Justices order more proceedings on fees owed to law firm

Jennifer Nelson for www.theindianalawyer.com

The Indiana Supreme Court noted that a trial court did not take into account caselaw when it denied an Indianapolis firm’s request for quantum meruit relief.

The justices reversed the denial of that relief to Cohen & Malad LLP, which sought part of the contingent fees earned in cases that were first handled by its attorneys, including John P. Daly Jr., who was employed as an associate at Cohen & Malad until he left for another firm. Although the trial court found that the Cohen & Malad attorneys – including Daly – worked a substantial number of hours on those cases and that most cases generated attorney fees, it denied Cohen & Malad’s quantum meruit relief.

The trial court found Daly wasn’t unjustly enriched where: the client in each case at issue chose to continue with Daly when he left the firm; Cohen & Malad and Daly had no agreement about what would happen if they parted ways; their employment agreement had no provision for file ownership and lacked a non-competition covenant, Cohen & Malad made a “very shrewd deal” for Daly’s services when it employed him on a salary basis, and Cohen & Malad was “very well compensated” for Daly’s time at the firm, as shown by the amount of fees Daly helped Cohen & Malad generate on other cases while he worked there.

The Court of Appeals affirmed in a 2-1 memorandum decision, but the justices reversed the lower court, citing Galanis v. Lyons & Truitt, 715 N.E.2d 858, 860 (Ind. 1999). The trial court’s findings of facts and conclusions of law did not acknowledge this case or apply its standards. The justices remanded for a determination of what proportional contributions toward the results in the cases at issue were made by attorneys working for Cohen & Malad and to enter a corresponding judgment in the firm’s favor.

The Supreme Court summarily affirmed the COA decision that the trial court erred in holding that Cohen & Malad should have sought recovery from the clients in 24 cases rather than from Daly or his new firm.

The case is Cohen & Malad, LLP v. John P. Daly, Jr., Golitko & Daly, P.C., and Golitko Legal Group, P.C., 29S02-1504-PL-165.