Frazier,v. Mellowitz

804 N.E.2d 796 (2004)

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Nature of the Case

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Facts

Patrick and Lorrie Skaggs' rented mobile home burned down, causing injuries to Patrick, Lorrie, and their daughter Patricia. Lorrie's daughter, Amber Nicole Mitchell, died in the fire. Fire officials concluded that the fire was caused by an electrical short. The trailer did not have a smoke alarm, and the Skaggs' landlord had wired shut the trailer's back door. The Skaggs initially hired Joseph Raab but Raab failed to file a lawsuit within the applicable two-year statute of limitations. Disciplinary sanctions against Raab were imposed. The Skaggs then hired D as their attorney. D settled the legal malpractice claim against Raab for $50,000. The Skaggs settled the claim for that amount against D's advice because they needed the money. D advised the Skaggs at the time of settlement that there was a likelihood that they would not recover anything in their other actions. D filed a wrongful death suit against Cossell Group based on an implied warranty of habitability theory. Cossell Group filed a motion to dismiss and argued that the Skaggs' claim was time-barred, but D successfully defended that motion. In the federal court action, Midwestern argued that it was not required to provide coverage for the losses. D determined that he lacked the time and finances to pursue the Skaggs' cases on his own. P and D entered into a litigation referral agreement. The terms of that agreement were set forth in a letter from Mellowitz to Frazier dated July 23, 1996, which provided in relevant part: This will confirm our agreement that we will pay you a referral fee of 25% of all attorney fees we recover on behalf of Patrick and Lorrie Skaggs, individually and on behalf of their children, Amber, deceased, and Patricia. You have also agreed to pay 25% of all costs and expenses in this matter as they are incurred. Your expenses as well as our expenses will be reimbursed from any recovery which we obtain on behalf of the clients. You have also agreed to act as a liaison with the clients and assist us on this matter as it proceeds. P assumed primary responsibility for the case. Ten months later, P sent D a letter seeking D's 25% share of expenses. Three months later P sent another letter asking for D’s share of expenses. P sent a third letter asking for expenses in December 1997. In December 1998, P negotiated a settlement with Cossell Group, in which Cossell Group agreed to pay the Skaggs $600,000 for their personal injuries, $240,000 of which went to pay the Skaggs' attorney's fees. D learned of the settlement and then decided it would be a good idea to pay his share of the fees. P sent a letter that D had breached their agreement which was null and void. P filed a Complaint for Declaratory Relief against D, seeking a determination from the trial court that D had breached the terms of the parties' litigation referral agreement and that P owed D nothing under the terms of that agreement. The trial court issued its order granting P's summary judgment on April 11, 2003. D appealed.