Court Finds Genuine Issue of Material Fact on Dispute Regarding Attorney Referral Fee
Sirote & Permutt, P.C. v. C. Randall Caldwell, Jr.
In this case, the Woerner companies (several businesses located in Foley, Alabama and owned by George Woerner) retained Cunningham Bounds, LLC, (“Cunningham”) to represent them in litigation related to the British Petroleum (“BP”) oil spill that occurred in the Gulf of Mexico in April of 2010. This engagement was brought about by C. Randall Caldwell, Jr. who contacted an attorney for Cunningham about the possibility of referring the Woerner companies to Cunningham for the handling of these claims. At the time that the Woerner companies and Cunningham entered into representation agreements, Caldwell was both the president of one of the Woerner companies and a licensed attorney in good standing. A year later, he left his employment with Woerner and returned to private practice.
The Woerner companies, which retained Sirote & Permutt, P.C. (“Sirote”) to assist Cunningham in the BP oil-spill litigation, sent a letter to Caldwell informing him that they were terminating the attorney-client relationship with him. Caldwell contended that he was entitled to referral fees under one of the provisions in the representation agreements which provided that Caldwell may receive up to 1/3 of the attorney’s fees. Cunningham filed a Complaint with the Mobile Circuit Court for interpleader and sought declaratory relief against Caldwell and Sirote. Caldwell filed a motion for summary judgment which was ultimately granted by the trial court.
At issue before the Alabama Supreme Court was whether Caldwell presented enough evidence to establish that a contract existed between him and Cunningham. Sirote argued that Caldwell was not a party to the representation agreements and that there was no evidence that a contract existed between Caldwell and any of the Woerner entities or Caldwell and Cunningham. The Court agreed and noted that the representation agreements included no specific promise to pay Caldwell a referral fee and merely included provisions where the Woerner companies acknowledged that their claims were referred to Cunningham by Caldwell and that Caldwell may receive up to 1/3 of attorney’s fees. The Court also emphasized that although the agreements acknowledged Caldwell as the referring attorney, they did not include any terms of agreement between Caldwell and Cunningham nor did they specify the triggering event for the payment of the referral fee or how the fee amount would be determined. Therefore, because Caldwell failed to present any evidence that a contract existed between him and Cunningham, the Court reversed the trial court’s decision.