KENNY ARMSTRONG, J.
This is an appeal from an award of attorney's fees following settlement of the underlying lawsuit. Appellees, law firm and attorney, represented Appellant in a lawsuit arising from an automobile accident. After protracted mediation, Appellee orally agreed to lower its contingency fee from 33 1/3% to 10% in consideration of Appellant's agreement to settle her case against the tort defendants for $52,000. Appellant agreed to accept this offer and signed the settlement agreement at the conclusion of the mediation. Thereafter, Appellant allegedly refused to sign the releases drafted by the tort defendants. The trial court, upon the tort defendants' motion, enforced the settlement agreement reached by the parties at mediation. Appellees assert that Appellant's refusal to sign the releases drafted by the tort defendants constitutes a breach of the modified fee agreement and now seek to enforce an attorney's fee lien for the full one-third of the recovery. The trial court granted Appellees' motion to enforce its lien for the full amount, and Appellant appeals. We conclude that the terms of the modified fee agreement between Appellees and Appellant only required Appellant to settle her case with the tort defendants for $52,000, which she did. Accordingly, the trial court erred in not enforcing the modified fee agreement. Reversed in part, affirmed in part, and remanded.
On March 18, 2009, Glankler Brown, PLLC ("Glankler") and Oscar C. Carr, III (together with Glankler, or "Appellees") entered into an engagement letter with the Appellant Janice Burch. Pursuant to the letter, Appellees agreed to represent Ms. Bunch in a personal injury lawsuit against Tiffany Jones. The underlying lawsuit arose from a December 15, 2008 automobile accident. Concerning Appellees attorney's fees, which are the subject of the instant appeal, the engagement letter provides, in pertinent part, that Appellees' attorney's fees would be "a contingency fee equal to one-third (1/3) of the gross recovery made by you on your behalf." The letter goes on to define "gross recovery" to include recovery by "settlement."
On December 11, 2009, Appellees filed suit against Tiffany Jones on Ms. Bunch's behalf. Following discovery, the parties agreed to mediate the case. The mediation was conducted on May 12, 2011. At some point during the mediation, Appellees offered to modify their attorney's fee agreed to in the engagement letter. The agreement to modify the fee schedule was set out in a May 13, 2011 letter from Mr. Carr to Ms. Bunch, stating, in relevant part: "This will also confirm that yesterday [at the mediation], in order to get the case settled, I agreed to reduce our firm's fee from 33 1/3% to 10% of the total gross recovery." Apparently, in reliance on Appellees' agreement to lower its fee to 10%, at the end of the May 12, 2011 mediation, Ms. Bunch signed the "Agreement of Essential Terms of Settlement," which provides: "If Defendants will pay $52,000 in full settlement of all claims and pay the entire mediator's fee, Plaintiff will accept it and will give a full release of all claims." Mr. Carr's May 13, 2011 letter further notes that "today [the mediator] left [Mr. Carr] a telephone message that the case had been settled for the amount you agreed to accept yesterday which was a total of $52,000 . . . ."
On July 25, 2011, unnamed defendant, GEICO General Insurance Company, filed a motion to enforce the mediation agreement/settlement, wherein it stated that "[t]his case was settled at the May 12, 2011 [mediation]. The terms of the settlement were that the Defendant Tiffany Jones . . . would pay the sum of $45,000.00 and the Plaintiff's uninsured motorist carrier GEICO . . . would pay $7,000 . . . for a total settlement of $52,000.00." Both tort defendants performed pursuant to the settlement agreement. On May 23, 2011, counsel for Ms. Jones tendered $45,000, which was received by Appellees on behalf of Ms. Bunch on May 24, 2011. Counsel for GEICO tendered $7,000 on May 25, 2011. Both tort defendants included releases and orders of dismissal with prejudice with their tender of these payments. Following receipt of the settlement funds by Appellees, Appellant never responded to Appellees' request to come into the office to sign the checks and the releases.
On July 27, 2011, Appellees filed a motion to withdraw as Ms. Bunch's counsel and for stay of proceedings. Therein, Appellees stated that "the interests of attorney and client have become adverse to such an extent that [Appellees] are no longer able to render effective representation." By order of September 9, 2011, the trial court allowed Appellees to withdraw. Thereafter, on October 21, 2011, Appellees filed a notice of attorney's lien pursuant to Tennessee Code Annotated Section 23-2-102, which provides that "[a]ttorneys . . . of record who begin a suit shall have a lien upon the plaintiff's . . . right of action from the date of the filing of the suit." In its notice of attorney's lien, Appellees argue, in relevant part, that:
Accordingly, Appellees sought an attorney's lien equal to one-third (1/3) of the $52,000 gross recovery, or $17,333.33.
On April 11, 2012, the trial court entered an order, granting the defendants' motion to enforce the settlement agreement. Therein, the trial court found, in relevant part that
On April 27, 2012, the trial court entered an order granting the tort defendants' motion to deposit the settlement funds with the court. In early May 2012, the tort defendants deposited $52,000 into the Registry of the Court. Ms. Bunch appealed. After several extensions, by order of January 22, 2014, this Court dismissed the appeal on January 22, 2014.
