PIERCE, Justice, for the Court:
¶ 1. This appeal arises from the trial court's grant of summary judgment in an action between an attorney and his former clients. Gloria Thompson and Deborah Dixon sued attorney Herbert Lee, Jr., who represented them in diet-drug litigation, for breach of contract, tortious breach of contract, failure to accurately refund their portion of a multi-district litigation fee, and under the theory of quantum meruit. The trial court granted partial summary judgment to the plaintiffs and partial summary judgment to the defendant. Both parties appeal.
¶ 2. Gloria Thompson and Deborah Dixon (collectively referred to as "the plaintiffs") hired attorney Herbert Lee, Jr., to represent them in diet-drug litigation (commonly referred to as Fen/Phen claims) against the diet-drug manufacturer, American Home Products ("AHP"). They were among thirteen plaintiffs who hired Lee to represent them in the diet drug suit against AHP on a contingency-fee basis. The parties dispute whether the contingency fee agreed to was forty percent or forty-five percent.
¶ 3. The diet-drug lawsuit was filed on behalf of the thirteen plaintiffs in the Circuit Court of Holmes County, Mississippi, and settled for an aggregate amount of approximately $32 million. As part of the settlement, a Multi District Litigation 1203
¶ 4. Both plaintiffs signed disclosure sheets documenting the disbursal of funds prior to receiving their portion of the settlement. They allege they were coerced by Lee into signing the disclosure sheet. Thompson received the largest settlement award of Lee's thirteen diet drug clients, more than $7.4 million. Dixon received the third largest settlement award, which was more than $3.1 million.
¶ 5. More than a year after the settlement of the plaintiffs' cases against AHP, the trustee of the MDL 1203 fund made a determination that one-third of all the sums deposited into the MDL 1203 Fee and Cost Account should be returned to those who had contributed them through a process approved by the MDL trustee's office. Consequently, two percent of Lee's
¶ 6. Thompson and Dixon subsequently filed the present lawsuit against Lee, claiming breach of contract, tortious breach of contract, failure to properly refund the plaintiffs their MDL fees, and that Lee is only entitled to be paid on a quantum meruit basis. Lee filed a motion for summary judgment alleging that no genuine issue of material fact existed regarding whether the plaintiffs had signed the retainer agreements and disbursement sheets authorizing a forty-five percent contingency fee. The motion further alleges that no genuine issue of material fact exists as to whether the plaintiffs were assessed the same amount of money for the MDL fees as Lee's eleven other diet-drug clients. Lee argued he was entitled to judgment as a matter of law and requested that the court grant summary judgment in his favor.
¶ 7. Thompson and Dixon filed a response to Lee's motion for summary judgment and moved the trial court to grant partial summary judgment in their favor. The plaintiffs' motion alleged that Lee refused to produce original copies of the contingency-fee contract and questions the genuineness and authenticity of the photocopy that was produced and the circumstances surrounding its production. The motion further alleged that genuine issues of material fact existed as evidenced by "substantial written documentation and sworn testimony" as to whether Lee overcharged the plaintiffs for attorney's fees. Finally, the plaintiffs' motion claimed that no genuine issue of material fact existed as to whether the MDL fee refund was misappropriated by Lee. The plaintiffs requested the trial court to grant partial summary judgment as to the MDL fee issue.
¶ 8. The trial court entered a memorandum opinion and order granting partial summary judgment to both parties. The trial court found that "upon signing the settlement disbursement sheet, plaintiffs became aware and agreed that Lee was retaining [forty-five percent] of their recoveries in attorney fees." Relying on this Court's holding in Turner v. Wakefield, 481 So.2d 846, 848 (Miss.1985), the trial court found that the plaintiffs had ratified the forty-five percent paid to Lee as attorney's fees and there existed no genuine issue of material fact with respect to the breach of contract and tortious breach of contract claims. The trial court granted summary judgment to Lee as to that issue. Because of this holding, the trial court also found that payment to Lee in quantum meruit is not appropriate and summary judgment was granted in favor of Lee on this claim, as well.
