Rich v. William Penn Life Insurance Company of New York

Filing 84

REPORT AND RECOMMENDATIONS of Special Master. Signed by Frederic N. Smalkin on 11/17/2020. (hmls, Deputy Clerk)

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 1 of 18

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
NORTHERN DIVISION

RICHARD DICKMAN; KENT

)

ALDERSON; LESLEY S. RICH,

)

Trustee for RICHARD S.

)

WALLBERG INSURANCE

)

TRUST; Individually and on behalf

)

o all those similarly situated,
f

)

Plaintiffs,

Civil Actions Nos.

)

V.

)

BANNER LIFE INSURANCE

)

COMPANY; WILLIAM PENN

)

LIFE INSURANCE COMPANY

)

OF NEW YORK,

)

Defendants.

l : 1 6 - c v - 0 0 1 9 2 - RD B

1 : l 7-cv-02026-GLR

)

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

INTRODUCTION TO REPORT AND RECOMMENDATION

This report and recommendations emanate from a Stipulated Order issued by
the

Honorable

Richard

D.

Bennett,

United

States

District

Maryland, appointing the undersigned as a Special Master.

Judge,

District

of

The matters discussed

herein arise from a dispute among a number of plaintiffs' attorneys who participated
in a class action that was settled.

The settlement resulted in a joint attorneys' fee in

a large amount, i.e., $ 7 , 8 5 1 , 0 0 1 . 0 8 .
Judge Bennett.
allocation

That total gross amount has been approved by

Remaining is - a s in virtually all major class actions cases - th e

of that money among the plaintiffs' attorneys.

After all substantive issues were concluded in the District Court, an appeal
was taken by an objecting
Richmond.

member of the class to the Fourth Circuit Court in

That matter is still pending.

The appellant's issue does not focus on

counsel fees, but appellate fees will at some point, i.e., at the res judicata close of

1

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 2 of 18

the case as a whole. Because appellate fee matters are not ripe, they will not be taken
into account of monetary allocation at this point.

In my

first

discussions

telephonically with the

many plaintiffs'

attorneys

involved in the allocation case, there arose a dispute among them with regard to
whether I should wait and do nothing in response to Judge Bennett's Order until the
entire case was buttoned up after all appellate and first instance cases are completely
concluded.

There would then be no question the ultimate total amount of money

was reached.

Preliminarily, after telephonic discussion with attorneys who had disparate
views on the matter, I decided not to wait for the outcome of the appellate matter,
but rather to proceed with a pair of two cardinal issues (with different claimants)
regarding the allocation of fees.

It was felt by most (but not all) of the counsel

involved that there was no substantial reason to wait for the appellate outcome, but
to proceed to address issues that are not inherently tied to what might or might not
happen

in

the

Court

of Appeals.

attorneys' fees among them.

These

are

major

disputes

on

splitting-up

of

I determined there was no reason to wait for the appeal,

and that it was in the interest of all concerned to proceed on the likely assumption
that the District Court's final decisions would not be reversed on appeal.

MAJOR PERSONA

The problems now before me essentially emanate from two law firms and two
lawyers.

It is indisputable that these two lawyers, Mr. "Wally" Walker and Mr.

"Dee" Miles III, were associated with two (different) Alabama law firms on January
19,

2016,

a cardinal

date

in the

matters

now under scrutiny.

Mr.

Walker was

associated with "The Finley Firm" and Mr. Miles with the firm of "Beasley, Allen,
Crow, Methvin, Portis, and Miles" (for short, "Beasley).
now.

There are two disputes

One is a monetary disagreement between the Finley Firm and Mr. Walker.

The other is a monetary disagreement between the Geoff McDonald & Associates
(GMA) firm and the Beasley firm, a firm including Mr. Miles.

(It is noted that Mr.

Miles had some connection with the Finley firm, stopping payment of the 2 3 .4 % he
had formerly written to Finley would be sent to that Firm,)

2

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 3 of 18

BASIC INTRODUCTION: THE AGREMENT

One might say that the present inquiry generally tests the old saying, "As you
sow, so shall you reap."
attorneys.

The seed was planted into an agreement among law firm

They were not said to have been duped in any way, were experienced

attorneys, and they certainly must have known that a contractual agreement does not
disappear on its own.

