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Judges uphold contingent fees award

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The contingent fee contract a law firm entered into with a city regarding a sewer fee dispute, which ultimately led to the firm collecting nearly 10 times more than the city anticipated, was valid and reasonable, the Indiana Court of Appeals affirmed today.

In The City of New Albany v. K. Lee Cotner, Richard R. Fox, Steve Gustafson, and Law Offices of Fox & Cotner, No. 22A01-0904-CV-175, New Albany hired Fox & Cotner on a contingency fee basis in regards to its sewer fee dispute with the Town of Georgetown. The terms of the agreement with the firm said Fox & Cotner would get one third of whatever they ultimately collected from Georgetown in the dispute. The city later retained another attorney to help with regards to sewer litigation seeking back sewer fees and penalties from Georgetown.

Around this time, Fox & Cotner proposed a new fee contract because it thought it had lost the original one and wanted to ensure payment, as well as to avoid any argument related to the fee since the city was also paying the other attorney. The city rejected the new contract, which including recouping a one-tenth contingent fee on capital improvements, leaving the old one in place; the original contract was eventually located.

Georgetown ultimately settled with New Albany and agreed to pay $100,000 as payment for back sewer fees and $800,000 as payment for its remaining payment obligations. Over the city's objections, Fox & Cotner sought a third of the total amount, not just the $100,000 for back sewer fees. The trial court granted summary judgment for the firm and ordered the city to pay $300,000 plus interest.

New Albany argued the scope of the fee contract, whether estoppel applies, and the reasonableness of the fee were genuine issues of material fact, but the appellate judges disagreed.

The term "sewer fee dispute" in the original contract is ambiguous, but all of the designated evidence points to the fact that it generally involved the collection of back sewer fees, unpaid connection fees, and penalties for excess flow under the terms of the contract between the municipalities, wrote Judge Nancy Vaidik.

"The 'sewer fee dispute' encompassed the issue of penalties for excess flow and thus, in accordance with the sewage contract, also encompassed its alternative of monetary contributions toward capital improvements," she wrote.

The judges also rejected New Albany's argument that Fox & Cotner had a duty to tell the city at mediation that it was going to assert a claim for a third of the total amount of the settlement fees, not just the back sewer fees. But the city knew of the firm's claim for contingent fees on the capital improvement claims because the firm attempted to renegotiate its fees, including on capital improvements, but the city rejected the proposed contract.

Examining the contingent fee contract at the time it was entered into, the Court of Appeals ruled it was reasonable. The city claimed it was reasonable when it was entered into, but that the $300,000 the firm tried to recoup was unreasonable because it didn't expend enough effort to justify such a high fee. But the city's evidence doesn't address the dispositive issue of whether the contingent fee was unreasonable at the time the contract was entered in to, so "without more, 20/20 hindsight is simply not enough to overcome the presumption that the contingent fee is reasonable," wrote Judge Vaidik.

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  1. The voices of the prophets are more on blogs than subway walls these days, Dawn. Here is the voice of one calling out in the wilderness ... against a corrupted judiciary ... that remains corrupt a decade and a half later ... due to, so sadly, the acquiescence of good judges unwilling to shake the forest ... for fear that is not faith .. http://www.ogdenonpolitics.com/2013/09/prof-alan-dershowitz-on-indiana.html

  2. So I purchased a vehicle cash from the lot on West Washington in Feb 2017. Since then I found it the vehicle had been declared a total loss and had sat in a salvage yard due to fire. My title does not show any of that. I also have had to put thousands of dollars into repairs because it was not a solid vehicle like they stated. I need to find out how to contact the lawyers on this lawsuit.

  3. It really doesn't matter what the law IS, if law enforcement refuses to take reports (or take them seriously), if courts refuse to allow unrepresented parties to speak (especially in Small Claims, which is supposedly "informal"). It doesn't matter what the law IS, if constituents are unable to make effective contact or receive any meaningful response from their representatives. Two of our pets were unnecessarily killed; court records reflect that I "abandoned" them. Not so; when I was denied one of them (and my possessions, which by court order I was supposed to be able to remove), I went directly to the court. And earlier, when I tried to have the DV PO extended (it expired while the subject was on probation for violating it), the court denied any extension. The result? Same problems, less than eight hours after expiration. Ironic that the county sheriff was charged (and later pleaded to) with intimidation, but none of his officers seemed interested or capable of taking such a report from a private citizen. When I learned from one officer what I needed to do, I forwarded audio and transcript of one occurrence and my call to law enforcement (before the statute of limitations expired) to the prosecutor's office. I didn't even receive an acknowledgement. Earlier, I'd gone in to the prosecutor's office and been told that the officer's (written) report didn't match what I said occurred. Since I had the audio, I can only say that I have very little faith in Indiana government or law enforcement.

  4. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  5. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

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