Joel Bacow v. Master Beat Inc ( 2015 )

STATE OF MICHIGAN
COURT OF APPEALS
JOEL BACOW, a/k/a JOEL MARTIN, UNPUBLISHED
October 29, 2015
Plaintiff-Appellant,
v No. 320323
Oakland Circuit Court
MASTER BEAT, INC., WALTER LC No. 2013-131636-CZ
PALAMARCHUK, and MICHAEL SKILL,
Defendants/Third-Party Plaintiffs-
Appellees,
and
GEORGE CANLER,
Third-Party Defendant.
Before: RONAYNE KRAUSE, P.J., and GLEICHER and STEPHENS, JJ.
GLEICHER, J. (concurring).
I fully concur with the majority opinion, but write separately to expand on the majority’s
analysis. My colleagues correctly reject that Dupree v Malpractice Research, Inc, 179 Mich
App 254; 445 NW2d 498 (1989), pertains to this case and appropriately limit Dupree to its facts.
It bears emphasis that in Dupree, this Court rested its decision on three distinct expressions of
public policy: MCL 600.2164(1), MCR 8.121, and Michigan Rule of Professional Conduct
(MRPC) 5.4(a). None of those public policy provisions applies, even remotely, to this case.
Because the underlying action in Dupree sounded in medical malpractice, MCR 8.121
regulated the contingency fee contract between the involved attorneys and their client. That
court rule embodies our state’s public policy regarding fee arrangements in actions “for personal
injury or wrongful death[.]” Attorney fees in such cases are limited and highly regulated to
prevent abuse. The Dupree Court determined that enforcement of the contract between the
plaintiffs’ attorneys and the Medical Quality Foundation presented a risk that the plaintiffs would
“net less than half of their gross recovery.” Dupree, 179 Mich. App. at 264. This concern
contributed to the Court’s decision to find that the contract contravened public policy.
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This is a breach-of-contract action. None of the parties to the consulting agreement at
issue are attorneys. Moreover, contingency fee contracts in breach-of-contract or debt collection
actions are perfectly legal and, in Michigan, limited only by the Rules of Professional Conduct.
Outside the realm of personal injury litigation, contracting parties (even attorneys) may elect to
structure a contract’s consideration as they see fit. Contingency fee contracts are particularly
common in the debt collection arena, where no regulations cap the allowable percentage fee.
Nor does MRPC 5.4(a) play any role here. That rule generally prohibits an attorney from
sharing a legal fee with a nonlawyer. Plaintiff Joel Martin is a layperson, as are defendants.
While the Rules of Professional Conduct allow courts to invalidate unethical fee contracts
entered into by attorneys, see Evans & Luptak, PLC v Lizza, 251 Mich. App. 187; 650 NW2d 364
(2002), the rules do not prohibit private parties from deciding how they will share the proceeds
of a breach-of-contract or collection action.
MCL 600.2164(1) barely verges on pertinence. That statute provides that “[n]o expert
witness shall be paid, or receive as compensation in any given case for his services as such, a
sum in excess of the ordinary witness fees provided by law,” unless permitted by the court. The
contract at issue authorizes Martin to “select[] attorneys, accountants, experts and other persons
with respect to the lawsuit[.]” Nothing in the consulting contract speaks to the payment of the
experts.
Defendants hired Martin to act as their agent in locating suitable counsel and witnesses
and to serve as defendants’ “liason” with the legal world. The percentage-based consideration
described in the consulting agreement permitted defendants to avoid doing the legwork necessary
to pursue legal action, while incentivizing Martin to find individuals and entities illegally
profiting from defendants’ songs and to arrange for their civil prosecution. Martin employed his
skills and experience on defendants’ behalf in exchange for compensation based on a percentage
of any proceeds he helped amass. None of the contract’s signers are lawyers. Their payment
arrangements are their business, not that of the courts.
/s/ Elizabeth L. Gleicher
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