Paul MacKinnon et al.
Robert R. Berluti et al No. 135468
FINDINGS OF FACT ON COUNT V OF COMPLAINT ALLEGING
VIOLATION OF G.L.c. 93A
L. Sanders, Justice
case involves a dispute between an attorney and two of his
clients about the fee that the attorney collected in
connection with a settlement of his clients' contract and
Wage Act claims against their former employer. The plaintiffs
(the former clients) contend that the defendant attorney
misled them as to the value of their claims and then
collected as part of that settlement a fee that was excessive
and substantially more than the contingent fee that the
plaintiffs had originally agreed to pay. Plaintiffs asserted,
among other things, claims for breach of contract and a
violation of 93A.
September 26, 2016, the jury returned a verdict in favor of
the defendants on the breach of contract counts.
Specifically, they found that the written fee agreement that
plaintiff Paul McKinnon had with the defendant Robert Berluti
had been modified and that as a consequence of that
modification, there was no breach of the fee agreement when
the settlement proceeds were disbursed as they were. The jury
made this finding in the context of a set of instructions
which advised them of the special duties that an attorney
owes to his client--duties which are fiduciary in nature.
They also were instructed that the defendants bore the burden
of proving that there had been a modification. As to
plaintiff Olivo, the jury found that he had no agreement with
Berluti regarding the payment of attorneys fees and therefore
there was no breach of contract. This verdict was amply
supported by the evidence.
Court reserved for itself the 93A Count. I informed the
parties before submission of the contract count to the jury
that I intended to adopt the findings of the jury as part of
my own findings on the reserved 93A claim. I do so now.
Moreover, there are no additional facts that plaintiffs have
proven which would support the conclusion that the defendants
engaged in unfair and deceptive business practices.
Defendants are therefore entitled to judgment in their favor
on this last remaining count in the case. In support thereof,
this Court makes the following findings of fact.
approached Berluti in 2008 about bringing a claim against his
former employer Lindenmayr Monroe for unpaid commissions.
Because Olivo had been terminated by the company and there
was a possibility the company could assert counterclaims
against him if he brought his own suit, it was agreed that
Olivo would try to find another Lindemayr employee willing to
be the named plaintiff in a class action against Lindemayr
for these unpaid conmussions. Olivo was successful in
locating such a person. Paul McKinnon, who had recently
retired from the company, was willing to serve as named
plaintiff, and in September 2009, McKinnon entered into a
written fee agreement with Berluti. That agreement provided
among other things that McKinnon would be responsible for
costs and expenses, but that he would pay no attorneys fees
unless he prevailed, either at trial or through a settlement.
In that event, Berluti would receive a fee consisting of
one-third of the proceeds. As the jury found, Olivo had no
fee agreement with Berluti.
case against Lindenmayr was brought as a putative class
action and alleged a violation of the Wage Act and breach of
contract among other claims. If McKinnon prevailed at trial,
the Wage Act provided for an award of attorneys fees as
approved by the court, and for the assessment of treble
damages in the discretion of the court (the statute has since
been amended). Judge William Young, to whom the case was
assigned, declined to certify the class until McKinnon's
individual claim was resolved. Thus, Olivo's chance of
recovery depended not only on McKinnon prevailing but also on
Judge Young's ultimately agreeing to permit class
case also carried various other risks for the plaintiffs.
Those risks were outlined by an attorney called by the
defendants as an expert. Plaintiffs offered no credible
evidence to rebut this testimony. Berluti explained these
risks to both plaintiffs at various times in the litigation.
effort was made to resolve the case through mediation, which
proved unsuccessful. Then as the trial date approached,
Berluti, with his client's knowledge and consent, resumed
settlement talks with opposing counsel. Although opposing
counsel (David Kerman) was not called by either side as a
witness at trial, this Court credits Berluti's testimony
as to the gist of those discussions.
final offer by Kerman was to pay Berluti $215, 000 for his
attorneys fees (about $30, 000 less than the billing records
showed his fees were as of that date), pay McKinnon $60, 000
and pay Olivo $95, 000. Although Olivo was not a named
plaintiff, Kerman was insistent that he be included in the
settlement and sign a confidentiality agreement regarding it,
thus diminishing the chance that Lindemayr would face
additional litigation by other former employees. Contrary to
plaintiffs' assertion, Kerman did not propose a lump sum
settlement and leave it to Berluti to apportion. Thus,
Berluti did not place his own interest ahead of his clients,
and the fee that he collected was not excessive. Kerman was
also firm in his position as to what McKinnon and Olivo would
each receive. These amount were fair and reasonable in light
of the risks they faced if the case had not been settled.
Indeed, had the settlement not separately provided for
attorneys fees, the plaintiffs would have received less,
since Berluti would have taken a third out of the recovery.
Court is fully aware of an attorney's obligations to his
client and the professional rules of ethics which must be
followed, particularly with respect to fee agreements.
Berluti fulfilled those obligations and acted ethically and
fairly in dealing with his clients in negotiating the
settlement. Each of the plaintiffs fully understood the
settlement offer that they accepted and agreed to. They also
understood precisely what Berluti received as part of that
settlement and the basis for it. In accepting the settlement,
MacKinnon understood (as the jury concluded) that the
apportionment of attorneys fees was different from that
contemplated by the original fee agreement. He accepted his
share with that understanding and indeed expressed his
satisfaction with the outcome. As already pointed out,
Olivo's chance of recovery was even more contingent--and
thus the amount he received particularly reasonable--since he
was not even a named plaintiff at that point.
short, neither plaintiff was misled in any way, nor did
Berluti engage in any conduct that was unfair and/or
deceptive in violation of chapter 93A. Accordingly, it is
hereby ORDERED ...