§8.3 Fees Charged to Minors

The Case: Wright v. Wright , No. M2007-00378-COA-R3-CV, 2007 WL 4340871 (Tenn. Ct. App. Dec. 12, 2007).

The Basic Facts: Case involving personal injuries to minor settled and attorney sought approval of contingency fee. The child's guardian ad litem objected to the fee request, which was one-third of the monetary recovery for the child.

The Bottom Line:

• "By caselaw and by statute the settlement of a case brought by a minor for personal injuries must be approved by the court, and the court must ensure that the settlement itself is in the best interests of the minor. See Busby v. Massey, 686 S.W.2d 60 (Tenn. 1984); Rafferty v. Rainey, 292 F.Supp. 152 (E.D. Tenn. 1968); see also T.C.A. § 29-34-105; T.C.A. § 34-1-121(b). Obviously, part of settling a minor's personal injury claim is authorization to pay attorney's fees, and a determination of the proper amount of attorney's fees for handling a minor's claim must be made by the court. See Roberts v. Vaughn, [219 S.W. 1034, 1036 (Tenn. 1920)] (holding that attorney's fees for representing a minor are subject to the 'action of the Court in fixing his compensation' only 'after an investigation of their value'); see generally 42 Am. Jur. 2d Infants § 200 (2000)." Id. at *1.
• "Although not specifically raised on appeal, counsel for the plaintiff has at one time contended that the issue of attorney's fees was beyond the duties of the guardian ad litem. This Court wishes to make clear that a challenge to attorney's fees is well within the duties of a guardian ad litem. The role of a guardian ad litem is to protect a minor's interests. Toms v. Toms, 209 S.W.3d 76, 81 (Tenn. Ct. App. 2005); Keisling v. Keisling, 196 S.W.3d 703, 729-30 (Tenn. Ct. App. 2005) see also Tenn. R. Civ. P. 17.03. Specifically, the role of a minor's guardian ad litem in the context of settling of a serious tort claim is illustrated by Thomas v. R.W. Harmon, Inc., 760 S.W.2d 212 (Tenn. Ct. App. 1988). Thomas involved a collateral challenge to a minor's settlement entered into by the child's parent without the aid of counsel. See id. at 213. The minor was seriously injured, but the parent settled for a small amount. Id. This Court held that the trial court's failure to appoint a guardian ad litem, investigate into the facts of the incident, or determine whether the settlement was in the minor's best interests supported setting aside the judgment. Id. at 217." Id. at *3.
• "The Court does not suggest that Thomas is factually the same as this case, but Thomas does illustrate that the guardian ad litem is obliged to bring to the trial court's attention all facts bearing upon the fairness of the settlement, and this necessarily includes examination of the amount of attorney's fees to be awarded. It is obvious that the higher the fee for the attorney, the less there is available for the minor.
  
  In a settlement proceeding, the guardian ad litem has the duty to conduct a thorough investigation and evaluate the damages suffered by the minor and the adequacy of the settlement, including the amount of attorney fees charged by the minor's attorney." Id. at *4.
• "It has long been the law in Tennessee that a next friend (including a parent) cannot make a contract with counsel which would bind the minor with respect to the amount of attorney's fees. City of Nashville v. Williams, [82 S.W.2d 541 (Tenn. 1935)]; Roberts, [219 S.W. at 1035]. This rule was recently reiterated in a case in which a lawyer sought a percentage under a contingent fee agreement with a father for representation of a minor in a malpractice action. This Court explained:

  We further note that it is well established under the law in Tennessee that a next friend cannot contract with counsel for the amount of their fees so as to bind the minor. Where an attorney confers a benefit upon a minor child he is entitled to the reasonable value of his services from the amount recovered; however, it is left to the court to determine what that value is under the circumstances presented. Accordingly, regardless of the fact that [the minor's parents] agreed that [the attorney] would receive thirty-three and one-third of the total recovery in this case, he is only entitled to that fee which the Trial Court determines to be reasonable.

  Shoughrue v. St. Mary's Med. Ctr., 152 S.W.3d 577, 585 (Tenn. Ct. App. 2004) (internal citations omitted)." Id.
• "The factors to be considered in setting attorney's fees are those contained in Rule of Professional Conduct 1.5(a):
  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 by the lawyer;
  3. The fee customarily charged in the locality for similar services;
  4. 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 or lawyers performing the services; and
  8. Whether the fee is fixed or contingent."
  Id. at *4-5.
• "One seeking attorney's fees has the burden of proving what constitutes a reasonable fee and should be in a position to tender the necessary proof. Wilson Mgmt. Co. v. Star Distribs. Co., 745 S.W.2d 870, 873 (Tenn. 1988). As Justice (then Judge) Koch has explained for this Court:
  [The party seeking attorney's fees] has the burden to make out a prima facie claim for his request for reasonable attorney's fees. Ordinarily, the party requesting attorney's fees carries this burden by presenting the affidavit of the lawyer who performed the work. Parties opposing a request for attorney's fees should be afforded a fair opportunity to cross-examine the requesting party's lawyer or to present proof of its own. Hosier v. Crye-Leike Commercial, Inc., 2001 WL 799740 at *6 (Tenn. Ct. App. July 17, 2001) (internal citations omitted)." Id. at *5.
• "Both counsel for the plaintiff and the trial court seem to have believed that the contingent fee agreement trumped all the other relevant factors set out in RPC 1.5(a). We disagree. The hearing held on September 25, 2006 was devoid of proof as to the time devoted to the case by counsel, there were no findings as to the specifically articulated criteria, and there was no recognition that the burden was on counsel for the plaintiff to show the reasonableness of his request. While a trial court may rely to some extent on its knowledge of the case and also on its own general knowledge of fee schedules in an area, it cannot allow this information to overwhelm its obligation to consider all relevant factors. See RPC 1.5(a). The decision below on attorney's fees is therefore reversed.
  
  This case is remanded to the trial court for a full hearing wherein counsel for the plaintiff shall have the burden of proving the amount of a reasonable fee, and all appropriate factors in RPC 1.5(a) shall be considered. In the process of determining the reasonable fee to be awarded, the trial court shall make findings with respect to those factors." Id. at 6-7.

Other Sources of Note: Wright v. Wright , No. M2008-01181-COA-R3-CV, 2009 WL 3246459 (Tenn. Ct. App. Oct. 8, 2009 (affirming amount of fee approved by trial court after remand and hearing on amount of reasonable fee and consideration of factors in RPC 1.5(a).