COA: Attorney must wait to collect fees

The Indiana Court of Appeals affirmed a trial court’s ruling on when an attorney could receive his compensation under a contingency fee agreement, even though the attorney didn’t submit a transcript of the bench trial detailing the trial court’s findings.

In Thomas J. Herr v. Carter Lumber Inc., The Carter Jones Lumber Company, and Brian L. Oaks, No. 79A02-0803-CV-290, before ruling on the issue Thomas Herr was appealing – whether the trial court erred in ordering he receive compensation under a contingency fee agreement only after his former client, Carter Lumber, makes a recovery – the appellate court first had to determine whether the fact Herr didn’t provide a transcript of the bench trial in his appeal warranted the court dismissing the appeal.

Relying on previous cases regarding this issue – Pabey v. Pastrick, 816 N.E.2d 1138, 1141-1142 (Ind. 2004) and In re Walker, 665 N.E.2d 586, 588 (Ind. 1996), the Court of Appeals ruled it would address the issue Herr raised.

Carter Lumber hired Herr to represent it in certain collection matters at the rate of $175 per hour plus reimbursement of any advanced costs, and other collection matters on the basis of a 25 percent contingent fee with the client to pay court costs.

At some point, Herr’s representation was terminated and he filed a complaint against Carter Lumber seeking quantum meruit compensation, as measured by his normal fee of $185 per hour for all the work he did that hadn’t been paid.

Because the contract between Herr and Carter Lumber didn’t spell out what Herr’s compensation would be in the event he was terminated, the trial court ruled the attorney would have to wait until funds are collected on behalf of the client to collect his fee.

Citing similar caselaw that dealt with a contingency fee agreement that didn’t specify a termination clause, the appellate court determined Herr can’t receive compensation for his attorney fees until Carter Lumber receives payment from collections.