Further, although there might have been discussions about

resetting the agreement, it was not done. Discussions are discussions; they disappear
into the ether.

Agreements do not.The agreement set forth below is consonant with

the basic Anglo-American common law notions of an enforceable contract.

Once

the seeds of the Agreement were sown, the were not pulled from the Agreement to
be reformed, disavowed, etc., until it was known after a settlement that the gross
amount of money to be distributed among the firms was very large, indeed.

One of, and to my mind the cardinal one at this moment, is to address the
validity and enforceability of the Agreement from its birth to the present.

On a letter dated January 1 9 , 2 0 1 6 ,

an agreement (the "Agreement") among

firms on the heading of Geoffrey McDonald, Esq., was created and, within a few
days, was signed by all f
our firms involved in a complex class action filed the same
day.

The January 1 9 , 2 0 1 6 , document,

reads as follows:

[GMA Letterhead]

January 1 9 , 2 0 1 6 ,

W. Daniel "Dee" Miles, III, Esq., Beasley-Allen, and Crow, Methvin, Portis,
& Miles, P,C,
Post Office Box 4 1 6 0
Montgomery, AL 3 6 1 0 3

George "Wally" Walker, III, Esq.
The Finley Firm, P.C.
6 11 E. Glenn Ave
Auburn, AL 3 6 8 3 0

3

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 4 of 18

Christopher Nace, Esq.
Paulson & Nace, PLLC
1 6 1 5 New Hampshire Ave NW
Washington, D . C . 20009

Re:

Richard

J.

Dickman

and

James

K.

Alderson,

Individually and on behalf of all those similarly situated v. Banner Life
Insurance Company and Legal & General Americas, as Legal & General
Group, PLC.

Dear Dee, Wally, and Chris:

This letter serves as a confirmation of our agreement that an attorney's fees
collected

in the

above-captioned

actions

are

to

be

distributed

in the

following

manner:

2 3 . 4 % of fees to:

THE FINLEY FIRM, P.C.
6 1 1 E, Glenn Ave
Auburn, AL 36830
[phone]

3 5 . 8 % of fees to:

BEASLEY-ALLEN, CROW, METHWIN, PORTIS & MILES, P . C .
2 1 8 Commerce Street
Montgomery, AL 3 6 1 0 4
800-898-2034

3 5 . 8 % of fees to:

GEOFF MCDONALD & ASSOCIATES, P.C. ("GMA")
3 3 1 5 West Broad Street
Richmond, VA 23230
(804) 8 8 8 - 8 8 8 8

4

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 5 of 18

5% of fees to
PAULSON & NACE, PLLC
1 6 1 5 New Hampshire Ave, NW
Washington, DC 20009
[phone]

It is the understanding of the parties to this agreement that the foregoing percentages
reflect, as accurately as possible, the fair and reasonable value of client acquisition
and services rendered in the above-referenced matter by each of the parties hereto.
Costs and expenses associated with the above matter will be split equally between
Beasley-Allen and GMA.

George Walker, III, Esq. will pay for his own personal

travel expenses, et cetera.

Please

acknowledge your acceptance

of the Referral Fee Agreement below and

mailing or faxing back a copy of this letter.
to contact

the

Should you have any questions, feel free

undersigned.

Sincerely,

Isl Geoffrey R. McDonald, Esq.
CEO & President

Accepted and Agreed:

Dated 01/22116

Isl George "Wally" Walker, III, Esq.
The Finley Firm, P.C.

Isl Dee Miles

Dated January 20, 2 0 1 6 ,

Beasley-Allen, Crow, Methvin, Portis, & Miles, P.C.

Isl Christopher Nace, Esq.

Dated 1/26/16

Paulson & Nace, PLLC

5

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 6 of 18

Dated 0 1/ 1 9 / 2 0 1 6 ,

/s/GM
Geoff McDonald, Esq.
Geoff McDonald & Associates, P.C.

Accompanying the letter set forth above, there were similar documents signed
by both named plaintiffs - Mr. Dickman on January 20, 2 0 1 6 , and Mr. Alderson on
February 3 , 2 0 1 6 ,

"Discloser of Division Fees".

signed by all the lawyers who signed the letter above.

Those documents were also
I find as a matter of law that

the signatures and wording of the Disclosure Forms fully satisfied the requirement,
if any, that unaffiliated firms splitting fees are required to notify and obtain the
consent of their clients to act for them.

