Trice v. Toyota Motor Corporation et al

Filing 889

MEMORANDUM OPINION AND ORDER denying (865) Motion for Release of Funds; denying (876) Motion for Additional Findings per Rule 52(b) and for Altered Judgment per Rule 59(e); granting (886) Motion to Accept Late Filing; denying (582) Motion for Add itional Findings per Rule 52(b) and for Altered Judgment per Rule 59(e); denying (587) Motion for Release of Funds; granting (599) Motion to Accept Late Filing (Written Opinion). Signed by Judge Ann D. Montgomery on 6/27/2018. Associated Cases: 0:10-cv-02804-ADM-DTS, 0:10-cv-02805-ADM-DTS(TLU)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Bridgette Trice, as trustee for the heirs
and next of kin of Devyn Bolton, deceased,
Plaintiffs,

v.

MEMORANDUM OPINION
AND ORDER
Civil Case No. 10-2804 ADM/DTS

Toyota Motor Corporation, et al.,
Defendants.
______________________________________________________________________________
Quincy Ray Adams,
Plaintiff,
v.

Civil Case No. 10-2805 ADM/DTS

Toyota Motor Corporation, et al.,
Defendants.
______________________________________________________________________________
W.B. Markovits, Esq., Christopher D. Stock, Esq., and Louise M. Roselle, Esq., Markovits,
Stock & DeMarco, LLC, Cincinnati, OH, on behalf of Plaintiffs Bridgette Trice and Quincy Ray
Adams.
Sharon L. Van Dyck, Esq., Van Dyck Law Firm, PLLC, Minneapolis, MN, and Michael B.
Padden, Esq., Padden Law Firm, PLLC, Lake Elmo, MN, on behalf of Padden Law Firm, PLLC.
______________________________________________________________________________
I. INTRODUCTION
Before the Court is Padden Law Firm, PLLC’s (the “Padden Firm”) Motion for Release
of Funds [Trice Docket No. 865; Adams Docket No. 587]1 and Motion for Additional Findings

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Citations to the “Trice Docket” are to civil case number 10-2804 ADM/DTS. Citations
to the “Adams Docket” are to civil case number 10-2805 ADM/DTS.

per Rule 52(b) and for Altered Judgment per Rule 59(e) [Trice Docket No. 876; Quincy Adams
Docket No. 582].2 For the reasons set forth below, both motions are denied.
II. ANALYSIS
A. Motion for Additional Findings and Altered Judgment
On April 27, 2018, the Court issued a Memorandum Opinion and Order (“Order”) [Trice
Docket No. 860; Adams Docket No. 575] authorizing distribution of the contingency fee earned
by law firms representing Plaintiffs in these companion cases. The Order allocates 15% of the
contingency fee to the Padden Firm and 30% to the Law Office of Kenneth R. White, P.C. (the
“White Firm”).3 Judgment was entered pursuant to the Order on April 30, 2018. See Judgment
[Trice Docket No. 862; Adams Docket No. 577].
The Padden Firm moves for additional findings of fact and an amended judgment,
arguing the fee allocation is erroneous. The Padden Firm contends that it is entitled to 30% of
the contingency fee according to an April 2014 Fee Agreement among Plaintiffs and their
attorneys. See Padden Decl. [Trice Docket No. 737] Ex. 12 (April 2014 Fee Agreement). The
Padden Firm argues that the Court misapplied controlling Minnesota law when it declined to
enforce the April 2014 Fee Agreement and instead divided fees in proportion to the amount of

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The Padden Firm has also filed a Motion to Accept Late Filing [Trice Docket No. 886,
Adams Docket No. 599]. Counsel encountered technical difficulties when filing its reply
memorandum in support of its Motion for Additional Findings per Rule 52(b) and for Altered
Judgment per Rule 59(e). No prejudice resulted from the delay in filing because the reply brief
was emailed to all interested parties on the June 22, 2018 filing deadline and was filed on
CM/ECF the next day. Van Dyck Decl. [Trice Docket No. 887; Adams Docket No. 600]. The
Motion to Accept Late Filing is granted.
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The remaining 55% of the contingency fee is not in dispute and has been paid to the law
firm of Markovitz, Stock & DeMarco, LLC (“MSD”), which served as lead litigation counsel in
these cases.
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work each firm performed.
“A Rule 52 motion is intended to correct findings of fact which are central to the ultimate
decision.” Dale & Selby Superette & Deli v. U.S. Dep’t of Agric., 838 F. Supp. 1346, 1347 (D.
Minn. 1993) (internal quotation marks omitted). “Rule 59(e) motions serve a limited function of
correcting manifest errors of law or fact or to present newly discovered evidence. Such motions
cannot be used to introduce new evidence, tender new legal theories, or raise arguments which
could have been offered or raised prior to entry of judgment.” Innovative Home Health Care,
Inc. v. P.T.-O.T. Assocs. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998) (internal
citations omitted). “[A] motion made pursuant to Rules 52 and 59 is not intended to routinely
give litigants a second bite at the apple, but to afford an opportunity for relief in extraordinary
circumstances.” Dale & Selby Superette, 838 F. Supp. at 1348.
The Padden Law Firm argues that the standard governing the division of fees among
different law firms—Minnesota Rule of Professional Conduct 1.5(e)—provides two alternatives
for dividing fees, and that the Court erred by addressing only one of the alternatives. Rule 1.5(e)
states:
A division of a fee between lawyers who are not in the same firm
may be made only if:
(1) the division is in proportion to the services performed by each
lawyer or each lawyer assumes joint responsibility for the
representation;
(2) the client agrees to the arrangement, including the share each
lawyer will receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable.
The alternative bases for dividing fees are set forth in subparagraph 1, which permits fees to be

