CHARLESTON – A Charleston law firm has asked the state Supreme Court to hear a case regarding attorney fees stemming from Monsanto litigation after the Intermediate Court of Appeals affirmed a lower court ruling.
On May 23, the three-judge ICA ruled Putnam Circuit Judge Joseph K. Reeder was correct in awarding judgment last year to James F. Humphreys & Associates for $375,000 plus interest against The Calwell Practice, which now is known as Calwell Luce dTrapano.
Monsanto was the defendant in about 55 lawsuits starting in 2004 seeking damages for toxic exposure from its plant in Nitro. Stuart Calwell and Humphreys were co-counsel in the case, and they had an arrangement for equal sharing of costs and potential attorney fees awards.
On June 4, Calwell Luce diTrapano filed its motion of appeal with the Supreme Court. The justices still must decide whether to hear arguments in the case.
The firm is asking the Supreme Court to vacate and reverse the May 23 ICA order and to vacate and reverse the 2023 Putnam Circuit Court order and remand the case back to Reeder with instructions to enter judgment in favor of the firm.
In January 2012, Calwell and Humphreys agreed to end Humphreys’ involvement in the case with an agreement that Humphreys would receive 12.5 percent of any settlement or verdict of to $110 million. When the litigation settled, Monsanto agreed to pay up to $84 million for medical monitoring claims and $9 million for property cleanup.
Circuit Judge Derek Swope, who was overseeing the case in Putnam County after former Circuit Judge O.C. “Hobby” Spaulding retired, awarded Calwell $20 million in attorney fees and expenses. Humphreys received the 12.5 percent of that fee award.
Swope also approved $9.5 million for future attorney fees, called incentive payments, to be paid if certain milestones were met. Those included various class members qualifying for certain benefits under the class settlement agreement.
The medical monitoring class settlement agreement contained a “triggering event” that if 100 class members registered to participate in serum dioxin screening and 25 percent of those had a defined level in their system, additional benefits would be provided to the class. It also stipulated that Calwell would receive an additional $6.5 million in attorney fees if that happened, and Humphreys would get his share of that money as well.
“However, at some point during the screening period, it became evident that the triggering event would not occur,” Reeder wrote in his order. “Calwell questioned the reliability of the screening tests.”
That’s when Monsanto and Calwell agreed to amend the settlement agreement to say the class would be afforded additional screening. They also agreed that Calwell would instead be awarded $3 million in attorney fees. Swope awarded that amount to Calwell on September 8, 2017.
Humphreys said he was entitled to 12.5 percent of that $3 million, but Calwell disagreed.
Humphreys’ firm then sued Calwell’s firm in Kanawha Circuit Court in 2020, alleging breach of contract and unjust enrichment regarding the 12.5 percent of that final $3 million. The case was transferred to Putnam Circuit Court and Swope under the original Monsanto litigation.
Calwell claimed the triggering event was a prerequisite to any claim of attorney fees. Calwell also says Humphreys can’t assert a breach of contract claim because Humphreys failed to disclose the fee sharing agreement in his firm’s 2016 bankruptcy.
In one court filing, Calwell’s firm argues that a 2014 order entered by Swope defines specifically the fees to which Humphreys was entitled and is “the controlling document” regarding Humphreys’ fee entitlements. Calwell says that order provides payments to Humphreys only if the “triggering event” is met.
“This is logical and fair and makes sense,” Booth Goodwin, Calwell’s attorney in the matter, wrote in a proposed order filed last year. “If the triggering event occurred, then those fees would be tied in some way to Humphrey’s original contributions to this case and the development of the claims against Monsanto.
“But neither the 2014 order nor the 2012 agreement contained any language evidencing an intent to give Humphreys a share of fees flowing from separate claims and separate litigation giving rise to a new fee award.”
Goodwin also noted that Calwell handled separate litigation against Thomas Memorial Hospital and other third parties regarding medical monitoring issues with the Monsanto case. He says those separate claims promoted the settlement modification at issue.
Goodwin wrote that affidavits from Charleston attorneys Thomas V. Flaherty and Thomas J. Hurney Jr. support this notion.
Reeder sided with Humphreys, also noting the issues with the Humphreys firm’s bankruptcy.
“Even if the disclosures were wanting of more detail, the court declines to step into the shoes of the bankruptcy court and second guess the sufficiency of that disclosure,” Reeder wrote. “Humphreys is not judicially estopped from prosecuting a claim for breach of contract.”
In the appeal to the ICA, Calwell says Reeder erred by refusing to hold that the 2014 order bars Humphreys from receiving 12.5 percent of the $3 million because it specifically conditioned Humphreys’ right to share in future fees upon the occurrence of the “triggering event,” which never occurred.
The ICA judges disagreed.
“There is no assertion that the fee sharing agreement is invalid,” the three ICA judges wrote in the May 23 decision. “Likewise, there is no genuine dispute that the fees in question were awarded in the Monsanto litigation and therefore subject to the fee sharing agreement. The 2014 order merely interpreted the fee sharing agreement within the context of the Monsanto litigation as it stood at that point in time.
“The fact that Calwell was later able to negotiate the removal of the triggering event for a lesser fee does not remove that lesser fee award from the scope of the fee sharing agreement. Accordingly, the circuit court did not err in refusing to hold that the 2014 order bars Humphreys from receiving 12.5 percent of the fee.”
In the appeal, Calwell also said the circuit judge erred by refusing to hold that Humphreys was judicially estopped from sharing in the fee because Humphreys’ bankruptcy disclosures were insufficient. Again, the ICA disagreed.
“Here, Humphreys’ assertion of a claim for breach of contract is not clearly inconsistent with the position taken in the bankruptcy proceedings,” the ICA wrote. “Humphreys disclosed ‘referral/join representation agreements’ as one of the various classes of assets available for administration and ‘co-counsel agreements’ that the reorganized firm would assume.
“Further, the bankruptcy court approved the disclosure statement and found that it contained ‘adequate information’ enabling creditors to make an informed decision on the propose reorganization plan. Just as the circuit court held, this court declines ‘to stop into the shoes of the bankruptcy court and second guess the sufficiency of that disclosure.’”
Calwell is being represented by Goodwin, Benjamin Ware and Stephanie Daly of Goodwin & Goodwin in Charleston and by L. Dante diTrapano from Calwell Luce diTrapano. Humphreys is being represented by Hissam, Zak Ritchie and Andrew Robey of Hissam Forman Donovan Ritchie in Charleston.
West Virginia Intermediate Court of Appeals case number 23-ICA-220 (Putnam Circuit Court case number 04-C-465)
