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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 just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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