¶ 9. With regard to the MDL fees, the trial court found that, "[t]he MDL Agreement entered into on behalf of his clients by Lee indicates that [six percent] of the settlement of each client shall be deposited in the MDL Fund." (emphasis added.) The trial court further found that certain federal MDL 1203 pretrial orders were applicable in the present matter and required
¶ 10. Lee appeals from the trial court's decision and the plaintiffs cross-appeal. They raise the following issues:
¶ 11. A trial court's grant or denial of summary judgment is reviewed de novo. Daniels v. GNB, 629 So.2d 595, 599 (Miss.1993) (citing Mantachie Natural Gas Dist. v. Miss. Valley Gas Co., 594 So.2d 1170, 1172 (Miss.1992)). In reviewing the record, the court must consider all the evidence in the light most favorable to the nonmoving party when deciding to grant or deny summary judgment. Edmonds v. Williamson, 13 So.3d 1283, 1287-88 (Miss.2009) (citing United States Fid. & Guar. Co. v. Martin, 998 So.2d 956, 962 (Miss.2008)). Further, the "trial court's grant of summary judgment shall be affirmed `if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Germany v. Denbury Onshore, LLC, 984 So.2d 270, 275 (Miss.2008) (quoting Miss. R. Civ. P. 56(c)).
¶ 12. Lee complains that the trial court incorrectly relied on three pretrial orders entered by the United States District Court for the Eastern District of Pennsylvania, MDL 1203 Pre-Trial Orders 467, 517, and 2152, in granting summary judgment to the plaintiffs on the issue of the MDL fee refund. Lee alleges that these pretrial orders are inapplicable because no mechanism exists to transfer a case from a Mississippi state court to a federal MDL court and because the Circuit Court of Holmes County did not enter an order as required by the language of Pre-Trial Order No. 467.
¶ 13. In his opinion, the trial judge pointed out that Pre-Trial Order No. 467 "states that all state court actions are eligible for state-federal coordination under the orders, provided that the state court orders such coordination." The trial court reviewed the orders and the agreement entered into between Lee and the PMC of MDL 1203, and concluded that the pretrial orders were applicable in the present matter. Because the trial court was of the opinion that the orders were applicable, it held that the MDL Refund was to be administered on a pro rata basis and granted summary judgment in favor of the plaintiffs on this issue.
¶ 14. MDL 1203 Pre-Trial Order 467 established a system in which a certain percentage of all MDL 1203 settlements would be sequestered so that the funds would be "available to provide for reimbursement of costs and payment of attorneys' fees to the Plaintiffs' Management Committee ... to perform work for the benefit of plaintiffs in MDL 1203 and in any state-court proceedings coordinated hereunder." MDL 1203 Pre-Trial Order 467 (Feb. 10, 1999). The order further states, "All funds in the account will be
¶ 15. With regard to diet-drug cases in state courts, Pre-Trial Order 467 further states:
MDL 1203 Pre-Trial Order 467 (Feb. 10, 1999). Lee argues that since no such order was entered by the Circuit Court of Holmes County, the Pre-Trial Orders are inapplicable.
¶ 16. MDL 1203 Pre-Trial Order 517 states that Pre-Trial Order 467 "is hereby extended to all MDL No. 1203 civil actions, irrespective of the jurisdictions from which the actions were transferred." MDL 1203 Pre-Trial Order 517 (March 18, 1999). Pre-Trial Order 517 is inapplicable because the underlying diet-drug suit was never transferred into or out of the Eastern District of Pennsylvania, but rather Lee simply contracted with the PMC for the "common benefit" discovery.