ISSUES

I have thoroughly reviewed the above matters as proffered to me by a number
of attorneys.submitting

a substantial

set of documents.

After having read and

considered the proffered matters, along with applicable law, I have come to a number
of conclusions which will be addressed seriatim.
justifying

a

trial-like

hearing

to

come

to

an

I did not see any substantial reason
appropriate

result.

The

written

submissions were clear and did not require further examination.

Issue I

The first issue to be dealt with, and clearly the most significant one, is whether
or not the letter of January 1 9 , 2 0 1 6 , (hereinafter "the Agreement) is enforceable as
a matter of law.

Counsel have strong differing views on the matter.

First comes the questions ofjurisdiction, both of venue and of substantive law.
It is my conclusion that the United States District Court in the District of Maryland
clearly has venue to examine and to render judgment on the issues raised in the
matter, and that, as seems to be acknowledged by the parties, the substantive law of
Maryland is to be looked to for the enforceability vel non of the January 1 6 letter as
a fee-splitter.

6

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 7 of 18

Maryland approaches the issue of non-internalized lawyer splitting has several
dimensions.

The first follow below:

RULE OF MARYLAND LA WYERS 19-301.5. FEES (1.5)

•

(e) A division of a fee between attorneys who are not in the same firm may
be made only if:

•

( 1 ) the division is in proportion to the services performed by each attorney
or each attorney assumes joint responsibility for the representation;

•

(2)

the

client

agrees

to

the joint

representation

and

the

agreement

is

confirmed in writing; and
•

(3) the total fee is reasonable.

Division o Fee--[7] A division of fee is a single billing to a client covering the
f
fee of two or more attorneys who are not in the same firm. A division of fee
facilitates association of more than one attorney in a matter in which neither alone
could serve the client as well, and most often is used when the fee is contingent
and the division is between a referring attorney and a trial specialist. Section (e)
of this

Rule permits the

attorneys to

divide

a fee

on either the

basis

of the

proportion of services they render or by agreement between the participating
attorneys if all assume responsibility for the representation as a whole and the
client

agrees

to

the

joint

representation,

which

is

confirmed

in

writing.

Contingent fee agreements must be in a writing signed by the client and must
otherwise

comply

with

section

( c)

of this

Rule.

Joint

responsibility

for

the

representation entails financial and ethical responsibility for the representation as
if the attorneys were associated in a partnership. An attorney should only refer a
matter

to

an

attorney

whom

the

referring

attorney

reasonably

believes

is

competent to handle the matter.

Cross

reference:

See

Post

v.

Bregman,

349

Md.

142

(1998)

and

Son

v.

Margolius, 349 Md. 4 4 1 (1 9 9 8 ) .

The Post case cross-referenced above gives clear Maryland law relevance to
this case.

That case from the State's highest court makes it clear

that the Rule on

fee-splitting stated above is not a punitive rule, and it should not in all cases govern

7

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 8 of 18

as a fiat.

See, Alan F. Post Chartered v. Bregman, et al., 349 Md. 142 ( 1 9 9 8 ) ,

with

relevant parts from that follow:

The issues presented to the court through Bregman's motion were clear. Post
asserted that the fee arrangement 1 5 5 provided for in the December,

1991

letters was subject to the requirements ofMLRPC Rule 1 . 5 ( e ), requiring either
that the division be in proportion to the services performed or that, by written
agreement with the client,
representation,

and

that

the

lawyers

neither

assume joint responsibility

condition

was

met.

for the

Accordingly,

the

arrangement was unenforceable and all that Bregman was entitled to was what
would

be

due

on

a quantum

contended ( 1 ) that Rule

meruit basis.

Bregman,

on

the

other hand,

1.5(e) was an ethical rule, enforceable through the

attorney grievance mechanism, but that it did not serve to affect or modify the
December,

1 9 9 1 agreement, and (2) even if the arrangement was subject to

the rule, the rule was not violated, as there was, in fact, a joint responsibility
for the representation. The latter contention was based largely on the facts that
Bregman

was

listed

as

co-counsel

on

all

pleadings

and

other papers,

he

actually performed work on the case, and Post was authorized in his retainer
agreement with Taylor to engage other counsel.

