A New York court has modified the attorney fee allocation in the case of Dickey v. Prevost, affecting how fees are shared between law firms in personal injury cases. The decision, made by the Appellate Division of the Supreme Court of the State of New York on July 24, 2026, could have implications for future legal fee disputes among attorneys.
The dispute arose when Thomas J. Dickey and Sandra J. Dickey, the plaintiffs in a personal injury action, initially hired the law firm Maxwell Murphy, LLC. After a mediation session, the Dickeys were advised to accept a settlement offer. However, they later sought representation from Collins & Collins Attorneys, LLC, which agreed to represent them only if Maxwell Murphy was compensated based on the value of the services provided, known as quantum meruit.
The case escalated when the Collins & Collins firm recommended a new, higher settlement offer after a second mediation. Once the personal injury action was discontinued, Maxwell Murphy filed a motion to apportion the attorneys' fees between the two firms. The Supreme Court in Niagara County ruled in favor of Maxwell Murphy, awarding them $64,811.87. This decision was appealed by Maxwell Murphy.
The court ruled that the initial judgment of $64,811.87 in favor of Maxwell Murphy was modified. Instead, the court decided to award the firm two-thirds of the gross contingency fee from the case, minus any disbursements already paid. The judges involved in this decision included Lindley, Montour, Ogden, Nowak, and Delconte.
The court stated, "the proper apportionment of the contingency fee is two-thirds to the Maxwell Murphy firm, less the disbursements that were already paid by the Collins & Collins firm."
This ruling is significant as it clarifies how attorney fees can be allocated between outgoing and incoming attorneys in personal injury cases. The court emphasized that if a client discharges an attorney, the attorney can only recover the reasonable value of the services rendered, which is determined at the time of discharge. The court noted that the plaintiffs had elected for the Maxwell Murphy firm to be compensated on a quantum meruit basis.
The impact of this ruling could resonate beyond this case, as it sets a precedent for how fees are divided in similar legal disputes. It reinforces the principle that attorneys must agree on fee arrangements and that clients have the right to choose how their legal representation is compensated. This ruling could influence future negotiations between law firms and their clients regarding fee structures.
Looking ahead, the Collins & Collins firm had initially filed a cross-appeal, but it was dismissed for failure to timely perfect. Therefore, no further action from the Collins & Collins firm is currently pending in this case. The ruling stands as a significant clarification in attorney fee disputes in New York.