Laredo Nat'l Bank v. Gordon

61 F.2d 906 (5th Cir. 1932)



The duty of fair dealing applies to the client as well as to the attorney. 


This is an action at law by an attorney, Bernard Gordon, against his client, Laredo National Bank, to recover $12,500 as a fee agreed upon in the settlement of a suit which the attorney had brought for the bank against Abraham Rosenblum, Aaron Rosenblum, and the Abe Rosenblum Corporation. While the suit was pending, the bank and its local attorney entered into negotiations with the Rosenblums for a compromise settlement. While Gordon initially refused the settlement, he was asked to specify what he considered as reasonable fees, to which he responded $12,500. On June 29, the local attorney for the bank addressed a letter to Gordon who lived in New York, advising that a settlement had been effected, directing dismissal of the suit which Gordon had brought in New York and which was still pending, and stating that the bank's president "will write you direct and take up the matter of your fee and its payment." On July 3, 1930, the bank's president wrote Gordon that the bank would pay a reasonable fee, but that the amount mentioned in his telegram of March 10 was beyond reason. Gordon testified that before he received this last-mentioned letter he had already dismissed the suit against the Rosenblums, in compliance with the directions of the bank's local attorney. At the close of the evidence in this case, both sides moved for a directed verdict, whereupon the trial court charged the jury to render a verdict in favor of Gordon for $12,500 with interest. After this charge was given, the bank undertook to withdraw its motion, and requested the court to submit to the jury the question whether it had accepted Gordon's offer contained in his telegram of March 10 to take $12,500 in settlement of his fee.


Did the trial court err in directing a verdict for plaintiff?




It was the duty of the trial court under all the evidence to direct a verdict for the plaintiff. There was no contradiction of his testimony. It is true, of course, that an attorney ought not to take advantage of his client, or be permitted to drive a hard bargain. But the evidence shows that Gordon thought a better settlement could be made with the Rosenblums, did not suggest giving up the trial of the case, was reluctant to accept the bank's suggestion of a compromise and its taking the case out of his hands, and expressed himself as perfectly willing to let the question of his fee be postponed until the case in which he was employed was disposed of. It was only when the bank insisted upon making its own settlement that he agreed to accept a fee which was less than he would have been entitled to receive if he had been paid the contingent fee originally agreed upon. So far as this record shows, his conduct was above reproach. The duty of fair dealing applies to the client as well as to the attorney. The record before us leaves no room for reasonable doubt that Gordon was justly entitled to the verdict which the court directed the jury to render in his favor.

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