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COA Lets Divorce Attorney Keep Fees

Posted on Monday, May 14, 2018

Getting stuck with joint liability for attorneys’ fees after a reversal in the COA is like being saddled with the dinner tab after a bad date--no fair. Thanks to a recent published opinion from the court of appeals, divorce attorneys can breathe a little easier in knowing that the former will no longer happen to them. In Kasben v Hoffman, attorney Gary Bergstrom represented Beryl Hoffman through a heated divorce. The trial court awarded Hoffman attorney’s fees based on financial need and her husband’s unreasonable conduct. Hoffman filed for bankruptcy during the proceedings and the $125,989.98 awarded was placed in escrow in anticipation of the trial court’s distribution of property. The trial court split the amount between the parties to compensate Kasben for property wrongfully distributed by the bankruptcy trustee. An appeal followed and the COA concluded that the trial court erred in dividing the money and that all of it should have gone to Kasben.

 

On remand, the trial court, citing the COA’s decision, determined that it was required to hold both Hoffman and her attorney jointly and severally liable for the entire amount of $125,989.98. The Court of Appeals reasoned that, since it first remanded only with direction that the sum wrongfully awarded be paid back to Kasben, but did not address who should pay it, the trial court must have concluded that the COA order required it to hold the attorney liable since Hoffman authorized the money in escrow to be used to pay Kasben for representing her. In resolving the issue, the COA held that, by ordering the attorney to reimburse Kasben, the trial court was erroneously adjudicating the rights of a third party in a divorce proceeding. It further once Hoffman authorized the funds held for her benefit to be paid to her attorney, the attorney could no longer be charged with liability for those funds whether they were wrongfully awarded or not, absent a showing of fraud. Now when cases with fees in escrow are reversed and remanded, the appellee’s attorney won’t be left empty-handed.

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