Lofton v. Fairmont Specialty Insurance Managers, Inc.

Summary

The Kentucky Supreme Court held that an attorney who voluntarily withdraws from a contingency-fee representation is not automatically entitled to quantum meruit compensation merely because the withdrawal was permitted for good cause. A disagreement with the client over whether to accept a settlement offer did not constitute sufficient cause to support recovery of attorney’s fees, although the attorney was entitled to reasonable costs and expenses.

Holdings

1. Good faith or good cause sufficient to permit an attorney to withdraw under SCR 1.16(b) does not, by itself, establish entitlement to quantum meruit compensation for services performed under a contingency-fee agreement. The standards for withdrawal and for fee recovery are distinct, and the latter requires a higher level of justification.
2. An attorney's disagreement with a client over the value of the case or whether to accept a settlement offer is not, standing alone, sufficient good cause to support the attorney's quantum meruit claim after voluntary withdrawal.
3. Lofton was entitled to recover only his reasonable costs and expenses incurred in the representation, not attorney's fees under quantum meruit.

Questions Presented

1. Whether an attorney who voluntarily withdraws from representation for allegedly good cause may recover a quantum meruit fee under a contingency-fee agreement.
2. Whether a disagreement between attorney and client over the value of a case and whether to accept a settlement offer constitutes sufficient good cause to preserve the attorney's right to quantum meruit compensation.
3. Whether the trial court properly limited Lofton's recovery to reasonable costs and expenses.

Disposition

affirmed