JAMES CONANT & a.
TIMOTHY O'MEARA & a.
Argued: November 13, 2014.
Orr & Reno, P.A., of Concord (Jeffrey C. Spear on the brief and orally), for the petitioners.
Law Office of Joshua L. Gordon, of Concord (Joshua L. Gordon on the brief and orally), for respondent Timothy O'Meara.
Respondent Timothy O'Meara (O'Meara) appeals the order of the Superior Court (Wageling, J.) granting summary judgment against him and his law firm, O'Meara Newborn, PLLC, in this action brought by the petitioners, James and Anita Conant, for the equitable recovery of fees paid to O'Meara. Respondent O'Meara Newborn, PLLC did not appeal. We affirm in part and reverse in part.
Many of the facts underlying this action are recited in our previous decision disbarring O'Meara for ethical violations committed in the course of representing the Conants. See O'Meara's Case, 164 N.H. 170 (2012). Accordingly, we provide only an abbreviated background below. Facts recited below that are not drawn from O'Meara's Case were either recited in the trial court's order or are supported by the record.
On May 19, 2005, Anita Conant was severely injured in an automobile accident in Pennsylvania. Id. at 172. She was rear-ended by a paving truck while stopped at a red light and, as a result of the spinal cord injury she suffered, she was rendered a ventilator-dependent quadriplegic. Id.
James Conant, Anita Conant's husband, retained O'Meara to represent the Conants in a personal injury suit arising out of the accident. He executed a contingent fee agreement providing, in part, "that O'Meara would be paid 33.33% of the gross amount recovered." Id. at 173 (quotation omitted). Approximately ten days after being retained by the Conants, O'Meara learned that the paving company whose truck was involved in the accident was insured for a total of $11 million. Id.
O'Meara filed suit on November 3, 2005, and, on December 1, was informed by opposing counsel that the insurer did not contest liability. Id. Approximately eight days later, O'Meara informed opposing counsel that he believed the suit was "a policy limits case" and had been instructed "to proceed to trial" if the policy limits were not paid. Id. (quotation omitted). At the time, O'Meara knew he lacked authority to settle the case for the policy limits. Id. A certified life planner later estimated that Anita Conant, who was forty-seven years old at the time of the accident, would need more than $23 million to sustain her for the rest of her life. Id. at 172, 174.
After expressing concern over O'Meara's unauthorized demand to settle, James Conant suggested that O'Meara reduce his fee. Id. at 174. O'Meara agreed to consider it, and thereafter proposed a $166, 000 reduction. Id. Tension over O'Meara's fee persisted. Id. At a meeting on February 25, the parties discussed what O'Meara's fee should be if the case settled for the policy limits. Id. O'Meara offered to reduce his potential fee from $3.67 million to $3.17 million, which angered James Conant. Id. James Conant's brother stated "he had been informed that a $2 million fee was reasonable in a case such as this one, " but "[n]one of the other Conants responded." Id. Instead, "[t]he exchange . . . became heated, " id., and O'Meara was asked what would happen if the Conant family fired him. Id. at 175. "O'Meara responded that litigation 'gets ugly'" and "told the Conants that if they terminated his services, he would sue them for his one-third contingency fee and 'would win.'" Id. Eventually the parties modified the original fee agreement, initialing handwritten changes indicating that O'Meara's fee was "to be negotiated." Id. (quotation omitted).
The dispute over fees continued, and ultimately, on the day of a scheduled mediation in federal court in Pennsylvania, O'Meara informed the Conants at the courthouse "that he would not proceed with the mediation unless he received at least a $2 million fee." Id. James Conant felt he had no choice but to sign a memorandum agreeing to that fee. Id.
O'Meara negotiated an $11.5 million settlement subject to certain contingencies. After the mediation, the Conants dismissed O'Meara and the case settled for $11.5 million. Id. Subsequently, "the Conants and O'Meara agreed that the Conants would pay O'Meara an undisputed fee of $750, 000, place $1, 250, 000 in escrow, and arbitrate the issue of how this amount should be divided." Id. At the arbitration, "O'Meara testified that, before he left the Conants' home on February 25, the Conants had agreed to pay him $2 million in fees." Id. at 176. In March 2009, the arbitration panel reached a decision awarding O'Meara $837, 000 of the escrow fund and the Conants the remaining $413, 000. See id. at 176. One arbitrator dissented.
On February 6, 2007, counsel for the Conants filed a grievance with the Attorney Discipline Office (ADO) alleging ethical violations by O'Meara. The ensuing disciplinary proceeding culminated in our September 18, 2012 order disbarring him. See id. at 182. In that order, we concluded that "O'Meara lied under oath when he testified at the arbitration that the Conants agreed to his $2 million fee at the February 25 meeting." Id. at 181. By petition dated October 17, 2012, the Conants commenced this case as an independent action in equity against O'Meara and his firm to disgorge all fees the Conants have paid them.
Ruling on cross-motions for summary judgment, the trial court set aside the arbitration judgment and ordered O'Meara "to return $837, 000 to the Conants." The court also found that "at the time the Conants paid O'Meara an 'undisputed' fee amount, O'Meara had already violated his fiduciary duties, making his retention of the fee amount inequitable." Accordingly, it ordered ...