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Bennett v. Prawer
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2001 ME 172
Docket: Cum-01-345
Argued: October 10, 2001
Decided: December 17, 2001
Panel:CLIFFORD, RUDMAN, ALEXANDER, and CALKINS, JJ.
JEFFREY BENNETT, ESQ. and THE BENNETT LAW FIRM, P.A.
f/k/a BENNETT BENNETT and TROIANO, P.A.
f/k/a BENNETT and ASSOCIATES, P.A.
v.
HARVEY PRAWER, GILBERT PRAWER and S. PRAWER & COMPANY
RUDMAN, J.
[¶1] Jeffrey Bennett appeals from the judgment entered in the
Superior Court (Cumberland County, Mills, J.) denying his motion to vacate
the Award and Determination entered by a Panel of the Fee Arbitration
Commission of the Board of Overseers of the Bar in favor of Harvey Prawer,
Gilbert Prawer, and S. Prawer & Company (Prawer). Bennett contends that
the petition submitted to the Fee Arbitration Commission was not ripe for
review or, if found ripe for review, the award must be vacated because the
Panel of the Fee Arbitration Commission exceeded its authority. We
disagree and affirm the judgment.
I. CASE HISTORY
[¶2] In 1993, Prawer engaged Jeffrey Bennett and his law firm to
defend Prawer in a number of pending lawsuits on an hourly basis. During
the course of Bennett's representation, a Federal False Claims Act lawsuit
was filed against Fleet Bank of Maine, Recoll Management Corporation,
Verrill & Dana, P. Benjamin Zuckerman, Anne M. Dufour, and Amy Bierbaum
(attorney-defendants). The government intervened and pursued the Federal
False Claims Act litigation against Fleet Bank. Bennett continued to
represent Prawer in Federal False Claims lawsuits against the attorney-
defendants.
[¶3] Sometime after filing Federal False Claims lawsuits, Bennett
agreed to represent Prawer pursuant to a contingency fee agreement. The
agreement called for a fee of 50% of the judgment or settlement together
with costs. The contingency fee agreement stated that the usual and
customary contingency fee percentage of the gross recovery was increased
in exchange for Bennett's continued participation, the reduction of non-
contingent liability for attorney fees incurred in the representation as
litigation and trial counsel for the Federal False Claims lawsuit, and the
forgiveness of certain outstanding professional fees accrued on a non-
contingent basis. After years of pursuing a Federal False Claims lawsuit
against the attorney-defendants, Prawer decided to dismiss at least part of
the case. Asserting that he was forced to withdraw for ethical reasons when
Prawer refused to sign a conflict of interest waiver following Prawer's
decision to dismiss the lawsuit, Bennett formally withdrew from
representing Prawer. The Federal False Claims litigation that originated
with Bennett's Federal False Claims lawsuit against Fleet Bank continued to
be pressed by the government. The United States District Court issued an
order approving a settlement that included a payment of $100,000 to
Prawer. That order was appealed; Prawer ultimately agreed to finally settle
for a total of $75,000.
[¶4] Prior to dismissing the lawsuit against the attorney-defendants,
Bennett in a letter dated September 26, 1997, informed Prawer that Prawer
"might be financially responsible to pay [Bennett] . . . reasonable or hourly
compensation for our many years of service" and "might be responsible to
pay the initial debt forgiveness." Disagreeing with Bennett, Prawer sought
to limit Bennett's compensation to 50% of the settlement reached in the
Fleet Bank False Claims action by filing a petition with the Fee Arbitration
Commission pursuant to our Bar Rule 9.
[¶5] The Panel determined that "the contingent fee contract [did]
not strictly and exclusively apply," and based upon the facts presented to
the Panel "that the principles of quantum meruit apply and that the
contingent fee agreement remains a key element in arriving at an award of
fees." After considering the principles contained in Maine Bar Rule 3.3(a){1}
and the amount of the actual settlement in the matter, the Panel
determined "that the quantum meruit award of fees [was] limited by the
value of the settlement." The Panel awarded Bennett $50,000 in attorney
fees or 50% of $100,000,{2} $8,944.07 in costs, and "interest at the statutory
pre-judgment rate . . . on the amount of costs awarded."{3}
[¶6] In April 2000, Bennett filed a motion to vacate the arbitration
award pursuant to 14 M.R.S.A. § 5938(1)(C) (1980) in Superior Court. The
Superior Court denied Bennett's motion, and this appeal followed.
II. DISCUSSION
[¶7] Bennett argues that the fee dispute raised by Prawer's petition
was not ripe for review by the Fee Arbitration Commission because no fees
had been charged by Bennett nor paid by Prawer as required by Maine Bar
Rule 9(e)(1).{4} Rule 9 provides "a simple, speedy and reliable system for
resolving fee questions." Anderson v. Elliott, 555 A.2d 1042, 1049 (Me.
1989). Rule 9 is remedial in nature and, therefore, should be construed
broadly. See Director of Bureau of Labor Standards v. Cormier, 527 A.2d
1297, 1300 (Me. 1987) (stating that "[r]emedial statutes should be liberally
construed to further the beneficent purposes for which they are enacted").
Although Bennett never sent Prawer a bill and Prawer never made any
payments to Bennett, the language contained in Bennett's letter is a claim
for fees. Accordingly, the fee dispute was ripe for review by a Panel of the
Fee Arbitration Commission.
