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Brady v. Starke

Court of Appeals of Missouri, Western District, Special Division

February 7, 2017

JAMES E. BRADY, III, Appellant,

         Appeal from the Circuit Court of Jackson County, Missouri The Honorable Sandra Midkiff, Judge

          Before: Cynthia L. Martin, Presiding Judge, Gary D. Witt, Judge and Zel M. Fischer, Special Judge

          Cynthia L. Martin, Judge

         James Brady ("Brady") appeals from the entry of judgment in favor of Patrick Starke ("Starke") and Patrick B. Starke, Attorney at Law, P.C. ("Law Firm") on Brady's claim to declare a fee-sharing agreement unenforceable, and on Starke's and Law Firm's counterclaim for breach of contract. Because a valid and enforceable fee-sharing agreement existed between the parties, we affirm.

         Factual and Procedural Background[1]

         Brady and Starke are licensed attorneys in Missouri. Starke has practiced law for over thirty years, while Brady has been admitted to practice law since 2009. From approximately May 2010 until July 2012, both attorneys operated out of the same office building in Blue Springs, Missouri. Starke owns the building and rented office space to Brady for Brady's own law practice, The Brady Law Firm, LLC.

         A large, stand-alone sign sits in front of the office building near the property's entrance from the road. The sign reads "Starke Law Offices, " and lists the address and a phone number. The phone number belongs to Starke. The door into the building reads "Law Offices, " and lists Starke's phone number. The names of other attorneys occupying office space in the building are listed on the door underneath Starke's phone number. Each attorney has the designation "Attorney at Law" below their name, but nothing indicates that the listed attorneys are separate, unaffiliated law offices.[2] This is the only public entrance into the building.

         Upon entering the office building, there is a single, shared reception area where a paralegal, Melodie Chrisman ("Chrisman"), would greet clients and visitors for all the attorneys. Chrisman greeted Brady's visitors the same as Starke's visitors. Chrisman answered phone calls for all of the attorneys in the building, including Brady. It was not uncommon for Brady's clients to call Starke's phone number--the one posted on the sign and door--in order to contact Brady. As with visitors, Chrisman treated callers for Brady the same as she treated callers for Starke.

         The rental agreement between Starke and Brady was oral. Under the terms of the agreement, Brady was to pay Starke $500 per month in rent, as well as postage and copying expenses. In addition to his office space and the reception area, Brady enjoyed shared use of Starke's kitchen, conference room, and other common areas.

         Starke provided Brady with clerical forms, such as client intake forms and medical authorizations. In fact, Chrisman testified that on one occasion, Brady used a provided medical authorization form and listed "JAMES E. BRADY, III, ATTORNEY AT LAW" in the first paragraph, but referred to "Starke Law Offices" in the paragraph relating to authorization revocation.

         Brady hoped that he would receive an overflow of Starke's business by having an office in Starke's building. Starke also wanted to help Brady build his law practice. To that end, Starke passed cases to Brady when he did not have time to pursue them or was otherwise not interested in pursuing them. In such instances, Chrisman or other staff members would call the client to say that Starke could not take their case but that he was referring the case to "a young attorney here in our office." Chrisman testified that she would explain to the client that "[i]f there's a problem, you know, let us know, you can call us back; we just want to make sure that you're happy." Chrisman stated that "[t]hat's kind of the way we addressed all of our clients."

         In addition to the rental agreement, Brady and Starke orally agreed to split any attorney's fees earned from the cases they referred to each other. The "generating attorney" would be entitled to 25% of the total fee earned, with the remaining 75% going to the primary attorney. Even after referring a case, however, Starke remained available and responsible to the clients on those cases.

         During the time that Brady maintained an office in Starke's building, Laura Ziegler ("Ziegler") came to Starke for representation on a personal injury case. Starke had previously represented Ziegler on several other matters. After reviewing Ziegler's file, Starke decided to have Brady take the lead on the case because Starke had a heavy caseload. Starke met with Ziegler twice before passing the case off to Brady. Starke introduced Ziegler to Brady while Ziegler was in Starke's office. Starke testified that he would have told Ziegler that he was available, and to call him if there was a problem, because he almost always said words to that effect when passing off a client. The trial court found this testimony to be credible.

         Brady and Starke discussed Ziegler's case numerous times. Brady sought and received advice from Starke on how to proceed, particularly after the defendant failed to timely answer Ziegler's petition. Starke advised Brady on default judgment proceedings. Starke advised Brady to submit medical evidence at the default judgment hearing and to seek $2 million in damages rather than $1 million. Starke recommended that Brady not attempt to collect the default judgment until after a year passed.

         In July 2012, Brady informed Starke that he was moving out of Starke's office space. At this time, the attorneys signed a letter acknowledging and memorializing their pre- existing oral agreement to split fees earned on certain cases 25%-75%. Specifically, the letter stated that Brady would pay Starke 25% of the legal fees earned in two cases, Ziegler and Byron Chaney ("Chaney"), "for [his] involvement." Additionally, Starke disclaimed any interest he might have in the fees earned in a third case. The letter also mentioned rent and expenses owed to Starke, but stated that they could be paid out of the fees earned in the Chaney case. Both attorneys signed the letter. Brady later paid Starke for his portion of the Chaney fees, including an amount for unpaid rent.

         Brady and Starke continued discussing Ziegler's case after Brady moved out of Starke's building. Brady shared information about the case with Starke and Starke continued to offer advice to Brady about collecting the default judgment. Brady and Starke met and discussed Ziegler's case on October 31, 2012, the eve of the one-year anniversary of the default judgment. Their collaborative discussions about how best to proceed in collecting the Ziegler judgment continued into the following year.

         Brady advised Starke that there was a reasonable chance Ziegler's case would settle at a mediation scheduled in April 2013. Ziegler's case did, in fact, settle as a result of the mediation, generating an attorney's fee in the amount of $380, 000. Based on the fee-sharing agreement, Starke was entitled to $95, 000 of this fee.

         Brady initially held Starke's share of the Ziegler fee in his trust account, but later distributed Starke's share of the fee to himself after filing a petition seeking a declaration that the fee-sharing agreement was unenforceable. Starke and Law Firm filed a counterclaim for breach of contract, quantum meruit, and unjust enrichment seeking to recover Starke's share of the Ziegler fee.

         The parties tried the case to the court, and requested findings of fact and conclusions of law in accordance with Rule 73.01(c).[3] The trial court's judgment included detailed findings and conclusions, and found in favor of Starke and Law Firm on the counterclaim for breach of contract and on Brady's request for a declaratory judgment. The trial court awarded Starke $95, 000 in damages, plus pre-judgment interest pursuant to section 408.020 from May 2, 2013.[4] The trial court also awarded post-judgment ...

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