Trials & Litigation

Appeals court says client must pay law firm's fees unless there is a finding of misconduct

An appeals court in Michigan has agreed with a lower court that a law firm and its attorney did not commit malpractice by signing a settlement agreement on behalf of a group of clients, even though one client objected to the pact.

Defendant IGC Management Inc. had appealed the lower court’s summary disposition rulings in the Oakland County case, on both an attorney fee claim by Frasco, Caponigro, Wineman & Scheible and IGC’s legal malpractice counterclaim, Legal Newsline reports.

Absent a formal determination that the law firm acted unethically, the legal fees for work done by FCWS and its lawyer, Christian Hauser, could not be forfeited, the Michigan Court of Appeals ruled in an unpublished April 16 opinion.

“The record does not support a finding of unfair dealing or bad faith,” a three-judge panel wrote in a per curiam opinion.

“It shows that Hauser intended to sign the Settlement Agreement on behalf of all claimants except IGC, that he expressly and repeatedly informed the facilitator that he was not authorized to sign on behalf of IGC, and that he requested that the facilitator place a separate line on the written agreement for IGC which would remain unsigned.”

The underlying dispute involved a group of subcontractors, represented by FCWS, who were owed money by a bankrupt general contractor. The settlement negotiations occurred as part of a workout effect with those involved in financing the project.

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