[¶8] Bennett, in the alternative, contends that the award should be
vacated pursuant to 14 M.R.S.A. § 5938(1)(C){5} because the arbitrators
exceeded their power by addressing the issue of whether Bennett was
entitled to attorney fees based on a theory of quantum meruit resulting from
Prawer's dismissal of the claims against the attorney-defendants. Bennett
asserts that the arbitration panel should not have decided this issue because
it is a novel legal theory. Even if it were a novel theory, which it is not, "our
review of an arbitrator's award is narrow." Union River Valley Teachers
Assoc. v. Lamoine Sch. Comm., 2000 ME 57, ¶ 5, 748 A.2d 990, 991. "In
determining if an arbitrator exceeded his authority, we construe the
underlying contract broadly, resolving all doubt in favor of finding that the
arbitrator acted within his power." Id. The client-initiated, compulsory fee
arbitration required by Rule 9, results in a court imposed contract that the
parties to a fee dispute are deemed to have entered. If the arbitrator
commits an error of law, that alone does not mean that the arbitrator
exceeded his authority. Id. The burden of proving that the arbitrator
exceeded his or her authority lies with the party seeking to vacate the
arbitration award. Id. at 992.
[¶9] Although our Bar Rules do not expressly provide a Panel with
authority to decide novel legal issues, such authority is implied. Rule 9 was
promulgated to provide both attorneys and clients with "a simple, speedy,
and reliable system for resolving fee questions" that can, at a client's
request, replace any trial in court. Anderson, 555 A.2d at 1049. We have
stated that "[i]n bargaining for an arbitrator's decision, the parties bargain as
well for the arbitrator's interpretation of the law." Board of Dirs. of Maine
Sch. Admin. Dist. No. 33 v. Teachers' Ass'n of Maine Sch. Admin. Dist. No.
33, 395 A.2d 461, 463 (Me. 1978). Even if the Panel reaches a
determination that a court "could not or would not" reach this alone is not a
sufficient reason to vacate the award. 14 M.R.S.A. § 5938(1).
[¶10] In the present case, the parties are deemed to have bargained
for arbitration. Prawer agreed to be bound by the arbitrator's decision when
he filed his petition with the Fee Arbitration Commission, and Bennett
consented to arbitration as a condition precedent to practicing law in this
State. M. Bar R. 3.3(c), 9(e)(1)(B). As such, they are bound by the
arbitrator's determination of legal issues, novel or otherwise.
The entry is:
Judgment affirmed.
For plaintiffs:
Jeffrey Bennett, Esq. (orally)
The Bennett Law Firm, P.A.
121 Middle Street, suite 300
Portland, ME 04101
Attorneys for defendant:
John P. McVeigh, Esq. (orally)
Preti, Flaherty, Beliveau, Pachios & Haley, LLC
P O Box 9546
Portland, ME 04112-9546
FOOTNOTES******************************** {1} . Rule 3.3(a) provides a list
of "factors to be considered as guides in determining the reasonableness
of a fee." They consist of the following: (1) The time and labor required,
the novelty and difficulty of the questions involved, and the skill requisite
to perform the legal service properly; (2) The likelihood, if apparent to
the client, that the acceptance of the particular employment will preclude
other employment of the lawyer; (3) The fee customarily charged in the locality
for similar legal services; (4) The responsibility assumed, the amount involved,
and the results obtained; (5) The time limitations imposed by the client
or by the circumstances; (6) The nature and length of the professional relationship
with the client; (7) The experience, reputation, and ability of the lawyer
performing the services; (8) Whether the fee is fixed or contingent; and
(9) The informed written consent of the client as to the fee agreement.
M. Bar R. 3.3(a). {2} . Prawer conceded that it would be reasonable to find
the value of the settlement to be $100,000. {3} . The Panel determined that
interest at the pre-judgment rate should be paid on the costs awarded from
the date of Bennett's Reply to the Fee Arbitration Commission to the date
of the award, and interest would continue to accrue until payment was made.
{4} . Rule 9(e)(1) provides that fee arbitration proceedings will be initiated
"[u]pon receiving a complaint from any source regarding legal fees
paid to or charged by an attorney." M. Bar R. 9(e)(1). {5} . The fee
arbitration proceedings required by the Maine Bar Rules are governed by
Maine's Uniform Arbitration Act, 14 M.R.S.A. §§ 5927, 5929-5949
(1980). M. Bar R. 9(g)(3)(i). Section 5938(1) of the Act permits an arbitration
award to be vacated for the following reasons: 1. Vacating award. Upon application
of a party, the court shall vacate an award where: A. The award was procured
by corruption, fraud or other undue means; B. There was evident partiality
by an arbitrator appointed as a neutral or corruption in any of the arbitrators
or misconduct prejudicing the rights of any party; C. The arbitrators exceeded
their powers; D. The arbitrators refused to postpone the hearing upon sufficient
cause being shown therefor or refused to hear evidence material to the controversy
or otherwise so conducted the hearing, contrary to the provisions of section
5931, as to prejudice substantially the rights of a party; E. There was
no arbitration agreement and the issue was not adversely determined in proceedings
under section 5928 and the party did not participate in the arbitration
hearing without raising the objection; or F. The award was not made within
the time fixed therefor by the agreement or, if not so fixed, within such
time as the court has ordered, and the party has not waived the objection.
But the fact that the relief was such that it could not or would not be
granted by a court of law or equity is not ground for vacating or refusing
to confirm the award. 14 M.R.S.A. § 5938(1) (1980).
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