Arbitration between Client and Attorney

Arbitration about legal fees


We previously wrote here about your ability to make the other side in a lawsuit pay your attorney’s fees, including lawsuits involving federal civil rights.

Today we write about a recent Fifth Circuit case styled Gallagher v. Vokey which involves a dispute between a client and his own lawyer over the issue of fees.

The facts of Gallagher

Edward Gallagher was a United States Navy Seal. In early 2018, Gallagher was faced with criminal charges brought by the United States Navy

Gallagher reached out to Vokey for representation because his firm was known in the SEAL community for providing counsel through United American Patriots (UAP).

While Gallagher was in custody, Vokey met with him twice, once on October 10, 2018 and again on October 13, 2018.

After some period of time, their professional relationship deteriorated, and Gallagher terminated Vokey’s representation. At that point, Vokey wanted to be paid for his legal work.

The parties’ engagement agreement.

Vokey stated that Gallagher signed an Engagement Letter when he met with him on October 13 (although the letter was dated October 11).

Gallagher said he had no recollection of ever seeing an Engagement Letter and never signed anything. He supported his statement by the fact that he did not meet with Vokey on October 11. Vokey responded by contending the date on the Engagement Letter was simply a typographical error.

Vokey and Gallagher sue each other

Since Gallagher refused to pay, Vokey sued to compel arbitration pursuant to the Engagement Letter.

Gallagher then sued Vokey, seeking a declaratory judgement that he did not owe Vokey fees and could not be compelled to arbitrate. The district court consolidated both cases and denied Vokey’s demand for arbitration based upon the date discrepancy and Gallagher’s lack of recollection of having signed the Engagement Letter.

Vokey appealed.

The Fifth Circuit reverses and remands

On appeal, the Fifth Circuit began with two questions: (1) whether there was a valid agreement to arbitrate between the parties, and (2) whether the dispute in question falls within the scope of that arbitration agreement.

The Court began by acknowledging that the “quantum of evidence required to prove or disprove the existence of an agreement to arbitrate is not entirely clear in this Circuit.”

Interestingly, the Fifth Circuit stated that “[t]he party resisting arbitration bears ‘the burden of showing that he is entitled to a jury trial.’”

(I say “interesting” because in almost all cases, the party attempting to invoke a contractual provision (here, Vokey) carries the burden of proving the existence and validity of the contract.)

Thus, “[t]o put the making of the arbitration agreement in issue, a party is required to unequivocally deny that he agreed to arbitrate and produce some evidence supporting his position.”

In the case before it, the Fifth Circuit held that the signed Engagement Letter, combined with Vokey’s and a witness’s sworn declarations attesting to having personally witnessed Gallagher sign the document, were strong evidence that the contract was genuine.

In response, Gallagher produced no evidence whatsoever. Gallagher’s statement that he had no recollection of having signed the Engagement Letter was not competent evidence that he did not sign it.

Finally, the Court held that the fee dispute was clearly within the scope of the arbitration provision.

So, the parties were required to arbitrated the fee dispute.

Panter Law Firm, PLLC, 7736 Old Canton Road, Suite B, Madison, MS 39110