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Contingent Fee Need Not Be Disgorged After Appeal Reversal!



The Washington Supreme Court has ruled that a plaintiff's lawyer who collects a contingent fee need not reimburse that fee to the defendant if the decision in the plaintiff's favor is reversed on appeal. The decision came on June 7 (Ehsani v. McCullough Family Partnership, Wash., No. 78353-5, 6/7/07).


Pursuant to a trial court judgment, Sayed Ehsani paid approximately $77,900 to his trial opponents' attorney, David B. Cullen, rather than posting a supersedeas bond to stay the judgment pending appeal. At the direction of his clients, Cullen paid part of the funds to certain of his clients' creditors, retained another portion as his fee, and remitted the balance to his client. The appellate court overturned the judgment. On remand, Ehsani filed a motion for restitution asking the trial court to order Cullen to restore the full $77,900 previously distributed from Cullen's client trust account.

The trial court denied the motion; the court of appeals held that Cullen must repay Ehsani for the full $77,900. But the supreme court reversed, siding with Cullen and the Washington State Bar Association, which took part in the appeal as amicus curiae.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.