## Facts

- Lutex, Inc.’s shareholders exchanged their Lutex interests for Detrex Corporation stock in a 1968 acquisition.
- The shareholders later believed the Detrex stock was worth less than represented and retained attorney Jac Chambliss of Chambliss, Bahner & Crawford to pursue claims.
- Chambliss obtained a compromise settlement offer of $860,000 from Detrex.
- On June 5, 1971, the shareholders executed a written contingent-fee agreement providing Chambliss a fee of 15% of any recovery above $860,000.
- After the federal securities action was filed, the shareholders became dissatisfied and asked to associate attorney John I. Foster, Jr.; Chambliss agreed.
- Chambliss and Foster agreed to divide the 15% contingent fee 70% to Chambliss and 30% to Foster.
- The shareholders later designated Foster as lead counsel; Chambliss objected and withdrew by letter dated May 15, 1972, while initially leaving his appearance of record to avoid harming the clients’ federal case.
- Foster continued and later settled the Detrex litigation for $965,150, which was $105,150 above the earlier $860,000 offer.
- Chambliss’s firm sued the shareholders in state court for attorney’s fees, asserting breach of contract and seeking a larger recovery in quantum meruit than the contract would yield.

## Issues

1. Whether a lawyer who performed services under a contingent-fee agreement but withdrew after a change in lead counsel is limited to the contract fee formula.
2. Whether the lawyer may instead recover in quantum meruit for the reasonable value of services when an enforceable fee contract remains applicable to the ultimate recovery.

## Decision

- The Court of Appeals affirmed the trial court’s award of $15,772.50 to Chambliss, Bahner & Crawford.
- The court held the firm’s recovery was governed by the written fee contract: 15% of the amount recovered above $860,000.
- The court rejected the firm’s request for a larger fee measured by quantum meruit.

## Legal Principles

- When an attorney and client have a valid, enforceable fee contract that remains applicable to the recovery obtained, the contract generally controls the measure of the attorney’s compensation.
- Quantum meruit is not ordinarily available to increase an attorney’s compensation beyond an operative fee agreement that has not been rescinded, invalidated, or rendered unenforceable.
- A client’s association of additional counsel and a lawyer’s subsequent withdrawal do not, without more, nullify an existing contingent-fee formula where the parties’ conduct remains within the contract’s framework and the contract can still be applied to the result.

## Conclusion

The court enforced the parties’ contingent-fee agreement and limited the withdrawing firm’s fee to 15% of the settlement amount above the prior $860,000 benchmark, declining to award a larger fee based on quantum meruit.


Chambliss, Bahner & Crawford v. Luther, 531 S.W.2d 108 (Tenn. Ct. App. 1975)