5th Circuit Says $67,500 Fee Goes To Attorney Who Worked On Vioxx Settlement

by Tara Arick on February 12, 2013 · 0 comments

in Litigation

- From LexisNexis® Mealey’s™ Daily Legal News.

A Fifth Circuit U.S. Court of Appeals panel on Feb. 7 said the Vioxx multidistrict litigation court properly awarded attorney fees from a settlement to the lawyer who represented the client during the settlement and not to another lawyer who tried to stop the process at the 11th hour (In Re: Vioxx Products Liability Litigation, Gene Weeks, Ronald R. Benjamin v. Merck and Company, Incorporated v Maria D. Tejedor, No. 12-30586, 5th Cir.).

In 2005, Gene Weeks hired Maria D. Tejedor of Diez-Arguelles Tejedor in Orlando, Fla., to represent him in a lawsuit alleging that the pain drug Vioxx caused him to suffer a heart attack. Tejedor filed the suit in the Vioxx MDL court in the U.S. District Court for the Eastern District of Louisiana.

In 2007, Tejedor told Weeks about Merck’s settlement program and recommended that he participate. Weeks signed an agreement to participate and in 2008 released all his claims in exchange for participating in the settlement program.

In May 2009, Tejedor told Weeks that he was eligible for a settlement award. Later, she told him the award was $ 230,000 and that he had a limited time to appeal the award.

Late Attorney Change

Tejedor also told Weeks that the claims administrator had reduced Weeks’ award because of the claimant’s high cholesterol.

Two days after being told about his award, Weeks told Tejedor that he no longer required her representation, that any actions taken by her on his behalf are unauthorized and that he was represented by another law firm.

With the appeal deadline approaching, Tejedor appealed. The claims administrator agreed that the lowered award was in error and increased Weeks’ award to $ 285,000.

Motion To Rescind

The following month, after Weeks had signed a release but before he received his award, Ronald R. Benjamin of the Law Office of Ronald R. Benjamin in Binghamton, N.Y., filed a motion to vacate and rescind Weeks’ participation in the settlement as involuntary and the result of cajoling by Tejedor.

The District Court denied the motion to rescind, finding that Weeks voluntarily enrolled in the settlement and that his decision was irrevocable. The court noted that Weeks signed a release but added that Tejedor had been terminated and could file a lien to recover her fees.

Weeks accepted the settlement award through Tejedor. Tejedor deducted her 24 percent fee, or about $ 67,500, from the award and sent the remaining $ 185,000 to Weeks. Weeks signed a closing statement that he did not oppose Tejedor’s deduction.

Special Master Hearing

Tejedor put her costs and fees into a trust account and filed a lien for the same amount. A special master instructed Benjamin to attend a meeting and to provide documentation in support of his position. Benjamin did not provide any documents or attend the meetings.

The special master awarded Tejedor $ 67,500 in attorney fees, finding that she represented Weeks during the settlement process and that her efforts resulted in the award. He also found no evidence that Benjamin assisted in obtaining the award and recommended sanctions against Benjamin for flagrant abuse and disregard for the judicial process.

The District Court adopted the special master’s recommendation as to Tejedor’s award. It found that Benjamin’s account of handling Weeks’ claim was speculative and not supported by evidence.

Although Benjamin’s conduct was unwarranted and inappropriate, the District Court declined to impose sanctions on the attorney.

1st Attorney Got Award

Benjamin appealed.

In a per curiam opinion, the Fifth Circuit panel said the District Court did not err in awarding attorney fees to Tejedor because her work culminated in Weeks’ award. According to the attorney-client contract, the panel said Tejedor’s fee was to be based on a settlement obtained.

“By contrast, Benjamin’s work on behalf of Weeks – filing a motion to vacate and rescind Weeks’ participation in the settlement – focused on opposing settlement efforts,” the panel wrote.

Benjamin argued that the special master and the District Court failed to consider a summary judgment motion he filed. The panel said the special master’s scheduling order did not allow for motion practice.

Benjamin also argued that the special master said he would not take testimony but proceeded to do so with Tejedor. The panel said Tejedor’s answers to the special master’s questions was not “additional evidence or testimony” but a summary of her evidence.

‘Abandoned’ Client

Benjamin also argued that Tejedor abandoned Weeks in January 2009, telling him she would no longer represent him and stating that Weeks elected to allow her to withdraw as counsel. He also said Weeks told Tejedor that his new counsel recommended that no more actions take place on his behalf.

The panel said Benjamin did not demonstrate that he presented that evidence to the special master. The panel said the evidence “shows at best” that there was uncertainty in January 2009 about the relationship between Weeks and Tejedor.

“It does not show that his [Benjamin's] work contributed in any way to Weeks’ settlement award,” the panel said. It said it also did not rebut the position that Tejedor’s efforts culminated in the award.

Tejedor testified that she told Weeks that if he wanted to pursue a tort claim against Merck, he would have to obtain different counsel, the panel said.

No Appellate Fees

Based on that, the panel said, “[W]e cannot say that the special master’s recommendation to award the attorney’s fees to Tejedor, and the district court’s adoption of this recommendation, was in error.”

Separately, Tejedor moved for appellate attorney fees and costs. However, the panel said “at least some of Benjamin’s arguments are not ‘frivolous’” under the Federal Rules of Appellate Procedure.

The panel said Benjamin’s evidence about the uncertainty in January 2009 about the relationship between Weeks and Tejedor, while not persuasive or properly submitted, raised questions about Tejedor’s claim for attorney fees that are arguable on their merits.

No Sanctions Needed

The panel agreed with the District Court that while Benjamin’s actions were unwarranted and inappropriate, it was sufficient to award the entire disputed lien to Tejedor.

The panel was composed of Circuit Judges Jerry Edwin Smith, Edward C. Prado and Stephen A. Higginson.

Benjamin represents himself. Tejedor is represented by himself and by Susan Whaley Fox of Fox & Loquasto in Orlando.

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