The court viewed the case, essentially, as a breach of contract action, to which
the ethical argument made in Post's complaint for declaratory judgment was
offered as a defense. It found that there was a contract between the parties­
emanating from the December 1 9 9 1

letter-and that the contract was clear

and unambiguous. It also determined that the "ethical question is not a defense
to

a breach

parties,

of contract between the parties,"

Post,

himself."

"not

Upon

only

those

entered

findings,

into,
the

but

court

especially

in his

case

granted

when

made

one

the

Bregman's

of the

proposal

motion

for

summary judgment with respect to the breach of contract claim and declared,
as a result, that there no longer was a dispute requiring a declaratory judgment.

It manifested those decisions in an order entered on June 1 9 , 1 9 9 5 , granting
summary

judgment

on

Count

II

of

Bregman's

counterclaim,

judgment in favor of Bregman in the amount of $ 11 2 , 8 8 1

entering

(representing the

$ 1 0 4 , 0 0 0 share of the fee, reimbursement for $2,233 in funds contributed by
Bregman, and pre-judgment interest on the $ 1 0 6 , 2 3 3 from November* 1 5 6 1 ,
1994),

and

dismissing

Post's

complaint

counterclaim as moot.

8

and

Count

I

of

Bregman's

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 9 of 18

In his appeal to the Court of Special Appeals, Post claimed that the circuit
court erred ( 1 )

in finding,

on summary judgment, that the

fee

agreement

consisted only of the December letter, rather than the combination of the June
and December letters, and in further finding that the agreement was clear and
unambiguous, and (2) in concluding that the agreement was not governed by
MLRPC Rule 1 . 5 . On the first issue, the appellate court concluded that there
was, in fact, a dispute over whether the June letter was part of the agreement
between the parties, but it determined that the dispute was not a material one
and that, even if the two letters are read together, the resulting agreement was
clear

and

unambiguous.

The

alleged

"duty"

on

the

part

of Bregman

to

contribute 25% to the litigation, mentioned in the June letter, was, in the
court's view, a passive one: "The plain language of the contract, then, * * 8 1 3
specifies that appellees' role in the litigation was a passive one; no duty to
contribute

would

Bregman, supra.

arise

until

appellees

were

'called

upon.'

"

• Post

1 1 2 Md.App. at 7 5 4 , 6 8 6 A.2d at 672.

The second issue, it said, emanated from the principle established in
Hoffman v.

v.

Quincy,

71

U . S . (4 Wall.) 5 3 5 , 5 5 0 ,

Von

1 8 L.Ed. 403 (1 8 6 6 ), that

parties to a contract are deemed to have contracted with knowledge of existing
law and that "the laws which subsist at the time and place of the making of a
contract . . . enter into and form a part of it, as if they were expressly referred
to or incorporated in its terms.

p ost_y.

Bregman. supra,

1 1 2 Md.App. at

7 5 8 , 6 8 6 A.2d at 674, quoting from Wilmington Trust Co. v. Clark, 289 Md.
3 1 3 , 320, 424 A.2d 744, 749 (1 9 8 1) , quoting in tum from Von H ff a
o
m n v.
Quincy, supra. Although recognizing that statutes constitute "law for purposes

of interpreting contracts," the court drew from Attorney Gen. of Maryland v.
Waldron.

289 Md, 6 8 3 , 4 2 6 A.2d 929 (1 9 8 1 ) ,

"a

clear distinction between

legislative enactments and the legislature in general and rules passed by the
judiciary for the purpose of regulating the conduct of lawyers" and concluded
from that that MLRPC did not constitute * 1 5 7 "laws" to be read into contracts.
Nor, the court continued, did MLRPC qualify as "judicial precedent," even
assuming

that

judicial

precedent

was

automatically

incorporated

into

contracts. Finally, the court turned to the concern expressed in the Scope part
of MLRPC that the purpose of the rules "can be subverted when they are
invoked by opposing parties as procedural weapons" and the admonition that
the fact that the rules may be a basis for disciplining lawyers "does not imply
that an antagonist in a collateral proceeding or transaction has standing to seek
enforcement

of the

pronouncements

Rule."

by the

To

a large

extent,

Court of Special

this

Appeals

view

followed

that MLRPC

earlier

does

not

represent a reflection of public policy. See Kersten v. Van Grack, 92 Md.App.

9

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 10 of 18

466,

608

A.2d

1270

(1992);

compare,

however, Fraidin y.

