## Facts

- A minor, represented through her father, was seriously injured in an automobile collision; the father retained a personal-injury firm to pursue claims.
- The firm offered hourly billing or a contingency agreement; the client chose a written contingency contract.
- The contract set the firm’s fee at one-third of any recovery and included a termination clause granting the firm one-third of the most recent settlement offer if the client discharged the firm before acceptance.
- About one month after retention, an insurer made a $194,000 settlement offer.
- Roughly one month later, the client discharged the firm while the $194,000 offer remained the most recent offer.
- The firm demanded one-third of $194,000 (about $64,600) under the termination clause; the client refused, arguing the fee was excessive given the work performed.

## Issues

1. Whether a contingent-fee termination clause entitling a discharged lawyer to a percentage of the last settlement offer is enforceable without a determination that the resulting fee is reasonable under the circumstances.
2. Whether summary judgment was proper where the firm showed that one-third contingency fees are customary and that it was experienced, but offered no evidence describing the actual services performed before discharge.

## Decision

- The Nebraska Supreme Court reversed the grant of summary judgment for the firm and remanded.
- The court held that attorney-client fee contracts, including contingent-fee agreements, are subject to judicial scrutiny for reasonableness and public policy limits.
- The termination clause could not be applied mechanically to award one-third of the last offer without assessing whether the demanded amount was reasonable in light of the services actually rendered.
- The firm’s proof was insufficient for summary judgment because it did not present evidence detailing the work performed, time and labor, or other facts necessary to evaluate reasonableness.

## Legal Principles

- Attorney fees must be reasonable; a written fee agreement does not, by itself, establish enforceability of the resulting fee.
- A client has the right to discharge counsel; fee provisions should not function as a penalty for exercising that right.
- When a lawyer is discharged before completing a contingent-fee matter, recovery is limited to a reasonable fee based on the circumstances, rather than an automatic contractual percentage producing an unearned or disproportionate result.
- On summary judgment in a fee dispute, the lawyer must present evidence supporting both entitlement and reasonableness, including facts such as the nature and extent of services, time and labor, difficulty, results obtained, and the lawyer’s experience; customary percentages alone are not enough.

## Conclusion

The court required a fact-based reasonableness determination before any fee could be awarded under a contingent-fee termination clause and held that, without evidence of the services actually performed, the firm was not entitled to summary judgment for one-third of the last settlement offer.


Hauptman, O’Brien, Wolf & Lathrop, P.C. v. Turco, 273 Neb. 924, 735 N.W.2d 368 (Neb. 2007)