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divided in proportion to the work performed or, alternatively, where each lawyer assumes joint
responsibility for the representation. See Minn. R. Prof’l Conduct 1.5(e)(1). The Padden Firm
contends that its relationship to Plaintiffs falls within the second alternative, and thus the April
2104 Fee Agreement is valid and should have been enforced.
Because the Padden Firm did not present this argument prior to the entry of judgment, it
is procedurally improper to raise it now. See Innovative Home Health Care, Inc., 141 F.3d at
1286 (stating that Rule 59(e) motions “cannot be used to introduce new evidence, tender new
legal theories, or raise arguments which could have been offered or raised prior to entry of
judgment”). The Padden Firm’s 29-page response brief filed prior to the Judgment did not
mention, much less discuss, the “joint responsibility” prong of Rule 1.5(e)(1). See generally
Padden Firm Resp. Br. [Trice Docket No. 829]. The Padden Firm’s prejudgment supplemental
letter brief [Trice Docket No. 842] also did not address joint responsibility, even though the
letter brief was filed days after Plaintiffs had argued that the “joint responsibility” alternative
under Rule 1.5(e)(1) did not apply because the Padden Firm did not assume responsibility for
litigation expenses. See Pls.’ Reply Mem. [Trice Docket No. 770; Adams Docket No. 503] at 26
n.8 (arguing that the second alternative of Rule 1.5(e)(1) does not apply). Because the Padden
Firm had multiple opportunities to raise the “joint responsibility” argument prior to the entry of
the Judgment and did not do so, the Padden Firm’s motion under Rules 52(b) and 59(e)
constitutes a second bite at the apple rather than a need for relief in extraordinary circumstances.
In addition to being procedurally improper, the argument fails on the merits because the
Padden Firm did not assume joint responsibility for the representation. The Comments to Rule
1.5(e)(1) state that “Joint responsibility for representation entails financial and ethical

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responsibility for the representation as if the lawyers were associated in a partnership.” Minn. R.
Prof’l Conduct 1.5 cmt. 7. The Padden Firm assumed no financial responsibility for litigation
expenses, which exceeded $100,000 in these cases. First Markovitz Decl. [Trice Docket No.
721; Adams Docket No. 467] ¶ 13; Markovitz Reply Decl. [Trice Docket No. 772; Adams
Docket No. 507] ¶ 5.4
The Padden Firm also did not assume joint ethical responsibility for Plaintiffs’ legal
representation. For example, the Padden Firm did not hold itself jointly responsible for an
unauthorized settlement demand and other allegedly unethical conduct by Plaintiffs’ former lead
trial counsel Napoli Shkolnik, PLLC (“Napoli”). Although the Padden Firm was the first firm
hired by the Plaintiffs, it played a very limited role in these cases, primarily handling public
relations. The Padden Firm assumed little to no responsibility for ensuring the continued
effective representation of Plaintiffs. See, e.g., Markovitz Reply Decl. Exs. 8–16 (emails
showing the Padden Firm’s lack of involvement and failure to respond to MSD’s requests for
timely assistance with critical tasks in Plaintiffs’ cases). Thus, the “joint responsibility”
alternative under Rule 1.5(e)(1) does not apply to the fee division in these cases.
Because the Court correctly applied Rule 1.5(e) and did not commit a manifest error of
law or fact, the Padden Firm’s motion under Rules 52(b) and 59(e) is denied.

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The Padden Firm vaguely asserted in a pre-judgment memorandum that its expenses
over the entire course of the litigation “probably totaled around $3,000,” but that it chose not to
seek reimbursement for its expenses. See Padden Firm Response Br. at 21. The Padden Firm
has not submitted an affidavit or other evidentiary support for this unsworn assertion.
Additionally, the $3,000 is more than offset by $34,500 in “advance” fees that the Padden Firm
received from Plaintiffs’ initial trial counsel, Waite, Schneider, Bayless, and Chesley Co., LPA,
during the early stage of these cases. See Markovitz Reply Decl. ¶ 4, Exs. 2, 3.
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B. Motion for Release of Funds
The Padden Firm requests the Court to authorize a partial distribution of attorneys’ fees
and other funds currently being held in the White Firm’s trust account. The Padden Firm argues
that partial distribution is proper even though the April 30, 2018 Judgment for attorneys’ fees is
being appealed,5 because the amounts sought to be distributed are not at issue in the appeal.
The piecemeal distribution of the amounts remaining in trust is inappropriate. The
Eighth Circuit may conclude that the attorneys’ fees should be allocated in an entirely different
manner than the Court determined or the attorneys propose. Further, these cases require finality,
and thus the amounts will continue to be held in trust until all remaining issues have been fully
and finally adjudicated.
III. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS
HEREBY ORDERED that:
1.

Padden Law Firm, PLLC’s Motion to Accept Late Filing [Trice Docket No. 886,
Adams Docket No. 599] is GRANTED;

2.

Padden Law Firm, PLLC’s Motion for Release of Funds [Trice Docket No. 865;
Quincy Adams Docket No. 587] is DENIED; and

3.

Padden Law Firm, PLLC’s Motion for Additional Findings per Rule 52(b) and for
Altered Judgment per Rule 59(e) [Trice Docket No. 876; Quincy Adams Docket
No. 582] is DENIED.
BY THE COURT:

s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: June 27, 2018.

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The Order and Judgment were appealed by Napoli, whose quantum meruit claim for
attorneys’ fees was denied. See Notice Appeal [Trice Docket No. 874; Adams Docket No. 579].
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