Stratton v. Arch Coal, Inc. et al

Filing 177

MEMORANDUM OPINION AND ORDER re: 166 Notice of Attorneys' Lien and 167 Supplement In Support: Directing that Mr. New and the Law Offices of Stephen P. New receive a fee of 40% of the settlement plus costs and expenses for services re ndered; directing the Clerk of Court to pay said fees and expenses to Attorney Stephen P. New prior to releasing the remainder of the deposited settlement amount to current Counsel for the Plaintiff. Signed by Judge Irene C. Berger on 4/2/2018. (cc: attys; any unrepresented party) (slr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BECKLEY DIVISION
JASON K. STRATTON,
Plaintiff,
v.

CIVIL ACTION NO. 5:16-cv-12204

ARCH COAL, INC., et al.,
Defendants.

MEMORANDUM OPINION ORDER
The Court has reviewed the Notice of Attorneys’ Lien (Document 166) and Supplement in
Support of Attorneys’ Lien (Document 167) filed by Mr. Stephen P. New and Ms. Amanda J.
Taylor of the Law Office of Stephen P. New. The Court has also considered the arguments put
forth by the parties during the hearing held on March 15, 2018. For the reasons stated herein, the
Court finds that the request should be granted and the movants awarded their attorneys’ fees.
The Plaintiff originally retained the Law Office of Stephen P. New in November of 2015
to represent him in a wrongful termination action. The Plaintiff and Mr. New’s law firm entered
into a contract wherein the Plaintiff agreed to pay forty percent (40%) of the gross recovery, plus
all costs and expenses, from any judgment. (Notice of Attorneys’ Lien, Ex. 1.) (Document 1661) The contract also stated that, should the Plaintiff desire to “retain another attorney and dismiss
[Mr. New], the [Plaintiff] hereby ASSIGNS, CONVEYS AND GRANTS, unto the attorney herein,
40% of any settlement offers plus costs and expenses . . . .” (Id.) Ms. Taylor and Mr. New
1

litigated the Plaintiff’s case through 2017. On December 22, 2017, the Plaintiff’s counsel filed a
Motion to Withdraw from Representation (Document 163) at the Plaintiff’s behest after the
Plaintiff and his counsel could not come to an agreement regarding certain issues outside the scope
of Mr. New’s representation of the Plaintiff in this action. Specifically, issues arose regarding the
Plaintiff’s mitigation of damages surrounding a Kentucky corporation registered in his name.
Shortly after filing the motion to withdraw, but before this Court issued a ruling on it, the
Plaintiff retained Jeffrey Simpkins and proceeded to mediate the case. Through the course of
mediation, the Plaintiff reached a settlement agreement with the Defendants. It is with respect to
that settlement agreement that the Law Office of Stephen New filed an attorneys’ lien to recover
fees and expenses for services provided. The Plaintiff’s new counsel did not file a written
response in opposition to the charging lien or the supplemental documents in support.
With respect to the termination of the attorney-client relationship, the West Virginia
Supreme Court of Appeals has found as follows:
If the contract between attorney and client be broken without fault
on the part of the attorney, he may recover damages for breach, or
on quantum meruit, for the reasonable value of his services. . . . But,
if the compensation under the contract is contingent on the success
of the suit, and the attorney is discharged without fault on his part,
the measure of damages is not the contingent fee, but a reasonable
compensation for the services actually rendered.
Clayton v. Martin, 151 S.E. 855, 856-57 (W.Va. 1930) (emphasis added). In these instances
where the compensation is based on a reasonable compensation for services as opposed to the
contingency fee agreement alone, “the court is to consider many factors beyond the number of
hours devoted to the case.” Abramson ex rel. Estate of Abramson v. Laneko Eng'g Co., 370 F.
Supp. 2d 498, 499 (S.D.W. Va. 2005) (Chambers, J.). The West Virginia Supreme Court of
Appeals has on several occasions addressed these factors under different factual scenarios and
2