Weitzman,

93

Md.App. 1 6 8 , 1 9 1, 6 1 1 A.2d 1046, 1 0 5 7 (1992).

From all of this, the Court of Special Appeals concluded that "the judiciary
must

be

extremely

application

of the

careful
rules

not

to

abuse

it promulgates

its

into

autonomy
areas

by

extending

not within

its

the

primary

authority" and that "the enforceability in contract of fee-sharing agreements
between attorneys is one such area."

post, supra,

at 7 6 2 , 6 8 6 A . 2 d a t 6 7 6 .

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

1 2 1 6 9 As the Minnesota court observed in Christensen

y.

Eggen,

562

N.W.2d 806 (Minn.App.1997), although the Code constitutes a statement of
important public policy, a court ought not to strike down an otherwise valid
fee-sharing agreement "merely because of a minor technical deficiency with
respect to the professional rules." • 1
d. at 8 1 1. This Court has expressed the
same

view,

albeit

Manufacturing Co.

in

a

different

v. Newman.

context.

See

Maryland Fertilizing

and

60 Md. 584, 5 8 8 (1 8 8 3 ) : "Parties have the

right to make their contracts in what form they please, provided they consist
with the law of the land; and it is the duty of the Courts so to construe them,
if possible,

as to

maintain them in their integrity

and entirety." See also

Webster v. People's Loan, Etc. Bank, 1 6 0 Md. 5 7 , 6 1, 1 5 2 A. 8 1 5 , 8 1 7 (1 9 3 1 ) ;
Mortgage Inv. v. Citizens Bank, 278 Md. 505, 509, 366 A.2d 47, 49 (1976).
In more direct accord with Christensen, see Watson v. Pietranton,

1 7 8 W.Va.

7 9 9 , 3 6 4 S.E.2d 8 1 2 (1 9 8 7 ) ; Breckler v. Thaler, 87 Cal.App.3d 1 8 9 , 196, 1 5 1
Cal.Rptr. 5 0 (Cal.Ct.App.1978) ("Attorneys should be permitted to agree in
advance what division of fees there will be, so long as they make a good faith
attempt at the time of agreement to anticipate the proportions of services to be
performed and responsibilities to be assumed, and otherwise comply with [the
applicable rule]" ) .1 3 1 4

When presented with a defense resting on Rule 1 .5 ( e ), the court must look to
all

of the

circumstances-whether the rule was,

in

fact,

violated,

and,

if

violated ( 1 ) the nature of the alleged violation, (2) how the violation came
about, (3) the extent to which the parties acted in good faith, (4) whether the
lawyer raising the defense is at least equally culpable as the lawyer against
whom the defense is raised and whether the defense is being raised simply to
escape an otherwise valid contractual obligation,° (5) whether the violation
* 170 has some particular public importance, such that there is a public interest

in not enforcing the agreement, (6) whether the client, in particular, would be

10

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 11 of 18

harmed by enforcing the agreement, and, in that regard, if the agreement is
found to be so violative of the Rule as to be unenforceable, whether all or any
part of the disputed amount should be returned to the client on the ground that,
to

that

extent,

the

fee

is

unreasonable,

and

(7)

any

other

relevant

considerations. We view a violation of Rule 1 . 5 ( e), whether regarded as an
external defense or as incorporated into the contract itself, as being in the
nature of an equitable defense, and principles of equity ought to be applied.
As we indicated, having declared Rule 1 .5 ( e) inapplicable, the circuit court
never considered these matters. It must now do so.

JUDGMENT OF COURT OF SPECIAL APPEALS REVERSED

Based upon the Post case, I shall now discuss the factors involved in Maryland
law and policy as to split fees among different groups of non-affiliated counsel.

Maryland's

lawyer's

guideline

for proper

split

fees

among

non-affiliated

counsel encompasses three criteria for compliance, and they shall be dealt with
seriatim:

(e) A division of a fee between attorneys who are not in the same firm may be

made only if:

( 1 ) the division is in proportion to the services performed by each attorney or
each attorney assumes joint responsibility for the representation;
(2) the client agrees to the joint representation and the agreement is confirmed
in writing; and
(3) the total fee is reasonable.

•

Criterion ( 1 ): I am of the opinion that this first criterion should not invalidate
the Agreement.