¶ 17. MDL 1203 Pre-Trial Order 2152 sought to clarify Pre-Trial Orders 467 and 517. It stated, "Defendants are required to withhold [nine percent]
¶ 18. We find that the MDL 1203 Pre-Trial Orders 467 and 2152 are applicable
Lee argued at the hearing and now on appeal that no order existed in the underlying action subjecting the diet-drug litigation in the Holmes County Circuit Court to the federal MDL orders. The plaintiffs did not provide such an order in response, and none can be found in the record. However, the trial court reviewed the contract between Lee and the PMC of MDL 1203 and the language of the Pre-Trial Orders themselves, and determined the orders to be applicable. The trial court was correct in this determination.
¶ 19. MDL 1203 Pre-Trial Order 467 specifically states, "The Court shall establish an insured, interest bearing escrow account to receive and disburse funds as provided in this Order. The Court will, by future Order, designate an escrow agent to manage the account. All funds in the account will be held as funds subject to the direction of the Court." MDL 1203 Pre-Trial Order 4675 (Feb. 10, 1999). Lee admits that he willingly participated in the MDL Common Benefit Fund, and therefore he voluntarily subjected himself to the orders of the United States District Court for the Eastern District of Pennsylvania in regard to the funds he placed in the MDL account. Therefore, the Pre-Trial Orders are applicable.
¶ 20. Because the Pre-Trial Orders are applicable, the trial court was correct in granting summary judgment to the plaintiffs as to the issue of whether the MDL refund was to be distributed on a pro rata basis. MDL 1203 Pre-Trial Order 2152 provides specific instructions as to how the MDL fee is to be paid. The percentage owed to the MDL Fund is to be deducted entirely from the attorney's fees, not the client's recovery. The order provides the following example:
$ 100,000.00 Gross Settlement Amount -$ 9,000.00 [Nine Percent] Assessment3 (Deducted By AHP)4 _____________ $ 91,000.00 Settlement Payment to Jane Doe's Attorney $ 91,000.00 Settlement Payment to Jane Doe's Attorney -$ 5,000.00 Litigation Expenses _____________ $ 86,000.00 Net Settlement Recovery $ 86,000.00 Net Settlement Recovery -$ 29,000.00 Contingency Fee After Deduction of [Nine Percent] Assessment _____________ ($95,000.00 × 40% = $38,000.00-$9,000.00) $ 57,000.00Balance to Client =============
¶ 22. Based on the requirements of Pre-Trial Order 2152, as evidenced by the above example, the entire six-percent MDL fee was to be deducted from Lee's attorney's fees. Payments to all of Lee's thirteen diet-drug clients should have been made in this manner. Had that been done, the entire two-percent refund would have belonged to Lee — as the entirety of the MDL 1203 fee would have been deducted entirely from his attorney's fees. Therefore, the trial court was correct in granting summary judgment to the plaintiffs as to the MDL refunds because there is no genuine issue of material fact that such payments should have been made on a pro rata basis. However, this issue must be remanded to the trial court to determine if the settlement was distributed in accordance with MDL 1203 Pre-Trial Order 2152, and if not, to order such distribution.
¶ 23. Lee questions the trial court's jurisdiction to hear this case and further complains that the trial court improperly granted full faith and credit to the order of a foreign court in granting the plaintiffs summary judgment on this issue of the MDL fee refund. Lee cites In re: Zyprexa Products Liability Litigation, 467 F.Supp.2d 256, 268 (E.D.N.Y.2006), and In re: Showa Denko K.K. L-Tryptophan Products Liability Litigation, 953 F.2d 162 (4th Cir.1992), as authority for the proposition that the trial court lacked jurisdiction to enforce the federal orders. Lee also claims Thompson and Dixon did not follow the procedure established by the Uniform Enforcement of Foreign Judgments Act, Mississippi Code Sections 11-7-301 through 11-7-309, in order to have the MDL 1203 Pre-Trial Orders enforced in the present action. See Miss.Code Ann. §§ 11-7-301 to 11-7-309 (Rev.2004.)