established a non-exhaustive list that includes the time and labor required, the difficulty of the
question, the requisite skills required to perform the job, the customary fee, whether the fee agreed
to was fixed or contingent, the experience and reputation of the attorneys, and awards in similar
cases. Id. at 499-500; Syl. Pt. 3, Stafford v. Bishop, 127 S.E. 501 (W.Va. 1925); Statler v. Dodson,
466 S.E.2d 497, 505-06 (W.Va. 1995); Kopelman and Associates, L.C. v. Collins, 473 S.E.2d 910,
920-21 (W.Va. 1996).
Here, the Plaintiff contractually agreed to compensate Mr. New’s firm by a contingency
fee of forty percent. The Court finds that the contractual language of the parties is controlling and
that the agreed-to forty percent of the settlement plus the reimbursement of expenses is a
reasonable compensation1 for the services rendered by the Law Office of Stephen New. Upon
entering into a contractual relationship with Mr. New’s firm, Mr. New and Ms. Taylor substantially
contributed to the Plaintiff’s wrongful termination case. Mr. New’s law firm is experienced in
litigation and, upon taking the case, conducted a thorough investigation of the Plaintiff’s claims.
Upon removal to this Court, Mr. New’s firm continued to represent the Plaintiff in a diligent and
effective manner, including successfully defending against a motion to dismiss.
Mr. New’s firm developed a strategy for litigating the case, took several depositions,
responded to motions for summary judgment, and responded to motions in limine. It appears that
the Plaintiff was completely satisfied with representation from Mr. New’s firm during all of this
work, and did not become dissatisfied until Mr. New informed the Plaintiff that the firm did not
represent him in his capacity as a representative for other business entities with which he was

1 Without publicizing the amount of the confidential settlement negotiated by the parties, the Court notes that the
forty percent fee awarded herein amounts to significantly less than any reasonable calculation of fees based on the
time involved in briefing motions to dismiss, briefing motions for summary judgment, taking multiple depositions,
and responding to discovery requests.

3

affiliated. It was at that point in late 2017, after the brunt of the litigation had been completed
and the parties were awaiting a ruling on summary judgment motions, that the Plaintiff became
unhappy with Mr. New’s representation and the parties agreed that Mr. New would withdraw from
representation at no fault of his own.
Based on these facts and circumstances, Mr. New’s firm is entitled to its contractually
agreed-upon forty percent of the settlement proceeds. Mr. New’s firm did all of the work leading
up to the mediation, and the Plaintiff and Mr. Simpkins undoubtedly relied on this work during the
mediation process. Mr. New’s firm represented the Plaintiff for two years, covering all aspects
of the litigation preceding the successful mediation, including motions to dismiss, discovery,
motions for summary judgment and motions in limine. While the Court cannot assume that Mr.
New’s appearance at the mediation would have resulted in the same settlement agreement, it is fair
to assume that it was largely because of Mr. New’s prior work that the settlement was reached,
given that Mr. Simpkins2 was hired immediately before the mediation.
Wherefore, after thorough review and careful consideration, the Court ORDERS that Mr.
New and the Law Offices of Stephen P. New receive a fee of forty percent (40%) of the settlement

2 In the interests of ensuring that the parties had the opportunity to fully explain the circumstances involved in the
change in counsel and eventual attorneys lien, the Court ordered the parties to appear at a hearing. During this
hearing, Mr. Simpkins offered an extended monologue detailing alleged unprofessional communications between
himself and Mr. New and talked around the nature of the Kentucky proceedings for which Mr. New declined to
represent the Plaintiff. Mr. Simpkins all but refused to answer the Court’s questions about the facts regarding the
Plaintiff’s business dealings in Kentucky after the Court twice prompted him to do so. The Court was able to garner
an understanding of those details only after an attorney for the Defendant, who had no remaining interest in the case,
voluntarily appeared at the hearing, and provided an explanation. Overall, Mr. Simpkins’ statements and arguments
made no reference whatsoever to the applicable legal standards, and he provided no factual arguments to support the
Plaintiff’s position that Mr. New was not entitled to fees under those legal standards. In addition to his unprepared
and inadequate efforts to address the merits of the attorney fee issue, Mr. Simpkins made the wholly disrespectful and
outrageous suggestion that the Court may be “in the back pocket” of Mr. New and his law firm, or at least that Mr.
New may have believed the same. The Court finds Mr. Simpkins’ argument to be beneath the integrity, civility and
professionalism required of the legal profession. Based on his egregious behavior, the Court recommends that Mr.
Simpkins endeavor to improve his preparedness and performance prior to any future appearance.

4

plus costs and expenses for services rendered. The Clerk of the Court is DIRECTED to pay said
fees and expenses to Attorney Stephen P. New prior to releasing the remainder of the deposited
settlement amount to current Counsel for the Plaintiff.
The Court DIRECTS the Clerk to send a certified copy of this Order to counsel of record
and to any unrepresented party.
ENTER:

5

April 2, 2018