On January 31, 2014, Appellees filed a motion to enforce the attorney's lien in the trial court, seeking an award of $3,182.79 in litigation costs and expenses and a $17,333.33 contingency fee from the proceeds deposited with the court. Appellees' motion was heard by the trial court on February 14, 2014 and May 2, 2014. By order of May 13, 2014, the trial court granted Appellees' motion to enforce its attorney's lien and awarded Appellees $20,516.12 in attorney's fees and litigation costs, plus post-judgment interest thereon at the statutory rate of 5.25%.
Ms. Bunch appeals. She raises three issues for review as stated in her brief:
The issue of Appellees' attorney fees was tried by the court, sitting without a jury.
The issues here further involve questions sounding in contract. The applicable standard of review was succinctly set out in the case of
The gravamen of this case is whether the Appellees and Ms. Bunch have an enforceable modification of the original engagement agreement. If so, the question is whether any action or inaction on Ms. Bunch's part constituted a breach of that modified contract so as to nullify it. We begin with the question of modification.
It is well settled that contracts may be modified by mutual assent to the changed terms.
We note that the trial court did not make any specific findings concerning the enforceability of the parties' modified contingency fee agreement. Accordingly, our review of that question is de novo, and we will conduct our own independent examination of the appellate record.
Although the distinction is subtle, we must keep in mind that, in this appeal, we are concerned with the modified agreement between Appellees and Ms. Bunch. In other words, any agreement or settlement that Ms. Bunch entered with the tort defendants is irrelevant to this appeal except to the extent that Ms. Bunch's obligations under such agreement(s) are also required of her under her modified contract with Appellees. For example, the "Agreement of Essential terms of Settlement" is not an agreement between Ms. Bunch and the Appellees; rather, it is an agreement between Ms. Bunch and the tort defendants. As set out above, for payment of $52,000, Ms. Bunch agreed to "give full release of all claims" against the tort defendants. Under the settlement agreement, Ms. Bunch has no contractual obligation to Appellees, only to the tort defendants. Ms. Bunch's obligation to Appellees is a separate agreement, memorialized in Mr. Carr's May 13, 2011 letter, which states that "in order to get the case settled, I agreed to reduce our firm's fee . . . ." Based upon this language, it is Ms. Bunch's settlement of the case that Appellees bargained for in exchange for lowering their fee. In this regard, there was a meeting of the minds, mutual consideration, and sufficient explicitness of the contract terms to enforce the parties' modification of their original fee schedule. The question, then, is whether Ms. Bunch breached her obligation under the modified contract to settle the case against the tort defendants.
There can be little doubt that Appellees received the benefit of their bargain in this case, which was the $52,000 settlement. Ms. Bunch was also held to the terms of the settlement when the trial court enforced the settlement agreement, awarding Ms. Bunch $52,000 and dismissing her claims against the tort defendants with prejudice. In short, there is no doubt that this case was, in fact, settled.
However, when Ms. Bunch allegedly refused to sign releases (in favor of the tort defendants), Appellees argue that this refusal constitutes a breach by Ms. Bunch of the contract she had entered with the Appellees. Specifically, in seeking to recoup the full measure of fees that was contemplated in the original engagement letter, i.e., 33 1/3% of any settlement, Appellees argue that their subsequent agreement to take 10% in fees "was contingent upon [Appellant's] agreement to accept the . . . settlement offer resulting from mediation." "Because [Appellant] refused to accept a settlement of the case as a result of mediation," Appellees aver that their "agreement to accept a reduced attorney fee no longer exists . . . ." We disagree. As discussed above, Ms. Bunch's obligation under the contract with the Appellees was to settle the case. This she did. Any obligation to release the tort defendants was due to the tort defendants under the settlement agreement and was not owed to Appellees. Any failure of Ms. Bunch to execute a release could have only been enforced by the tort defendants, who were owed this duty under the settlement agreement. Regardless, it appears that any breach of the settlement agreement vis-a-vis the tort defendants was cured upon the trial court's dismissal of Ms. Bunch's claims against them with prejudice.
Having determined that the modification of the parties' contract was enforceable and that Ms. Bunch satisfied her sole requirement thereunder to settle the case against the tort defendants, we pretermit Appellant's second issue concerning promissory estoppel.
Concerning Appellant's third issue that Appellees should be denied any fees based upon Appellant's allegation that Appellees breached the parties' agreement by filing a lien for attorney's fees, we have reviewed the record and find no clear evidence that Appellees, although incorrect in their argument, acted in bad faith in seeking fees in this case, or that there was any prohibition in the parties' agreement to preclude Appellees from seeking such enforcement. Accordingly, we decline to disgorge Appellees of any fee in this case. However, based upon the foregoing analysis, we conclude that Appellees are only entitled to attorney's fees equal to 10% of the gross settlement amount of $52,000., or $5,200, plus $3,182.79 in litigation costs and expenses.
For the foregoing reasons, we reverse the trial court's award of $17,333.33 in attorney's fees and remand the case for entry of judgment in favor of Appellees for $5,200 in attorney's fees plus their expenses in the amount of $3,182.79 and for any further proceedings that may be necessary and are consistent with this opinion. The order of the trial court is otherwise affirmed. Costs of the appeal are assessed against the Appellees, Glankler Brown, PLLC, Oscar C. Carr, III, and their surety, for all of which execution may issue if necessary.
