Parnoff v. Yuille
The fee cap in C.G.S. §52-251c does not constitute an unconstitutional deprivation of the right to contract and a contract exceeding the cap was unenforceable. Laurence Parnoff and Darcy Yuille entered into a contingent fee retainer agreement under which Parnoff prosecuted Yuille's claim for injuries and damages from Bridgeport Hospital's allegedly bad faith handling of her workers' compensation claim. The agreement provided for a contingent fee of 40 percent, exceeding the fee cap in C.G.S. §52-251c. Following binding arbitration, Yuille was awarded $1,096,032.93. Parnoff's invoice to Yuille indicated an attorneys' fee of $484,446.10 representing 40 percent of the gross settlement proceeds. Yuille objected and authorized a fee of $125,000. Parnoff brought this action against Yuille. Following trial, the jury found, essentially, that the parties had entered a contingency fee agreement, the agreement was not excessive, unconscionable and unenforceable and the defendant did not waive the provisions of C.G.S. §52-251c. The jury awarded the plaintiff $139,404.94 less $125,000 already paid, representing the maximum fee allowable under the fee cap statute, as instructed. The jury found the defendant's breach of contract "wanton, malicious and egregious." Punitive damages of $75,000 and prejudgment interest of $37,639.33 were awarded. Both parties appealed. The Appellate Court reversed the judgment. For the plaintiff's appeal, the Appellate Court determined that C.G.S. §52-251c applied to the parties' agreement and that C.G.S. §52-251c, as applied, did not violate article first, §10 of the federal constitution. The constitutional prohibition regarding the impairment of contracts is not absolute. Given the stated regulatory purpose of the statute to protect the public from overreaching attorneys and the public benefit it espouses, the Appellate Court yielded to the legislative branch's judgment on the issue. The trial court properly declined to charge the jury regarding the defendant's ratification of her obligation under the contract as the plaintiff did not specifically reply to the defendant's special defense asserting the statute. For the cross-appeal, the Appellate Court ruled that the plaintiff was not entitled to recover on a contract that violated public policy. The jury should not have been permitted to consider the contract based claims. The verdict on the contract counts could not stand. The judgment relating to punitive damages and prejudgment interest, having no legal basis independent of the fee agreement, also could not stand.