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2004AP3236 Markwardt v. Zurich American Ins. Co.

By: dmc-admin//September 18, 2006//

2004AP3236 Markwardt v. Zurich American Ins. Co.

By: dmc-admin//September 18, 2006//

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“A client may freely change attorneys. However, as our supreme court long ago explained, terminating a contract with an attorney without cause is a breach of contract by the client. Tonn, 6 Wis. 2d at 503. ‘[W]here the attorney has been employed to perform specific legal services, his discharge, without cause or fault on his part before he has fully performed the work he was employed to do, constitutes a breach of his contract of employment and makes the client liable to respond in damages.’ Id. Damages to the attorney for breach by the client of the contingent-fee employment contract are the contingent fee based on the amount actually realized, less a fair allowance for the time and expenses the discharged attorney would have had to expend in performing the balance of the contract. Id. at 505. If there is not good cause for the discharge, any contractual attorney lien rights survive the discharge. See id. at 503; see also Freyer v. Mutual Benefit Health & Accident Ass’n, 45 Wis. 2d 106, 107, 172 N.W.2d 338 (1969) (recognizing a valid contractual lien for a discharged former attorney); cf. McBride v. Wausau Ins. Cos., 176 Wis. 2d 382, 388, 500 N.W.2d 387 (Ct. App. 1993) (refusing to enforce lien of discharged attorney whose ‘standard of conduct is below that required of attorneys as a matter of law’). However, ‘[a] contingent-fee contract is always subject to the supervision of the court as to its reasonableness.’ Tonn, 6 Wis. 2d at 504.

“We find no evidence in the record that any of these plaintiffs discharged Cannon & Dunphy for cause. Nor has there been any challenge to the reasonableness of the one-third contingency-fee contract. Consequently, the original counsel, Cannon & Dunphy, is entitled to assert its rights to fees under the Retainer Contract. The Retainer Contract specifically grants Cannon & Dunphy an attorney lien to protect those fees. The Retainer Contract makes additional lien provisions should Cannon & Dunphy withdraw, and contains no language which abrogates the existing law that the lien remains in effect should the client discharge the firm without cause. We conclude, as did the trial courts, that Cannon & Dunphy may properly assert its lien, based on the Retainer Contract, to protect its right to attorney fees.”

Affirmed.

Recommended for publication in the official reports.

Dist I., Milwaukee County, Kessler, J.

Attorneys:

For Appellant: Gende, James J., II, Waukesha

For Respondent: Johnson, Terry E., Milwaukee

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