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Keywords

contracttortplaintiffattorneylawyertrialjury trial
contracttortplaintiffattorneylawyertrialjury trial

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Wunschel Law Firm, P.C. v. Clabaugh, 291 N.W.2d 331, 9 A.L.R.4th 181

Facts

The case originated when the Wunschel Law Firm defended Larry D. Clabaugh in a defamation suit. Clabaugh had previously employed other counsel but sought representation from Wunschel after that relationship ended. The firm proposed a contingent fee contract, which Clabaugh accepted, agreeing to pay one-third of any amount saved under the $17,500 prayer in the defamation suit. After a jury trial resulted in a judgment against Clabaugh for $1,750, the firm billed him for $4,270, leading to the present action for fees when Clabaugh refused to pay.

The case originated when the Wunschel Law Firm defended Larry D. Clabaugh in a defamation suit. Clabaugh had previously employed other counsel but sought representation from Wunschel after that relationship ended. The firm proposed a contingent fee contract, which Clabaugh accepted, agreeing to pay one-third of any amount saved under the $17,500 prayer in the defamation suit. After a jury trial resulted in a judgment against Clabaugh for $1,750, the firm billed him for $4,270, leading to the present action for fees when Clabaugh refused to pay.

Issue

Whether the court should approve contingent attorney fee contracts for the defense of unliquidated tort damage claims where the fee is fixed as a percentage of the difference between the amount prayed for in the petition and the amount actually awarded.

Whether the court should approve contingent attorney fee contracts for the defense of unliquidated tort damage claims where the fee is fixed as a percentage of the difference between the amount prayed for in the petition and the amount actually awarded.

Rule

Contingent fee contracts for the defense of unliquidated tort damage claims that are based on a percentage of the difference between the prayer of the petition and the amount awarded are void as they contravene public policy.

Contingent fee contracts for the defense of unliquidated tort damage claims that are based on a percentage of the difference between the prayer of the petition and the amount awarded are void as they contravene public policy.

Analysis

The court analyzed the nature of the contingent fee contract and its implications under the Iowa Code of Professional Responsibility for Lawyers. It concluded that such contracts could lead to unreasonable fees and do not align with the ethical standards that require fees to be reasonable. The court emphasized that the determination of fees based on speculative factors is contrary to sound public policy.

The court analyzed the nature of the contingent fee contract and its implications under the Iowa Code of Professional Responsibility for Lawyers. It concluded that such contracts could lead to unreasonable fees and do not align with the ethical standards that require fees to be reasonable. The court emphasized that the determination of fees based on speculative factors is contrary to sound public policy.

Conclusion

The court reversed the trial court's judgment and held that the contingent fee contract was void, allowing the plaintiff to seek recovery of fees on a quantum meruit basis.

The court reversed the trial court's judgment and held that the contingent fee contract was void, allowing the plaintiff to seek recovery of fees on a quantum meruit basis.

Who won?

Wunschel Law Firm, P.C. prevailed because the court found the contingent fee contract void and allowed for recovery on a different basis.

Wunschel Law Firm, P.C. prevailed because the court found the contingent fee contract void and allowed for recovery on a different basis.

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