The divisions among the attorneys were carefully made in

percentages in the January 2 0 1 6 , Agreement "in proportion to the services
performed by each attorney" and to the extent it could be forecasted at that
stage of the case.

(It is common knowledge that the only difference between

proportion and percentage is that the former is applicable to any number of
items, while the latter is simply a proportion carved out from one item, most
commonly in a percentage of one item, usually 100% as in this case.)

I also

have taken into account the factors in Port and find that the proportions of
services made at the beginning of this case in 2 0 1 6 , were made in good faith
based upon the foresight of those who were involved.

11

I also find nothing in

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 12 of 18

the public interest harmed by the agreement, nor has there been any harm to
the clients involved by the 2 0 1 6 , agreement; under the finalized settlement,
the distribution of the attorneys' fees is irrelevant to what the class members
will receive.

There are no matters of equity or other relevant issues that I

deem sufficient to do anything other than to apply the Port rules of lenience
in this case.
•

Criterion (2):

There is no dispute regarding the original clients' awareness of

the agreement to in writing, which satisfied the awareness part of the Rule.
•

Criterion (3):

The total legal fee, as part of the class action settlement, has

been judged by the Court as reasonable.

At the time the agreement was made,

there was nothing at all that made the split percentages unreasonable; only a
soothsayer could know the precise amount that would later constitute the cash
emanating from the agreed percentages, or for that matter if anyone would
wind up with a nickel,

At the end of the day this is the heart of the matter,

It

is also notable that the members of the Agreement knew what a complex
matter they were delving into with this class action case.

The claim was filed

January 1 9" , 2 0 1 6 , the very same day when the Agreement was dated and
signed by its first signatory and by the remainders a few days later

If there

had been a matter of unreasonableness in either the case or the Agreements'
lawyers tending to injure class action plaintiffs, Judge Bennett would certainly
not have deemed such a claim or such a fee Agreement unreasonable.

As

noted, the way in which the case would work out from a nickel to millions
was a question impossible to know ab initio.

Finally, it is true that Mr. Nace's

firm was in only for 5%, but Mr. Nace was acting only as local counsel at the
time of the filing and was obviously willing to ask for and be given a much
lower percentage than any of the other counsel who signed the agreement.
(N.B.

Mr. Nace and his

covered

in this

firm have not taken any position on the matters

Report and Recommendation.

As no

other signer of the

Agreement has implicated Mr. Nace in any way or any issue, his 5% will be
properly paid when allocation is ripe.)

The specific issues addressed above are exemplars.
fits

within

the

Post criteria

I have

considered

"all

In deciding whether this case
of the

circumstances"

as

it

suggests, including the seven matters set forth in that case, and I find that, as a whole,
the Agreement in this case is not unlawful or unenforceable under Maryland law.

As a side note, if this Agreement issue were to come before an Alabama court
(where it was drafted), the non-retaliatory aspect of Maryland law of fee splits set
forth in the Post case would be viewed the same by both States:

12

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 13 of 18

We conclude that the trial court erred to the extent that it determined the parties'
agreement to be unenforceable as violative of Rule 1 . 5 ( e ) , Ala. R. Prof. Cond. As
discussed in the Scope of the Alabama Rules of Professional Conduct and in the
above-cited

authorities,

the

sole

remedy

for

a

violation

of Rule

1.5(e)

is

disciplinary in nature; therefore, the trial court lacked the authority to declare the
parties' agreement unenforceable as violative of Rule l .5(e).

Poole v. Prince, 6 1 S o .3 d 258 (AL 2 0 1 0 ) .

Report and Recommendation to the Court on Issue 1

The Special Master hereby reports and recommends pursuant to the Court's
Stipulated Order of 29 May, 2020, that the Agreement of January 1 9 , 2 0 1 6 , is not
illegal under the laws of Maryland (or Alabama), is enforceable as an agreement by
law, and finds that the Agreement was lawful when signed and remains so to this
date.

Issue 2

The next Issue is whether the Special Master should conduct a hearing replete
with

discovery,

possibly

subpoenas,

depositions,

viva

voce

testimony,

etc.,

essentially matching the equivalent of a full-blown bench trial before applying the
Agreement to the grievances of

Mr. Walker and of GMA for submission to the

Court.

I shall look at this issue in two separate sub-issues, because the two individuals
who seek modification of the Agreement are in two rather different positions.