¶ 24. In re: Zyprexa and In re: Showa Denko K.K. are both federal cases reviewing pre-trial orders in unrelated Multi-District Litigation matters. In re: Zyprexa is a trial court ruling on a motion by the Plaintiffs' Steering Committee ("PSC") of an MDL matter in the United States District Court for the Eastern District of New York. The PSC sought funding partly through requiring a portion of every recovery paid to plaintiffs' attorneys in state courts where the state plaintiff's attorney also represented federal plaintiffs to be paid into a common benefit fund. The trial court ruled that "such compulsion would be inappropriate." In re: Zyprexa, 467 F.Supp.2d at 268. However, those facts
¶ 25. In re: Showa Denko K.K. is a federal appellate-court decision which struck portions of a trial court order providing funding for the PSC in that particular MDL. In re: Showa Denko K.K., 953 F.2d at 162. The portions which were struck required payment from plaintiffs' attorneys in state cases in which any MDL defendant was a party or payor. In re: Showa Denko K.K., 953 F.2d at 164. The United States Court of Appeals for the Fourth Circuit held that the portion of the order which "compels contributions from plaintiffs in state ... litigation who are not before the court" to have an "impermissible reach." Id. at 166. The court held that those portions must be stricken from the order because they were "improperly broad." Id. Again, the present case is distinguishable in that the order at issue in In re: Showa Denko K.K. compelled payment from attorneys who had not purposefully and willfully availed themselves of the benefit of the MDL discovery and agreed to pay compensation in exchange for such benefit.
¶ 26. Lee has clearly stated that in order "to successfully and economically prosecute his diet drug case, [Lee] participated in the [MDL] Common Benefit Fund in which all participating parties agreed to pay [six percent] of their recovery as a fee." Lee purposefully and willfully sought the benefit of the MDL discovery and agreed to pay into the Common Benefit Fund in exchange. Therefore, Lee's argument that In re: Zyprexa and In re: Showa Denko K.K. bar this Court from enforcing the federal court orders to which he willingly submitted himself is without merit.
¶ 27. Further, Lee claims the plaintiffs, Thompson and Dixon, should have followed the procedure laid out in the Uniform Enforcement of Foreign Judgments Act, Mississippi Code Sections 11-7-301 through 11-7-309, in order the have the MDL 1203 Pre-Trial Orders enforced in the Circuit Court of Holmes County. However, the procedure set forth in the Uniform Enforcement of Foreign Judgments Act is applicable to final judgments upon which collection can be made — not pretrial orders. This issue also is without merit.
¶ 28. Finally, on cross-appeal, Thompson and Dixon allege the trial court erred in granting summary judgment to Lee regarding the disputed contingency fee. Thompson and Dixon claim they signed contingency-fee agreements that stipulated that Lee would earn forty percent of their settlement, but that Lee instead charged them forty-five percent. The trial court ruled that the plaintiffs had ratified Lee retaining forty-five percent of the settlement by accepting their settlement funds with knowledge that Lee was retaining forty-five percent of their recoveries. The trial court concluded that such knowledge was imparted to the plaintiffs when they signed the settlement disbursement sheet which indicated that Lee would be paid forty-five percent of the settlement. Therefore, summary judgment was granted in Lee's favor as to this issue.
¶ 29. As evidence that a genuine issue of material fact exists as to the amount of the agreed-upon contingency fee, the plaintiffs point to the following: conflicting testimony
¶ 30. Thompson and Dixon further claim they had tremendous trouble obtaining and copying their client file from Lee. The record contains significant documentation as to the steps they took to obtain the client file. When the plaintiffs finally received their files to copy, neither an original nor a copy of the contingency-fee contract was located in the file. Copies of the retainer agreements stating the contingency fee was forty-five percent were eventually produced. However, the plaintiffs question their authenticity and claim their signatures appear to have been cut and pasted onto the documents.
¶ 31. Further, the plaintiffs claim in their briefs that they were coerced into signing the settlement-disbursement sheets at the time they originally received their portion of the settlement. However, Thompson testified in her deposition that when she went to pick up her settlement check, Lee explained, "this is what your settlement amount was. This is my attorney fees." She went on to testify that the reason she signed the settlement disbursement sheet to receive her check — despite the questions she had regarding the attorney's fees — was that "it really didn't matter... when I did get what he told me I was going to get, I was going to have more money than I would ever spend in my life." Thompson testified that Lee only spoke harshly and used profanity when she questioned him about the MDL refund.
