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The Colorado Court of Appeals took on this assignment when it tried to untangle that question as a determiner of how fees should be divided in Larson v. Grinnan, (2017 COA 85).

After a propane explosion injured a man, his wife, and daughter, the man asked his good friend, Michael Grinnan (“Grinnan”), a general practitioner, to represent the family in a lawsuit against various defendants. Grinnan had very little personal injury experience, so he got permission to bring on Scott Larson (“Larson”), an established personal injury attorney on a contingency basis. The contingency agreement was signed by the plaintiffs and Larson, and identified Grinnan as associated counsel, and said he would be paid a percentage of Larson’s fee, not to exceed 100%. Beyond that, terms were undefined. At the end of settling, Larson’s fee was more than 3 million dollars, with about $300,000 in costs (previously agreed to be paid by Larson). Larson paid Grinnan $50,000 and then the two were unable to agree how to divide the fees.

The trial court awarded Grinnan about $426,000 plus interest on the full amount in question at 8%. The questions on appeal were did Grinnan take on joint responsibility in the case (one of the statutory determinants of division of fees) and what that means. The Court looked at whether Grinnan assumed financial responsibility. The test is generally whether Grinnan would be subject to joint and several or vicarious liability for Larson’s legal malpractice. In this case, the undisputed evidence shows that Grinnan and Larson entered into a joint venture for the purposes of representing the plaintiffs and sharing in the fee. From that arrangement flows vicarious malpractice liability. Therefore, the Court concluded that Grinnan assumed financial responsibility for the case.

The second determination would be whether Grinnan also assumed ethical responsibility as part of the joint responsibility. The statute states that joint responsibility creates ethical responsibility for the representation as if the lawyers were associated in a partnership. The problem is, what ethical responsibility entails in Colorado is not clearly defined. The Court said, to accept ethical responsibility, the referring lawyer (Grinnan) must actively monitor the progress of the case, make a reasonable effort to see that all involved in the case are abiding by the Rules of Professional Conduct, and to be available to consult with the client regarding any concerns the client may have.

Here, the trial court did not at all address whether Grinnan had met any of the standards to have assumed ethical responsibility in the case. The Court remanded the case to the trial court to determine whether Grinnan had assumed ethical responsibility. It says the trial court will have to make its determination based on the existing record. If the court finds that Grinnan assumed ethical responsibility, then the court’s fee award stands, subject to an appeal by Larson. If the court finds Grinnan did not assume ethical responsibility, then the fee should be divided based on the proportion of work done by each party.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado.

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