The
defendant law firm agreed to pay the plaintiff, an attorney, a referral fee
with regard to four clients who were all injured in the same motor vehicle accident. After the defendant obtained a settlement of
approximately $10.5 million dollars, it refused to pay the referral fee and the
plaintiff filed suit. The defendant responded
by arguing that the referral fee agreement was unenforceable as contrary to
public policy because it did not comply with Michigan Rule of Professional
Conduct (MRPC) 1.5(e), which provides that a division of a fee between lawyers
who are not in the same firm may be made only if the client is advised of and
does not object to the participation of all the lawyers involved. The case proceeded to a jury trial, where the
trial court instructed the jury that the plaintiff had to prove by a
preponderance of the evidence that each client was his client in order for him
to recover in relation to that client.
The jury returned a verdict finding that only one client was the
plaintiff’s client. The Court of Appeals,
in a published opinion, held that the trial court reversibly erred in its
instructions and verdict form. The Supreme
Court has granted leave to appeal to address: (1) whether MRPC 1.5(e)
requires the client to have an attorney-client relationship with all
participating lawyers; (2) if so, what are the parameters of such relationship
and how is it formed; (3) which party carries the burden with respect to a
contract’s compliance with MRPC 1.5(e), see Palenkas v Beaumont Hosp,
432 Mich 527, 548-550 (1989); and (4) if an attorney-client relationship with
all participating lawyers is required under MRPC 1.5(e), whether reversal is
required in this case. See MCR 2.613(A);
Cox v Bd of Hosp Managers for City of Flint,
467 Mich 1, 15 (2002).