¶ 32. Dixon also testified at her deposition that she began to question the contingency fee when she heard "rumors" that the contingency fee between Lee and his diet-drug clients was forty-five percent. Dixon then said, "I called Sharon Lee[, Lee's wife,] and asked her about the [forty-five] percent. She told me it went up. I said, `How can it just go up?' She said because no other attorney was settling the fen-phen cases for [forty] percent."
¶ 33. When asked why she signed the settlement-disbursement sheet that clearly stated she was paying forty-five percent in attorney's fees, Dixon answered, "Lee told me if we didn't sign, that we was [sic] gonna [sic] have to pay him and still find another attorney. And who was gonna [sic] start all over when we done got to this point?" Dixon testified that she did not confront Lee about the alleged increase in attorney's fees because she already had asked Sharon Lee about the issue on the telephone, and been told the fees "went up."
¶ 34. Thompson and Dixon cite this Court's recent decision in Waggoner v. Williamson, 8 So.3d 147 (Miss.2009), for the proposition that settling a claim does not waive the client's right to pursue a suit against the attorney. It is true that this Court does not accept the proposition that "because the plaintiffs accepted the settlement funds, that they waived any right to sue for malpractice" Id. at 156 (quoting Channel v. Loyacono, 954 So.2d 415, 426 (Miss.2007)), however, that is not the ruling the trial court made in the present
Id. (citing Stoner v. Marshall, 145 Colo. 352, 358 P.2d 1021 (1961)). The Court restated this rule by saying, "assuming the fact of fraud, a contract obligation obtained by fraudulent representation is not void, but voidable. Upon discovery thereof, the one defrauded must act promptly and finally to repudiate the agreement; however, a continuance to ratify the contract terms constitutes a waiver." Id. at 848-49.
¶ 35. However, distinguishing the present case from the rule set forth in Turner are the allegations of coercion. "The law will presume that the contract was freely entered into by the parties without coercion or overreaching." Singer v. Tatum, 251 Miss. 661, 691, 171 So.2d 134, 148 (1965). Both plaintiffs allege Lee coerced them into signing the disbursement sheets which stated Lee's fee was forty-five percent, because Lee stated that their failure to do so would delay their compensation or prevent it all together. Both Thompson and Dixon allege that their attorney — who owed them all of the fiduciary duties which are part of the attorney-client relationship — "strong-armed" them into signing the disbursement sheets.
¶ 36. This matter must be remanded to the trial court for the finder of fact to determine if such coercion was present at the time the disbursement sheets were signed, keeping in mind the fiduciary relationship between a lawyer and his client. If such coercion is found, the Turner rule will be inapplicable. It will be a question for the jury as to whether Thompson and Dixon originally entered a contract with Lee to pay him forty percent or forty-five percent of their recovery. Therefore, the trial court is reversed as to this issue.
¶ 37. The trial court did not err in granting summary judgment to the plaintiffs on the issue of the MDL refund. This case must be remanded, however, to determine if the MDL fees were paid in accordance with MDL 1203 Pre-Trial Order 2152, and if not, to order such distribution. The trial court erred in granting summary judgment to the defendant as to the breach-of-contract claim, and the matter must also be remanded on this issue. Further, because the breach-of-contract claim has been remanded, so must the claims for tortious breach of contract, fraud, and quantum meruit, as they are contingent on
¶ 38.
WALLER, C.J., CARLSON, P.J., DICKINSON, RANDOLPH, LAMAR, KITCHENS AND CHANDLER, JJ., CONCUR. GRAVES, P.J., NOT PARTICIPATING.
In re: Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liability Litigation, 553 F.Supp.2d 442, 449-50 (E.D.Pa.2008).
