Chambliss, Bahner & Crawford v. Luther

531 S.E.2d 108 (1975)

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Nature of the Case

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Facts

Chambliss (P) represented Luther (Ds), the former shareholders of Lutex, in a lawsuit against Detrex Corporation. That suit arose over the merger of Lutex with Detrex. P did the corporate work for Lutex, and P even owned some of Lutex’s stock. Lutex sold out to Detrex for a stock swap. D then contacted P because they thought they were misled as to the value of the Detrex stock. P took the case and got an out of court settlement offer for $860,000. D were not happy with that offer and decided to sue Detrex for a violation of securities regulations. P was retained under a contingency fee of 15% for any amounts above the compromise offer. D then decided they were unhappy with P’s performance and asked that another attorney be associated with the case. P and the other attorney agreed that they would divide the 15% fee 70% to P and 30% to new counsel. The new counsel was made lead counsel, and P did not like this and withdrew as counsel by letter. The suit was settled for $965,150. P sued D to collect his fee. The Chancellor held that the contract of employment had been breached by the appointment of new counsel as lead counsel but that the damages to P should be limited to the contract price. P sought to recover in quantum meruit claiming that he and his brother had spent over 1,000 hours over two years and he wanted reasonable compensation apart from the contract. P’s testimony indicated that reasonable compensation was $60,000 to $1750,000. The Chancellor awarded P was he was due under the contract. P appealed.