown's agreement to accept a reduced attorney fee no longer exists because Plaintiff voluntarily first breached the agreement by refusing to accept a settlement as a result of the mediation . . . .
Accordingly, Appellees sought an attorney's lien equal to one-third (1/3) of the $52, 000 gross recovery, or $17, 333.33.
On April 11, 2012, the trial court entered an order, granting the defendants' motion to enforce the settlement agreement. Therein, the ...