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Law firm can’t collect attorney fees from insurer

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Relying on caselaw from 1892, the Indiana Court of Appeals decided that Ken Nunn Law Office may not collect attorney fees it says are owed by a former client from a third-party insurance company following a settlement.

Kenneth Henderson hired the Nunn Law Office in May 2009 on a contingency fee basis after he was involved in an accident with another driver, Joshua Beal. Beal was insured by State Farm Mutual Automobile Insurance Co. The law firm filed a lawsuit against Beal in March 2010; two weeks later, Henderson fired the law firm because he was unhappy with how his case had been handled.

The law firm then sent a notice of lien for attorney fees to the court, Henderson and State Farm. In late April 2010, Henderson and State Farm settled for more than $12,000. State Farm paid Nunn Law Office the $541 in costs it requested in its lien, but no attorney fees.

The law office sued Henderson and the insurer, and the trial court ordered Henderson pay nearly $4,000 to the law firm after granting default judgment against him. In doing so, the judge also denied State Farm’s summary judgment motion. Nunn Law Office claimed that State Farm and Henderson had a duty and failed to protect the “quantum meriut attorney’s fee lien” of the firm. State Farm argued that it was not liable for attorney fees for services rendered to Henderson.

On interlocutory appeal, the Court of Appeals reversed, finding the Nunn Law Office has no claim for attorney fees through either an equitable lien or quantum meruit. The judges cited Hanna v. Island Coal Co., 5 Ind. App. 163, 31 N.E. 846, 847 (1892), which held that no lien can be acquired before judgment that would prevent the client from compromising and releasing his claim without the attorney’s consent, including in personal injury actions.

“We decline to expand upon this State’s previous articulations of the boundaries of the reach of an equitable lien for the protection of attorney fees where the proceeds of the compromise have been transferred to the attorney’s former client and thus decline to hold that a charging or equitable lien may be enforced against a party other than Nunn’s former client under these circumstances where prior to settlement Nunn was no longer counsel for Henderson and was paid its expenses,” Judge Elaine Brown wrote.

The law firm may not recover from State Farm under the theory of quantum meruit because State Farm was not a party to the fee agreement between Henderson and Nunn Law Office, any work done by the law firm was for the benefit of Henderson, not the insurer, and State Farm was not unjustly enriched by the legal services provided by the firm to Henderson, the judges held.

The case, State Farm Mutual Automobile Insurance Company v. Ken Nunn Law Office, 49A02-1202-CT-68, goes back to Marion Superior Court for further proceedings.

 

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  1. I will be filing a lawsuit in Tippecanoe County for so many violations in a case we became involved in, including failure to contact through mail, Violation of 4th Amendment rights, Violation of Civil Rights, and so on. Even the Indiana Ombudsmen Bureau found violations and I have now received the report and they are demanding further training in Tippecanoe County. I am going to make sure they follow through!!!

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  3. I thought the purpose of the criminal justice center was to consolidate all the criminal services and get them out of downtown to clean up the place. Why in the HELL are the civil courts moving? What a burden to all the downtown law firms. Now we all get to work downtown, but then have to get in a car and COMMUTE to court? Who approved this idiocy?

  4. I drive through the neighborhood whenever I go to the City-County Building or the Federal Courthouse. The surrounding streets are all two way with only two lanes of traffic, and traffic is very slow during rush hour. I hope that enough money has been allocated to allow for improvement of the surrounding streets.

  5. I have had an ongoing custody case for 6 yrs. I should have been the sole legal custodial parent but was a victim of a vindictive ex and the system biasedly supported him. He is an alcoholic and doesn't even have a license for two yrs now after his 2nd DUI. Fast frwd 6 yrs later my kids are suffering poor nutritional health, psychological issues, failing in school, have NO MD and the GAL could care less, DCS doesn't care. The child isn't getting his ADHD med he needs and will not succeed in life living this way. NO one will HELP our family.I tried for over 6 yrs. The judge called me an idiot for not knowing how to enter evidence and the last hearing was 8 mths ago. That in itself is unjust! The kids want to be with their Mother! They are being alienated from her and fed lies by their Father! I was hit in a car accident 3 yrs ago and am declared handicapped myself. Poor poor way to treat the indigent in Indiana!

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