BROWN v. GRIMES
For the following three reasons, the trial court refused to enforce a fee-sharing agreement between lawyers plaintiff James Brown and defendant Milton Grimes arising out of cases they handled in Texas: Brown had not performed his contractual responsibility to pay Paul Ross, a third party; Brown had unclean hands because he had unethically agreed to share his fees with Ross, a former lawyer who had resigned from the Bar; and the fee-sharing agreement violated applicable Texas law because the clients did not consent to the arrangement at the outset of the litigation. The trial court also ordered Brown to return fees he had already received from Grimes under the fee sharing agreement less an amount for the reasonable value of Brown's services. Brown does not challenge the sufficiency of the evidence supporting the trial court's factual conclusions.
Court hold as follows: the trial court did not commit legal error in excusing Grimes from any further obligation to Brown under a fee-sharing agreement because of Brown's failure to perform one of his contractual obligations; the trial court erred in requiring Brown to repay moneys already paid to him because there was not a total failure of consideration; the trial court erred in denying enforcement of the fee-sharing agreement under the unclean hands doctrine because Brown's offending conduct did not affect the fee sharing agreement, was not inequitable as to Grimes, and did not prejudice Grimes; even if unclean hands applied, Grimes was not entitled to any affirmative relief; and a violation of the laws of either California or Texas governing fee sharing agreements did not require Brown to repay money received from Grimes under the fee sharing agreement.
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