High court invalidates contingent fee agreements and awarding of attorney’s fees
On Dec. 29, 2016, the Supreme Court issued its opinion in In re Malite, 2016 MP 20. The Supreme Court affirmed two trial court orders invalidating the contingent fee agreements entered between Antonio Atalig and four heirs of the Estate of Angel Malite and awarding Atalig and his colleague, Reynaldo O. Yana, $75,525 in attorney’s fees.
In 2010, the Supreme Court affirmed a trial court’s disgorgement order regarding attorney’s fees that had been awarded to Atalig and Yana, but vacated an order denying all attorney’s fees. The high court remanded the question of attorney’s fees to the trial court with instructions to conduct a hearing on the validity of the contingent fee agreements. The high court directed the trial court that if it found those arrangements to be invalid, it should then consider the reasonableness of the attorney’s fees proposed by Atalig and Yana pursuant to Rule 1.5 of the ABA Model Rules of Professional Conduct, and either grant that proposal or determine what the reasonable fees should be. On remand, the trial court invalidated the contingent fee agreements, found the attorney’s fees $1,500,000 as proposed by Atalig and Yana excessive and unreliable, and reduced the award to $75,525.00.
On appeal, Atalig and Yana argued the trial court lacked substantial evidence to invalidate the contingent fee agreement and the trial court’s award of attorney’s fees was unreasonable.
The Supreme Court found the trial court’s decision invalidating the contingent fee agreements not clearly erroneous. The high court found that the trial court cited multiple points of evidence, both from Atalig’s own testimony and in the form of reasonable inferences from circumstantial evidence, to conclude that Atalig and Yana were aware they bore minimal risk of non-payment and the contingent fee was unreasonably disproportionate to the work performed. The high court concluded that these findings sufficiently supported the trial court’s decision invalidating the contingent agreements. Moreover, the high court noted that Atalig and Yana failed to offer evidence, other than their own testimony and time logs prepared after the fact, to refute this finding.
The high court then considered the award of reasonable fees. The high court found that because the trial court applied the Model Rules of Professional Conduct 1.5(a) factors and articulated the reasons for its findings, it could not say that the trial court abused its discretion in finding the requested fees unreasonable and instead crafting its own award.
The Supreme Court affirmed both the trial court’s order invalidating the contingent fee agreements and the order reducing Atalig and Yana’s claimed hours and subsequent award of $75,525.
The high court’s full opinion is available at http://www.cnmilaw.org/supreme16.html.
For further information, contact the Supreme Court at 236-9800. (NMI Judiciary)