Breach of Fee Sharing Agreement Excuses Party from Contractual Obligations


In Brown v. Grimes, 2011 DJDAR 1645 (2011), the Second District California Court of Appeal decided an interesting case concerning enforcement of the terms of a fee sharing agreement.

The trial court refused to enforce the agreement for three reasons:

1. failure to perform material obligations of the contract;

2. unclean hands due to an unethical arrangement to split fees with a non-lawyer; and,

3. because the agreement lacked the required consent of the client to split fees.

Paul Ross (“Ross”) was a former California attorney. He resigned from the practice of law as a result of State Bar proceedings which were pending against him. He did investigative work for a California attorney named James Brown (“Brown”). Ross referred cases to Brown arising from a refinery explosion in Texas.

Brown was unable to prosecute the cases as lead counsel. For this reason, Ross and Brown contacted another California attorney, Milton Grimes (“Grimes”), who agreed to act as the lead attorney.

Brown and Grimes agreed to split the fees on a 50/50 basis. Both Ross and Brown then agreed to bring in yet another law firm to work on the cases, with a further split of any amounts recovered.

Please see full article below for more information.

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