Eminent Domain Case Becomes A Cautionary Tale
The Wisconsin Court of Appeals released a decision January 7, 2016, in Biersdorf & Assoc. v. Goplin, App. No. 2015AP570. According to the decision, the case began as a fee dispute between the Biersdorf law firm and a former client. In reality, the case began as a routine eminent domain matter involving a DOT highway taking. However it began, it is now a cautionary tale about misjudging attorney fees at mediation, trying to back out of a mediated settlement, and suing clients over unpaid fees.
The Biersdorf firm represented Goplin and Peterson in an eminent domain matter. At mediation with DOT, both the lawyer and the clients were hazy on the terms of their engagement agreement. Nonetheless, the parties entered into a mediated settlement with DOT.
A few days later, the firm realized it had underestimated its fees and – without the client’s authorization – contacted the court and opposing counsel to try to unwind the settlement. But the court enforced the settlement. Biersdorf was left with around $69,000 in what it considered unpaid fees plus costs.
Biersdorf then sued the clients for breach of contract, unjust enrichment, and fraudulent misrepresentation. The clients counterclaimed for breach of fiduciary duties.
The Biersdorf firm lost big in the trial court. The court found that Biersdorf was not entitled to any further fees. The court also found that Biersdorf breached its fiduciary duty when it attempted to back out of the settlement without client authorization. The court also awarded costs to the clients for having to attend a hearing to enforce the settlement. Finally, the court ordered Biersdorf to pay his former clients’ attorney fees of $142,500 plus costs for making a frivolous fraud claim.
The Court of Appeals affirmed in all respects. While the decision is per curiam and therefore can’t be cited in any court, the discussion is comprehensive and enlightening. You can read it here.