13

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 14 of 18

Issue 2(a)

Mr. Walker

Mr. Walker has asked for the equivalent of a full-blown hearing in this Court
to fix how much money he is entitled to receive from the Finley Firm out of its 23 .4
% percentage of January 2 0 1 6 , agreement money. The purpose of the hearing would
be irrelevant as to the validity of the Agreement discussed above.
be to determine what the Finley Firm owes Mr. Walker.

Rather, it would

Such an internecine dispute

between members of a firm does not belong in this Federal Court for resolution.

The reason is simple:

The Agreement of January 1 9 , 2 0 1 6 , did not grant Mr. Walker personally any
percentage of the 1 0 0 % splits in the Agreement.
party as to the percentage split.

Therefore, he is not an interested

In fact, Mr. Walker was not just a small apple in the

creation of the Agreement and of the Finley firm as to the specific percentage due
that firm.
Finley

The Agreement lists "George "Wally" Walker, III, Esq. just above The

Firm,

P.C.,

not

on

his

own

behalf,

but

on

that

of the

Finley

Firm.

Additionally, it is also obvious that Mr. Walker was not signing in his own behalf
when he signed page 2, but signing for the Finley Firm; he clearly signed his name
over an entity representing a firm, as did other signers.

Finally, it was to the Finley

Firm that the percentage of 2 3 .4 % was "distributed in the following manner."

That

manner was clearly not directed to Mr. Walker, but only to the Finley Firm.

For the reasons stated above, Mr. Walker is not entitled to seek a percentage
of the $ 7 , 8 5 1 , 0 0 1. 0 8 million directly to himself.

It must come through Finley up

until Mr. Walker left that firm years after the Agreement was executed.

Simply put,

he was not a party to the Agreement; his work was part of his connection with the
Finley Firm, and Mr. Walker was acting for the Finley Firm.

If Mr. Walker feels

that during the prosecution of the class action, he was not paid by Finley as Finley
should have done and is now owed money from Finley, that has nothing to do with
this Court's duty to see that the moneys achieved are distributed to the firms that
were signatories of the Agreement, not to any particular lawyer within a firm.

If Mr.

Walker feels he has been denied what he claims he is owed between him and Finley,
the appropriate solution for Mr. Walker is to file a separate claim for common law
or equity relief in an appropriate court.

14

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 15 of 18

Issue 2(b)

This

issue

is

a dispute

between two parties

to the

McDonald (GMA) Firm and the Beasley-Allen Firm.

agreement,

the

Geoff

In the Agreement, these two

firms were willing to sign percentages of 3 5 . 8 % of fees each.

Now, Beasley-Allen

claims that it should get more money than GMA (both of which worked on the case),
because Beasley-Allen did more work than GMA in the prosecution of the class
action case.

The answer to this claim is essentially in pari materia with that of the

Walker-Finley answer.

There was

an Agreement

signed by

both

firms.

At the time,

percentage of profits was allocated to each of these two firms.
signed by those firms.

a specific

The Agreement was

Neither had just "fallen off the turnip truck."

If they had

simply done a deal through a cell phone call, it would be a different story from the
very specific written Agreement among the firms that was signed.

Furthermore, the

language of the Agreement did not tie any particular amount of work needed to
acquire the percentage, given that no one knew if they would get any money from
the case, or who would do what, as the case went forward,

Finally, the language in

To refresh recollection, it states: "It is the

the agreement is a key part of the story.

understanding of the parties to this agreement that the foregoing percentages reflect,
as accurately as possible, the fair and reasonable value of client acquisition and
.
services

rendered

. . . .»

Beasley-Allen has claimed that the entry of a second defendant, Penn, during
the pre-settlement period is not within the scope of the Agreement, and that it should
be able to have a higher split than the one it agreed to in the Agreement of 2 0 1 6 , on
account of increased effort including work with Penn, which apparently had not been
taken into account at the time the Agreement was signed.

The difficulty here is that

Penn was connected with the original defendant, and not simply just one out of the
blue.

The entry of an affiliated firm by the defendant was one of the things that was

not known at the time of the Agreement, but was not outside the pale and scope of
the

Agreement's

written

intentions

in

January

simultaneously filed.

