Referral fee agreement becomes issue when plaintiff attorney refers wrongful death case; says he was screwed out of agreed fee. $78,000. San Joaquin County.
Summary
When plaintiff's attorney refers wrongful death case to well-known trial lawyer he later becomes a plaintiff himself; says written agreement on referral fee was breached.
The Case
- Case Name: Reeve v. Meleyco
- Court and Case Number: San Joaquin County Superior Court / 2014-0012368
- Date of Verdict or Judgment: Wednesday, August 23, 2017
- Date Action was Filed: Wednesday, December 03, 2014
- Type of Case: Breach of Contract
- Judge or Arbitrator(s): Hon. Barbara Kronlund
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Plaintiffs: Robert K. Reeve
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Defendants: Kenneth N. Meleyco
- Type of Result: Jury Verdict
The Result
- Gross Verdict or Award: $78,750
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Economic Damages:
$78,750. The jury found the statute of limitations had run as to the 2007 settlement, but awarded Reeve 25% of Meleyco's 35% fee on the $900,000 settlement, for a total of $78,750.
- Trial or Arbitration Time: 8 days.
- Jury Deliberation Time: 5 1/2 days.
- Jury Polls: 12-0
The Attorneys
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Attorney for the Plaintiff:
Law Office of Stephanie J. Finelli by Stephanie J. Finelli, Sacramento.
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Attorney for the Defendant:
Weintraub Tobin Chediak Coleman Grodin by Zachary Smith, Sacramento.
Facts and Background
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Facts and Background:
Kenneth N. Meleyco is a prominent personal injury attorney in Stockton. In May 2007 plaintiff, attorney Robert Reeve, referred a wrongful death action to Meleyco, who promised in writing to give Mr. Reeve a referral fee of 25% of Meleyco's own fee of 35% of any recovery. Just prior to the wrongful death case settling as to one defendant in October 2007, Meleyco told Reeve he was reducing the referral fee to 15%. Reeve did not agree.
When the wrongful death case settled for $3,375,000 as against one defendant, the client felt he was not receiving enough of the settlement, so Meleyco agreed to give the client all but $20,000 of what he stated would have been Reeve's referral fee of 15%, which was $177,000. The client accepted this and in February 2008, Meleyco sent Reeve a check for $20,000, stating this was all the client would agree to. In 2011, Meleyco settled the wrongful death case with a second defendant for $900,000 and paid Reeve nothing.
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Plaintiff's Contentions:
That the written referral agreement was valid and binding on Meleyco, who was required to pay Reeve 25% of his own fee. If the client wanted more money and sought it from the referral fee, then Meleyco was obligated to keep the disputed funds in trust and then file an interpleader rather than deciding on his own to give Reeve's referral fee to the client.
Also, that Meleyco never even asked the client to agree to a referral fee regarding the second settlement in 2011; he simply kept the entire 35%, which was $315,000. That Meleyco had sole control over the funds and had an obligation to pay Reeve, and thus to ask the client to consent to the payment.
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Defendant's Contentions:
That Rule 2-200 of the Rules of Professional Conduct barred him from paying any more in referral fees than the client would agree to. Since the client had agreed to pay Reeve $20,000 only for the 2007-2008 settlement, Meleyco was not required to ask for his authority to pay a referral fee in 2011.
Demands and Offers
- Plaintiff Final Demand before Trial: $100,000, reduced to $90,000 just before trial.
- Defendant Offer during Trial: $20,000, revoked before the jury returned from deliberations.