15

of

2016,

when

the

case

was

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 16 of 18

Given the foregoing finding that the Agreement is legal and must be observed
among the parties as written by their signatures therein, the Agreement should not
be changed by this Court.

Report and Recommendation to the Court on Issues 2(a) and (b)

For the reasons stated above, the Special Master reports and recommends to
the Court that the Agreement of January 1 9 , 2 0 1 6 , has been found lawful and proper
and

as

setting

forth clearly

the matters

agreed upon

by the

four firms,

In the

circumstances, I recommend that the Court deny the relief sought by Beasley-Allen
vs

. GMA and by Mr.

Walker vs. the Finley Firm in this Court, but without prejudice

for those entities to settle their own disputes via common law or equity litigation in
an appropriate venue.

Issue 3 with Report and Recommendation

The next issue has to do with Mr. Walker's relationship with the Finley and
the Boles firms.

(Boles was not a signatory.)

It is stated that Mr. Walker left the

Finley firm by voluntary retirement after Judge Bennett had preliminarily approved
settlement of the case.
after

his

separation

appropriately

If work on this case was done for Boles through Mr. Walker
from

Finley

in

the

end

of November,

then

it

should

be

deducted from the $ 7 , 8 5 1 , 0 0 1. 0 8 million general fee fund.

I suggest that the Court direct both Mr. Walker and the Boles Firm each to file
simultaneously

to

the

Court

documents

within

30

days

after

this

Report

and

Recommendation is - assuming it is affirmed by Judge Bennett under Fed.R.Civ.
P. 5 3 .

Such documents should

consist of time sheets, invoices, etc., worked in the

Boles Firm after Mr. Walker's November resignation from the Finley Firm and be
signed under oath by Mr. Walker and a Boles partner.

The documents will be only

for work done after Mr. Walker's resignation from Finley on November 3 0 , 2 0 1 9 .

I

suggest that such amount be appropriately subtracted from the $ 7 , 8 5 1 , 0 0 1. 0 8 and
turned over to the Boles Firm to be settled up with Mr. Walker.

16

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 17 of 18

Report and Recommendation to the Court on Issue 3

For the reasons stated above, I recommend to the Court that Mr. Walker and
the

Boles

stated

Firm working together be drawn out of the $ 7 , 8 5 1 , 0 0 1. 0 8 on the terms

above.

Issue 4 with Report and Recommendation

This issue is forward looking timing of distribution.

The "unknown known"

of a final legal fee allocation of dollars is not yet ready for distribution, due both to
the changes that will accompany the appellate process, the Court's decisions on the
Recommendations

hereinabove,

or

matters

not

yet

raised.

I

suggest

that

the

$ 7 , 8 5 1 , 0 0 1. 0 8 million dollars be held in escrow and remain that way until after all
appellate court rulings are finished and nothing remains of the case other than a final

If not, of course,

distribution of the money among counsel, if the Court so agrees.
the

Court

is

free

to

direct

that

a

percentage

of,

or

the

whole

amount

of,

$ 7 , 8 5 1 , 0 0 1. 0 8 , be distributed now, without waiting for an appellate decision.

ALL

THE

ABOVE

FED.R.CIV.P

53

REPORTED

AND THE

BENNETT, THIS 1 7

AND

ORDERS

RECOMMENDED

PURSUANT

TO

OF THE HONORABLE RICHARD D.

DAY OF NOVEMBER, 2020:

Frederic N. Smalkin

Special Master

17

Case 1:17-cv-02026-GLR Document 84 Filed 11/17/20 Page 18 of 18

PROOF OF SERVICE BY E-Mail
Re: Dickman, et al. / Banner Life Insurance Company, et al.
Reference No. 1410008534
I, Teresa Menendez, not a party to the within action, hereby declare that on November 17, 2020, I served
the attached Special Master's Report and Recommendation on the Law Clerk to the Honorable Richard D.
Bennett in the within action by electronic mail at Washington, DISTRICT OF COLUMBIA, addressed as
follows:
Catherine Gamper Esq.
United States District Court for the District of Maryland
101 W. Lombard St.
Chambers 5D
Baltimore, MD 21201
Phone: [phone]
[e-mail]

I declare under penalty of perjury the foregoing to be true and correct. Executed at Washington,
DISTRICT OF COLUMBIA on November 17, 2020.

/s/ Teresa Menendez
Teresa Menendez
JAMS
[e-mail]